The recession has been a difficult time for millions of households which inevitably caused a profound shift in the behaviour of consumers. There has been a lot of commentary about the recession and associated problems, but very little on how things will change when it is all over.
In response to this we’ve highlighted five key ways in which consumer life has changed due to the economic collapse.
1. Generation Y will focus on work-life balance not the work-only lifestyle of the Baby-Boomers: After seeing their parents work long hours for many years and then watching it get destroyed in the financial crisis, Generation Y is reluctant to allow work to take over their lives.
2. Functionality over Frivolity: Spending on extravagant goods is no more, and there is a shift to more functional spending. For example PWC’s report on the New Consumer Behaviour Paradigm, emphasises ‘Practical Pleasures’ such as home alternatives to pricey spa and salon treatments. Rather than cutting back, the focus is getting better value for their money.
3. New Entrepreneurialism: With many losing their jobs and fewer career opportunities, more will develop new and creative opportunities for themselves. Increased technological capabilities and tough repercussions in economics will encourage people shape their own future.
4. Search Assisted Retail: Pre-recession shopping was heavily focused on impulse buying, but with the growth of smart phones and desire for getting more value from goods, the internet and retail will go hand in hand. The shopping experience will keep shoppers on their feet but there will always be online comparisons made when purchasing.
5. Dialogue Between Companies and Customers: With complaints soaring during the recession and the growth of brands on social media increasing, consumers have a platform and no fear for speaking up against poor service and bad products. It is vital that companies acknowledge a greater voice for the customer and do not create their own bad PR.
With the recession producing a necessary shift in the structure of the economy, consumer changes are likely to be for the longer, rather than short term.
Paul Barnes
Media Analyst
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