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The Four Faces Of The Value Shopper
Value is front and center for every purchase. But how consumers interpret value, seek it out and acquire it does differ. The four value shoppers we identify are all viable targets during this "shopping recession."
Socially Frugal Shoppers can afford to ride out the recession unscathed, but now it's cool to be thrifty. From the White House to the neighbor's foreclosed house, the economy is on everyone's lips, and this consumer doesn't cherish being held up as evidence of conspicuous consumption. Less is the new more.
Values: belonging, identity, pride, security, loyalty
Demographic hotspots: Top income quintile
Swing Shoppers are still on the hunt for the good life, but for less. Scrimping and splurging and buying high and low have always been part of their DNA, but more so now. Shopping for brand names at discounters and off-price chains is their new favorite sport. They swung upscale when the economy was hot; now they're trading down in the cold economy.
Values: practicality, reality, responsibility, legacy, self-sufficiency
Demographic hotspots: Boomers watching retirement dollars dwindle, Gen Xers trying to build lifestyles on a budget
Bargain Shoppers have long made thrift a lifestyle centerpiece. They're not tightwads, but life stages – or simply Mom, the family's chief financial officer – often dictate taking a thrifty approach to all budget needs. These savvy, price-sensitive shoppers don't tire of shopping with coupons, haggling, joining loyalty programs or partaking in comparison shopping. They know the shelf price is just the starting point and that price control is within their reach.
Values: savvy, control, reality, practicality, reward, success
Demographic hotspots: Budget-bound moms, families, low-middle-income and lower-income consumers
Cheapskates will drive miles out of their way to save a few pennies on gas. Their mindset is truly "a penny saved is a penny earned" – regardless of how many dollars that penny costs. They're frugal to the nth degree. And their cost-saving measures may strike others as a tad extreme, if not unsafe (e.g., reusing paper towels and buying damaged cans of food from the discount cart).
Values: control, prevention, safety, self-sufficiency
Demographic hotspots: Cheap is a lifestyle; look for them across demographics
Excerpt from Iconoculture's "The New Value Mindset: Targeting Value Shoppers During the Shopping Recession"
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BREAKING THROUGH: GETTING YOUR MESSAGE TO YOUR AUDIENCE
Homing in on Value Shoppers:
A Closer Look at Iconoculture's
Point of View
With current concerns over the economy and prices rising everywhere from grocery stores to airports, more and more consumers are looking for bargains. That makes value-conscious shoppers a relevant target for virtually any company with a product or service to sell. Consumer-trend research firm Iconoculture took a close look at "value shoppers" in a recent point-of-view article titled "The New Value Mindset: Targeting Value Shoppers During the Shopping Recession."
To bring some of the company's insights to our clients, Perspectives recently interviewed Tim Henderson, one of the authors of the July 2008 article. Here is the Q&A along with excerpts from Iconoculture's article.
Q&A with Tim Henderson, Consumer Strategist for Iconoculture
Perspectives: Why is Iconoculture looking at value shoppers now?
Henderson: We're looking at consumers across the whole value set, and we see that 2008 brought a much more price-sensitive consumer. Until this year, most shoppers engaged in what we call scrimping and splurging. They used the Internet, loyalty programs and coupons to get the lowest prices on many things, but the same consumers would often splurge on other things that they saw as offering higher quality. That was part of their idea of value. Now, with the mortgage meltdown and other economic realities, value basically equals price. Value isn't as nuanced as before. So we're looking at how that will change retail going into the 2008 holiday shopping season and beyond.
Perspectives: The "demographic hotspots" that you spell out in your article seem to cover every income level. Is everyone redefining value?
Henderson: In some ways, yes. The "demographic hotspots" are key targets and they can be found across incomes. If you want to narrow it, think about consumers as swing voters or what we call "swing shoppers" – that vast middle ground of middle-income shoppers. In terms of income, they aren't very high end or very low end. So they are shopping across the spectrum. These are the people who are redefining value and are changing where they shop. Moms are a key demographic among middle-income consumers, and it's likely they have decided to tighten the purse strings.
Perspectives: You also assign several values to each group – such as control, self-sufficiency or loyalty. How are you seeing marketing messages encompass these values?
Henderson: Those values are motivators. They help marketers understand what motivates consumers' shopping behaviors. For someone who has reality as a value, it's likely they will prefer straightforward marketing messages – they want a clear, no-nonsense message indicating the value of this product. A shopper who has belonging as a value may prefer marketing messages that make her or him feel a part of something.
One thing I've been telling retail clients is that they have to redefine value because that's what consumers are doing. Retailers like Whole Foods and Target already are starting to do this. For instance, Target is a discounter, but most people don't think of it that way. People expect Target to be trendy and hip. They expect more from Target than they do from other discounters, and people sometimes equate "more" with higher cost. Unfortunately, that can hurt Target in 2008.
In September [2008], Target launched the Bullseye Bodegas in New York. These are essentially pop-up stores that feature products from the retailer's designer collaborations. When Target announced the Bullseye Bodegas, the press release was filled with very value-conscious terms, such as "bargains," "great deals," "commitment to low prices," "incredible value." Essentially, Target is putting forth its definition of value, which is that value equals price plus quality plus hip and trendy merchandise. It's delivering the low-price message that shoppers are listening for this year, but it's also reminding people that they don't have to sacrifice other things that matter to them.
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