Consumer spending does shift in a recession. Australia is now in the biggest recession since the Great Depression. Despite all the doom and gloom, now is an important time for marketers to focus on changing consumer dynamics.
As we navigate the circumstances of this new COVID world, consumers are having to recalibrate their spending habits from what goes in their shopping baskets to rethinking those long-term big-ticket items. With this comes a huge shift in consumer spending, changes in their mindset, and changes to what they expect from brands, retailers and marketers.
Two new Consumer spenders in a Recession
Neilsen has identified two types of new consumers who will spend according to their circumstances.
- Constrained – those that have had their income & spending impacted by COVID related challenges
- Insulated – similar or more discretionary income due to restriction & impact on lifestyle & spending outlets
These consumers will continue to re-shape the way they spend their money and brands must ensure they are rebounding, rebooting or reinventing their product offering. Additionally, brands must change the way they market to this change in consumer behaviour.
Pivot focus to align with changing spends:
Reassess product portfolios and adjust
Fast track timelines for new products & distribution channels to meet consumer & market demands
Reconsider how to stay relevant to the consumer
Serve customer differently and adapt with consumer confidence
Adapt to the demand for value-for-money products
Address how to tackle a reduction in brand loyalties
- Keep calm and advertise on. In the early days of COVID too many brands panicked and shutdown, allowing competitors to take the lead in marketing
Whatever the change, it’s crucial for marketing teams to adapt and highlight clear product claims, in order to keep pace with the evolving consumer demands in our new post COVID world.