A Fortunate Few Consumers Continue Active Shopping for Major Goods Despite the Recession
The Leo J. Shapiro & Associates national survey of 2,902 consumers conducted during the past six recessionary months finds that one in ten (11%) consumers continued to shop actively for three or more of the ten major products covered in the survey. These fortunate few include over a third of all active shoppers for personal computers, major appliances, carpeting, new cars, and TVs. They also include 20% to 30% of all active shoppers for air travel, housing, overnight stays at motels, and furniture.
For these highly active shoppers, the Shapiro Consumer Affordability Index (CAI) – which tracks whether consumers feel they can afford to sustain their current level of spending – stands at a boom time level of 116.
At the other extreme, over half (58%) of all consumers did not shop actively for any of the ten surveyed products during the past six recessionary months. Their CAI of only 77 indicates they feel they are experiencing the recession deeply.
The remaining 31% of consumers shopped for one or two major products and had a CAI of 97.
Short term, the national sales potential for major goods – and the future of the economy - depends critically on what happens to the fortunate few. Middle term, national sales potential and economic conditions depend on what happens to the 31% of consumers on the cusp of recession. Longer term, sales potential depends on whether the 58% of the nation’s consumers now mired in recession can improve their financial position.
The fortunate few are distinguished from the unfortunate many by their financial status and demographic characteristics.
Financial Status
As is logical, the fortunate few include a disproportionately large percent of people in the upper economic class, whereas the unfortunate many include a disproportionately large percent of poverty class people.
Annual family incomes ranges downward from $79,000 for consumers rated “high” as active shoppers in that they actively shop for three or more of the ten monitored products - to $63,000 for those rated “Middle” – who shop for one or two products – to $42,000 for those rated “low” in that they shop for none of the ten products.
There are also tight relationships between active shopping and ownership of mutual funds and common stock. Among “high” active shoppers, 62% own stock, which is more than double of 32% among “low” active shoppers. The ratio of buyers to sellers in the event stock prices plunge 10% is 3-to-1 among the fortunate few but only 0.9 to 1 among the unfortunate many.
The index that tracks consumers feeling of affluence, ranges from a high of 136 for those rated “high” for active shopping in that they are actively shopping for three or more of the ten monitored products to a low of 64 among those rated low in that they are not shopping for any of the ten monitored products.
Demographic Characteristics
Active shopping for major goods correlates tightly with being male, a college graduate, and under 50 years old.
Concentrations of Active Shoppers
The recession impacts active shopping differently on a product-by-product basis. Among the ten major products monitored, active shopping for personal computers is most dependent on what happens to the 11% of consumers who are recession resistant.
Almost four in ten (38%) active shoppers for personal computers are included in the fortunate 11% of the population. By contrast, only 13% of active used car shoppers are included among the unfortunate many recession resistant consumers.
Six in ten (61%) active shoppers for carpeting are included among the fortunate 11%. They constitute an identifiable market that can be targeted by carpet manufacturers and retailers.
At the other extreme, active shoppers for used cars are more widely dispersed in the general population than are active shoppers for any of the other ten products.
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Significance
The significance of the
number and characteristics of consumers actively shopping for specific products
is different for 1) those who are seeking to anticipate macro-economic trends;
and 2) manufacturers and retailers seeking to market specific products to
consumers.
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