10 things consumers are doing in a recession

We all like top 10 lists...here is a good one from Influx insights

1. Food stays on the list, clothes and furniture don't
2. People are trading down to private label
3. People trading down the protein ladder from steak to ground beef, others moving from beef to chicken and others moving from protein to carbs
4. The home is the focal point- cheap take out pizza and movies is the new form of entertainment- people aren't going out and they are not cutting back on their entertainment tech. Sales of the more affordable flat screen are holding up
5. Vegetable gardens are booming
6. People are trying to stay healthy on their own with out resorting to experts- this means increased sales of vitamins and OTC medicines.
7. They need relief for these troubled times so they are buying more sleep aids, pain relievers and antacids
8. Home repair is on the increase
9. People are not buying new cars, they are repairing and maintaining the ones they have
10. Parents are not transitioning their kids between diapers and underwear with pull ups, instead they are going straight to underwear

Survivalists stock up ready for the worst

Even people who normally pass for functioning and intelligent human beings believe that the world may be coming to an end. The state of anxiety that these people live in must be at time debilitating. And, given the world has existed for how many million years? It is sure to continue on as it evolves and reincarnates. Some things are sure as eggs, the sun will come up each day.

Survivalists stock up ready for the worst.

More on survivalists here

Less money, more sweets?

I never knew this, but apparently confectionery companies do great business in economic downturns. For example:

"Cadbury reported a 7% revenue growth in 2008, Hershey’s profits jumped by 8.5% in the fourth quarter of last year, and Nestle saw profits grow by 10.9% during the same period." PSFK

I wonder what the reason is? Nostalgia? Affordable pleasure? Desire for a sugar rush?

Any ideas?

More on the article here

luxury / consumption

There has been some much talk about the economic downturn and how it is impacting the consumer where it counts ... spending in retail. Well, undeniably, there has been an adjustment.

Now more might think before they buy (or not buy as the case may be) and perhaps we are trading down to quality budget buys where no real value exists in the premium end of the market. This raises questions, lots of them: What is the power of the brand, how is value determined by consumers, do premium brands deliver to expectations in this new economic world order, do we all really want to conserve?

Undoubtedly, some segments of the population do want to conserve (and thank goodness for them) yet aspiration is an important aspect of who we are, it is a form or dreaming, desire, hope and sets us in motion to achieve a goal. Surely in a developed world where most of us of working age aren't unemployed (less than 5%?) and have good incomes. lowered cost of living (reduced mortgage repayments, subsideised cost of entry to the property market, reduction in grocery bills, sales, sales and more sales) well things just aren't that bad. How can we make the most of this new age of frugality?

Check out the SMH article on how luxury brands are surviving or even thriving in the economic downturn...luxury in tough times

Behaviour in tough times




I love that as researchers we can sit back and see how people are reacting to the current economic climate. Here are some clues from a recent SMH article.






TRADING UP ON DOMESTIC PRODUCTS

"They are trading up from less expensive products and what they perceive to be poorer performing brands. We are seeing similar patterns in most developed markets - people are sticking to the brands they know and trust, even if they are a little dearer. They don't want to wash things twice. They don't want waste." Vice-president, marketing, David McNeil

COCOONING

Foxtel says the economic climate has created a trend for more people cocooning at home, which is generating subscription growth for the pay TV provider. For the December 2008 half, Foxtel's subscriptions were up 7 per cent. Pay-TV take-up is increasing this year, Foxtel says.

DOMESTIC TRAVEL
General manager of Stayz, Kirsty Shaw, who has about 20,000 holiday rental listings, says. "Online traffic is up 55 per cent for February, year-on-year. Nights inquired for over the Easter period is up 46 per cent. There's been a general increase in people holidaying domestically rather than travelling overseas."

VALUE PROPOSITIONS WORKING
"While competitors are taking a slash-and-burn mentality with their communications, we have been focused and consistent on how Hyundai delivers quality and value."

Trend towards short trips and late bookings


Even though the tourism industry was hoping that domestic tourism would increase due to EGC, it seems both international and domestic tourism have suffered a blow.

What has increased is a trend towards short trips and late bookings which has been confirmed by online travel booking sites.

