The End of the Impulse Shopper?

Is it the new frugality? Or, more to the point, the new intentionality?

The economy is improving, at least for some. And the sales of larger homes and similarly sized cars suggest that there is money sloshing around in this mega-market.

But, as the following article explains, many people may have less wealth, but more to the point, they have less time. Because whatever they do earn is taking up more of their day, week and year. The decline in available hours for those who work in what used to be considered middle class jobs means that people have to take more jobs or more work to get by. And since the web is increasingly offering a better selection as well as far more convenient, especially when delivery is thrown in, the notion that people simply love to shop as a popular pastime may be a thing of that gauzy, golden past.

The convergence of economics and efficiency has historically been a killer for those who are unable to adapt. So even as the screaming hype around Black Friday sales approaches sensory overload, the underlying reality is that it could be heralding more of a change than a reinforcement of the status quo. JL

The Wall Street Journal reports:

The shift of attention toward the Web and lingering frugality after the trauma of the financial crisis are the underpinnings of the problem.
Elisabeth Hoffman and fiancé Josh Loeser paused by a display of artfully decorated cakes and pastries while shopping recently at a Pick ‘n Save grocery store here. But after a split second of interest, their expressions faded.
“They’re not on the list,” said Ms. Hoffman, a 35-year-old interior designer and remodeler, as they pushed on to pick up chicken breast and diced tomatoes for a chicken chili recipe.
She and Mr. Loeser, a 30-year-old heating and ventilation repairman, have adopted a series of habits to make sure they buy only what they came for. They shop together, for instance, and when possible they avoid grocery carts, which come with the temptation to fill them up.
Retailers wondering what’s gone wrong with their business could learn a lot from the couple—and from other Milwaukee-area families The Wall Street Journal spent time with this fall. Observations of their carefully executed shopping plans identified what may be an endangered species in the retail landscape: the impulse buy.

A new intentionality has taken hold of shopping. Many Americans have the money and the will to spend. But they are time-pressed and deal savvy, visiting stores only when they run out of items like cereal or toilet paper and after doing extensive research on purchases online and with friends. They buy what they came for—and then leave.Those habits threaten more than just gum sales at checkout. Impulse is why stores offer deep discounts on loss leaders, why they put the milk in the back corner and why marketers spend heavily to pile up products in displays at the ends of the aisles. If shoppers just target the deals and don’t let their eyes wander, long cherished models for boosting sales fall apart.

Store layouts are a known strategy that retailers use to influence how shoppers behave. But can sounds and smells also be used to get you to spend more? Here's #TheShortAnswer.

The shift of attention toward the Web and lingering frugality after the trauma of the financial crisis are the underpinnings of the problem. And the symptoms of the industry’s malaise are clear enough: extended declines in shopper traffic, weak sales growth, and a discount-driven race to the bottom that is sapping pricing power.
Chico’s FAS Inc. says customers are now browsing online first and then coming into stores “on a mission.” Shoppers who once spent two hours at the women’s apparel retailer are down to 45 minutes.
“When you’re online, you lose a lot of the impulse and your units per transaction are less online than they are in a store,” Chico’s Chief Executive David Dyer told analysts in September.

Elisabeth Hoffman and Josh Loeser splurge on nights out, pedicures and dinner with friends. They save by having no Internet at home. Darren Hauck for The Wall Street Journal

Much of that intentionality has now spread beyond the Web to in-store shopping as well. “Consumers are now conditioned to shop for specific items and it’s not just affecting online consumer psyche but offline consumer psyche as well,” said Joel Bines, a managing director at retail consultancy AlixPartners.
Consider Ms. Hoffman and Mr. Loeser. After picking up their chili-fixings, they headed to Walgreens for Halloween candy. They skipped the plastic shopping baskets near the entrance and darted straight to the candy section.
At checkout, they were greeted by a display of toys from the Disney movie “Frozen,” including a plush Olaf doll that sang when Mr. Loeser squeezed its hand. “Should we get it as a gift?” Ms. Hoffman asked, thinking about relatives with young children who were due to visit the next day. Mr. Loeser shrugged, unimpressed. They passed.
Over in Racine, Wis., Cyndi and Chad Tremelling steered their Wal-Mart shopping cart straight to the grocery aisles, passing brightly colored Danskin athletic gear, rows of “Frozen” Elsa dolls, and boxes of Keurig coffee makers without so much as a glance.
When their 18-month-old daughter, Addie, grabbed a jumbo box of Lucky Charms, the couple first confirmed the cereal was on their list before letting her plop it in the cart.
No such luck when she went for a bag of Snickers chocolates.
“Mama loves Snickers, but we don’t need them today,” she said

The Tremellings splurge on Netflix and cable, new cellphones and zoo passes. But they work to keep down spending on eating at restaurants, soda and home furnishings. Darren Hauck for The Wall Street Journal

Their bill came to $171—every cent from items on their carefully typed shopping list.
Wal-Mart Stores Inc. moved aggressively into the low-margin grocery business in the 1980s hoping it would prove a weekly draw for shoppers who in theory would also pick up more profitable items like clothing and toys. But the formula has come under strain.

