Recessions can cause radical and disruptive changes in consumer behavior. The OTO Research report confirms that during this recession 80% of consumers are going to change their consumption habits. 89% of consumers will systematically check online what and where the best products are, and what is their value for money. Consumers are getting smart in the way they optimize their spending. During a recession, your brand’s role is to build trust and justify value for money.
I have identified four major consumer trends that will shape consumer spending and behavior over the next 24 months and beyond.
1. Cash withdrawal
With markets tumbling, property prices falling, and job security a distant memory, consumers are in a save-money mindset. Consumers are making full use of the Internet to save money. For example, visitors to online coupon sites increased 42% year-over-year, while time spent on these sites also increased 28% year-over-year. In another example of a cash crunch, consumers get a cheaper caffeine fix at home instead of more expensive coffee shops. Tesco in the UK has seen sales of coffee machines increase by 76 per cent and sales of ground coffee by 13 per cent compared to last year. Sales of thermal mugs have also increased by 78 percent.
2. Selling
Consumers, empowered by the Internet and cash-strapped, are embracing the idea of earning money rather than simply spending or saving it. As Trend Watching states in its latest report, “If saving is the new expense, then making money from the sale of personal property, property, and creations dwarfs saving.” Established online platforms like eBay are serving this new trend well, however there are great examples of this selling trend (my personal favorites include):
Parkatmyhouse.com – Connects those who have parking spaces for rent with those who need them. Car owners can pre-reserve a parking spot every day, but they can also make one-time reservations for a soccer game or a day of shopping in the city.
Giftcardrescue – Service that allows users to exchange their unwanted gift cards. Consumers create an account and provide the details of the card they have and GiftCardRescue will indicate the redemption value they are willing to pay.
Ether.com Phone Advice: By signing up for a free Ether number (which forwards to any regular phone number), consumers with specific expertise, from holistic life coaches to PowerPoint assistants, can charge their clients for hour, minute or per call.
The government is also taking advantage of the Sellsuming trend: the 1920 Assembly Bill (also called the Surplus Solar Energy Bill) in California, which will allow solar producing consumers to have their utility pay for any excess electricity they generate in a year. base. Michigan, Minnesota and Rhode Island are considering similar legislation.
3. Escapism
Consumers are spending money on things to take their mind off our economic headaches, and the entertainment industry should be elated. Movie Theater Attendance Up 13% Year-over-Year; Fast & Furious broke the record for the most lucrative opening weekend for a film released in April.
Brands that embrace and invite a positive proposition (embracing this need for escapism) will do well during these challenging times. Philip Graves, author of the Consumer Behavior Blog, has a fascinating article on the psychology of the consumer mind during a recession and the need for many people to restore their emotional balance through what they consume.
4. Word of Experience
Consumers are sharing and talking about their experiences with brands, products, and services. OTO research confirms that 54% of consumers say their main source of information when choosing a brand is consumer-generated content about the product and the brand experience. Even for the mythical iPhone, PleaseFixtheiPhone.com prompted users to list product flaws and asked Steve Jobs to fix them. Over 250,000 votes and 1,600 posts in less than a week! Monitoring and understanding what consumers are saying online about your brand is no longer an innovation but a necessity.