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Autor:   •  April 25, 2013  •  Research Paper  •  1,051 Words (5 Pages)  •  720 Views

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Subject: How economy and future trends of consumers’ behavior affect Target

This memo will explain how the economy was and is affecting online shopping in order to provide a complete understanding of Target’s competitive landscape, as well as introducing some of the new online shopping behaviors of consumers.

Economy: Recession vs. Recovery

Since consumption is closely related to economic conditions, many people have expressed concern for online shopping under the impacts of a poor economy. In order to be cost-effective, people need to make the right decision under different economic scenarios. However, as the journalist Rebecca Greenfield points out, whether the economy gets better or worsens, people will continue to shop online, but the way they go about doing it might change.

Even under a recession, for example in 2008 and 2009, online sales and online marketing were both experiencing significant growth. According to the survey done by Thomas Ford and Sarah Rhodes (2009) at Wilkes University, while traditional stores were hurting, there was an 18% increase in the presence of online stores. One-third of the consumers planned to buy more online in 2010, and 26% of consumers say they would increase purchase online if they suffer a worsening personal financial situation. When the market is in a bad condition and buying slows, there seems to be a great degree of migration of purchasing from physical stores to online stores, according to The Wall Street Journal's Stu Woo (2011).The flow of money online reached a peak in the past 20 years, partly due to the reason that many consumers shifted their spending online during the recession (Woo, 2011).

While the economy has been slowly recovering, the US Department of Commerce shows that online retail sales in the US jumped from $145 billion in 2009 to $194 billion in 2011. A similar trend is noticed in the mobile-commerce (m-commerce) channel. Based on industry estimates, m-commerce sales in the US grew by nearly 91% to reach $6.7 billion in 2011. The US m-commerce sales are estimated to reach a value of $31 billion by 2015, according to industry experts (Market Line, 2013). Consumer confidence has reached its highest point from the past 4 years, climbing from 50 to 65 (Trading Economics, 2013). Concern over rising prices remains the primary economic issue for consumers (45%), followed by unemployment at 34% and financial market at 10% (Fulgoni, Lipsman, & Essling, 2012).

Future trend: Path to Purchase

I have examined the economic factors on online shopping. Next, I will further explain some possible trends of consumers’ online shopping behaviors.

The shoppers’ multi-channel journey today is not so much like a funnel but more like a flight map (Fulgoni et al, 2012). The traditional pattern starts

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