First there was the 2008 recession and the resulting wave of layoffs. That was followed by the slow recovery, which continues today. So it’s no wonder that for the last five years consumers have been concerned about such issues as job security, personal finances, and the health of the economy.
Consumers continue “tightening their belts,” according to the Boston Consulting Group’s 2013 Global Consumer Sentiment Survey of more than 35,000 people in 20 countries. Nearly half of the consumers surveyed in developed economies do not expect economic improvement in the next several years, and 46 percent said they plan to cut discretionary spending. Translation: Businesses shouldn’t expect a return to the free-spending days before the recession.
There is good news. Consumers, especially millennials, continue to place a premium on brands. And the majority of those questioned said buying still “makes them happy” and that they believe “spending is good for the economy and society.”
What has changed since the global recession: Ostentatious is out; value for money and quality are in. Consumers are moving toward brands that “convey social awareness, environmental stewardship, and a healthy lifestyle, such as natural and organic ingredients, rather than brands that are simply more expensive,” BCG reports.
How can companies get beyond the “lingering angst” among consumers? Luxury brands should avoid an “emphasis on conspicuous consumption” and highlight product performance and artisanship. Millennials are important. Brands need to hook them now so they stay loyal as they grow older and have more discretionary income and influence over household spending.