In the June 1st issue of Advertising Age, a column was devoted entirely to the question whether consumer spending would be permanently changed in the wake of the “deepest recession in half a century, and (whether) the tightening will remain when the downturn ends“.
The frugal consumer's "bible"
The consensus seems to point toward a general pattern of lesser spending and greater savings that will persist even after the worst of the recession is over. However, the degree to which consumers will cling to this new modus vivendi depends on how directly they were impacted by the recent meltdown.
Persons who were first-hand victims of job losses and/or home foreclosures and whose experience was deeply traumatic will be much more consistent about continuing to live a frugal lifestyle with a greater focus on saving. Those for whom the economy has been merely “troubling and worrisome” will probably be more likely to resume their old spending habits once the economy becomes healthy again and lifestyle trends return to glamour and increased spending.
In yesterday’s Wall Street Journal, the surprising findings of a poll conducted by JD Power (automotive forecasting) were reported. Consumers were asked: “If you had $3500 to spend on features for a new car, which features would you choose?” The market researchers were shocked to find a growing number of respondents declaring: “I would keep the money!” In short…Consumers weren’t even willing to part with imaginary money!!! (Source: WSJ 6/9/09 Eye on the Road).
In light of this discouraging news, expect for some of the changes now taking place in an effort to fuel current consumer spending may to become permanent fixtures of the marketplace. Lower prices; smaller (more affordable) sizes; new positioning strategies such as organic, environmentally-friendly, fair trade or cause-related will all give consumers a ‘reason to buy’ that still communicates value…a central theme in the emerging consumer psyche!
Fragrance Insights 