Trends in Consumer Spending

According to the latest report on Megatrends in Consumer Spending, conducted by WSL Strategic Retail, the economic crisis may have indefinitely changed the retail channels consumers shop. WSL has conducted research on consumer spending, behavior, and attitudes since 1986. Their 2010 report noted significant changes in the way consumers shop, some of them expected and others suggesting possible long term changes for future years.

Most notably, the largest difference in consumer spending has been the increase in online shopping. In tough economic times, consumers found the internet the best way to find the lowest prices through comparative shopping and coupons, with online retailer Amazon.com coming out the big winner. 47% of women, across all ages and demographics, reported shopping online in the past three months, and 24% in the last week, up from 10% in 2008 (Evans, 2010). Online retailing is now the third most popular form of retailing, while "big box" stores like Macy's fell to number five, behind even dollar stores ("New Consumer Study", 2010). Dollar stores showed a significant increase in their market share, with 70% of Wal-Mart's core shopper (individuals with household incomes under $40,000) reporting to also shop at dollar stores (Evans, 2010). The last major consumer shift was the increase in spending at traditional supermarkets. The increase in spending on raw ingredients over prepared foods suggested a shift to more healthful and homecooked meals over frozen, prepared meals or take out that reigned prior to 2010.

The way that consumers do shop significantly changed. Rather then buying everything at once in one trip, shoppers decreased the amount of items they purchased at once and increased the numbers of trips or stores they shopped at. This indicated that consumers were shopping various stores to find the best sales and prices, the same way they were online. Bulk items and less expensive private label products were top selling items, which further supports this theory.

The economic downturn has caused consumers to scrutinize their spending and become "smart shoppers". It is likely that shoppers will not return to their old ways of shopping and many of these habits will be retained, even as the economy recovers. Although economists and businesses are calling for beginning of the recovery of the economy, individuals are more likely to respond later to the recovery through their shopping habits. WSL indicated that the individual's personal experience with the economic crisis is more likely to influence their future shopping behavior then age, income, or any other factor. The increase in home cooked meals has lead to health and wellness being a mainstream concept, and is another trend that is likely to stick around ("The Odyssey Begins", 2010).
References:

Evans, K. (2010, March 26). How America Now Shops: Dollar Stores, Online Retailers(Watch out, Wal-Mart). The Wall Street Journal. Retrieved March 30, 2010, from http://blogs.wsj.com/economics/2010/03/23/how-america-now-shops-dollar-stores-online-retailers-watch-out-walmart/

Gourmet Retailer. (2010, March 26). New Consumer Study Reveals Channel Shifts, Increased Shopping Trips. Gourmet Retailer. Retrieved March 30, 2010, from www.gourmetretailer.com/gourmetretailer/content_display/news/e3if745772b249372dd0a7b

Strategic Retail. (2010, March 25). How America Shops MegaTrends Study 2010. WSL Strategic Retail. Retrieved March 30, 2010, from www.wslstrategicretail.com/emailblast/HAS/2010-sellsheet_email.pdf