WHAT’S HAPPENING
- When the going gets tough, the tough dicker for a better price. Consumers are beginning to embrace a range of unusual buying behaviors that will help them stretch a dollar further. Haggling, for example, is becoming fashionable again. Max Edison has become a minor media star — his 2001 book How to Haggle is on back order at Amazon.
- Why own when sharing or renting will do? Even in boom times, we noted the rise of fractional ownership, especially of prestige luxury items. Now that strategy is being applied to commuter cars, condos and even community department stores.
- We’ve mentioned that the mushy core of this economic swamp is the housing bubble. Through services like YouWalkAway.com, consumers can do just that legally and in a way that controls the damage done to their credit (NYTimes.com 2.29.08). They can approach home ownership less like marriage and more like dating. And why wouldn’t they? The annual average cost of renting is now lower than owning: $15,721 compared to $17,707 (Washington Post 11.25.07).
- Even before the economic downturn, “transparent recycling” was coming into fashion. While most Americans are not going to become freegans, digging through restaurant compost for their next meal, they are going to think twice about throwing out that old sofa.
- Another area where consumers are trading down in a big way: personal transportation. While car sales languish coast-to-coast, bicycle sales are actually up nearly 10%, and Shimano — the world’s largest bike parts manufacturer — set a new sales record in 2007 (BicycleRetailer.com 2.25.08).
- Five finger discount? A number of national chains report that shoplifting and employee theft are up significantly — as much as 11% in some areas (HometownAnnapolis.com 3.24.08). Not every consumer will throw her morals out the window with every dip in the Dow Jones. But thieves are finding more willing markets for hot, cheap goods.
- A penny saved is a penny earned. Yes, Americans seem to be dabbling in that most extreme and alien form of economic behavior: saving the old-fashioned way. Sixty percent of Boomers say they are spending less in the current economy (FOXBusiness.com 2.12.08).
- In tough economic times, smart marketers want to know what consumers are buying. But it pays to look at how consumers are buying.
- Don’t expect a sudden full-stop in discretionary spending. Do expect a certain amount of trading down, and higher levels of skepticism about what “luxury” and “prestige” really mean as value propositions.
- We’ve tracked the emergence of consumer interest in “überobscure” goods and services. That will amp up in coming months, especially where obscurity equals savings. Treasure hunting at pawnshops and garage sales could be almost as popular as the Olympics in Summer 2008.
- We’re talking about a fundamental shift into active, intentional, highly targeted consumerism. Consumers know the economy’s health rests with them. They know companies are hurting for business. They know their dollar can go further when they flex their muscles of free choice.
- Watch as consumers take a somewhat aloof approach in their buying behavior. You can’t haggle if you’re too enthralled with any particular item. Even “gotta have its” will be subject to price comparisons and value assessments.
