Will consumers return to their heady spending habits of the pre-recession era? The quick answer is no...but it's not that simple. We told you months ago that Americans would continue to pinch pennies long past the recovery. They will remain frugal but not deprived. There is a difference. In this post I'll share the data and tips to help keep you attractive to the consumer in this new market.
Two reports out this week should be required reading for any business that wants to stay in business over the long term. Ogilvy Mather of Chicago and Booz and Company have released some interesting data...we'll summarize here and you can check out the longer reports for full info.
The Ogilvy Report gave us a glimpse of the collective guilt they now feel:
- 78% said the recession changed their spending habits...for the better.
- While only 17% admitted to over spending. "Hey Mom, it wasn't me!".
- But again, 84% said they needed to "clean up" their spending act.
The Booz Report asked if consumers would RETURN to their spending habits:
- Less than 20% said they would go back to eating out...
- 18% will go back to buying clothing like they did pre-recession
- 17% will return to buying electronics
- 13% will continue buying for home improvement.
Those numbers would indicate lots of folks...won't.
What has changed in buying habits might help you position your company. Here is a short list:
- 44% of the respondents have switched to less expensive food brands;
- 40% to less expensive household products;
- 34% to less expensive health and beauty products;
- 58% say they have deferred buying larger purchases like home furniture;
- 65% said they would shop at a different store for price EVEN if that store was not as convenient;
- 55% said the best price was more important than the best brand.
There is loads of information for you here if you THINK beyond the numbers. Here are seven things we think you need to do...NOW to retain your market share. It's that important:
- Trust - You need to build it and stay on message. The consumer needs to know they can trust your product or service.
- Value - The other word you need to incorporate in your marketing message. We told you this months and months ago...done anything yet?
- Reward for Savings - Tell your customer they deserve to make the buy. They have saved for "it" now they need that reward.
- Worth the Indulgence - Show how, even high ticket items, actually save the consumer money in the long run.
- Can Do - "America has been through so much, and we've been there all along. Together we can do...." Join in the message of hope.
- YOU are in Control - Make sure you recognize that the consumer is in control...of nearly everything. From customer service to the buying decision...it's out of your hands. Treat your customer well...very well.
- Focus on THEM - Center your message around your understanding of the consumer not from the message of what is good for the company.
Remember frugal is different than deprived.. Oh...a couple more interesting stats:
93% of the respondents said they would rather have a smaller home with no mortgage than a big house with a mortgage. And, 75% said they would rather have a secure job without the benefit of regular raises than have a less secure job with the promise of annual raises.
Think things have changed?