Hanging onto Market Share
June 22, 2009,
The recent winners at retail — basically, Walmart, off-pricers and dollar stores —share a common assertion: This new market share is ours and we’re going to hang onto it when the economy improves.
Value retailers will probably hang on to some of the new consumers they’ve captured during the recession. After all, there are fewer choices of brick-and-mortar outlets than there were a year ago, and, at the moment, there doesn’t seem to be much appetite for ginning up new retail nameplates for the mall or strip center.
On the top end of the consumer spectrum, there are signs more handsomely compensated households might be ready to spend again. Eight in 10 consumers earning from $100,000 to $149,999 plan to redecorate in some fashion this year, according to a recent survey by HTT sister publication Furniture Today, which teamed with HGTV on the project. Nine out of 10 consumers earning $150,000 and more plan to redecorate. Where will they shop? Two-thirds of the affluent group have previously purchased top-of-bed linens on line, and 50% have purchased area rugs from the Internet.
But with the mass of consumers still worried about job security, the value of their homes and paying down debt, value retailers will probably have several more months to convince shoppers to stick with them. Their efforts to make non-commodity items more attractive to the Target/Costco/Bed Bed & Beyond consumer will be worth watching.
There’s been a lot of debate about whether the recession will permanently recalibrate spending habits. The answer probably boils down to the demographics. But it’s good to see retailer’s hewing to the old adage: Never waste a crisis.