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How has the economic downturn impacted consumer behaviour?
The effects on different sectors are already evident, particularly those that rely on discretionary spending for example in areas including private education and private health. Rhea Simnett, Head of Insight at RAPP UK, has identified seven coping strategies that consumers are adopting 1:
- #759d00;">Stop – stopping and delaying purchases
- #759d00;">Reduce – reducing volume or frequency of purchases
- #759d00;">Manage – managing costs through comparisons and shopping around
- #759d00;">Downgrade – looking for items that do the same, but cost a little less
- #759d00;">Smart – using vouchers, discount codes and loyalty schemes
- #759d00;">Swap – using a different means to achieve the same aim
- #759d00;">Treat – treating yourself to small items to make up for missing out on the big things
Naked Eye will be spending time with families across the UK to get a closer understanding of how consumers’ habits are changing, and how they are using these strategies to manage their finances in the economic downturn.
#759d00;">Stop
#759d00;">Not buying at all or delaying purchases until an unspecified time in the future
Many people have always been thrifty, regardless of economic conditions, but the recession has focused minds. Rhea Simnett found that:
#759d00;">46% say they have always thought twice about making small, “unnecessary” purchases
#759d00;">32% say they recently started to think twice about “unnecessary” purchases
#759d00;">17% have recently stopped going on an annual holiday
#759d00;">19% agree with “I will cancel one or more of my direct debits to charity”
During 2011 we have seen a significant increase in the ‘Stop’ trend, the example below demonstrates a real increase in people wanting to cancel their phone contracts and Sky contracts. The data was collected from Google search trends:
Look out for our films on this topic and updates on @nakedeyelondon #austerity.
References: