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Jun 21, 2009 by Mark MaierIn the RAB's Radio Sales Today newsletter, the headline read "Consumers Cautiously Ready To Spend Again" which is direction that several indicators are showing, we have hit the bottom of the recession and should start the upward climb out...
"Restraint will be the new mantra among consumers, according to the latest Nielsen Global Consumer Confidence Survey. But that doesn't mean they won't start spending again in the near future.
Respondents to the poll conducted in April, across 50 countries making up 86 percent of the GDP, said they would continue to focus on fiscal responsibility. Yet, "they will allow themselves some of those little indulgences," said James Russo, vice president, Global Consumer Insights. "Perhaps pent up demand will play itself out and they'll take that vacation they put off, go back to casual dining and increase out of home entertainment activities such as movie going."
It looks like consumers will come out of the recession with at least a temporary change in attitude....
"Consumers clearly indicated that they would remain focused on savings past the recovery. "A whole new value system has emerged," said Russo. "One of casual restraint. There is a focus on fiscal responsibility and budgeting, but that doesn't mean there isn't a market for indulgences. I don't mean diamond jewelry, but moderation will be key and you may see consumers begin to trade up and move back to mainstream retailers."
One behavior that will not change as drastically is trying to save on gas and electricity. Slightly more than half of respondents (51 percent) said they did so in April. Forty percent of consumers said they would continue to keep an eye on such services. The same holds true with the telephone company, with 34 percent currently acting with restraint and 21 percent looking to do so moving forward.
Nielsen conducted a similar study in October and it proved telling. From October 2008 to April 2009, consumers across 15 behavioral segments followed through on plans to cut back on discretionary purchases while increasing levels of savings. For example, in April, most of the 40 percent of consumers who said they would delay upgrading technology followed through with their promise. More than a third (34 percent) said they'd use their car less -- 29 percent ended up doing so. And 33 percent said they'd cut down on vacations and delay replacement of major household items. In both instances, 34 percent of consumers actually did."
I think it is important to share this article with your clients, let them know that things will not be right back where they were, value will be a key proposition in all they do and smart marketing strategies will help them tell that story to the audience.
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