I read an interesting article today from WARC which highlights how consumers in the US are displaying a “new frugality” which is likely to outlast the current financial crisis. The findings are based on research from Booz & Company which conducted a poll of 2,000 people, and integrated the results with its broader insights into the trends shaping popular habits in America.
Overall, it found that a “pervasive retrenchment” in attitudes is “reshaping consumption patterns in ways that will persist even as the economy rebounds.” Just 32% of its survey respondents believed their personal financial situation would improve over the next 12 months and two-thirds of participants regarded saving as being more important than spending, while a similar number were making frequent use of coupons.
Some 64% revealed a heightened willingness to shop at stores with lower prices while 55% preferred to get the “best price” rather than the “best brand.”
Nearly six in ten had reduced their outlay on dining out.
79% of customers are also “more inclined” to conduct research before buying food and beverage brands. While many people were choosing lower-priced and own-label options when it came to food they were less willing to do so for alcoholic drinks. Booz & Co identified a number of distinct demographics that have emerged since the onset of the recession including “Shopper 2.0″, a young, price-sensitive group that favour buying online whenever possible, and show low levels of loyalty to brands and retailers.
The overall conclusion is that manufacturers have lured consumers with new promotions and consumers have traded down and liked the experience. The expectation is that as the economy recovers, marketers need to better target their strategies to preserve the value of existing brands”
These views are highly likely to reflect the UK consumer and highlight what we all suspect ie that we are not going to emerge from this recession with things returning to how they were. So we need to be ready to engage and embrace the new canny, informed, more frugal and sometimes fickle consumer and ensure that brands carry values that override basic price comparisons and discounting. As history shows it is brands that continue to invest in marketing throughout a recession that emerge the stronger but the big question today is how in the modern digital age we leverage new and traditional media to capture the imagination, needs and spend of our customers.
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