Posts Tagged ‘economic rebound’

The New Normal, According to Consumers

(This post originally appeared on as a contribution to the Prosper Now blog.)

As Consumer Insights Director, I have been working with the vast amount of insights we gather for an entire decade. And, it’s been interesting to see how consumers have evolved over this time span: from their embrace of online shopping (seen in full effect for Back-to-School this year) to the “spend now, worry later” mantra voiced by many before the burst of the housing bubble burst and subsequent meltdown on Wall Street. Even post-recession, consumers are adapting to the times, couponing at every corner, working within budgets, fattening up their piggy banks, and becoming attached at the hip to their favorite social media sites. And who really thought that – even as little as just a few years ago – that the term “mobile exclusivity” would enter our vocabulary?

Most certainly, a lot has changed in ten years.

While the advent of m-commerce might be a close second, I would argue that the clear turning post for consumer behavior during the last decade came with the “Great Recession.” Shoppers went from “spend now, worry later” to an “abort spending, worry, worry, worry” mindset. Holiday 2008 was an absolute disaster for most retailers, and, to this day, they are still trying to coax shoppers back in their stores. According to some of our latest insights, consumer confidence continues to trend below an ideal range, employment – or rather, unemployment – remains a chief concern, while decreasing overall spending is a financial priority to an increasing number of consumers.

Think about that last statement for a bit. The lagging consumer confidence, weak outlook for employment, and spending cutbacks we’re seeing currently applied to the 2009 consumer…and the 2010 consumer…even those in 2011. This persistent drought of positive economic news over the past several years has changed consumers’ approach to spending. Are frugal consumers the “new normal”?

If the economy continues at this lackluster pace, you betcha.

This month, we asked 8,500 U.S. consumers if they thought the economy would ever rebound to what it was before the economic crisis, and the results were fairly well divided: just over a third were hopeful for a rebound, while nearly as many either aren’t on the rebound bandwagon or are simply unsure.

Why is it important to get shoppers’ perspective on the matter? Doubt in the economy brews uncertainty and hesitation toward consumer spending. With two-thirds of Americans feeling pessimistic or indecisive about an economic rebound, we’re likely to continue to see heavy coupon usage, a strong focus on budgets, further attempts at debt reduction, targeted spending, price comparisons – smart shopping strategies executed by well-informed consumers (who have been made all the more knowledgeable by the recent rise of mobile devices).

Translation: if consumers are going to spend their hard earned money, they are going to make every dollar count.

It’s also important to note that with the economy flatlining over the past four years, optimism for a rebound has been waning among consumers. Back in July 2009, more than two in five were confident that the economy would bounce back to its pre-recession glory; the current figure represents a 20%+ drop from this point in time. On the upside, though, with the debt ceiling crisis looming back in July 2011, consumers harbored their worst feelings toward a rebound, so at least we’ve made some improvement versus a year ago:

So what’s a retailer to do? It’s all about the CONSUMER. Knowing who your shoppers are, what they are planning or willing to buy, and adjusting your merchandising mix, marketing strategy, and inventory levels accordingly will likely help you weather this economic maelstrom. And you might find that you have to chart a new course to ensure your long-term sustainability.

For more information on this data, please contact BIGinsight™.


5 Facts You Need to Know About the 2012 Consumer

January 31, 2012 Leave a comment

For the first BIG Call of the New Year, I had the privilege of presenting our new January data with Dr. Marianne Bickle, director of the Center for Retailing at the University of South Carolina and author of the soon-to-be-released book, The Changing American Consumer (written in cooperation with the Prosper Foundation).

This month, we discussed the 5 Fact You Need to Know About the 2012 Consumer:

1. Consumer Confidence is Questionable: Back in January 2007, 50.5% of consumers were very confident or confident in the chances for a strong economy. Our current level of confidence is 40% below that heyday, and we really haven’t made any headway on confidence as it compares to when we were weathering the recession.

2. Economic Rebound is Becoming Less Realistic: This month, we found that about a third of consumers are positive that the economy will rebound to its pre-recession glory. That’s down a couple of points from last year’s reading, but represents a full 20% decline from January 2010. More consumers today have a pessimistic take on any potential bounceback or just view our economic situation with a big question mark.

3. Budgeting is BIG: A couple of times a year, we ask consumers if they think that the current economic crisis will impact their lifestyles over the next 5 years. This month, the top lifestyle impact was sticking to a budget, which edged out considering purchases more carefully and becoming more price conscious when shopping for food and clothing (the latter two had been slightly more popular for the past two January readings.)

4. Practicality is Rising, while Impulse Spending is Declining: Over the past five years, practicality has been steadily increasing. This month, nearly 50% indicated that they were pragmatic in their purchases, up almost 10 points from five years ago. Those focused on needs over wants – and thus less focused on immediate impulse buys – follow this same trend, only on a slightly higher plane. This month, about three in five are only focused on the necessities when at the store, much higher than the 48.5% who said the same in January 2007.

5. Targeted Spending Hits the Bull’s-Eye: While spending may be perking up from the heart of the recession, we certainly aren’t seeing a recovery in spending…but that doesn’t mean that consumers have clamped their wallets shut. BIG Ticket purchase plans over the next six months for items like Autos, Computers, Furniture, Mobile Devices, and TVs, have improved from one year ago.

To listen to the recorded webinar, click here.

P.S. Dr. Marianne Bickle is also a regular contributor on our Prosper Now Blog on Click over to read her latest entry, JCPenney’s Consumers Voice Opinions Regarding Sales.

For more information on this data or for release information on The Changing American Consumer, please contact BIGinsight™.

Source: Consumer Intentions & Actions® Survey – JAN-12 (N = 9317, 1/4 – 1/11/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Generation Gap: Gen Y is the Most Optimistic for Economic Rebound

January 13, 2012 10 comments

While hope for an economic rebound may be fading among consumers in general, Gen Y is the most likely to have a Pollyanna-like outlook for our future economy, generationally speaking:

Silent (born 1945 or earlier)
Boomers (born 1946 – 1964)
Gen X (born 1965 – 1982)
Gen Y (born 1983 – 1993)

According to the latest data from our Consumer Intentions & Actions® survey, more than one in three (36.7%) Gen Y youngsters have faith that the economy will bounce back to its pre-recession glory. Gen X isn’t too far behind at 35.8%, though Boomers (29.5%) and Silents (26.8%) are having a harder time embracing this outlook.

Interestingly, Gen Y-ers are also the ones most likely to view the future of the U.S. economy with a big ‘ole question mark (37.5%). Perhaps, though, this is because those on the younger end of this generation just didn’t fully experience the pre-recession economy as full-fledged “adults” [you know the full-time jobs, housing, debt, supporting a family…all those “fun” things]. Fewer of those in the Gen X (33.9%), Boomer (32.5%), and Silent (33.9%) generations express this uncertainty.

But who’s the Generational Grumpy Gus? Two in five (39.3%) Silents aren’t holding out hope for a rebound, while nearly as many Boomers (37.9%) feel the same way. Fewer than a third of Gen X-ers (30.3%) are taking a pessimistic standpoint, while just one in four (25.8%) of those in Gen Y share this sentiment.

Final thoughts? Speaking from a Gen X standpoint, let’s all hope the economy at least recovers to a point where we’re not waxing nostalgic about a time when it was worth ($) planning ahead for retirement. Sorry, Boomers.

For more information on this data, please contact BIGinsight™.

Source: Consumer Intentions & Actions® Survey – JAN-12 (N = 9317, 1/4 – 1/11/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

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