There’s an interesting article in the April 27 issue of Time Magazine about how the current worldwide economic woes are effecting Americans. The report, which is a combination of essays and survey statistics of U.S. spending habits and attitudes toward the economy, is not, however, just a, “woe is us,” statement of how the recession is causing a collective tightening of our purse strings. The piece seems to indicate the recession may just change the way we spend for years to come — a cultural shift if you will — that will prevail beyond the current world money problems.
Should this be the case, and I think it might be, then marketers had better take note.
Take into consideration the following citations from the report:
- “Talk to people not just about how they feel about how they’re living now, and you hear more resolve than regret.”
- “Even when prosperity returns, 61 percent predict, they’ll continue to spend less than they did before.”
And from the introductory prose’s conclusion:
- “So we pass the time by ending our gardens and patching our safety nets and debating whether, years from now, this season will be remembered for what we last, or all that we found.”
What this piece, and a lot of the accompanying statistics, might indicate is that our society is waking up from the self-indulgent bender of the last 50 years and shifting to a more sensible way of living. What that might mean to marketers is that premium is no longer chic. To put it more bluntly, why buy Nike when Wilson will do? Spending that much on a Volvo seems too indulgent. How about we just get a Honda Civic? An $80 bottle of wine? Nah. Beringer White Zinfandel will work fine.
This potential trend certainly hits pretty close to home for those of us in Kentucky working around the spirits business, which has seen declines in many premium categories, though several are up. For the better part of the last 20 years or so, spirits brands have trumped one another with premium brands. They’ve done it so much that, if you can believe it, there are premium spirits, super premium spirits and even ultra premium spirits. And it’s not just my home category of bourbon, but other whiskeys, vodkas, gins, rums and more.
Premium brands extend beyond the spirits category, though. There are premium dog foods, coffees, cleaning supplies, bathroom tissues, soups, soaps, clothing, cars and furniture. You pay a little more, you get a better product or experience (allegedly).
Most categories of anything are taking a hit right now thanks to the economy, so it’s hard to tell if the intimations in the Time article are indicative of a trend to be. BMW and Mercedes are both reporting double-digit losses over the same months last year. The Time piece shows 56 percent of Americans are dining out less at non-fast-food restaurants (also consider an upgrade or premium). More people are shopping at discount stores, using coupons and buying in bulk than in previous years.
All of that is expected with our country’s financial woes the way they are. But will this time of economic uncertainty mean we will re-learn what it means to spend? If so, what does this mean for brands that are consider a “step-up” experience? And, selfishly, what does it mean for their marketers?
Please answer those questions and share your thoughts in the comments. Let us now begin to decipher if our overall spending habits are changing and if so, how. And how will brands effected by that change adjust to survive and thrive in what could be a new world order?
What say you? The comments are yours.
Related articles by Zemanta & Jason Falls
- Growth Strategies For A Tough Economy (nick-rice.com)
- What Are Consumers Drinking & Where Are They Toasting (intoxicologist.wordpress.com)
- Immaterialism (murketing.com)
- Recession Changing Consumer Spending and Saving Habits (shoppingblog.com)
- Economix: Is It a Luxury, or a Necessity? (economix.blogs.nytimes.com)
- A glut at fault (economist.com)