How We Shop Now: Post Recession Shopping Behavior

Online and Web-Influenced Shopping

Patterns and Trends in Retail Shopping Behavior

This time last year, dismal sales forecasts were projected in retail stores and shoppers held on tightly to their disposable income due to uncertainty and fears related to the recession. There was talk about converting empty shopping malls into community colleges and dance studios. It was thought that even if retail spending increases, the increases would occur online rather than in the mall, unless retailers were able to lure shoppers back in to the mall.

This weekend, listening to the local news, I was surprised to hear that a local mall is requiring that shoppers under the age of 18 must now be accompanied by a parent. I wondered about the motivation for this change, and if it had anything at all to do with attracting shoppers to the mall, and began an updated search of retail trends. I didn’t learn about the local mall’s policy change, but there are some interesting new patterns and trends that relate to our shopping behaviors, this shopping season, ways social media, web cameras, and virtual dressing rooms are being used to make online shopping more social and interactive; and how one retailer plans to make your in store experience a Disney experience.


Consumer Spending and Confidence

July retail sales were sluggish. Sales increased slightly over last year, but not as much as was expected. July is the time stores are clearing summer stock and preparing for the Back to School season. Sales are typically mild in July, but July sales patterns can be used to predict how well the Back to School season might go. This year, discount and department stores fared well, with the exception of stores, such as Aeropostale, that cater to teens.

Consumer spending is an important component of economic recovery, and consumer confidence surveys can be used to help rate consumer confidence and predict consumer behavior. Consumer confidence slipped from 54 points in June to 50 points in July. 90 points indicates a strong economy. Consumers have been saving more and working to pay down consumer debt. Consumer savings is three times higher now than before the recession. Will consumers spend or save their disposable income? How much will we spend on what? How has the recession affected our spending behavior? How do online sales compare with in store sales?

Online Retail Sales and Spending

Some sources estimate an increase in online sales of 8% from the previous quarter of this year; a 20% increase over 2009 online sales for the same quarter. Forrester research predicts e-commerce sales in the U.S. will keep growing at a 10 percent compound annual growth rate through 2014. It forecasts online retail sales in the U.S. will be nearly $250 billion, up from $155 billion in 2009. Last year, online retail sales were up 11 percent, compared to 2.5 percent for all retail sales. In Western Europe, Forrester expects a slightly faster 11 percent growth rate for online retail sales, going from $93 billion (68 billion Euros) in 2009 to $156 billion (114.5 billion Euros) in 2014.

2010 Back to School Shopping

According to Business Wire 2010 and the eBillme Online Spending Index, 17% of consumers plan to do their back to school shopping online this year, spending $272.00 online. 18-24 year olds plan to do the most online back to school shopping this year. Shoppers plan to spend an average of $516.96 on back to school, both online and offline. Here is how we plan to spend:

Computers and electronics: $144

Clothing: $96

Books: $95

Shoes: $50

Dorm furniture: $42

Gifts: $37

School supplies: $32

Other: $20

A Deloitte survey completed July 27th predicts an improved outlook for back to school spending. It finds that nearly 30% of consumers surveyed plan to spend more this year over last year, while 17% say they will spend less. 58% of respondents say they will change the way they shop, buying more items on sale or only what the family really needs. Of families who expect to spend more, they say their children need more expensive items; computers; and that school budget cuts mean parents pay for more.

According to Deloitte, consumers are returning to department stores and discount storesthis year. The majority (89%) of shoppers will shop at discount/value stores for back to school. However, dollar stores dropped to the 3rd most popular destination from the 2nd, and now follows office supply stores. 33% of consumers, down from 40% last year, will shop at dollar stores. 31% plan to head to department stores, up from 26% last year, and putting department stores in the fourth most popular destination. 23% will go to specialty clothing stores, up 6% from last year.


Web-Influenced Retail Sales

In addition to online sales, many sales are now web influenced. Shoppers are tapping in to social networks and using mobile phones applications to enhance their shopping experiences, compare prices, view advertisements, and access coupons and discounts.

Amazon, the world’s largest online retailer, now offers a feature where Amazon shoppers can connect their Amazon and Facebook accounts. This allows online shoppers to engage in social interactions and consult with others about purchasing decisions.

