While most consumers are curbing their overall spending as a result of today's poor economic climate, a new demographic group - now known as 'Recession Shoppers' - has revealed that they will go online to find the very best deals as their financial situation deteriorates, according to a study by Penn, Schoen & Berland Associates, and commissioned by LinkShare.
The study identified this growing consumer segment, and also noted the increasing power of coupons and discounts in influencing buying behaviour. Indeed, LinkShare argues, consumers have become increasingly careful about their purchasing decisions, with most now seeing online research as a normal part of their buying behaviour, even for small purchases.
According to the study, retailers that offer discounts, special promotions, and product comparisons online to help engage and retain this group of consumers will have more success than those that continue to try striking emotional chords through traditional channels. These strategies, combined with an understanding of the various online shopping personalities, are likely to be effective in winning new customers as well as influencing existing ones.
That hardcore online shoppers (i.e. those who shop online weekly) were found to be easily influenced by coupons and discounts. But the study also found that the new segment of Recession Shoppers are likely to shop more online as their personal economic circumstances deteriorate.
Among the study's most significant findings:
- 68% of Recession Shoppers, and 79% of Weekly Shoppers, said they had purchased something online (that they wouldn't otherwise have bought) because of a coupon or discount;
- 64% of Recession Shoppers, and 70% of Weekly Shoppers, said they had purchased something from a particular online retailer that they wouldn't have otherwise patronised, because of a coupon or discount;
- 74% of online shoppers have opted to receive e-mail alerts from their favourite retailers;
- The Recession Shopper is 17 percentage points more likely than other shoppers to research products or services online, several times each week;
- Consumers under 34 years old tend to make more online purchases every month than any other age group;
- 34% of consumers said they planned to make more online purchases in 2009 than they did in 2008.
"We are aware that the current state of the economy is changing the way consumers are shopping," said Jonathan Levine, co-president for LinkShare. "But these results show that consumers are becoming more aggressive when searching for deals, and the internet offers the ability to research products as well as compare pricing with the click of a mouse."
The results also revealed that, in order to engage these consumers more effectively, retailers will need to change the way they think about and connect with these shoppers. According to LinkShare, there are three critical points that retailers must address in order to stay competitive in today's tough economy:
- They must cater to consumers' need for information-based shopping;
- They must know which channels to use to reach frequent online shoppers;
- They must build brand champions by increasing customer loyalty.
Overall, the study concluded that consumers have become more aggressive when shopping for deals, and more cautious where they spend their money. While they are concerned with the ongoing economic crisis, many consumers now see online shopping as part of the solution because of the ease of researching, comparing, and reviewing products - something that is often difficult when shopping in-store.