Shopping behaviour changing in troubled times

Mitch Webber, managing director for OgilvyAction, a sales-acceleration unit of the Ogilvy Group, said now that shoppers have more limited budgets they spend more time considering their purchases.

"Through our 'Shoppers' Change in Attitude' study, we have discovered that certain products are being directly impacted by the change in shoppers' behaviour. A significant number of consumers [61 per cent] tend to make their final decision about the product they want to buy inside the store, the last touch point where transactions occur," he said.

Webber said about 8 per cent of the shoppers decided on the product category they wanted to purchase from inside stores, while 21 per cent and 32 per cent based their decisions on the brand and value/quantity, respectively.

Despite the recession, sale of essential goods such as toothpaste and condiments, as well as perishable products appear to remain unchanged. Consumers are also usually less price sensitive in this category.

However, they appear to be purchasing luxury or non-essential products in smaller quantities or only during promotions. They also seem to be considering cheaper alternatives.

Webber said the global slowdown had had an impact on Thailand's economic standing, while overall consumer spending is projected to fall by 2.2 per cent to about Bt4.7 trillion this year.

According to the survey, about 55 per cent of Thai consumers are not confident about their personal finances, while 66 per cent think it is "not such a good or even a bad time" to buy things they do not need immediately. About 54 per cent prefer saving any leftover cash.

It is imperative for retailers and makers to understand shopper's attitudes towards different products and how they make their decisions, Webber said. Huge discounts are not necessarily the best answer, because consumers will continue expecting cheap products and firms will not be able to raise prices once the recession ends.

He said in-store advertising could actually gauge the effect a campaign can have on sales.

"Asia is driving a lot of new ideas and will lead the world in terms of shoppers' attitudes. Here we have more opportunities and freedom inside stores," he added.