Retail’s Challenge: The Overstuffed Consumer

Long before September 11, U.S. consumers were suffering shopping fatigue from a six-year buying binge that left them overstuffed and underwhelmed. Now an industry expert tells retailers what they need to do to lure shoppers back.


It sure looks like business as usual. Tinsel, lights, and ribbon as far as the eye can see. Mannequins dressed to the nines. And throngs of would-be buyers. As the crucial days before Christmas dwindle, many stores in New York — shopping capital of the galaxy (apologies to Beverly Hills) — feel as mobbed as ever.


Yet the tidings from U.S. retailers are not universally merry. True, sales overall are running about 3% ahead of last year’s, according to a report from UBS Warburg. But look who’s getting the big traffic: discounters like Wal-Mart and Target, and warehouse clubs such as Costco. Sears’ same-store sales, by contrast, were down 1.3% in November. Circuit City, down 4%. Gap? Don’t even ask. (Okay — its sales dropped a stunning 25%.)

Clearly, the tragedy of September 11 has left its mark on shoppers. So have fears of a protracted economic downturn. But Wendy Liebmann argues that there’s something more profound going on. Since 1989, her consulting firm, WSL Strategic Retail, has authored “How America Shops,” a survey of consumers’ attitudes on shops and shopping that’s published every other year. Liebmann says that, even if September 11 had never happened, many retailers would be on the brink.

The problem: After six years of shopping, Americans simply have enough stuff — and most stores are offering little reason to return. Here, Liebmann talks with Fast Company about the trend, and about what some retailers are doing to buck it.

You spend a lot of time in malls — maybe as much as some teenagers we could name. What are you seeing there now?

There’s been a very telling progression since September 11. In the first few days, of course, consumers simply shopped to stock up for a war. Soon after, though, they returned for a different reason. It was very much about feeling a need to be around other people. You could walk through the malls and see plenty of people — but no one was actually shopping. And you’d get to the food court, and there would be people lining up to eat. The mall was the town square where people came together.

Which raises an important truth: Shopping in the United States isn’t purely about need. It’s about our emotional connection to who we are and how we live. Shopping is so much a part of our lives in this country that it’s both a necessity and therapy: The way we show we care is to shop. So in the weeks that followed, we began to see mothers and children in the malls shopping for school clothes. Friends, arm in arm, shopping together. It was all about holding on to something or someone you could recognize as safe.


Now, with the holiday season, retailing has returned marginally from the brink. The extraordinary shock of the situation has eased, and shopping has become one of the easiest ways for us to get on with our lives. It’s less threatening than getting on a plane or maybe even opening the mail. It’s like coming home — the simple act reminds us of when — before September 11 — it was always a good time to shop. And President Bush says it’s the right thing to do.

Not only that, but everything’s on sale.

Exactly. Overlaying the emotional resonance is the most compelling reason of all to shop — and that is, the sales are huge! Even though the economists say it’s a recession and people are losing their jobs, we’re going to save a lot of money by shopping now.

So, people are finding their way back into stores, where everything is being sold at huge discounts. Luxury-goods retailers are plastering their windows with signs for 35% discounts. Department stores are cutting even deeper. Retailers are saying, If we don’t get them in the door now, we don’t have a chance. They’re panicking out of necessity. There are very few retailers who are in very strong positions and a ton of retailers who are very precarious.

If huge sales are the most compelling reason for people to shop now, can the prospects for retailers be very bright come December 26?

What’s going on in stores now reflects a larger problem rooted in what shoppers were thinking and doing before September 11. A big part of it is what we’ve called the “overstuffed consumer.” For the past six years, consumers have bought just about everything in sight — clothes, computers, cell phones, cars, jewelry. Well before September 11, long before economists started screaming about a recession, consumers’ closets were full, their garages were full — and they were full. They were absolutely sated.


It wasn’t that consumers weren’t willing to shop. You could tempt them. But it got to the point where, unless new products were extraordinarily innovative or there was a huge sale, they didn’t need anything. How many more pairs of denim do I need? How many computers or phones? Previously, they always had to have the newest and latest — then they got it and realized that the latest wasn’t much different from what they had before. So, enough already.

In our 2000 edition of “How America Shops,” we reported that consumers made an average of 3.5 shopping trips per week and visited an average of 2.9 stores per trip. This year, before September 11, they were making the same number of trips per week — but they were shopping at just 1.9 stores on each trip. This is a sure sign that shoppers are no longer searching for something more. Either they have it already, or they don’t need it or don’t want it.

But beyond the lack of compelling new products, you argue that stores themselves are giving us little reason to get excited about shopping.

That’s true. Before September 11, Americans already had begun to voice their disdain for the quality of their shopping experiences. When asked to grade retailers, they gave an average of D+, a barely passing score.

Department stores present a perfect example of the problem. They’ve been losing share of shoppers for years to discount stores and specialty stores. So now they’re advertising big sales to get people in their stores and get rid of inventory. What a lot of them aren’t recognizing is this truth: Their customers are bored.

Retailers can do something about that. It’s not purely about innovative products. It’s about the selling environment, the emotional environment. What consumers say they crave are stores with “cleanliness” and “convenient location” that are “good for browsing” and attract “people I feel comfortable with.” Instead, shoppers see so much sameness when they go from one place to another. Unless you can create an environment that’s unique, consumers will say, “I’ll just go wherever it’s cheapest.”


Nordstrom had a competitive advantage, but it didn’t really understand what that was. Its stores offered great customer service — but it lost sight of the fact that customers also expected the stores to have a great and exciting merchandise mix, and that the stores had to look good. So the pricing and selection of products on the racks deteriorated. And if there’s nothing great to buy, service is irrelevant. Nordstrom didn’t realize that consumers today expect you to have it all.

Retailers have to create a total experience that’s competitive with any number of experiences that I can spend my time and money on. If I go to a baseball game and come away with a great feeling — the game was fun, we ate great food, I got jackets for the kids — then I have that emotional standard in my head. Then tomorrow I visit a store, and I evaluate the shopping experience on the same terms.

Which retailers have created that sort of experience?

Well, I love Starbucks. When you walk in, there are great smells and jazz music. There’s no time in my day, but for three minutes, I can revel in the experience. Is it worth $3.25? Well, for those three minutes, it is. I’m buying a moment of luxury.

But think about a completely different shopping experience. What is Americans’ favorite store? One-quarter of our survey population said Wal-Mart. People who don’t shop there tend to think of it as place that’s all about low prices. But it’s also about affordable abundance. Consumers walk in the door to see merchandise decked high. Regardless of income level, they look up at it and think, Wow, I can afford all this. They know that nothing bad is going to happen to them in this place. It may not have the lowest prices every day. But it’s generally pretty good. And customers know it’s safe.

H&M, the Swedish chain that has entered the United States, is giving traditional retailers a scare. It’s tapping into consumers’ interest in fashion and the shared understanding that everything is going to be in and out in a minute or so. It’s only going to cost a few bucks, so come in and have a good time. They’re doing what Gap did a generation ago, which was to turn their merchandise every few weeks — and to make fashion fun again. They’ve created a unique shopping experience.


Keith H. Hammonds ( is a Fast Company senior editor. Learn more about WSL Strategic Retail on the Web.