"Yes, consumers are being more cautious - but that's trendy now, isn't it?" Those are the words on everyone's lips these days - whether from retailers being interviewed, a conference or presentation speaker, or a TV personality salivating over a bargain bin like it's a bucket of chicken.
Bargain retail giants are posting sales rises
like nobody's business, and if your inbox is anything like mine you can count on a slew of retail voucher offers on a daily, if not hourly, basis. "Being frugal is trendy," Neil Saunders, md of research agency Columnio recently told retail delegates during a presentation on the home improvement market. "Confidence is down, but incomes are gradually going up. The main challenge over the next few years won't be the fact that people can't spend, it's that they won't because they're not used to it."
There's never been a better time to promote bargain lines - Channel 4 has even made a TV show about it
- and yet, is the need to save pounds so strong it's overtaken the social stigma of a basket full of bulk-buy, ten-a-pennies?
Not according to Tesco, who recently revealed a re-branding of its Value range to overcome shoppers' embarrassment
(or lack of comfort, in the slightly more diplomatic words of its commercial director Andrew Yaxley) at having a trolley full of plain-faced bargains. With the prettier-packaged Everyday Value range, Tesco is hoping to communicate a message of higher quality while maintaining a low price, and its recent trading update
revealed 80% of its customers agree.
But is there more to it than people going for the products that look good and sell cheap? According to a retailer questioned as part of a recent DIY Week Outdoor Living special, there is. "It's the middle to top end garden furniture which is selling well at the moment," a buyer from Chessington Garden Centre told DIY Week. "People are willing to invest if they think a product will last."
Even more recently, a retailer interviewed for our sustainability feature said his paint consumers tended to opt for well-known brands, with factors such as price and environmental credentials merely incidental. Another symptom of consumer caution, perhaps, taking the step from ‘won’t buy’ to ‘won’t buy unless I know it’s worth it.’
Columnio's findings on what triggers home improvement purchases show a more hopeful trend. While the 'not got one so I'll buy one' response was down 19%, the desire to 'want a better one/upgrade' was up 8.2% in recent times. "This shows that while people are being frugal, if there is a product they want they will find a way to buy it," said Mr Saunders.
Also interesting in these findings was that DIY purchases are more than 80% driven by price. Indicating that, to some extent, when it comes to knowing what your customers are willing to spend, DIY retailers have their fingers on the pulse.
What do you think? Are your budget lines flying off the shelves? Or are your customers opting to invest in the products that will last? Leave a comment below.