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.
Implementing measures from an environmental standpoint makes more sense than ever for companies. Costs can be cut in many cases. Adopting certain measures can help companies make their product offerings more price-competitive and bolster their bottom lines in the process. In addition, they'll be more attractive to consumers because they'll have a great story to tell—one that increasingly resonates with consumers.
Just a few ideas consumer-product companies might want to consider:
- Manufacturing products from renewable or recycled materials as much as possible.
- Using recycled paperboard and plastics or biodegradable materials to package and ship consumer products; using biodegradable inks.
- Doing away with extraneous packaging, which saves money and cuts down on waste.
- Concentrating products by making them more efficacious. Less packaging is required, cutting down on pack sizes and weight, and making them more energy-efficient to ship.
- Conversely, offering more value-priced bulk products on basic commodities; possibly shrink-wrapping smaller containers that are reusable to those bulk-packaged products).
- Offering refills to consumers so that they can reuse containers—an old idea whose time has come again.
- Offering consumers suggestions on how to repurpose product packaging. Companies might also do it themselves. TerraCycle, based in Trenton, NJ, began by commercializing liquid plant food made from biological waste in reused soda bottles, which the company got from school recycling programs after making donations for the bottles.
- Supporting worthwhile environmental causes. Food manufacturers and retailers that are enjoying growth with natural and organic products might support family farms and organic growers' associations as Stonyfield Farm of Londonderry, NH, and Annie's of Napa, Calif., do. Or donating a percentage of profits to American Forests in Washington, DC; for each dollar donated, the organization plants a tree.
Some consumer-product companies are already implementing many of those measures, which saves precious natural resources and dramatically cuts down on materials that have to be recycled or that add substantially to our landfills, while giving consumers more value for their dollar.
Illustrating consumer values like those affords marketers great opportunities. Company websites, product brochures, media outlets, and packaging can link brands to the emerging values in the marketplace. That resonates with consumers.
Selling new brand value propositions is more important than trying to advertise and sell products as usual, especially now when the economy is making it hard to do anything as usual. Advertising that continues to push new and improved products, tries to make favorable comparisons with competitive products, or uses price as leading value indicators is increasingly falling on deaf ears.
However, brands and products that are marketed in an authentic, back-to-basics, eco-conscious manner enable marketers to respond to emerging culturally driven values in a meaningful, relevant manner. Companies can begin to reposition their brands to reflect the values of the communities in which they are doing business.
By doing so, they can offer greater perceived value to consumers than their competitors do. Competitors will likely respond and follow suit, but there is much to be said for being the first in a category to own value mindshare among consumers, isn't there?
Companies that stand for core values and work toward specific goals without "greenwashing" will stand to profit. Owners, managers, employees, shareholders, suppliers, and partners feel good about companies that have a realistic sense of purpose—and commitment.
The payoff? Consumers are increasingly attuned to supporting the brands that are perceived as being honest, socially responsible, transparent, and environmentally conscious, because that's where their values are increasingly headed. The companies that deliver those values will survive and thrive—no matter how challenging the economy and the business environment are.
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