A new report examines shifting consumer habits in the economic downturn. The report, by WPP Store, Playbook 2: The Sky Did Not Fall, reveals that “Consumers have begun to spend, but they spend on items they deem to be truly important. Wallets no longer expand to accommodate wants. Rather, consumers are restricting their spending to fit their budgets.”
New purchasing mentality: Consumers have learned that sometimes the cheaper brand is good enough. Unless they are convinced that a product is tangibly or emotionally better, they will select the less expensive alternative – either branded or own label – and pocket the difference.
Expanded presence of online: The decline in the product range found in stores will be accompanied by the coming of age of online and mobile retailing as more consumers click for product research, broader selection and the purchase reassurance found in online customer communities sharing product reviews and evaluations.
Greater reliance on brand strength: Discount is thriving in this economy, which is no surprise. The most important determinant of success, however, is not the sector served but the strength of brand equity.
Accelerated growth of new media: The fast-fragmenting media world offers new opportunities – and dangers – for brand promotion. Mass merchant customer databases and direct access to consumers positions mass merchants to become influential media owners at the expense of traditional players.
I found the last point, Accelerated growth of new media to be the most interesting (and contradictory to the preceding point Greater reliance on brand strength.) In my experience in when brands participates in new media (think: Social Media) they must give up a certain amount of control surrounding their brand message, which leads to greater transparency.
The full report is available here Download Playbook 2 (pdf, 1.27mb)
For even more read, “Retailing In The Recession: Playbook #1 – Through The Looking Glass”