Rising Gas Prices: Igniting or Just Fueling Change?
Monday, July 25th, 2011
Gas prices have been a hot topic for most people this summer. How high will prices go? How long will this last? And for many of us in the marketing world, how will this affect shopper behavior? There is no denying it has impacted behaviors, and the ways are numerous.
Shoppers are not just cutting back on spending; they are evolving and becoming more savvy, explorative, and efficient. When faced with rising gas prices, deal-seeking behavior is heightened, and BIG Research reports ~45% of consumers are reducing shopping-trip frequency.
Though some retailers struggle during these times, supercenters excel as many shoppers view them as a cost-effective one-stop shop. In fact, a study published by the American Marketing Association reports that a 100% increase in gas prices causes an ~25% increase in supercenter share of shopper spending. So, it would appear that the $1.06 rise in gas prices we have experienced over the past year has increased supercenter business by ~8% – 10%.
While change is evident, I question if gas prices are the origin.
Thinking back, this is not the first time shoppers have faced a gas spike (remember 2008) or reconsidered their spending habits – as during the recession. And the types of behavioral shifts resulting from the recent rise in gas prices are really nothing new. Perhaps this summer’s gas spike is just another log on the fire, one of many factors over the years that continue to incite shoppers to adopt smarter, value-oriented, and more efficient shopping practices. And if these behaviors persist, how do we connect with these shoppers for the long haul?