Consumer trends come and go. What else is new?
Plenty. We're living in an unprecedented era when several critical elements—consumers' rising debt, higher costs for basic necessities, low savings rates, shrinking assets, and a growing awareness of environmental issues—have gradually come together in a perfect storm.
Consumer spending used to account for two-thirds of all economic activity in the United States before 1990 and had steadily crept up to around 72% before the current economy brought excessive spending to a screeching halt. "The problem with the US is excessive consumption," Columbia University economist Joseph Stiglitz has said. It seems that, as with many other sectors in our economy, we are seeing a major correction there, too.
A substantial shift seems to have occurred in the consumer mind-set and is apparently more than a transient trend. As a result, consumer-product companies and their marketers have to understand what now motivates consumers to part with their hard-earned cash.
The following trends point to the shift in consumer values:
- Precycling: It's an expression coined by The Intelligence Group. Consumers are consciously choosing to purchase fewer products, to buy more in bulk, and then to repurpose as much as they can. Precycling cuts down on waste and recycling, which is good news for the environment and local landfills.
- Excess: It's the new dirty word in consumerese. The nation's economic challenges are highly personal. According to some estimates, US consumers are now shelling out 57 cents of every dollar for basic necessities—and that number is climbing. Translation: a huge decline in discretionary purchasing power and not much money for extras. Even more telling: There's not much inclination for a lot of extras, either.
- Reorientation: Consumers are consciously making lifestyle adjustments.. Even trendsetters are reorienting their lifestyles in an effort to eliminate excess and waste.
- Simplification: People are yearning to pare down and simplify their lives. Many consumers are becoming more selective about the products they purchase and doing more with less.
Those trends aren't new. They've been embraced by the environmentally conscious for decades. More recently, though, they've been catching fire with mainstream consumers. What used to be an on-and-off trend, or passing fad, is now more permanent.
The question, then, is this: How can consumer-product companies position their brands and products in response to consumers' emerging new values?
As consumers purchase fewer products, businesses need to start rethinking their strategies and recognize that it's about survival of the fittest. At a time when brand loyalties are plummeting, eco-conscious brands are giving consumers reasons to believe.