Are Retailers Slow to Catch onto the Current Consumer?

When the recession hit last fall, or even earlier based on some opinions, retailers didn’t know what to do. It’s not too often that most of us are affected by something all at once. The reality hit most people that money is important, and shopping sprees aren’t. So, naturally, retailers such as Walmart dropped prices on a lot of merchandise, in order to entice the casual shopper. It wasn’t just retailers though, but car prices went down in some cases, as did lodging, and even food.

But as an MSNBC.com report shows, retailers might not be cluing into how the current consumer operates, and they may be hurting themselves more than helping by offering rock-bottom prices on a lot of popular merchandise. The number one reason for this comes down to the fact that the current consumer has come to expect ridiculous deals on product, so when the economy does improve, people are going to continue expecting the same kind of pricing.

There’s also the issue that, again, due to the economy, product manufacturers aren’t exactly giving people a reason to run out to the stores this season to pick something up. What’s the “must have” product? According to the article, there doesn’t seem to be one. The question is also raised, if a product is sold for a low price, but consumers don’t need it, is it really a deal? After all, spending money on something you don’t need and won’t use doesn’t seem to make much sense.

Some retailers are going even further with their deals this year than last. Walmart, for example, has already had leaked fliers that show Black Friday-esque deals that will happen soon… long before the official and usual date of Friday after Thanksgiving. What are your thoughts on this? Are retailers doing the right thing by charging so little, or will it come to bite them in the rear in the fiercest way possible?

Many retailers are aiming to lure shoppers with marketing messages appealing to sentiment but focused on value. Home products retailer Crate & Barrel, for example, is touting “holiday moments at prices to celebrate.” Analysts say customers in this post-bubble era are looking for value, but that means more than just a great sale price or alluring marketing message. Today many consumers are thinking carefully about whether they need the product on offer, even if the price seems too good to pass up. “A bargain on something you don’t need isn’t a bargain,” Flickinger notes.