How should retailers deal with the new “frugal consumer”

A Wall Street Journal article (Oct 4, 2011) describes the emergence of the frugal consumer who buys what they need, focus on promotion purchases, avoid premium products, clip coupons and combine shopping trips to save on gas.  The impact of trading down is expected to stress apparel retailers who had to place orders in early spring when the economy was rebounding. These retailers also expected to pass along the increased costs of cotton. Pressure on inventory and on costs is expected to require creative retail solutions. Should retailers focus on specific promotions (buy one and get half off second item) discounts or use discounts linked to their store credit or debit card consumers to retain their loyalty and increase their instore spend ? Will smaller pack sizes and private label sales do the trick ? Or will growth of Dollar stores be the wave of the future ?

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About aviyer2010

Professor
This entry was posted in Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , . Bookmark the permalink.

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