Tough Customers

Research: Shoppers, with increasingly mixed lifestyles and a passion for value, are forcing retailers to grapple with how to attract them.

February 10, 2002|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Retailers who think they know their customers might be in for a rude awakening: Shoppers no longer fit neatly into traditional roles or stereotypes.

Consumers have become harder to pigeonhole, tougher to target, more demanding and powerful and full of contradictions, according to new consumer research by a team from Texas A&M University's Center for Retailing Studies and the consulting firm Andersen's retail practice arm.

Teen-agers are as apt to buy cell phones as baby-boomer grandparents are to buy skateboards. Someone shopping for a VCR will likely come armed with competitors' prices. Consumers want more than value, though - they want stores that both entertain and offer a sense of well being.

In coming years, retailers will be fighting it out for market share in an ever-more-competitive marketplace. And they will have their hands full trying to solve the puzzle of the American shopper, say authors of the half-year study, released last month during the National Retail Federation's annual conference in New York.

David M. Szymanski, director of the Center for Retailing Studies, said he and researchers at Andersen took on the topic of the "ever-shifting" consumer to try to help retailers pinpoint trends that will shape consumer buying. Those attuned to their customers will thrive. Others will fall by the wayside.

"In the next two or three years, to be successful you better have an understanding of who customers are, what they need and where they're going," Szymanski said. "The danger is doing things the same old way and losing ground ... [to] the competitor who is in touch with the consumer. The danger is complacency and losing sight of the customer."

Retailers such as Kmart Corp., which filed for Chapter 11 bankruptcy protection late last month and will likely close hundreds of stores, fall into that category, Szymanski said.

"As we see it, Kmart has lost sight of the customer," he said. "They didn't understand what the customer valued in experience."

By talking with retail experts, the researchers came up with more than 300 consumer trends. Then, a team of 20 industry experts narrowed those trends, consolidating them into six mega-trends that retailers should pay attention to when deciding everything from merchandising to store design. Senior executives from 10 top retailers, among them Lowe's, Payless Shoesource, Sears, ShopKo and Talbots, then further defined the trends.

"The findings are truly fascinating, and a little perplexing. The longer I've been in business, the more complicated it's become," said William J. Podany, president and chief executive officer of ShopKo Stores.

One mega-trend focuses on the "cueless customer," who no longer offers "cues" to what he or she will buy - or how much he will spend - based on age, gender or style of dress.

Today, many women out-earn their spouses. More men are playing the role of stay-at-home dad. Older people are living younger lifestyles, while young people - especially teen-agers - want to act and live like adults.

"Seventy percent of teens have cell phones and buy some portion of their clothing," Jay A. Scansaroli, global managing partner in the retail industry services of Andersen, said while presenting the study to retailers during the NRF conference.

At ShopKo, a chain of 369 discount stores, Podany has seen the rise of the "cueless customer" especially among women, who are not only mothers but business owners and professionals.

"Satisfying the expectations of all women in an 88,000-square-foot ShopKo is daunting," Podany said. Customers "are less easy to define, so determining the needs of a customer is more difficult today."

Consumers also are more powerful than ever before - one of the study's other mega-trends - mostly because of virtually unlimited information on prices, product options and customer reaction available on the Internet. The broader power has given consumers less tolerance for inconvenience.

ShopKo, Szymanski said, has picked up on this and tries to respect customers' time by always opening a new register if more than two people line up at the checkout. Because the customer has so much knowledge at his fingertips, it will place greater burdens on retailers to offer fair prices and to resolve any problems, he said.

"Customers want to dictate the nature and pace of their own shopping experience, not have it dictated by someone else," the study said.

Podany said nearly all his customers have Internet access and use it to either shop or learn about products.

"They're shopping around for the best value," he said. "They're price-conscious and willing to shop around."

Another trend points to consumers' desire for stimulation and sanctuary. Scansaroli noted that more Americans are taking "adventure" vacations, where they snowboard or skateboard.

"But at the same time, they want solitude" and are seeking it in yoga classes and in church.

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