The New Frugality: How to Reach Out to Retail Consumers Who Want to Buy Less
By Bob Phibbs
Buying less is a concept that seemed out of style for consumers beginning with the go-go 80’s until about three years ago.
During those thirty years, the size of the average American home mushroomed, even while families themselves were getting smaller. In Los Angeles, where I lived for much of that time, smaller homes were razed and the phrase McMansion was coined to refer to the outsized homes replacing them.
But then in 1998 architect Sarah Susanka published a book called The Not So Big House, which offered an alternative to McMansions. It suggested an emphasis on quality over quantity, and doing more with less physical space. That book is widely considered to be the match that lit the fire under what is now called the tiny house movement.
A tiny house doesn’t have a fixed definition, but we are really talking about TINY here - anywhere from 100 to 1,000 square feet. It has largely caught on with Millennials, who can be seen towing their tiny houses on the back of their trucks on TV shows like A&E’s Tiny House Nation or HGTV's Tiny House, Big Living.
Proponents of the tiny house movement use phrases like extreme downsizing to illustrate how they choose to live their lives.
Even Baby Boomers are jumping on the bandwagon with books about how to simplify.
Both generations are looking to own less, which means they buy less. They choose to get rid of things rather than acquire new ones.
This is, clearly, a problem for retailers.
What can you do proactively about this?
There are two solutions. The second one will seem natural and intuitive, but this first one might hurt a bit: sell fewer items.
If you spend any time reading the books on frugality, you will see one consistent theme: Buy fewer things, but higher quality ones. Books like 1993’s Your Money or Your Life emphasize the need to spend more money to get a quality product rather than waste money on an inferior one.
Most Millennials respond positively to this approach; they will turn up their noses at anything from K-Mart, but they will pay a premium price to get a cast-iron skillet from Williams Sonoma, which they perceive to be of higher quality and expect to keep and use their whole lives.
So for retailers with massive numbers of SKUs sitting on your shelves, consider doing some simplifying.
I’m here to tell you that you can make more money by stocking fewer, high-quality items that you can charge more for.
Take a look at your SKU list, sort it by price and margin, and I’ll bet you’ll see the bottom 20% are not actually making you any money.
Premium items today include more features that consumers can personalize; they are less mass-market. Look at all the build your own and design your own concepts in retail today, from bedspreads to furniture and from shoes to backpacks.
Let’s look at an example of a specific business that makes it a point to emphasize quality at every turn.
Case Study: The Levenger Experience
Levenger was started in 1987 by Steve Leveen. Steve was, and is, a passionate reader, and he wanted to create products that would resonate with people like himself.
That started out being mainly pens and journals, but soon expanded into all sorts of lifestyle products that thinking people would enjoy: furniture, end-tables, suitcases, folios, and yes, more pens and journals. Today, his company’s mantra is simple and clean and elegant; he wants to sell you objects pleasing to the touch, rewarding in their function, and made to last for generations.
Let’s take a look at one of Levenger’s signature products, the Circa notebook.
Now, let’s be honest about this, it’s a notebook that’s a set of seven little ceramic circles, and a bunch of pieces of paper with holes punched in them. You pick the color of your rings, you pick your cover, you pick your paper texture. This notebook suddenly is less about taking notes, and is more about you.
Sure, you could just as easily have bought a .99 spiral-bound notebook at Walgreen’s and captured the same information just as easily, but Circa? That’s a lifestyle choice!
Take it a step further and look at how the Levenger empire wants you to write in your journal. A cheap pen from a dollar store? Nonsense!
They sell a $289 fountain pen that will stay with you for all of your days! How many pens have you lost in your adult life … and how many of them would you have lost if they had cost you hundreds of dollars?
Now I get it, some of you are already asking, who would use a pen and pad versus a tablet?
Not the point...
He knows his niche. The value proposition for any customer is clear:
The more a consumer invests in a product, the more they care about it. The less they’re going to invest in it, the easier it is for them to say, “I’ll think about it,” and walk away.
I’m not just talking price here, I’m talking value.
But also when you carry more expensive merchandise, you need to have well-trained salespeople who give a damn and can sell value over price or shoppers will just scoff and walk out empty-handed.
After the fall of 2008, it was easy to focus on keeping the lights on and the inventory stocked. But as I said last week, we’re in the new normal now.
It’s been all too easy to look at things like retail sales training for your employees as a non-essential cost. But when you stock your store with fewer, more expensive products, you must upgrade the soft skills training of your staff, or your merchandise will still sit.
You also have to make sure you have someone who knows how to merchandise your store accordingly.
Employees have always been the glue that helps you match your products to your customers. It’s no different now.
If you are selling to Millennial generation shoppers particularly and have to skimp on anything, don’t skimp on retail sales training.
The very kind of person who would downsize extremely and move into a 500-square-foot house is exactly the kind of person who values care, attention to detail, and quality.
Going further, many other Americans who are not extreme are finding that they want to buy fewer things as well. They have the money, they have just become more discerning where they will spend it.
In short, customers will buy the better merchandise, and they will opt to buy from the retailers who take the best care of them. That means they’ll buy from a retailer with a curated collection and not from one who settled for a truckload of merch. They’ll buy from a retailer with a well-trained sales team and not from one who is saddled with leftover, lazy employees.
You must reach out to this newly frugal consumer with quality merchandise displayed and sold by quality, well-trained employees. This new shopper will be intrigued by your simplicity and learn about value over price through your employees. They will say, I’ll take it, not I’ll wait.
And that's real money you can take to the bank...
Searching for ways to convert more lookers into buyers?
Click the button below to read more about our latest Features & Benefits Course launch
Get our weekly newsletter updates. Read our mailing consent T&Cs here
The 5 Shifts Brick-and-Mortar Retailers Are Making to Generate Up to 20% Higher Profits Every Month
Are you a hungry brick-and-mortar store owner who’s ready for a fresh, people-obsessed strategy? This training is for you if you want to grow your business using a powerful customer experience formula proven to make your cash register chirp.