JC Penney just released an online application to sell back to school clothing to teenage girls. The application allows shoppers to use their web camera to enter a “virtual dressing room,” where they can browse through, try on and buy clothes. If a shopper likes an item she has virtually tried on, she can post a screen shot of herself in the outfit on facebook.

Luxottica, an eyewear company with stores like LensCrafers and Sunglass Hut is using technology to lure shoppers in to their stores. They are introducing a wind tunnel where glasses can be tried on in simulated weather conditions, and have a feature where a person can post photos of themselves onto facebook in different pairs of sunglasses. The store itself is shaped like an eye, and can be accessed like a web page; where the shopper is met by a concierge, told what the store offers, and asked how they would like to interact with the store.

SpendingPulse: 2010 Holiday Season

Source

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Comments 18 comments

vrbmft profile image

vrbmft 6 years ago from Yucaipa, California

Interesting stuff. I would have a hard time buying clothes in a virtual fitting room. I have to try on every pair of trousers I buy just because I don't like making the second trip. Perhaps at some point they will have an electronic device that will scan your body and tell you whether or not a particular pair of pants will fit or not!!

Where do you research all the data? I'm always impressed when hubbers, like yourself, have so much data on topics like the economy. I guess it is just out there.

Ohhhhhh, the economy! I try not to think of it too much and thank God every day for my abundance and that is what I call it and in fact that is what it is at the moment. I try not to worry about the next moment and I always have sufficient or plenty or abuundance.

But it is truly challenging times with respect to FUNDS, sufficient and insufficient!!

I suspected the mall wants to control teen behavior but pehaps under the guise of getting the folks with the money in there! Interesting.

Thanks for an informative hub, Lot of work there.

Vern


kimh039 profile image

kimh039 6 years ago Author

Vern, I put the references below the comments this time. The info is definitely out there, and the undergrad in business and econ helps. I started on this project awhile ago when pulling together articles and links for http://myonlineshoppes.wordpress.com . Check out ref#4 re how to use the virtual dressing room. you might actually like it - would be much easier to virtually try them on than to really try them all on. I often stick with a brand I know, so I'm familiar with the fit.....and adjust the size upwards as needed every couple years now! Thanks for your comments, Vern. As always, I enjoy reading your comments.


vocalcoach profile image

vocalcoach 6 years ago from Nashville Tn.

Excellent information. You obviously did your homework. I'm amazed with all of your knowledge on economy. Do you think things will improve - stay the same - decline?

Thanks so much.


kimh039 profile image

kimh039 6 years ago Author

Thanks vocalcoach. I'm afraid I've forgotten more than I remember about economics! As I was pulling this piece together, I was trying to reconcile a part of another hub I did on climate change, where I added a piece about how consumerism contributes to climate change and human health problems. So, what's good for the economy may not be so good for the ecology!


fetty profile image

fetty 6 years ago from South Jersey

Online shopping has its place. There are some items that the consumer just needs to feel and touch before they buy. Also, todays's teens have more disposable income than their parents and tend to shop together. That mall's policy might be motivated by other concerns than stated by vrbmft. Interesting hub.


kimh039 profile image

kimh039 6 years ago Author

@fetty - i like to touch fabrics and check out stitching details etc which is hard to do online; it helps if you know the brand. Teens had always had plenty of disposable income, which is why I thought it was odd in that sense to limit their presence in the mall. But if their parents income is less, theirs will be too. Of course, stores could be trying to cut down their losses from shoplifting - not that all teens steal and adults don't, but in groups I would imagine a teen is more likely to. I'm thinking it's more of a legal/social control/liability thing with the teens, but I don't know. Thanks for taking time to read and post; appreciate it.


billyaustindillon profile image

billyaustindillon 6 years ago

Kim as always so much useful information here. To give a clue as to how much consumer spending has gone to the 'cheap end' today's US trade deficit jumped 18% and was largely due to the record import of Chinese consumer goods. I wrote this story on Traders Community that you may find useful: http://www.traderscommunity.com/news.php?extend.34...


kimh039 profile image

kimh039 6 years ago Author

from the B.A.D. desk! So a good chunk of the spending we are doing is on imports from China - increasing our trade deficit to China. I know I don't think about that when I shop - I'm just looking for a deal! It would be nice if we could all be more informed about how our spending affects the national and world economy and the ecosystem! We could put labels on products like FDA labels!


