CMO Club Poll: New Frugality Is Fleeting

Posted by: David Kiley on July 23, 2009

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A poll of chief marketing officers shows a plurality of them believe that the U.S. consumer has been permanently changed by the Recession in terms of buying habits and brand psyche. But a surprising number believe that the so-called “new frugality” is fleeting, and that consumers will be back to their old habits after 2010.

The BusinessWeek Brand New Day/CMO Club weekly poll asked the club’s membership: “Do you think that the US Consumer is really resetting his or her consuming habits for good, or will current cutbacks evaporate when the economy gets going again?

90 CMOs responded:
41.2% Yes
34.4% No – Back to old behavior after 2010
22.2% No – Back to old behavior in 2010
2.2% No – Back to old behavior in 2009

A few Quotes from CMOs in the club who responded:

“All our research supports new consumer approaches to spending to remain for at least the next 4-6 years. They will not jump back into big debt.”

“Jobs drive spending. When the jobs come back, consumer income comes back,then their spending comes back.”

“We have moved from messaging and company wide consumer delivery on quality regardless of cost to value for money and its working”.

Reader Comments

Cal Walters

July 24, 2009 11:59 AM

We did a study using pack designs looking into how consumers feel about the recession and their purchasing, overall the trend towards premiumization in design was hitting them the wrong way for their trusted staple brands - what they wanted was assurance that the brands they bought were still worth the premiums they were already paying. But further changes were distracting. They still expect brands to stay relevant, but being consistent to reinforce what the brands stood for stood out - think about those that have made big changes, trying to look more premium or niche differentiated and how they have performed. While we saw consumers shifting in the short run, it was hard for them to project their long run patterns and behaviors - who really knows how they will act when money is back in their pockets. While what we have experienced is certainly really destructive to those who have lost jobs and homes, we as a whole have not had a fundamental shock to our system like the 1930's. Millenials have not fundamentally changed their expectations that almost everything digital can be had for free. Boomers will start back as soon as they feel their portfolios are back on track to growth. So our belief is that as soon as we feel some money in our pockets we will once again be attracted to the 'shiny objects' of consumption.

frank Loweser

July 24, 2009 1:40 PM

I think it is fleeting. Already I see friends of mine who cut way back returning t some of their spending habits, especially if they think their jobs are going to be okay...if they survived a purge.
I do think $1,000 handbags for people making $125k and under is over with. But people are not flocking away from BMW and Lexus to Ford and Chrysler without a fight.

I think a lot of editing is going on, but people who bought luxe are still going to buy luxe, perhaps not in s many categories.

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News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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