Image: Another victim of the credit crunch?
The Economist is looking at the longer term impact of the recession on consumer buying behaviours in an article called From buy, buy to bye-bye. Apparently, we’re not all going to snap back into boom mode the moment the green shoots poke their way into our line of sight.
Everyone’s stopped spending and a side-effect of this has been for us to ask – how much stuff do we really need anyway. This sentiment was echoed on the brilliant Radio 4 Now Show this week with one satirist (Paul Sinha, I think) declaring: “I want a hug, not another book by Gok Wan”, or something along those lines.
Brands, being mainly in the business of helping people to buy the right stuff when they do decide to go shopping, are paying close attention. Especially as the picture The Economist paints is one of people’s confidence in brands diving faster than the Hang Seng after a forced screening for all traders of The Ascent of Money.
But the economic cod-slap-in the-face is not just causing the reeling shopper to buy less in the long term, says The Economist:
Both the shift towards greater thrift and greater scepticism about brands will influence other consumer trends, too. Interest in things such as green products and healthy foods will continue to grow in a post-crisis world, but customers will be less willing to pay a premium for them, and will demand more value for money when they do.
It’s not bad news, necessarily. In fact, if you’ve got good products, good service and a good heart, then maybe it’s a big opportunity. And if you’re developing social web literacy in your organisation, why you could be on to a reallly good thing:
The downturn will also accelerate the use of social media, such as blogs and social-networking sites, by consumers looking for intelligence on firms and their products. As trust in brands is eroded, people will place more value on recommendations from friends. Social media make it harder for brands to pull the wool over consumers’ eyes, but they also offer canny companies a powerful new channel through which to promote their wares and test new products and pricing strategies.
Marketers ignore the messages that emanate from these groups at their peril. For one thing is clear: this recession has triggered a wholesale reappraisal by shoppers of the value that their habitual brands deliver. The winners will be those that adapt intelligently to the new reality. The losers will be those who think they can win simply by telling consumers to “Want It!”
Expect to see these quotes in a social media marketing pitch near you very soon….
Technorati Tags: consumer, credit crunch, marketing, brands, recession, shopping, social media, the economist
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April 7th, 2009 at 2:31 pm
“Trust in Brands being eroded.”
I second that. I think the old idea of a brand being this esoteric wrapper you can swaddle a product in to make it more appealing to a customer is gone in many sectors now. Financial Services, Utilities, Fast Food in particular (with Retail and Mobile Coms not far behind?)
Something I posted about myself recently:
http://www.travelblather.com/2009/04/trust-travel-brands.html
April 14th, 2009 at 1:48 pm
I’ve long since had the same view Jeremy, especially in a b2b context. A brand may lead you to the point of evaluation, but purchasing decisions are made after a thorough evaluation of the product/service. In the end, the brand has very little to do with the final purchasing decision.
April 20th, 2009 at 12:18 pm
Could the erosion of trust in brands not be related to the inability of the large brands to change their marketing approach from ‘push’ to ‘pull’ and understand the foundamental principles of Social Media?
Traditional marketing tends to push a consumer to believing they need a product, Social Media changes that to listening to the consumer and interacting with their needs. Large businesses tend to try to use Social Media as another advertising tool, resulting in limited response or negative response.
The smaller business finds it easy to be open and responsive to their consumers through social media because that is how they run their business, large brands haven’t had to do this for a long time!
I would argue that trust is only being eroded because the brands haven’t fully adapted to Social Media yet. When they do then ‘brand’ will still be a hugely important factor in the final purchasing decision.
The brands that gets on the back of ‘word of mouse’ marketing will be the ones that start to see benefits during the recession
April 20th, 2009 at 3:44 pm
A couple of people have emailed me asking if the ‘word of mouse’ comment was a typo – it wasn’t. It’s something I read on a blog a few weeks ago and thought it was very clever.
It was way of discussing social media as a word of mouth tool over the internet, hence the ‘mouse’.
Hope that clears that up!