Getting the bounce back into the economy
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The post-recession consumer landscape
From previous recessions, it has become evident that consumer spending has improved at only a modest rate in the years following. This recession will be no different. Consumers will start spending again, of course, and the hope has to be that businesses will be able to grow off the back of this spending. Retail, the sector which has remained surprisingly resilient during the downturn, will be a lead indicator for signs of recovery. With the north of England and the West Midlands hit by the manufacturing downturn and seeing the lowest levels of consumer confidence, it will be London and the South East that will lead the way in terms of growth post-recession.
But across all regions and across all consumer segments, the rules of the game have changed and in some cases there is no going back. From a culture of consumption we’ve moved to one of thrift; a make do and mend mindset that has become fashionable in itself. It’s a mindset that has galvanized consumers across all geodemographic segments and developed a momentum that is likely to continue even as the upturn comes. This thriftiness and drive for value doesn’t always mean looking for the cheapest option. Instead, it’s about maximizing, using an exacting set of selection criteria to make the best value for money and most rational choice on everything from mobile phones to washing machines to shampoo.
Consumption when it happens will see a shift from conspicuous to conscious consumption. Maximising, showing our green credentials and being particular with our brand loyalties are all part of a new concerned and considered consumption. In this new world, brands will need to focus on price, loyalty and most of all, service.
The price/value equation consumers are tuned into will require brands to work harder than ever to offer flexible payment and seek to lock consumers in with all inclusive packages at great prices. Alongside this will be a greater focus on loyalty card schemes and offering customers tangible rewards. Finally, in the post-recession world, exceptional customer service will be the making or breaking of a brand, and personal recommendations driven by successful interaction with your business, will be a key element of any brand’s success.
Such drivers will also apply online. In particular, user-generated content (UGC) will increasingly shape the online landscape post-recession.
Free content and UGC chime well with consumers focused on value for money and service. Consumers, especially in the online world, are used to getting something for free. But those online retailers who get their free content right, will be best placed to pick up new customers once the recovery curve comes. What’s more, good UGC, in particular customer reviews and recommendations, also drives transactions and, as with the offline world, personal recommendations will be increasingly important and drive ever more sophisticated feedback mechanisms and content.
And when the upturn really comes and marketing spend increases once again, UGC will break out of online to feed into and feature in advertising across all channels.