Study examines effects of economy on consumer shopping behaviors and influences

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Pinpointing the individuals most likely to buy particular products and services has never been easy. But shifting attitudes and behaviors sparked by the economic downturn have added new complications. Retailers in particular are feeling the pressure of trying to keep pace with dynamic consumers in a marketplace where targeted, efficient use of marketing dollars isn’t just best practice: it’s essential to survival.

With its “Retail Consumer Dynamics” (RCD) study, Little Rock, Ark.-based Acxiom Corp. aims to provide retailers with a framework for understanding this brave new world of consumer marketing.

The study categorizes consumers into nine key behavioral segments and evaluates how each views and responds to economic challenges. It also assesses the likelihood that each segment will be influenced by such marketing media as direct mail, e-mail, digital media and coupons.

The January 2009 edition of the study, which is ongoing, was based on an analysis of more than 18,000 data points. These were gathered through monthly e-mail surveys of 8,000 consumer respondents and semiannual e-mail surveys of more than 15,000 consumer respondents conducted by consumer intelligence firm BIG Research from July 2007 to October 2008, and from the consumer demographic, life stage and lifestyle information housed in Acxiom’s InfoBase-X repository and PersonicX Classic household-level segmentation suite.

“All consumers are not the same and don’t respond the same way to economic stress,” said Jim Harold, Acxiom’s industry executive for the retail and consumer markets.

The “Retail Consumer Dynamics” study identified “potential rebounders,” which were the three consumer segments most likely to increase spending when the economy starts to recover. These were “Savvy Spenders,” comprising higher-income families in search of value; “Protecting the Dream,” young middle-income families striving to maintain their lifestyles by shopping smart; and “It’s My Life,” affluent young child-free consumers.

Of these, the study found that the “It’s My Life” segment demonstrated the greatest responsiveness to direct mail, e-mail and new media.

Results also demonstrated that consumers were, on average, conducting more online research than ever before. However, the use of Internet research varied by product type.

For example, 50% of consumer respondents reported researching electronics online before making a purchase versus just 13% for sporting goods. The “Savvy Spenders,” “Protecting the Dream” and “It’s My Life” segments were more likely than others to conduct online research, particularly when shopping for electronics, appliances, home decor and jewelry.

Harold said retailers could use “Retail Consumer Dynamics” findings to determine where to allocate marketing dollars across media choices based on the segments their customers fall into and the types of products they want to promote. He recommended that retail marketers start by indexing their customer bases against the “RCD’s” nine behavioral segments.

“If you have a high index of [the] ‘Tight With Purpose’ [segment], you can look at how those individuals consume media and how they respond in individual categories, and then tailor your strategy accordingly,” Harold said.

He added that Acxiom has tried to make it easy for retailers to map the “RCD” findings to traditional segmentations. But even these are moving targets in today’s tough economy.

“Where retailers have traditionally lived and died by RFM [Recency, Frequency, Monetary Value] models … the notion of recency probably doesn’t change, but the notion of frequency might,” said David Frankland, principal analyst at Forrester Research. “Depending on what you’re selling, if somebody used to buy from you every couple of months, maybe what looks like a frequent customer is now going to become every three or four months. There’s a need to go back and test the validity of all of those models.”

Acxiom Retail Consumer Dynamics Study Behavioral Segments (by % of population):

Potential Rebounders:
Savvy Spenders—14.0%
Protecting the Dream—10.1%
It’s My Life—12.3%
Status Quo:
Full Spend Ahead—12.0%
Been There, Done That—17.8%
Eye on Essentials—6.2%
Squeaking By—9.7%
Digging In:
Tight With Purpose—5.2%
Reluctant Response—12.7%

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