What an abrupt change those frightening days in late 2008 and throughout 2009 brought to the American consumer. Gone are the times when a trip to the mall was a form of family entertainment. We became cautious and deliberate about spending, focused on paying down debt, slowly increasing personal savings. It was exactly right, except for one small overhanging issue: there will be no economic recovery without consumer spending. So, we at About.com have been using the means we have to understand where the consumer is right now, and how attitudes about spending, and advertising will shift throughout 2010.
In January About.com surveyed 1, 261 users to understand their spending concerns and priorities for 2010, asking them to help us understand their purchase decisions across the verticals of health, food, clothing, electronics and beauty. This study represents the beginning of a year-long discussion. With each MediaPost column we plan to dissect one category at a time, while building a broader thesis about trending consumer behavior.
What we've learned so far is that the consumer is still cautious, but is showing willingness to spend again especially on big-ticket items like home repair and electronics if, and probably only if, the future purchase has been carefully researched. Two ongoing trends that have continued to gain momentum in the five categories we reviewed: brands are not necessarily the top priority in purchase decisions and trusted purchase recommendations are growing in importance.
The mantra of the 2010 consumer may be, "show me the value." Ninety-three percent of participants intend to purchase only what they need, and of those 35 percent indicated that they will confine their spending to discounted items. Where there is an uptick in consumer desire, particularly across the electronics vertical, recommendation is a driving factor. In this category price remains the number one influence in a purchasing decision (at 31 percent) but combined recommendations by review sites, as well as friends and family, exceeded 42 percent, while the influence of a brand name dropped from 23 percent to 17 percent, and the role of features dropped from 25 percent to 7 percent.
This pragmatic mindset extends to, of all things, clothing: Price and quality still hold first and second positions for purchase influence, at 35 percent for both, but versatility has noticeably appreciated from 16 to 23 percent.
Even in the early days of the recession, consumers appeared intent on continuing to spend on high-quality, specifically organic, food. That's since changed according to our study. The value of buying healthful ingredients has dropped (from 46 to 37 percent), while taste increased from 30 to 39 percent. While organic food is not yet a staple in every cart, the responses were evenly split among three camps: Consumers were indifferent to natural foods; considered it a basic; or regarded it as a luxury.
After analyzing the category-specific information, we then looked at general attitudes of online advertising, and obtained some interesting insights. Fifty-six percent of the participants believed that online ads were helpful when shopping and researching online. In particular, 42 percent of participants found that online ads with printable coupons or offers were the most helpful.
Our study also revealed that the 2010 consumer expects to devote more time on the Web researching purchases and searching for coupons and sales. This increase in online traffic will, in turn, expose the consumer to more online advertising. Even as 53 percent credit online ads with introducing them to products and services and 33 percent laud tools for comparison shopping, 44 percent find these ads unhelpful. Online advertising may have a higher rate of satisfaction than TV or billboards, but there is room for improvement.
If the 2009 consumer was pretty much at a standstill, the 2010 version is back in motion, but more aware, more cautious and more eager to have full control of their purchase decisions. To support their return to the checkout, brands and advertisers need to communicate their value in these terms and be prepared to follow the consumer's twists and turns on the road to recovery.