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From July 2008
By Tracy Mullin
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Sponsored by
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It’s hard to escape the talk of how the
rising cost of fuel is affecting
Americans’ way of life, and there is
certainly no question that gas prices
are causing many consumers to postpone
purchases, forgo that morning cup of
coffee or change their commutes. Passing
the $4-per-gallon mark got me wondering
how people are adjusting, so I asked our
friends at BIGresearch to do a bit of
digging. |
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There is no doubt that higher gas prices are
impacting more Americans than ever before.
According to BIGresearch, 86 percent of people
are making adjustments to their lifestyles as a
result of higher fuel costs, up from 76 percent
at the same time last year. Understanding their
customers can help retailers power through a
tough economic environment.
Research tells us that Americans are on edge
about almost everything. One in 10 shoppers is
either concerned about being laid off or has a
family member who has been laid off. Employment
uncertainty, coupled with higher gas and food
prices, is affecting consumer confidence. Only
one-third of people feel confident investing in
the stock market right now, and just one in five
feels that the economy will recover in the next
six months.
To compensate, consumers continue to make
changes to their spending. More than half of
Americans say they are focusing on their needs
instead of wants, with many also becoming more
practical and realistic in purchases. This
explains why the number of people who say they
are reducing dining out and cutting back on
vacation and travel has jumped from last year’s
levels, as has the number who say they’re
delaying a major purchase.
Shoppers’ behaviors have also changed, as half
of consumers are taking fewer trips to the store
and shopping closer to home. They are also
leveraging the Internet: More than 90 percent of
shoppers say they research products online
before buying in a store, and they are using the
web to find store locations, hours and
merchandise availability to prevent a wasted
trip in the car.
While some of this belt-tightening is working,
shoppers are having a hard time keeping their
heads above water. Many admit to putting more
necessity purchases, like gasoline,
prescriptions and health care, on credit cards
this year and 20 percent of shoppers have credit
card balances of more than $5,000.
Consumers’ frustration over gas prices and
increased economic uncertainty should raise a
red flag on Capitol Hill, as Americans say they
are planning to make their voices heard this
fall. According to BIGresearch, 88.7 percent of
people plan to vote in November, up from the
82.3 percent who said they voted in the last
Presidential election.
The mood of the American consumer is sobering.
Retailers should do their very best in this
challenging environment to understand and
empathize with customers’ concerns. By knowing
more about shoppers’ mindsets, companies will be
better equipped to ride out this storm. |
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