Analysis & Opinion

Consumer Pulse: Frugal Bells, Frugal Bells, Frugal All the Way!

December 9, 2008 MullenLowe

Economic uncertainty is rife this holiday, and it’s causing psychological havoc among consumers. At a time when consumers are thinking about creating an “idealized holiday,” they’re being forced to contemplate the realities of a “dealized holiday.” As a result, most Americans are trying to reconcile their quest for the perfect gift with an apprehensive penny-pinching mindset — and it’s causing them to make significant behavioral changes in what and when they buy:

Deal or No Deal:

A robust Black Friday indicated that consumers are still willing to spend and to go out of their way to shop, but only if the deal is right. Driven by the promise of huge discounts, about 56% of shoppers had visited at least one store by 9 a.m. on Black Friday. And with the lure of unbeatable online discounts, coupons and shipping incentives, Cyber Monday spending was up 15%.

Wait and See — How Low Can It Go:

The online chatter is about holding out — scoping out the best prices — and waiting for the deals to go down further. Consumers expect the deals to get increasingly richer as the holidays draw closer, so they’re holding back a portion of their holiday budgets to take advantage of last-minute deals.

Practical Means Justifiably Smart:

While the deal may close the sale, practicality will prevail when it comes to choosing what gifts to buy. Compared to last year, clothing, books, DVDs and electronics will be “more in” as gifts with a functional purpose, while jewelry and toys will be “more out.”

Scaling Back on Spreading the Cheer:

The troubled economy is recalibrating the “wants” and “needs” for mass affluent consumer. They’re reassessing how much is enough? It’ll likely translate into economization even among big spenders — with fewer stocking stuffers and cutbacks on secondary gifts.


  • The idea of the “family gift” is highly motivating, as consumers will be more willing to justify a big-ticket item if it can be enjoyed together (e.g., Wii, fl at-screen TV, even a familiy vacation).
  • Be straightforward, be simple — give consumers real deals, with real savings, avoid tricks and don’t be afraid to say “the best price of the season” — to convince consumers that they can eliminate the hassle of last-minute shopping.
  • Small is the new big, and gifts that might have felt insubstantial in the past have become very appealing this year, especially when packaged creatively (e.g., in elegant oversized boxes) — and with the little added extras things that give big (e.g., movie gift card packaged with microwave popcorn is a special “night-in”).
  • Guarantee is a big word this holiday, and promises that take the risk out of purchase decisions, such as the exchange guarantees, satisfaction guarantees and even warranties, are all highly motivating to consumers.