Changing Minds

16 11 2008

Last week there was one of the many “Britain in Recession” features on the TV news and the reporter explained how sales of the Mini were down a whopping 40%, ouch!

 

Now in such a short space of time 40% of consumers haven’t lost their spending power, but what has and is happening is that consumers are thinking differently. Yes you can simply call this a reduction in consumer confidence, but I believe that in the current climate it goes deeper, and we may be about to see a significant shift in consumer attitudes to spending.

 

The media is already promoting the virtues of thrift and it is even starting to become fashionable to not consume. Sharing, swapping, bargain hunting, growing your own, making your own, cooking your own and making-do are becoming increasingly popular with consumers.

 

This will have significant implications because over the last decade more people than ever have enjoyed a good standard of living, which they have been encouraged to enhance by having easy access to credit.

 

This shift to thrift potentially exacerbate the recession, because much of our economic boom was based on people going shopping, be it for houses, cars, fitted kitchens, flat screen TVs etc. All of which helped keep money moving which fuelled economic growth. And importantly as there was “feel good” in the economy people weren’t replacing things because they needed to, instead people were upgrading to “improve” their quality of life.

 

In one respect if people now realise that you don’t need to buy new things to enhance your life, and that the simple pleasures of life such as spending time with your family is far more rewarding than lusting over a new 42” plasma TV, then the recession will have a good and lasting benefit for everyone.

 

However, this will come at a huge cost for our economy, if consumer spending becomes focused on replacing items as distress purchases, as opposed to “indulgence shopping” then retail sales will haemorrhage, and even the best marketing strategies will struggle to counter this shift in mindset.

 

It’s early days in this current recession and you would have to be very brave to predict the outcome.

 

Deciding what to do to protect your business is essential, but this may well involve a radical rethink as to how you operate, the product attributes you focus on when marketing and even the product itself.

 

Essentially, you may well have to find new ways to market your products and services to a customer base that is no longer in the mood to go shopping.

 

 

 

 

 

 

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