-Australians took fewer trips to other parts of the country for their holidays in the last three months of the year, with latest figures showing a sharper drop than expected.

-The National Visitor Survey figures will dash any hopes that the tourism industry has that domestic visitation will make up for the sharp fall in the number of overseas visitors to Australia.

-Cash strapped Aussies are already reining in their international travel and tourism observers were hoping that domestic travel would pick up the slack. A spokesman for peak national body Tourism & Transport Forum said: "We had really been hoping these figures would be better but clearly Australians are staying at home more than we thought."

-One bright spark for the travel sector is the Easter holidays, with airlines and travel sites reporting that advance bookings are on par with, and in some cases higher than, last year's figures.Despite predictions Australians would resort to domestic travel in the current economic climate, short international trips are proving popular for the Easter break.

-The trend towards short trips and late bookings was confirmed by online travel booking sites.

-Travel.com.au general manager Lisa Ferrari said its bookings for Easter were up 25 per cent on the same time last year. The site had noticed a particular spike in bookings for Bali, but also New Zealand and Fiji. Ferrari attributed the growth in Easter bookings to a combination of factors, including the Government's stimulus package, lower interest rates and petrol prices, increased competition and travel products marketed specifically to the Australian market.

-Angie Bohlmann of lastminute.com.au said bookings in February had increased 24 per cent compared with the same time last year and Australians were booking trips both internationally and domestically for Easter, with Los Angeles, London and Bali among the top destinations. Wotif.com's general manager Megan Magill said bookings were on par with the same time last year.

Is the party over for Gen Y?


The financial crisis hit Sally Mikkelsen's world just before Christmas. Two friends lost their jobs, and the chit-chat among her social circle started to stray into new and unwelcome territory.
Phrases such as "compulsory annual leave", "minimal pay rises" and "delayed promotion" gave these twentysomething children of the economic boom a different perspective on flexible workplaces and work/life balance.

"We've always been treated well by employers," says Mikkelsen, 24, a consultant at professional services firm KPMG in Melbourne. "We've been able to do what we want."
Now, she says, she and her friends are holding on to their jobs and waiting to see what happens.
"It's good to give us a dose of reality, for us to realise we can't have everything we want."

Consumer confidence in India


The GEC meltdown has been widely reported in the media. The biggest barrier to recovery is consumer confidence. Obviusly we are seeing a major shift in attitudes, perceptions and beliefs about the future (especially in terms of our financial security). In India, there is a healthy and growing respect for a hope for a better future .. is this grounded in a new found middle class confidence and a desire to continue the steady upward climb in the social mobility stakes (keeping up with the Patels, perhaps?) and the explosion of affluence, is it because they are coming off a low base and have only hope to sustain them (thanks Maslow for that theory) or is it because of other reasons? .... Click here to see more

Health Magazines & recession

Isn’t it interesting that during these hard economic times the magazines that are blooming in sales are all centered around health:
  • Healthy Food Guide
  • Health Smart
  • Women’s Health
  • Men’s Health
  • Diabetic Living
 The heaviest hit are men’s magazines:
  • FHM
  • Ralph
  •  Alpha
  • Zoo
 It is a contrast to the increase in sales of comfort food.

"untouchables"

An american survey (conducted by BIGresearch - www.bigresearch.com) has discovered the items consumers are most likely to cut back on during the current economic climate and the 'most untouchable' categories.

Most Untouchable:
1. Internet
2. Mobile phone service
3. Cable television
4. Discount shopping for apparel
5. Hair cuts and colours
6. Eating at fast food restaurants
7. New pair of shoes

The Office Dishwasher

The office dishwasher is running twice a day to keep up with the dirty dishes

What does this mean?

Is it Frugality Nouveau 2009?

Or is it just that a couple of new team members are creating just that bit extra washing up

Personally, I have long done the maths on bought in lunches (220 working days a year x $10 = $2,220 spent on lunches alone)

And every $.60 spent from the pocket means $1.00 pre tax ($5,000 a year pre tax on lunches) 

So, given the new world order of uncertainty I am buying the raw materials and making my own (most days) and saving a lot of dosh

And I get more variety, the food I like and better control over the calorific content