How The Current Economy Has Changed Consumer Behaviors
Copyright (c) 2010 Gareth Schweitzer
Since the economy began its downward spiral into recession in early 2008, we have seen changes in consumer behaviors and habits. Studies have shown that mindsets have shifted and that the current consumer is a very different person than the consumer of several years ago. Many marketing research services have begun to create their own surveys and reports to gain insight into this new consumer that we are dealing with today.
What most marketing research services begin with is an analysis of consumer behaviors - what are the top drivers of purchase decision making? Are people considering their purchase decisions with more thought to the future consequences? What are people buying more of? Less of? These questions and more can produce an effective study with meaningful results.
So far, various market research services have discovered that durability is a key propeller of consumers' purchase decision making. This suggests that consumers are looking to the future and considering the long-term implications to their current purchasing actions. It means that consumers believe the economic recession is here to stay, at least for a while. Consumers expect spending levels to remain at these reduced levels indefinitely, and they are making their decisions accordingly. A study that questioned consumers regarding their top reasons for buying a product produced the following results: the top three reasons for buying a product are
1) it is durable and will last for a long time;
2) the product will make the consumer's life easier; and
3) it is something the consumer has always wanted to have.
In another study by a marketing research services company, questions deconstructed what purchases and experiences people miss the most since the economic downturn. The questions posed elicited four main responses:
1) 24% of respondents said they miss dining out in restaurants (including fast food restaurants);
2) 15% said they miss traveling and taking vacations;
3) 14% said they miss buying apparel (clothes and shoes) that they used to purchase; and
4) 10% said they miss the ability to buy something on a whim, and the freedom to buy whatever they want without having to worry about the future. Sentiments like these will likely lead to an increasing desire for these more luxury items and behaviors, and eventually will bring forth increased spending. It is uncertain when this increased spending will begin, but it is clear that it will happen eventually.
Market research services have pressed consumers for more information regarding their opinions of luxury goods. We've found that after consumers made attempts to forgo luxury items, they realized that it is not too difficult to go without these goods; many consumers say now that their current budgets reflect the fact that luxury items seem unnecessary to them now. Out of people who declared that they are on a permanently stricter budget with respect to luxury goods, 42% of them said the reason is because they no longer feel a need to have these luxury items.
In fact, the definition of luxury seems to have changed. In one market research services study, consumers declared that small splurges are now luxuries to them: they feel guilt over eating out (even if it's inexpensive) or buying an item at full price. In the past, luxury items were more extravagant: expensive cars, high-tech electronics, and fancy clothes. Consumers indicate that they, in fact, do not want to be associated with these big-ticket displays of wealth. The recession has brought about a fundamental shift in the way people view happiness. Consumers now say that the things they want most in life are not material, but emotional. People want to be happy and spend time with family and friends. One survey reveals that the top indicators of success (according to the consumers surveyed) are 1) being able to have dinner with family often; and 2) being able to exercise every day.
From these survey results and from the current state of the economy, it is clear that the current American consumer is very different now than he or she was several years ago. As the definition of luxury changes, producers must adapt their products and marketing strategies to fit the current spending conditions. In the next few months and years we will experience changes (some lasting, some temporary) in the market and economy. As these changes evolve, market research will be crucial to determining successful strategies for producers.
Gareth Schweitzer is President of The Omnibus Company. The Omnibus Company, a division of Kelton Research, provides fast and accurate Omnibus surveys, Omnibus studies, and strategic consumer insights to public relations and marketing professionals looking for newsworthy, actionable data. http://www.omnibus.com