Hard-pressed shoppers use online to count high street pennies
Hard-pressed shoppers are using online retail sites to keep tight control of their household spending in the high street, according to a recent survey.
Supermarket Asda carried out a poll through its Facebook page and found that customers are visiting its online site, Asda.com, to put together a shopping list that fits their budget. They then take the list to the store to do their shopping.
The results speak of a new feeling among consumers that they need to be extra careful even with essential spending such as food. Asda found cost-cutting measures also included half-filling petrol tanks to increase fuel efficiency, and cutting their own hair.
They are published as part of Asda’s latest Asda Income Tracker, published this week, which found UK families were £11 worse off in July 2011 than at the same time last year. The average UK household had discretionary income of £166 a week in July 2011, 6.4% lower than the same time last year.
Andy Clarke, president and chief executive of Asda, said: “The Income Tracker spells out how tough family finances are right now. The maths is simple – the rising cost of feeding the family, getting around the increasing unemployment adds up to the biggest squeeze on families since before the last recession.”
Charles Davis, managing economist at the Centre for Economics and Business Research (CEBR), said: “Pressure on household finances continued to mount up in July as the cost of essential spending grows rapidly while wage increases remain slow. Price growth in transport, food, and alcohol & tobacco was strong over the year to July.
“The Asda Income Tracker shows that family spending power continues to fall from a year ago. With larger-than-usual rail fare increases allowed for next year and utility price rises set to come in over the coming months, the UK consumer still faces tough times ahead.”
All of this looks likely to spell tough times for retailers, online and offline, who will be faced with lower consumer spending. Asda’s Clarke says the retailer will be “tightening its belt” and keeping the price of food and fuel down in response. The difficult nature of the retail market is also highlighted by new research from accountancy firm RSM Tenon, reported in today’s Telegraph.
It found September could be high street retailers’ most difficult month for years, thanks to the twin pressures of quarterly rent bills and the need to buy stock ahead of Christmas and that many could go bust.
Tom MacLennan, head of lender services at RSM Tenon, said: “Retailers are facing a battle to simply get people to walk through their doors in the current economic climate, so many are banking on a successful Christmas trading period.
“However, to achieve this, they need a good amount of stock to sell which they will have to pay for mainly in the period between now and the end of next month. With retailers being squeezed more than ever before, a big bill such as this, coupled with the quarterly rent being due in September, will be enough to potentially send many retailers to the wall.”
Our view: Multichannel seems to be working differently for consumers keen to make sure they are top of their spending, according to Asda’s findings. It’s an altogether more time-consuming way to shop – but the time taken to put together a to-the-penny shopping list followed by the trip to the store speaks of the need for a much more budget-conscious approach to shopping. It’s been said for some time that spending habits have changed in the financial downturn, with people looking online rather than on the high street for bargains. It could be that habits will change is further where money is still tighter – something that online retailers will need to be aware of when planning their customer experience.
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Retailers are becoming more aware of the opportunities that multi-channel shoppers offer them. Be it the growing number of retailers utilising click and collect – John Lewis and Sainsbury’s being prime examples – or embracing the power of social media, multi-channel gives great opportunities for retailers to generate footfall and customer loyalty.
Recent research from Experian identified the consumers most likely to be multi-channel retailers. Using our consumer classification tool, Mosaic, we identified four particular consumer groups who are embracing multi-channel.
The trend of consumers using online to control their budget is very much in line with the consumer groups we identified. Multi-channel shoppers tend to be affluent at the same time as building for either their own or their children’s futures. This means that their income is tied up in property or investments, therefore, saving money wherever possible is vital. What’s important for retailers to recognise is that not all multi-channel shoppers are the same and a one size fits all marketing approach doesn’t work. To maximise the multi-channel opportunity, retailers need to tailor their communications to consumers, with relevant offers and which chime with the way consumers shop today.
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