Dollar Divide

Groceries now account for 56% of Wal-Mart’s $279 billion in U.S. sales, and categories like electronics and toys are waning or migrating online. Only once since 2012 has the company reported increased U.S. sales, excluding newly opened or closed stores. Meanwhile, traditional grocers like Kroger Co. are eroding Wal-Mart’s price advantage.
The Tremellings are typical of the greater Milwaukee area, which is typical of the U.S. Its 5.4% jobless rate, $52,000 median household income and population that is nearly one third Hispanic, black and other minorities mirror U.S. averages.
Mr. Tremelling, a firefighter and paramedic, and Ms. Tremelling, a stay-at-home mom, both 29, moved out of a parent’s basement two years ago, emboldened by nearly four years of stable paychecks. They recently splurged on an $800 swing set for their two daughters and a camera for their first-ever family vacation—to Washington, D.C.
Each of the purchases was accounted for in a budget Ms. Tremelling puts together every two weeks. On their wall calendar she marks due dates for car insurance, mortgage payment and phone bills. Across the bottom is scribbled “Place $$ in savings,” though Ms. Tremelling admits she rarely can.
One recent week, after accounting for the bills, Ms. Tremelling wrote down how much money the couple had left for food on a yellow legal pad and planned out the family meals for the next two weeks, working off a pre-existing two-page, typed master shopping list of already-vetted items.
Wal-Mart and other retailers are reacting to shoppers’ extreme planning in a variety of ways. Wal-Mart is trying to pair items that sell well together, like Corona beer and limes. They call it, “Better Together.” It is also investing in e-commerce and smaller stores that cater to more targeted shoppers. At Dollar Tree Inc., each week the chain designates a product like a pen or candy bar as “drive items” that cashiers push at checkout.
“It’s just that one last chance to get another item in their shopping bag,” Dollar Tree CEO Bob Sasser told investors in May.

Driving Price

The Jasinowskis splurge on daycare, home projects and biking gear. They save on pricey toys, restaurant visits and clothes. Darren Hauck for The Wall Street Journal

Walking past a downstairs bathroom full of plastic sheeting and paint cans, they recounted how weekly trips to Home Depot to fix up a bathroom and dining room have taken precedence over desires like a curved-screen HD television or dishwasher.
“It’s rarely a ‘No, we’re not going to buy something’,” said Mr. Jasinowski, age 31. “It’s more of a when.”
The couple—he is an art director at an advertising agency, and she is a kindergarten teacher—plan their food purchases carefully, too.
Every year, the Jasinowkis pool together $2,600 with their parents, grandparents and siblings to buy an entire cow from a nearby farm. A butcher slaughters the animal and parcels out individual cuts of meat, which the Jasinowskis freeze and use throughout the year.
“We save a decent amount of money when compared to what we were paying in the store,and we get good, quality meat that goes from the farm to table in the least amount of steps,” Mr. Jasinowski says.”
Adriana Salgado, a 26-year-old Milwaukee native who lives in a townhouse with her older sister, prefers to pick up pens and other supplies for her job running after-school programs at the local Boys & Girls Club at the Dollar Tree—even though her employer has a charge account at Wal-Mart—because she says they are cheaper. After a recent trip, she carefully folded the receipt she would need to get reimbursed for the $11.62 she spent.
She and her friend Paola Felix are just as penny-pinching with purchases for themselves. On a recent evening, as they watched the TV show “Scandal,” they admired the sharp blazer worn by actress Kerry Washington. “Oooh, that jacket is at The Limited!” Ms. Felix exclaimed, before demurring that she’d never buy it because the retailer’s well-advertised “Scandal” collection is too expensive. (The Limited said the line is targeted at a slightly older demographic and that most pieces are priced between $49-$100.)
“Please,” she said. “I shop at H&M and Forever 21. Forty dollars is a splurge for me.”