How economy has changed consumer behavior
When the economy started to slow down in the recession in early 2008, we saw changes in consumer behavior and habits. Studies show that mindsets have changed and today's consumers are very different from the consumers of a few years ago. Many market research services have started their own research and reports to get an idea of the new consumers we are dealing with today.
Where do most research services begin with consumer behavior analysis - what are the main drivers of purchasing decisions? Do people view their buying decisions with more thought on future consequences? What else do people buy? Less than? These and other issues can lead to effective research with significant results.
So far, various market research services have found that sustainability is a key driver in consumer purchasing decisions. This means that consumers look to the future and consider the long-term effects on their current buying behavior. This means that consumers accept that the economic recession will last at least for some time. The consumer expects the cost level to remain at this reduced level indefinitely and decides accordingly. A survey of consumers asking what their main reason for buying a product was found: The first three reasons to buy a product are:
Purchase information
1) durable and long lasting;
2) the product will make life easier for consumers; and
3) This is something that consumers have always wanted.
Another study by a market research firm deconstructed the purchases and experiences that people miss most after an economic downturn. There are four main answers to these questions:
1) 24% of respondents said they skipped dinner at restaurants (including fast food restaurants);
2) 15% say they miss travel and relaxation;
3) 14% said they miss buying the clothes (clothes and shoes) they usually buy; and
4) 10% say they lack the ability to buy something quickly and the freedom to buy what they want without worrying about the future. Such feelings lead to a growing desire for these more luxurious goods and behaviors, and ultimately to increased costs. It's uncertain when this cost increase will start, but it's clear that it will at some point.
Research services encourage consumers to learn more about what they think about luxury goods. We find that once consumers try to give up luxury items, they realize that it's not that hard to leave without it. Many consumers say that their current budget reflects the fact that luxury goods seem unnecessary to them today. Of those who said they had tighter budgets for luxury items, 42% said they no longer felt the need to own these luxury items.
Indeed, the definition of luxury seems to have changed. In a survey of market research services, consumers say that small quantities have become a luxury for them: they feel guilty about eating out (even if it's cheap) or buying things at full price. Luxury goods are more wasteful: expensive cars, high-tech electronics, and luxury clothes. Consumers say they don't really want to be associated with this display of extraordinary wealth. Fortunately, the recession has radically changed people's attitudes. Consumers today 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 study found that the best indicators of success (according to surveyed users) were 1) the ability to eat frequently with the family; and 2) the opportunity to exercise every day.
Study results and the current business climate show that consumers in the US today are very different from a few years ago. As the definition of luxury changes, manufacturers need to adapt their products and marketing strategies to current spending conditions. In the months and years to come, we will see changes (some permanent, some temporary) in markets and the economy. As these changes continue to evolve, market research will be critical in identifying successful strategies for manufacturers.
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