Consumers Get Cautious but Focused in 1997
It sounds like the ideal climate for shopping: falling interest rates, stocks at new heights, unemployment at a 24-year low.
So consumers headed en masse to the mall in 1997, right? Well, not so fast.
Americans actually held the line on merchandise, not so much because of tight budgets as tight schedules.
"Consumers are almost fanatical about time," says market researcher Britt Beemer. And they want to spend less of it in stores.
In fact, the No. 1 item on consumers' wish list this Christmas was to spend less time shopping.
Mr. Beemer, founder of America's Research Group in Orlando, Fla., points to three overriding consumer trends in 1997:
* Most people feel pressed for time and want to spend less of it shopping;
* Many two-income families are talking about trading income for more time at home.
* And consumers are returning to name brands.
"Comparison shopping ... does not really fit in with people's priorities right now. Brands simplify things," says Jon Berry, newsletter editor at another market-research firm, Roper Starch Worldwide in New York.
The quest for convenience and a focus on family, he says, leave Americans shopping less than the strong economy might allow.
"We haven't seen a real bounce-back in people going out and buying things to the extent that you would expect," Mr. Berry says.
For example, 1 in 3 Americans says now is a good time to go out and buy things they want or need. That's up from 16 percent in the 1991 recession, but far from the 46 percent in 1986, he says.
But if consumers are cautious about spending, they're not at all uncertain about what they want.
Less shopping around
In monthly surveys of more than 5,000 people, Beemer says, Americans reported shopping at 25 percent fewer grocery stores and visiting 16 percent fewer dealerships before buying a car than last year.
And they visited 12 percent fewer stores at Christmas this year than last.
The retailers' loss is a gain for a host of services, from online shopping for groceries and cars to the personal shopper and the workplace concierge for errand running.
Americans are also shopping wherever is most efficient, Berry says - a neighborhood shop for proximity or a superstore for "everything in one place."
"Store loyalty has been going down. People ... go to whatever seems like the best choice for them at the moment," he says.
People also spent less money this year than expected, he says. Many analysts forecast 6 or 7 percent growth in sales this Christmas, for example. But early numbers suggest gains closer to half that pace.
Too much work
And shopping isn't the only place Americans are cutting back.
They're also trying to spend less time at work.
Among two-income couples, 23 percent say they are "talking about" one person quitting full-time work. Nationwide, 3 to 5 percent of such households have already cut back, more in metropolitan areas.
To get by on one income, 12 percent of homeowners are getting out of hoc, paying down their mortgages early. That compares with a 4 percent level more typical since the 1950s.
Another way consumers are making it easy on themselves is buying familiar items.
"More and more consumers really focus on brands and are willing to pay more for brand names," Beemer says.
He sees this as a cyclical return to the brand focus last seen in the 1980s, when people would pay a premium for labels such as Calvin Klein.
One difference now is that the brand focus comes on top of a trend toward casual attire in the workplace. So the casual brands such as Eddie Bauer and Levi's emerge looking sharp.
But the trend cuts across all industries. Companies as diverse as automakers, newspaper publishers, and especially Internet sites are hiring managers to promote their brands.
In Beemer's surveys, these trends far outweigh other consumer concerns such as rising levels of debt and electronic privacy.
The bottom line, Berry says: "Going to the shopping mall and wandering from store to store doesn't seem as pleasure-giving as going to the park with one's kids."
* Staff writer Vic Roberts contributed to this story. Send comments to:firstname.lastname@example.org
Consumer Legislation, 1997
* People who lease cars got a break. A new federal law requires disclosure of key lease terms plus total payments and warnings about other costs.
* Correcting false information on credit reports is easier. The Fair Credit Reporting Act now requires lenders to contact all three major credit-reporting agencies with corrections, rather than leave this to consumers. The act prohibits giving false information to credit bureaus and tightens regulation of credit "repair" services.
* The National Highway Transportation Safety Agency says some consumers, especially with small children, can install air bag cutoffs in their cars.
* Pay phones were deregulated under the Telecommunications Act, prompting many pay-phone owners to block access to toll-free numbers.