A little over five years ago, the bankruptcy of Lehman Brothers signalled the beginning of the worst global financial crisis since the Great Depression. Since then, we’ve been monitoring how consumers have adapted to the ‘New Normal’ via our annual Mood of the World Report.
Every year at GfK Consumer Trends, we ask consumers in 25 countries about their perceptions of a range of concerns, to gain an insight into what’s on their minds and to formulate our view on what may be next. In 2013, 41% of global consumers rated ‘recession and unemployment’ as one of their top-three concerns and an equal proportion chose ‘inflation and high prices’. These two top-of-mind concerns are followed by ‘money enough to pay the bills’, painting a picture of how consumers’ top concerns are shaped by the fragile economic environment in many places.
In fact, globally, over half of respondents in our 2013 study said they experienced a negative economic event, such as job distress, over the past 12 months. Still, this constitutes an improvement from more than six in ten in 2009, pointing into a slightly more healthy economic position. Undoubtedly, there are vast differences across borders: in Spain’s troubled economy, for example, nearly four out of five consumers faced negative economic experiences, whilst less than one out of five did in Brazil.
Despite these signs of some much needed reinvigoration of the economic situation, we still do not observe this being fully translated in their consumption behaviours. Having grown weary of the on-going economic issues that are widely reported and which possibly also exert a direct impact on their lives, consumers still cling to the coping strategies which they have become accustomed to over the past years.
Restaurants, entertainment and buying lunch are but some of the categories in which our respondents have cut down more in 2013 than they did in 2009. When it comes to facing economic adversity, cutting down on non-essential consumption, looking for less expensive alternatives and postponing purchases in anticipation of special offers are some of the most universal strategies consumers adopt to better manage the pressure on their wallets. Hence, it is unsurprising that we are observing an increase in a range of these behaviours.
Consumers across the globe have developed a meticulous set of strategies that offers them the maximum perceived value for money and economic benefit. Several years’ worth of perfecting shopping strategies, re-learning behaviours and undergoing subtle change of the more malleable attitudinal traits are now reflected in consumers’ everyday tactics.
However, just as much as we have seen these changes occur in the first place, as the economy recovers, consumers are slowly but surely picking up spending again. For instance, we are beginning to see some positive medium-term confidence measures emerging in 19 out of the 25 countries in our study.
Then again, this process takes time as weary consumers only cautiously shed the defences they fashioned in response to the tough economic environment. Nevertheless, marketers may facilitate this process by providing subtle reassurances in their communications so as to assure consumers to have made the right choice and to ease any of the lingering discouragement from consuming what they want, rather than what they perceive they can in light of the economic environment.
In order to do this, we still need to carefully acknowledge consumers’ concept of value. By no means are they solely pursuing the cheapest possible alternative, but rather seeking offerings that tally with their intricate value-calculation. This calculation may fuse anything from quality and durability over utility and benefit to branding and perceptions of trust and security – price is still but one factor of this equation.