The economic shocks of the past two years have created greater urgency for retailers and their suppliers to understand and respond to the new marketplace realitiesnot the least of which is the fact that the recession has changed shopping behavior: seventy-two percent of all shoppers recently indicated that their shopping behavior has changed significantly or somewhat as a result of the economic environment, and only 7% have made no changes at all (Figure 1).
The shopping behavior data coupled with the demographic trends suggest that an enduring shift has taken place as a result of the Great Recession. Going forward, purchases will be more deliberate and purposeful. Conspicuous consumption will give way to more conscious or practical consumerism. Rampant deal-seeking will be replaced by more purchase selectivity and the use of shopping techniques and tools discovered during the recession.
The source of consumer spending also will radically change. Baby Boomers, who have fueled consumer consumption over the years and who also have helped lead us out of the most recent previous recessions, will not be in position to lead the way out of this recession as they near retirement and conserve savings. Instead, the up-market segment of Generation X (aged 2945) and the leading edge of the young Generation Y (aged 1028) will lead the recovery. Retailers will have to adapt their plans and approaches to appeal to this new generation of consumers.