The current economic crisis has had a major impact on consumer trends worldwide. Britain is experiencing the worst recession in living memory. Unfortunately, the crisis is not expected to change any time soon. During this critical time, it is essential that businesses have a better understanding of consumer trends. The recession, though, is not affecting all business industries negatively.
Such industries such as budget hotel chains and expensive coffees have shown an increase in sales. Consumers, while feeling this economic crunch, are more likely to treat their selves with small luxury items. This change of behavior is attributed to a consumer need to comfort them selves during a difficult time.
Other industries can use this information as a point of hope. Consumers during this time are more likely to be sensitive to price along with quality. Basically, customers want products that are both well-designed and inexpensive. Another critical factor for businesses to consider though is that consumers are more likely to have a prolonged purchasing decision. This is due in part to a consumer’s need to be financially intelligent at this point. However, it is also due to the comparison shopping in which most consumers are indulging.
The consumer’s need for short-term indulgence can be seen in UK’s sex industry. Sex shop’s, lap-dancing clubs, escort services, etc have shown an increase in sales and inquiries over the last year. Quite obviously consumers are searching for a way to lift their spirits in order to deal with the doom and gloom of the recession. Due to this new consumer behavior, cheaper alternatives to entertainment, such as karaoke, are also expected to do well during this downward trend.
Unfortunately, the luxury sector will suffer a major decrease. Consumer’s disposable income is decreasing. Therefore, consumers will have less money to spend on high end luxury items. A few well-priced indulgent items will be acceptable to the frugal consumer. However, high end items will lose a significant chunk of sales.
The environment should be impacted positively during this time. Environmental strategies currently call for a penny-saving attitude. With the current economic crisis, more consumers will turn toward eco-friendly strategies. Eco-smart consumers will ride bikes instead of driving, stay at home for holidays instead of traveling, and purchase used materials rather than new. All of these factors will have a major impact on a large number of industries in today’s recession.
