New frugality is here to stay
New frugality is here to stay
After two consecutive years of declining per capita consumption, a new frugality has become the dominant mind-set among consumers in the United States - and probably in other wealthy countries as well - according to a recent article by consultancy Booz & Company.
Frugal behaviours, such as reducing or deferring consumption, trading down to lower price points, purchasing private label brands, and shopping at discount outlets, are hardening into habits.
Booz & Company found that although all consumers are more frugal and value-driven today, there is a significant degree of variation in their definitions of value. These variations reflect different approaches to spending categories, price sensitivity, brand loyalty, methods for researching products, and shopping preferences. The old consumer segments, based on demographic factors such as age and ethnic background, no longer seem as apt in distinguishing consumer behaviour. It identifies six statistically significant consumer segments.
Companies that rely on pre-recession strategies and tactics will find themselves struggling against strong headwinds. Given the fundamental shifts in consumer behaviour, consumer marketers should be changing their product assortments, pricing strategies, advertising, and promotions to focus on value.
Via Marketing Daily
Thursday, 25 March 2010 09:02