These are unprecedented times with the credit crunch, declining home equity, stock market volatility and downward spiraling 401(k)s. Consumers are feeling distraught, disillusioned, and emotionally drained. Consumer sentiment, as a predictor of behavioral intent, is near all time record lows. And in a recent national opinion poll three out of four consumers feel “that things are going badly” in the US. All this is having a profound effect on consumer behavior:
1. The consumer radius is shrinking
Consumers are reigning in their propensity to roam and travel afar. They’re staying close to their emotional comfort zone — near home and work — for their shopping, dining out, and entertainment needs.
2. Home is where the consumer “head and heart” is
Consumers are thinking more about a great night in and creating good times at home rather than a great night out. It’s time to resort to things of comfort, reconnect with friends and family, and regroup in the emotional headquarters of consumers’ lives — home.
3. Consumers will postpone big decisions but make “little feel good decisions”
Uncertainty is translating into indecisiveness and resulting in the postponement of big ticket items — from cars, home furnishings, and even vacations. But small everyday “feel good” purchases and treats are still permissible.
4. Consumers want brands they can “feel good about”
Consumers are more carefully evaluating purchasing decisions to get the best value — and the best possible experience for the money. However, while lower prices are appealing, heightened trust, quality and “feeling good about what I buy” is also important.
- Now is a critical time — consumers are revaluating their relationships with brands, especially with respect to what brands deliver and what they stand for.
- Consumers are tired of feeling downbeat. They want brands that make them feel good. Brands that celebrate home, family, authenticity, and pride are highly relevant.
- Brands that provide a source of goodness and comfort are more likely to be given “permission” to enter into the home.
- Brands that continue to invest in enhancing their core equities will emerge from the economic downturn with an elevated “feel good factor” and a competitive advantage.