The Incredible Shrinking Customer Base
Chain Store Age – March, 2003
By Britt Beemer
As I travel around the country working with America’s retailers, I hear the same complaint over and over again. Their customer base is shrinking. Store aisles once jammed with shoppers are now empty.
The simple truth is that 21st century consumers are not nearly as enamored with the retail shopping experience as they were during the 1990s. The tight economy coupled with concerns over terrorist attacks have combined to bring about a shift in priorities among America ‘s consumers. Family and home are paramount, far outdistancing any desires for new possessions.
During the relatively peaceful economic good times of the 90s, Americans loved to shop. Many interviewed for America’s Research Group’s Consumer Mind Reader ™ Survey said they often shopped eight to 10 stores during the Christmas shopping season. Now they tell us they only shop three to five stores at Christmas time.
The sharp decline in shopping is of concern to the entire retail community, especially those who are experiencing it first hand. Major department stores were especially hard hit last year by significant losses in their customer base. Traditionally among the top five most popular shopping destinations attracting a third or more of all shoppers, major department stores plummeted in 2002 to 22.5%.
I caution retailers not to expect the love of shopping to return anytime soon. When asked whether they plan to spend more or less during 2003 than last year, nearly 80 percent of consumers told us they will spend the same amount or less. Only one in five expects to spend more this year than last.
We are seeing the end result of the vanishing customer every day. Many retailers have been forced out of business, and corporate bankruptcies are rampant across all retail categories.
The jolt needed to jump start spending again may be outside the control of the retail community. Hopefully most will weather this economic storm and live to sell another day. Those who plan to survive would be wise to heed the words of their former customers, who tell us one key reason they have stopped shopping particular stores is lack of new product. Stock your shelves with new appealing products and you stand a better chance of luring your customer back.
Simply put, if your customers don’t see new products they won’t see you.
TOP 10 STORES SHOPPED AT CHRISTMAS
National Department Stores---40.4%
Home Improvement Stores---29.1%
Membership Warehouse Clubs---25.2%
National Department Stores---49.7%
Major Department Stores---34.6%
Membership Warehouse Clubs---28.0%
Home Improvement Stores---26.6%
National Department Stores---57.6%
Major Department Stores---32.3%
Home Improvement Stores---30.1%
Membership Warehouse Clubs---24.8%
Britt Beemer, founder and chairman of America’s Research Group, is author of
two best-selling business books, Predatory Marketing and It Takes a Prophet to Make a Profit. More detailed information is available on the America’s Research Group website at http://www.predatory.com.
Return to News Index