Monday, July 26, 2010

Report shows what to expect in consumer recovery

Much has been written about the past, present and future of the consumer economy — but a recent report with the ominous title of "A Darwinian Gale" paints a picture that is simultaneously sobering and encouraging. Marketers should pay attention.
The report is from The Futures Co., the result of the 2008 merger of a London-based research group called Henley Centre HeadlightVision and Yankelovich, a major consumer research firm based in the U.S.

The study concludes that a recovering consumer marketplace is coming. Even with recovery, however, uncertainty about economic risk will remain.

Looking back, the researchers defined the consumer economy as an era of indulgence. This was followed by the consumer recession. Now, the recovery economy is called the consequences era. The study looked at five consumer strategies in each of these economic cycles: ambition, sensibility, mindset, passion and orientation.

Ambition. In the indulgence era, consumers were about trading up. During the recession, the focus became economizing. In the consequences era, the key consumer ambition will be responsibility. Consumers will be inclined to spend, but they will be more mindful about choices and will need better reasons to buy. Consumers will look for products and services that enable them to not be wasteful.

Sensibility. Exuberance, whether rational or irrational, was the watchword for the indulgent consumer. Anxiety replaced exuberance in the recession. In the recovery, consumer vigilance will rule. Part of the sensibility is heightened standards for corporate ethics and responsibility. Plus, marketers need to focus on giving consumers real information to allay their fears. Protection against risk can trump price, according to the report.

Mindset. The consumer has moved from bullish to sober and now to resourceful. The recession has created the belief that we cannot assume that things will always work out. Resourcefulness will be viewed through two lenses. Externally, the impact on the environment, energy and community is important in purchase decisions. Internally, consumers see their resources as time, energy, attention, health and emotions.

Companies that develop brands with tangible proof of thoughtful use of resources will build deeper consumer loyalty.

Passion. The cycle of consumer passion through the three economic cycles has changed from accumulation to frugality to prioritization. A new consideration of limits, not necessarily imposed by the economy, is leading consumers to buy only what matters most. Expect more rational consumer decision-making.

Orientation. Self-expression was the hallmark of the indulgence era. Recession changed that orientation to self-preservation. Now, the recovery consumer will use networks to help avoid consequences.

Networks will help consumers avoid risks — and more. Engagement and connection will provide consumers with a wide variety of sources to help guide their consumer purchases.

So, what's the message for marketers? Companies must seek out new and different ways to connect with consumers in the new world of two-way communication.

David Bohan founded Bohan Advertising|Marketing, a Nashville agency with clients in travel, hospitality, health care and consumer products, in 1990. He has worked in marketing and advertising since earning a degree at the University of Tennessee-Knoxville in 1970.

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