Apr 27

Written by: IRI Blog
4/27/2009 9:05 AM

We released a report today detailing the specific ways in which modern American consumers or the "Downturn Generation" are altering their lifestyles to weather the recession. Consumers have developed recession-savvy strategies to save money by changing their shopping, diet, home and automobile maintenance, fashion, cleaning and healthcare routines. Most interesting is the fact that many shoppers intend to continue these habits well into the future, even while the economy improves.

Based on the data our recent report gathered, we've identified three emerging categories of shoppers, which are:

Optimists - Consumers who believe "things will get better during the next 12 months," are spending wisely, cutting back selectively and making sacrifices as a last resort.

Maintainers - Consumers who agree that, "the economy won't get worse, but it won't get better either," and are also spending wisely, but are more aggressive about making cutbacks.

Pessimists - Consumers who identify with the direst predictions, believing, "if you think times are hard now, next year will be worse," and are cutting back wherever possible and hunting tirelessly to find deals.

Each of these groups is weathering the recession in unique ways, but all three across the board have made obvious behavioral and attitudinal changes, such as:

• Giving up favorite brands, buying smaller quantities or stocking up on sale items
• Cooking from scratch vs. buying prepared meals
• Using more coupons and sharing and trading coupons with others
• Spending more time researching purchases online 
• Postponing entertainment and non-essential purchases
• Avoiding automobile maintenance 
• Postponing doctor visits, relying on Internet for medical advice and increasing over the counter medical treatments
• Cutting way back on clothing purchases
• Giving up lawn care and home cleaning services
• Collaborating with neighbors, friends and family to split memberships, such as Costco, and sharing bulk purchases to ensure low unit cost

This shift in shopping behaviors can both be a challenge and an opportunity for CPG manufacturers and retailers. Here are a few ways manufacturers and retailers can address the needs and demands of the "Downturn Generation" consumer:

• Recognize and assist with changing rituals: Shoppers will appreciate brands that help them achieve what they're looking for, such as bulk quantities at discounted prices.
• Realize shoppers will travel for a deal: With gas prices lower than last year, consumers will go the extra distance for a lower price.
• Focus on familiar products: Buyers aren't looking for what's new; they're looking for a good price and what they know.  
• Good Enough is Really Good Enough: Again, shoppers are really looking for only what they need. t New product innovations that slightly raise prices likely won't attract consumers during this economic time.  
• Increase online and social media presence: Consumers are influenced more and more by Web sites, blogs and social media when researching a product.

For other ideas, feel free to contact IRI. As always, we're happy to hear your thoughts and feedback here on our company blog.

The full report also includes our assessment of how the CPG industry can use these insights to boost their own businesses, provide what consumers need and invigorate their customers.   For more information, please visit: http://us.infores.com/Insights/Publications/IRIPointofView/tabid/197/ctl/Details/mid/923/ItemID/788/Default.aspx.

We're keeping a close eye on the "Downturn Generation" and will continue to share our insights, as always... stay tuned.

Best regards,
Thom Blischok

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