1) Inconspicuous Consumption
Consumers respond to the social moment by taking consumption into the closet. As when we talk about going to Fred's (in-store restaurant), not Barney's. Or, ask to have new purchases shipped, rather than be seen carrying a branded shopping bag. Or, decide to have shoes repaired and last year's jacket altered. Spending as a covert activity. No bragging rights.
2) The Dyslexic Dilemma
It's a "b." No. It's a "d." Consumers stall in their tracks, trying to figure out what to do, right now. Are we heading out of the woods, or perhaps a bit deeper into it. The moment to watch: What happens when unemployment hits 10 percent at the exact moment the Dow tops 10,000. That deer-in-the-headlights look on the consumers' face: Now or not yet? What is the real barometer of economic health? Dare I buy a peach?
3) Private Labeling
The number one brands thrive, innovating, advertising and product improving. But, the number 2s and 3s stop striving, unable to compete with performance advances or on price. Into the vacuum steps Private Label. No longer just "okay, available and cheap," these grocery aisle invaders are well-branded, feature rich and are oh-so-profitable for the stores. Say goodbye to familiar but moribund household names; say hello to snazzy new entrants that shave quarters off the check-out total without sacrifice. (Store brands in play at Walmart pictured above)
4) Trading Down without Trading Off
Consumers make psychological assessments of where to spend and where to save their personal currency. Are we willing to buy last year's iPod on close-out, rather than the latest and greatest? Where can we make a financial trade down without a steep payment in street cred?
5) Investment Grade Purchases
Consumers opt for quality – the kind that costs a bit more upfront, but is ultimately worth repairing and refurbishing. As in remembering (perhaps for the first time) that what makes Gucci loafers worth it is not the buckle but the workmanship, leather and fit. Watch for articles in the fashion press to educate on what to look for and the importance of a couple of (new) important pieces to renovate last year's look.
We share more on trends for 2010 here.
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To your point on inconspicuous consumption – this is very important for luxury brands. Many marketers of luxury brands are shifting the emphasis away from conspicuous, “bragging” consumption towards a value proposition. This same trend has also been evident in retailers of home goods – we (the retailer) can create value for you (the consumer) by demonstrating how you can improve home value – investing in new paint, new décor, etc. The communications has less of a “show-off” feel to something that is more sensible. This is a result of observing consumer behavior/perceptions that, on an emotional level, reflect some consumer fear of being the next one to suffer job loss, etc., and a desire for more humility.
I believe we are seeing the birth of the ‘discerning customer’, whose main criteria for purchase is value-for-money. In the long run this will definitely see a host of quality products without any fancy trimmings at a very affordable cost. A good example is the Chevy Cruze which has been introduced in India at a fantastic price, considering the features.
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Possibly relevant to the US market, Except point no 3 which is extremely relevant to the Indian market.