Rebecca E. profile image

Rebecca E. 6 years ago from Canada

wow, this is great and keep these coming, this is very interesting how we think and shop, but the recession in my mind made it happen faster. Stumbled Upon for Traffic Blessings.


kimh039 profile image

kimh039 6 years ago Author

Thanks Rebecca. It was interesting how this hub kind of evolved over time. I have picked up a couple tips from reading your hubs, lately. Thanks for stopping to read, comment and stumble upon.


doitrightnow profile image

doitrightnow 5 years ago from San Juan, PR

This Hub made for an interesting read. I think it could be made stronger if you would dig a little into the differences around the country of money made per square foot on mall spaces, and what consumer behavior in different parts of the country means for that. For example, I read a sales study on Puerto Rico that says that malls there make about $1,500 per square foot per month, as opposed to somewhere around $70 to $80 per foot in most places in the USA. However, most Americans spend about 23% of their disposable income on retail, and most Puerto Ricans about 46%. Yet you look at Puerto Rico, and it has been in recession since 2006, long before the US went into recession. So what gives?


kimh039 profile image

kimh039 5 years ago Author

Interesting! I was listening to the radio news while driving today that recommended Americans move abroad if interested in wealth! India and Brazil were 2 of the countries recommended. Since health care costs have risen so much, it could be that Americans don't have as much disposable income. I wonder if Puerto Rico has socialized health care. Or, it could be we have higher disposable income and even though we spend only 23% on retail, it's still more dollars spent than the 46% of Puerto Rican disposable income. In other words, we might have 1000/mo disposable income and spend 230/mo on retail and someone in Peurto Rico has 200/mo disposable income and spends 100/mo on retail. That wouldn't explain your mall space scenario though. It seems like I read on AOL news this week about a mall overseas that was built, but no one rented space. Send links if you find some. That would be interesting. Thanks doitrightnow!.. ..for the idea and the comment.


Giselle Maine 5 years ago

Thank you for putting together these observations. I enjoyed hearing about the innovative web-influenced trends from retailers.


kimh039 profile image

kimh039 5 years ago Author

Thanks for stopping by to read and comment Giselle Maine. It is interesting how we are incorporating technology into our retail experiences - and other parts of our daily living. It would be imperceptible if we didn't step back and take a look.


nikashi_designs 5 years ago

Really well researched, actually learned more the second time I read this hub and my brain is working overtime now. I also noticed that many malls are putting age restrictions on visitors but never made the association that maybe this was another way to draw adults into the mall under the premise of accompanying a minor. The numbers are very accurate, slight variations from different reports. Thanks again.


kimh039 profile image

kimh039 5 years ago Author

Thank you nikashi-designs. I created a link to your hub on

"are brick and mortar retail stores a thing of the past." i update this hub every few months, but still need to do so for Holiday 2012. I think now that as long as the kids had lots of money to spend they were welcome. When the recession came along, kids got less of their parents' disposable income and were no longer welcome. I would imaging shoplifting increased as well. Thanks for stopping by nikashi_desings...appreciate it.


molometer profile image

molometer 4 years ago

Your research and analysis is spot on. There is definitely a trend to more online shopping as has been proven by this years data.

It is more convenient in many cases to have things delivered. In fact we could say we have turned the clock back as in the early days of retailing most shops would deliver to their customers.

The more things change, the more they stay the same.

Great hub all the right buttons pressed. Well done.


kimh039 profile image

kimh039 4 years ago Author

Thanks molometer:) I hadn't thought about it that way before. It is like we've gone back with having things delivered. I have really been aware lately of all the empty strip malls and retail shops going out of business. If we do all our shopping online we really don't need a store front. Good to see you, molometer. I hope all is well:)

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    References

    1. Deloitte - Outlook for Back to School Shopping

    2. Deloitte - Back to School Survey PDF

    3. NY Times; Luxottica

    4.NY Times; JC Penney

    5. NY Times; Amazon and Facebook Alliance

    6. Forrester Forecast

    7. NY Times; July Sales

    8. Business Wire 2010 and eBillme

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