To say the global recession was a wake-up call for the most consumers would be quite an understatement. It is just one of many events that have weakened people’s sense of security in the past decade along with political instability, terrorism and environmental issues such as global warming where already significant even before financial markets collapsed. As a result, there has been a mood of mistrust and anxiety that developed among many people around the world, which has produced a reexamination of priorities and values.
A recent study from Ogilvy & Mather in the U.S. identified new consumer priorities with quality of life and peace of mind at the top – and a focus on living life in a more sustainable way from both an environmental and financial point of view.
Marketers to respond to shift in consumer behavior
A paradigm shift is required to deal with a new, more conscious consumer and to design strategies that will pertain to such a shift in behavior and thinking. People are no longer finding indulging in excessive consumption as consumers are buying fewer products, fewer brands, and being more careful in their choices. In general, people are relying less on brands for fulfillment or status and are now considering other values and priorities into their choices.
Some experts think that when the recession is over, consumers will return to their spendthrift ways. However, this time that behavior may not hold true. Predictions and surveys abound that the post-recession consumer will be different. Although he/she may have been forced by circumstances to reassess their spending habits, many consumers have found that spending prudently equates to good value and more for the money.
Data from a variety of sources support this view. A recently released survey by the Pew Research Center in the United States reported that 71 percent of Americans said they have switched to less expensive brands as a result of the recession. Also in the United States, a study by Deloitte found that 84 percent of shoppers were examining their grocery purchases, looking for ways to save money. Seventy-nine percent said that they were “smarter” shoppers than they were two years earlier, and nearly the same proportion (75 percent) said that the need to reduce spending had made them understand which brands were really important to them. A Sanford C. Bernstein survey conducted in December 2009 found that half of consumers had not only traded down to less expensive products but found them to be “as good or better than” the costlier brands they replaced.
What does this signify for the new approaches to marketing?
Uncertainty equals opportunity. This is a time of great opportunity for businesses if they take the long view – especially their marketing activities. While consumer priorities have changed, the basic challenge for advertisers is the same – to deliver a pertinent message in creative ways. This can be accomplished by utilizing new approaches and making their communications relevant to the current concerns of the “new” consumers, who are now selecting brands for different purposes compared to pre-recessionary times. Today, brands need to create strategies to address consumer transformations. They should position themselves against contemporary consumer needs, as well as against their competing brands. The approaches will differ according to the product category and the market segment within that category, but a few highly successful global brands are already showing the way. Marketers should take notice from these examples.
A premium brand that is thriving in the new age of consumerism is Nespresso. The company has succeeded in defining itself as a “new luxury brand”. Even during a period of relative modesty in spending, people are not willing to live without a few luxuries. Nespresso has tapped into people’s desire to indulge themselves by offering them the same high-quality drink brewed at home. Plenty of marketing spending was accomplished a few years back to support the premium positioning of the brand. To demonstrate the attraction of Nespresso coffee, its ad agency created stories in which the actor George Clooney goes unrecognized and unnoticed in Nespresso stores. Clearly, the message that was conveyed was that the coffee is what is important to the clientele, rather than the endorsement of a celebrity.
In the personal care category, Unilever’s Dove brand has been taking aim at traditional standards of beauty, by means of the “Campaign for Real Beauty”, as well as viral videos such as “Onslaught”. By having focused on this creative direction, Dove has redirected the debate on beauty and scored a unique category for itself.
Another example of a brand that has benefited on people’s need to seek new and less costly ways to achieve satisfaction is McDonald’s. The recent campaign in France, called, “Come as You Are”, is based on the idea that there are not enough places where we can go to truly relax and be ourselves. This campaign, which generated a great deal of attention, showed the different personalities of McDonald’s customers. The message: “You not only get good food at a reasonable price, but you can eat what you like, stay as long as you wish, and simply be yourself.”
The conscious post-recession consumer and new marketing tactics
Conscious and mindful consumption does not always translate to purchasing less. It means that consumers will reconsider and focus their spending money on the most psychologically rewarding purchases. During the recession, such purchases will almost certainly offer the benefit of security, whereas in post-recession, they’re more likely to be focused on products that bring vitality and sensation to life, offer opportunities for self-expression and personal development and are environmentally friendly.
How companies reshape their marketing strategy going forward will depend a lot on who their customers are. However, what all consumers will have in common is a strong focus on price. Another suggestion is to be visible when customers are ready to purchase what you offer both offline and online. Regardless of gender and across almost every income level, one thing is clear, the recession has shaken the status quo for consumers and it seems as if the trend will be irreversible.
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