Thrifty is back in style -- and marketers will need to adjust consumer messages to express compassion and understanding.
Data shows a reverse trend to the carefree spending seen in November 2021 in the United States. "Thriftiness is back in, while optimism, rebelliousness, and daringness are down," according to market research company GWI.
The report -- The Consumer Dilemma -- shows 25% of consumers worldwide say they are “not very” or “not at all” financially secure, and 67% say inflation continues to have a moderate or a dramatic impact on them.
With thriftiness back in consumers’ minds, marketers will need to focus more on the message. “In light of increased price sensitivity, marketers can try to position their products as affordable luxuries,” Laura Connell, consumer trends manager at GWI, wrote in an email to Search & Performance Marketing Daily. “While consumers cut back on the amount they spend on treats, they still want to reward themselves.”
Connell explains that shoppers increasingly flock to off-price retailers like Nordstrom Rack, TJ Maxx, and Ross Dress for Less in a bid to look chic on a budget. And while big-ticket items like homeware and furniture are trending down, the growth for travel gear and cosmetic treatments shows there's still an appetite for the right kind of splurging.
Global data shows that concerns around personal finance are strongest in Hong Kong, Israel, Japan, Sweden, and New Zealand. Of all markets tracked in the Zeitgeist data, United Kingdom consumers are 44% most likely to say they are spending less compared with two years ago.
As in all things, there are two sides to this downturn. Where some feel the pinch more than others, 54% of consumers think the cost of living has increased during the past six months. Some 31% of consumers say they are spending less, where as 29% say they are spending more, compared with two years ago.
Half of consumers say they plan to be more energy-efficient. The data identified a rise in “eco-friendly intentions,” with 44% of consumers planning to walk or cycle more, and 38% planning to reuse more products. Just 10% plan on buying secondhand clothes.
“It’s more likely this shift is driven by the need to conserve cash, rather than the desire to save the planet, but it’s driving more sustainable changes nonetheless,” according to the study.
Consumers are more concerned about the basics. Some 59% are most price-conscious about food and groceries, while 56% are cost-conscious about utilities, 49% are cost-conscious about transportation, and 45% are cost-conscious about housing and maintenance.
Fewer consumers think they will spend less on groceries -- instead cutting back on more indulgent things such as alcohol, nights out, and vacations.
Retailers such as Ross, T.J. Max, Sephora, Macy’s, and Dollar General are doing better than Neiman Marcus, Whole Foods, Sax Off Fifth, WinCo Foods, and Publix.