Experience suggests that when U.S. consumers emerge from a recession they start spending again. But there’s much evidence indicating that, this time, things will be different.
Some indications are that the severity of this economic downturn means consumers’ recession-learned frugal attitudes and behavior will last well into the recovery period and even slow the recovery, and those established behaviors will continue indefinitely.
More confirmation emerged this week in results from Riedel Marketing Group (www.4rmg.com) surveys. Senior Partner A.J. Riedel points to evidence that Americans are making fundamental, long-term changes in their spending habits.
In December 2008, Riedel surveyed its 100-member HomeTrend Influentials Panel and heard 55% of the respondents say they would not go back to their old spending habits.
When the same question was asked in June 2009, 73% of HIPsters were now saying that they will not go back to their old spending habits.
“What I am hearing from the HIPsters is consistent with findings from other market research studies,” Ms. Riedel said. She pointed to:
- In a 2008 Booz & Co. study of 1000 households most respondents said that, even when the economy is better, they’ll continue frugality measures like eating at home more often and keep sending down on hobbies and sorts.
- In a recent Performics study two-thirds of respondents said the recession “fundamentally changed the way they think about saving and spending money” with 8 out of 10 saying the economic downturn will have a lasting impact on them.
Riedel asked her HIPsters panel to explain why they feel their new spending habits will last beyond the recovery. Some of their responses:
- “We found out that it is possible to live on a little less.”
- “It’s just money.” Riedel interprets this as a new perspective about the importance of money and goods. “We try and ‘run’ money now, not let money ‘run’ us.”
- “We were spending above our means and we really didn’t need to.”
- “We’ve learned how to work with less, we’ll continue doing just that. If we have extra, we’ll put it in savings.”
- “It’s been a good lesson for me that I don’t need to spend quite so much and I’ve been happy with many of the less expensive choices that I’ve made.”
- “We have found that we can really do without some of the things we were spending our money on.”
- “Because the habits are now established, painless, and save me money. That’s good no matter what’s going on in the economy.”
What consumers say and what they do
The way people intend to behave in the future doesn’t guarantee how they actually will behave. Even if consumers’ thrifty attitudes are sincere, newly learned behaviors are less measurable and their longevity tough to predict. Only time will tell just how frugal post-recession consumers will really be.
But it’s easy to believe that tomorrow’s healthy consumerism will be more humble than yesterday’s.