I Think Before I Spend
It seems that every week there's more relevant data released about increased coupon usage in the US (and occasionally internationally) due to the economy
What I'm more interested in are leading indicators of what's going to happen after the eventual recovery. Will this new found value consciousness continue? What generational impact does this severe downturn have on future generations? Since 80% of us were born after World War II, is this the Great Depression of our generation?
John Gerzema, Chief Insights Officer for Young & Rubicam, in his talk about the post-crisis consumer which he calls "The Great Unwind", shows very impressive data and arguments that is a must watch if you want to understand where consumerism is headed. The good news is that consumerism isn't dead. It's just changing from mindless to mindful and "value driven".
In addition here's some more data and evidence that indicates the past 18 months may have permanent impact of how consumers shop and thus how brands must market:
TNS Retail Forward research shows that 95% of Americans have modified their shopping behavior in some way in reaction to the recession.
Data Monitor's July report indicated that 56% of US consumers feel that their lifestyle has been impacted by the recession. Suddenly, they have been forced to re-evaluate their spending, including where they do their grocery shopping as well as their in-store choices.
44% of US shoppers are frequent buyers of private label products. Many are now likely to consider private label products to be on a par, if not better than market leading brands across sectors
For 72% of US shoppers, lower prices have a high amount of influence over where people do their shopping. Nevertheless, the quality of products sold similar influence over their (changeable) grocery shopping destinations. This is symptomatic of the intensifying value-consciousness across FMCG product sectors.
In May, 50-year old financial planning firm, First Command Financial Services' Behavior Index research revealed that more Americans have permanently reduced spending "pointing to a more frugal consumer environment after the recession is over" and is "about the birth of a new way of life" said Command Financial Services CEO, Scott Spiker.
Consistent with Gerzema's data that shows the turnaround of Americans' saving rate, First Command data indicates that the "feel good" has shifted from consumption to "cutting spending and saving more not just because they have to but because it makes them feel better".
In First Command's July update, Spiker said that while financial attitudes and behaviors are rebounding from the Fall 2008 lows, "Americans are turning away from unchecked consumerism and embracing the traditional values of personal responsibility and self-reliance"
Finally, First Command's October update continues to indicate spending limitationse with "Fifty seven percent of survey respondents say(ing) they plan to spend less on holiday gifts again this year. Consumers say they will set a maximum dollar amount on gifts (42 percent), give fewer gifts to each person (41 percent) and give gifts to fewer people (39 percent).
I can see this in my own spending and those of my son, our friends and our neighbors. I truly believe that we as a society will be much more value conscious going forward. Not that we won't spend. We'll just spend in a more thoughtful way with brands and retailers that match our thinking.
What are YOU thinking?
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