Could crisis be a bargain for the French "shopping @ddicts"?: Meeting French e-consumers taking advantage of the economic recession.

At a time when the press and polls keep telling us how low the French populations’ confidence is getting and how concerned they are about their capacity to continue consuming, a French research company, Axance, explores how some e-consumers manage to increase their buying power by taking advantage of the crisis and its consequences.

About this survey

Survey (interviews) conducted between February and May 2009 with 250 "shopping @ddicts" (aged 25-50, regular, experienced internet users who purchase several items online each month)

Introduction

Who could have anticipated a few months ago how the crisis would enable some French e-consumers to make bargains and increase their buying power?

Yes, you read right! Some French web consumers have shown smart flexibility to turn the economic crisis to their advantage. They have developed new ways to consume and to take advantage of crisis marketing techniques.

Contrary to predictions that we would see a collapse in e-consumers capacity to keep on purchasing, the "shopping @ddicts" we met explained how confident they were about their consumption habits. Au contraire! It's rather the other way around!

The crisis does not encourage savings

First outcome: French e-consumers do not save their money when anticipating an unpredictable future. They do not want to wait for the crisis to come to an end. Rather, they are well convinced that these dire times won't last forever, and that there is no use changing their consumption habits.

We asked an unemployed man why he stopped saving money and instead continues consuming as he used to when he had a job. He told us: "I stopped my bank orders towards my secondary accounts because I want to keep buying like I used to."

Does this mean there is too much confidence in the future? The e-consumers in our survey certainly do not intend to drain their capital and sustain some kind of shopping frenzy. On the contrary, they intend to maintain their buying power and their savings at the same time by taking advantage of cost saving opportunities provided by the crisis.

Their goal is simple: get more with the same budget.

Spend just as much, get more

With their darkest projections put aside, "shopping @ddicts" realised early on how the economic crisis created opportunities that allowed them to buy more with the same budget.

How do they achieve this?

Firstly, consumers want to protect their personal savings. To help them do this, they experiment with new ways to consume using tools and sites that offer bargains and opportunities to buy at a cheaper price, including:

•  High usage of price comparison sites (84% use them prior to every purchase)

• Private sales subscriptions to benefit from exclusive lower prices (72% subscribed to those private sales clubs)

•  Increased usage of auction sites and second-hand offers.

Aside from these new habits, what is really noticeable and should alarm any companies that believe they are dealing with obedient, tractable customers, is that e-consumers are strengthening their buying power.

We can confirm that the "shopping @ddicts" took good note of how sellers systematically respond to economically contracted periods by adjusting their price downward to maintain their sales charts.

Every web consumer we interviewed uses the same modus operandi: being patient and waiting for the best time to take advantage of the seller's weakness. They understand that sellers will eventually give in to selling off their items rather than see their profits collapse.

Some participants openly admitted that "since it is possible to get the items for 50% of their price, one can buy something else with that saving."

Shifting, being unfaithful to sellers and hunting for the "buy 2 get one free" offers define the profile of the "shopping @ddicts" and how they manage to get more without spending more!

A growing mistrust towards the stores

The last outcome found from our survey was that the "shopping @ddicts" have shifted from visiting and purchasing in high street stores, to living out their consumer life online.

As online purchase junkies, they have grown skeptical towards the traditional retail stores. This is partly due to the fact that it is more difficult to compare prices from one store to another, and the shared feeling that prices keep rising in retail stores whereas they are declining on the internet.

Every sector is impacted: from clothing, to consumer electronics, electrical goods, photo development, music and mass consumption goods. The opinion is widely shared by the "shopping @ddicts" we met: "prices are cheaper on the web."

Add to that the convenience of ordering from the comfort of your home at any time of day or night, and you get a full picture of the reasons why "serial shoppers" praise the online purchase – and why they do so during the crisis period.

Unwavering loyalty to the brands

A positive note is yet to be noted: a strong brand is still the best protection against the economic crisis.

Even if some "shopping @ddicts" admit picking up a retailer-branded item or a cost efficient "no-name" product from time to time, they remain consistently loyal to strong brands.

If one of their favourite brands is available when it comes to making the final decision, they tend to pick it quite often, regardless of the price. Brands are a quality label for many consumers, meaning durability, security, and pleasure; factors that matter even more during the economic recession.

Among the chief brands, technology companies (Sony, Samsung, Nokia, Philips, LG, Apple…) are at the top of the heap, followed by the well-known mass consumption brands (Danone, Lu, Yoplait, Nestlé...).

Our "shopping @ddicts" declared that they were likely to reduce their budget for other purchases in order to keep buying their favourite brands, rather than pick up cheaper, retailer-branded or "no name" products.

However, that doesn't mean that the "shopping @ddicts" would accept a price raise on their favourite products. Again, they will seek bargains and compare prices from one retailer to another just to maintain (or increase) their buying power.

Les 50 marques « incontournables » spontanément citées par les « shopping @ddicts »

Final words

There is no doubt that the crisis has been impacting consumption in France- especially e-commerce- but it cannot be disputed that some shoppers are benefitting from its effects. The "shopping @ddicts" take advantage of the crisis with a cynicism that online retailers ought not to ignore.

One participant told it to us plain and simple: "If the crisis should go on and on, retailers will have to keep on lowering their prices. They will just have to if they want to keep making money!"

The whole story tells us how deeply the economic crisis alters the relationship between retailers and consumers. Retailers should learn from this change in consumer behaviour and avoid getting trapped in a constant discount.

Unsure how your design appeals to web users? What kind of special offers should be available? When? How do I build up valued relationships with customers? How do I ensure loyalty? Axance is an expert with those issues, boasting 10-years of experience and over 12,000 web user interviews in France and all over the globe.

Research conducted by:

·         Marie-Aude Garnier, Watch and Emerging Usages consultant

·         Eric Marillet, Customer Research and Strategy Unit director