More than 50 percent of Americans struggle to afford the necessities, according to WSL/Strategic Retail’s How America Shops Mega Trends report.
It also found that the youth market, those 18 to 34 years old, are no longer the retail market’s golden ticket. Twenty-four percent of this age group said they do not have enough money to cover their basic needs. Those over 35 are doing better because they started their careers a decade before, when times were good. The research is compelling retailers who target the youth market to rethink their strategies, according to WSL/Strategic Retail.
The study also found that branded products are under threat. Shoppers in general are focusing more on price, with 67 percent of women agreeing that trusted brand names aren’t worth paying a higher price. More than a quarter of women admit that while they used to buy brand names they could not afford, they no longer give in to that indulgence. This figure is up 7 percent from 2010.
Even people who make six figures are struggling, with nearly 30 percent of Americans in the $100,000 to $150,000 income bracket claiming they can only afford the basics. Once considered affluent, these people now identify themselves as middle income.
“There is a huge fundamental issue when more than half of Americans can only afford basic necessities and people who earn up to $150,000 think they are poor,” said Wendy Liebmann, CEO of WSL Strategic Retail. “Look, American shoppers are moving on and coming back to shopping, but at their own pace. As a result, retail sales are precarious and likely to fluctuate up one month, down the next. That’s not going to change any time soon. Brands and retailers cannot ignore this. They will need to re-think the way they do business over the next three to five years - or longer.”
Candace Corlett, president of WSL Strategic Retail, added that, “The youth market, which has traditionally been known for its enthusiastic spending of discretionary income, has virtually dried up. As today’s young adults struggle to find employment and pay down student loan debt, this demographic now represents the largest percentage of Americans who are challenged to afford even basic necessities.”
Other survey findings include:
- 68 percent of those surveyed use coupons regularly, up 7 percentage points from 2010.
- 45 percent claim they only buy items that are on sale, also up 7 percentage points from 2010.
- 43 percent make a point to search online for store discounts before they shop, up 10 percentage points.
- 14 percent of women say they use their mobile phones while in the store to find a lower price before they buy.
- 66 percent of people pause before buying to ask, Is this a smart use of my money? Of those who make six figures, 47 percent say they pause before making a purchase.
- 58 percent say they stick to brands and stores they can afford. For those with a six-figure income, the figure is 36 percent.
- 48 percent stay out of stores where they might be tempted to overspend. For high income people that figure is 28 percent.
- 43 percent buy less when they go shopping, compared to 26 percent of higher income individuals.
Founded in 1986, WSL/Strategic Retail is the leading authority on shopper behavior and retail trends.