The Budget
The Big Budget Discussion
Danielle Pinnington, Managing Director at Shoppercentric takes a look at the hard-hitting impact of the budget on UK shoppers.
For the last four years the retail industry has been living with an increasingly difficult economic situation. With the Budget announced last month, businesses now have even more challenges to deal with. So, what can be learnt from how shoppers are dealing with the same difficulties?
Back in January 2009 we started measuring shopper perceptions of the changes they are making as they deal with the economic situation. When we compare some of the results from 2009 with data collected in January 2012, we can see how the extended nature of the downturn has impacted UK shoppers. 1 in 4 shoppers are now making major changes to household spending, and 1 in 10 are struggling to pay their bills.
Shoppers are continuing to use a range of strategies to cope with any hardship they are facing and strategies such as prudence, economising and avoidance are as popular as ever. It is clear that the shopper mindset really has moved on from the days of ‘I want it all now’ to ‘do I really need it?’
If we thought it was only the hard-pressed shoppers who are making changes, then the graph to the right showing different segments challenges that particular hypothesis. Even shoppers who claim to have been unaffected by the economic situation are still changing the way they shop.
As we’ve said before, shoppers have never had it so easy when it comes to dealing with an economic downturn; there are so many choices now in terms of channels, brands and own labels, that the opportunity to make best use of the scale and range of promotions available is greater than ever.
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This is not to say that all shoppers are looking for the lowest price - reactions to the downturn are different for everyone. All shoppers are trading off different purchase decisions on a regular basis to personalise their reaction to the economic situation. It is this readiness to mix and match across purchases that is enabling shoppers to cope with reduced budgets, whilst still feeling they are able to keep some spending habits that reflect their interpretation of quality of life.
This approach can make it hard for businesses to meet shoppers needs. To be successful a business needs a real understanding of shoppers - of what they want, and of the buttons to press to trigger a purchase.
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