Monday, August 24, 2009

More shoppers thinking twice in the checkout line

You predicted this! It is happening here like in Argentina...‏
More shoppers thinking twice in the checkout line

Do I really need that? Cost-conscious shoppers ditching items before checking out

NEW YORK (AP) -- Penny-pinching Americans are getting cold feet at the checkout -- thinking twice about spending and ditching items before they're rung up.
They're leaving sweaters in the dress department, dumping cookies near the grocery cashier and waiting until the last minute to weigh wants versus needs. Online, shoppers are abandoning their virtual carts as they search for better deals.

People "want to be in the act of shopping, but they don't want to be in the act of buying," said Joel Bines, a director at AlixPartners, a turnaround consultant.

It means more lost sales for stores at a time when there are already fewer customers because of the recession. For bricks-and-mortar shops already working with fewer staff, it also means more work because orphaned items have to be restocked.

Hard numbers are difficult to come by, but Burt P. Flickinger III, a retail consultant, estimates that in 25 percent of shoppers' trips to the store, they're ditching at least one item. In the recession of the early 1990s, it was 15 to 20 percent. In good times, it's more like 10 percent.

Ashley Nichols Guttuso of Midlothian, Va., dumped a red cardigan last week at the counter at the local Limited store after she found out she couldn't use a $15 store coupon on the $15 sweater.

Guttuso says she could have afforded it, but she has focused on necessities since losing her job as a copywriter for Circuit City in January, as the chain was preparing to go out of business.

"I went in there thinking I could get something for free," said the 27-year-old. "I couldn't rationalize it -- even spending $15 to $20. I am watching everything now."

Besides abandoning goods while standing in line, they're paying close attention once checkout begins. They ask cashiers to provide a total while they're still scanning items to see where they stand, or to have necessities like health care basics scanned first, said Dan Fishback, chief executive of DemandTec Inc., a retail technology company. When they hit their limit, they forgo what's left in the basket.

Lower credit limits are also contributing to the abandonment. Shoppers say credit card transactions are being denied if they go over their limit just a bit, said Ben Woosley, director of marketing and consumer research at In the past, issuers would often approve purchases up to 10 percent over the limit.

Web stores are taking a variety of steps to get consumers to complete purchases. They include sending e-mails to remind customers about abandoned items, simplifying the online checkout process and offering extra discounts to lasso would-be quitters.

Web retailers have always grappled with high abandonment rates because of confusion and technology glitches. Plus shoppers are less invested in the process because they didn't have to drive anywhere. But even online stores say orphaning has escalated.

Internet research company Forrester Research estimates as much as 59 percent of online purchases are being dumped during checkout. Those rates had ranged from 47 percent to 53 percent in the past six years, according to industry surveys.

The Container Store, which sells storage items, has seen its online abandonment rate rise to 68 percent. The company has launched an e-mail campaign to remind shoppers of their abandoned purchases and a service that lets shoppers pick up online purchases at the store to avoid shipping costs.

And has cut its abandonment rate to 49 percent from 56 percent by reducing the steps in the checkout process and sending out e-mail reminders, online marketing manager Shea Beck said.

Online shoppers are scrutinizing extra charges that wouldn't have slowed them down in a better economy, right up to clicking the "place order" button.

Eric Younan, 35, of Farmington Hills, Mich., who said he had never quit during the checkout process, has abandoned online shopping carts four times in recent weeks because he discovered extra charges late in the game.

"Two years ago, a $10 handling charge wouldn't have fazed me, but now I would just drop it," said Younan, a publicist. "Back then, I had more disposable income, and my time was worth money."

Thanks Mary for the link.
The patern is pretty standard once there's an economic crisis. Of course it depends a lot on the magnitud of what happens but somethings are almost unvoidable.
What would worry me the most living in America would be preparing both for recesion, lack of job opportunites and mostly an increase in crime, even new levels some of which people even today aren't sure of or consider likely.



Anonymous said...

Domestic violence soars in collapsed US economy:

Modesto has sky high unemployment and was hammered by the collapse of the housing market. I suppose this is the prelude to soaring crime in the wider society-after the wife gets fed up and leaves, the man then takes out his rage on anybody who happens to be nearby, and if he can take their money that is a bonus. Add to that all the US veterans coming home from the wars with PTSD, still in war mode and looking to take out anybody who crosses their path. I think it's just starting to get bad.

Unknown said...

Regarding shopping during this downturn, another problem is that consumers who overdraw their accounts (with credit, debit cards, etc.) face predatory overdraft charges, up to $45 in some cases.

Regarding Anonymous' post above, which actually is off topic, domestic violence is at least 50% committed by women. And two thirds of child abuse is committed by women. Domestic violence is a HUMAN problem, not a MALE one.

Joseph said...

That domestic violence increases during economic hard times is hardly new information.
Not all vets coming home have PTSD, nor does having it indicate a desire to "take out anybody who crosses their path."

recon said...

this is undoubtedly true but the line about shoppers ditching their virtual carts is ridiculous.

Anonymous said...

That picture looks like the Eaton's Centre in Toronto, Canada.