Has the recession changed consumers?

P&G and Home Depot fret that recession has forever changed consumer spending patterns. Is their fear real or unfounded?

Yes and No, to either.

Anita and I had worked on a research which attempted to find answers to this very same question, and what we uncovered is a must-know for all marketers. Our study was restricted to three categories, namely, Apparel, Leisure travel and Entertainment/Eating out. The study was restricted to Bangalore and quizzed three sets of consumers; ones who have had a drop in their salary, ones who haven't, and ones who haven't but speculate a dip. The study focused on whether consumer spending behaviour had altered since recession.

Summing up, these were the findings. Consumers across the board have cut down on their purchase quantum. That is, if they ate out once a week, now its once in two weeks. If they travelled for leisure every six months, now they do so only once a year. The most interesting finding that should bring cheer to the likes of P&G and Home Depot or any other brand out there is that, consumers still haven't switched to a 'cheaper' brand to save money. That is, if one were used to wearing Levi Strauss denims, one still buys the brand, albeit in lesser quantities.

The study also found that consumers stayed true to those brands that they believed delivered value for the money spent. It didn't matter if it were a mass or a premium brand. Enhanced value delivery through price cuts and discounts were welcome. In fact consumers looked forward to the same.

The Adage article too paints a similar picture, at least when it comes to describing the consumer as having turned frugal. Its important to note, based on our study, that frugality is a not result of brand switching, instead of lessened consumption, in categories where it was possible for the consumer to do so.

The future of consumption has not been altered dramatically when it comes to brand landscapes. What's happened is, consumers have turned into beings who more careful with their money, and therefore are looking for better bang for the same buck. Brands that deliver, stay.


Great article. I thought breaking down consumers into three types was very insightful, “Ones who have had a drop in their salary, ones who haven't, and ones who haven't but speculate a dip.”

I agree that consumers have turned into beings who are more careful with their money and this has been reflected in my own research which is context and pictographically driven. See: http://beyondfocusgroups.blogspot.com.

Dale Paulson, Ph.D.

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