Key Consumer Trends

This new consumer psychology has manifested itself in a few key buying trends looking ahead to 2004:

• Gift giving will extend beyond the holiday season and dominate consumer buying decisions for 2004.

• Finding value for the money is increasingly important, even as the economy has shown signs of recovery. Experts say bargain hunting is less about need, and more about the experience and satisfaction gained by hunting for and finding a great product at a good price.

• Consumers are becoming more comfortable making purchases online; significant growth in online retailing over the last year is a reflection of this.

• Consumers are looking to clear out the clutter, simplify their lives, and eliminate chaos.

‘ Gifting’ as a Verb

“ It’s no longer just about the holidays, gifting is about occasions,” says Danziger. “Consumers are buying more gifts, for more people and spending more money. They’re abandoning the need to fill physical (and emotional) empty spaces with things that made them feel more comfortable, and using that emotion to give to others.”

Unity Marketing recently surveyed 950 “serious” gift-givers, (people who spent $250 or more buying gifts in the past year). The study showed that 87 percent of consumers spent more (32 percent) or the same (55 percent) on gifts over the past year. In addition, 89 percent are giving gifts to more or the same number of people.

Gifting prospects for 2004 also appear strong. Tom and Connie Quilter, owners of Clarkesville Pottery and Galleries, with three locations in Austin, Texas, see evidence of the trend toward gifting in their stores, but their numbers show that overall, customers are buying less. “All of our customers are spending less money,” says Connie Quilter. “They’re still buying gifts more than personal items, but they’re not spending as much on them. What used to be a $150 gift is more often a $75 gift.”

Online Purchases More Likely

While e-retailing remains in a state of evolution, the landscape is much less turbulent than in previous years. Secure server technology has given consumers the confidence to load up their online shopping carts.

Online sales were forecasted to reach $17.5 billion in the fourth quarter of 2003, compared with 13.8 billion in the fourth quarter of 2002. That represents a year-to-year increase of 27 percent, although the sector still remains small, at less than 2 percent of total retail sales, says Rob Gallo, a consultant at Retail Forward, a market research firm specializing in retailing and consumer products marketing

“ The future of e-retailing will largely be in the hands of the multi-channel operators,” says Gallo. “Not only do multi-channel operators have the needed capital to drive their online operations, but customers’ heightened association with an offline brand has proven to be crucial (Pottery Barn is a typical example).”

While craft artists and gallery owners have little in common with huge multi-channel retailers, those who market simultaneously in numerous stores as well as catalogs and online, it’s a good idea to understand the mindset of consumers who find comfort in buying online from them.

Luxury Shoppers Seek Bargains

“ As luxury marketers, we’re trained to think that the discounting of merchandise devalues the brand,” says Danziger. “But research among luxury consumers doesn’t support that assumption. The luxury shopper is savvy about where to find the best price. And increasingly, he or she is turning to the Internet as the fastest, easiest and most convenient way to search out the top luxury brands on sale.”

Danziger adds that luxury shoppers find the hunt for bargains is “an experiential thrill,” which doesn’t mean these consumers will not buy one-of-a-kind or handmade items. “But it drives home the fact that consumers are looking for something new and different,” explains Danziger, “and they want their shopping experiences to be just that … experiences. If you don’t want to give them markdowns, you’ve got to give them something else.”

Toby Quitel, owner of Zephyr Galleries, with locations in New Jersey and Pennsylvania, is prepared to meet this need. “I still think there are collectors out there, and there are magnificent pieces for them,” he says. “I’ve seen people looking for lower price points over the last few years, but … there are still people with a wallet and a taste for unique pieces.”

Clutter is Out, Comfort is Still In

What the consumer is still looking for is a feeling of comfort, according to Pantone Inc., which provides professional color standards and forecasts for the design industries. “Consumers at every income level are interested in quality and value, getting rid of the superfluous and living their lives less chaotically,” Pantone’s experts report. “They are beginning to realize that knowledge, private time, personal energy and space are all personal currencies that are at least as important as money.”

Spending that is still focused on items for the home has changed from purely decorative to functional. It’s harder for consumers to justify spending money on purely decorative items. “We’re seeing a lot more emphasis on things like baskets and boxes, and items that help store and organize,” says Danziger. “Television shows like ‘Clean House’, ‘Simplify Your Life,’ are all about clearing out the old stuff and adding function to your life.”

At Clarkesville Pottery and Galleries, the Quilters have seen a strong trend away from items that are purely decorative, toward more functional pieces. “When the economy was flying high,” says Quilter, “we were selling large glass pieces. Now we’re selling more functional pottery.”

This need for value, comfort and order is reflected in a very balanced and considered approach to color in the home as well. “Colors are becoming clear and pure, and are driven by a need for more white, lights, and translucents,” says Color Marketing Group president Jay de Sibour. “Consumers are expected to break away from a period of fear and satisfy a pent-up demand for durable home products with brighter, sophisticated colors. Home fashion will focus on innocence, freshness and elegance.”

Bernadette Finnerty is a contributing editor for The Crafts Report..