Several articles, namely The New Consumer Frugality, an article from Strategy+Business, New frugality for many may outlive recession from msnbc.com and The New Frugality: Consume Less, Save More, Live Better from Wisebread, had me considering the future.
The New World Order: Consumer Frugality
It's fair to say that we are emerging from the Great Recession. We're not out of the woods, but there seems to be a constantly shining light beckoning to us through the trees. We are making progress slowly.
In the process of this recession, though, we have become less wealthy. Either from lost jobs, diminished home equity, higher taxes, higher costs of living, education, driving, insuring and unbearable debt loads... There's just less disposable income for spending on what used to be considered necessities and in hindsight seem more like frivolities. Top that with being worried about what the future looks like.
Consumer trends -- many of which had started developing before this marketplace turmoil -- have only accelerated. They support a new consumer attitude toward spending: one of frugality, characterized by a "strong value consciousness that dictates trade-offs in price, brand, and convenience."
That tells me that the good times of enthusiastic consumer spending are gone. The days of acquiring stuff to replace old stuff that gets placed into storage [paid for in addition to monthly living obligations] are no longer sustainable. Buying the largest McMansion that a mortgage can buy quickly becomes an upkeep nightmare if you can't afford cleaning and maintenance help. Clogging those homes and our lives with more stuff can only suffocate us personally and financially.
That puts us in the midst of a purge. Not that we've stopped buying. Rather, we now make considered trade-offs for the best combination of price, brand/quality and convenience. In making prudent trade-offs, we benefit by obtaining more; we focus on how purchases can benefit the community, the environment and contribute to sustainability. We're figuring out how to feel good through our new frugality.
So how does all of this affect us in the flooring industry? What does the new consumer frugality mean for those making and selling floor covering products?
Start by rereading David Wootton's post In the flooring industry, it pays to have a vision. Then, consider the implications of the New Consumer Frugality and flooring:
The New Consumer Frugality means that, although the floor covering business has entered into a more mature phase of growth - i.e., less stuff sold less frequently -- flooring faces an opportunity to redefine the customer experience in terms of how product is sold and what kind of product is sold. That in turn requires new customer-focused commitments.
We need to be transparent in our pricing and product claims. Why? Consumers don't trust marketing claims. They readily make use of the Internet to educate themselves, using digital comparison tools and tapping word-of-mouth perspectives. Customers are more likely to trust you if you make it easy for them to do their due diligance. They seek out transparency.
We need to be willing to build longterm relationships with customers. With that comes a true commitment to sustainability, a belief in authenticity, a commitement to service and to the local marketplaces we serve. Consumers are tired of being taken advantage of and being considered statistically insignificant when they have complaints. They expect you to be listening and paying attention, especially online, and they have high expectations about the feedback they offer and the interactions with them. They expect you to have meaningful ties to the community and that you think and act sustainably.
We must provide a greater focus on product differentiation and quality. Customers are seeking out simplified product offerings. They are time stressed and tired of being deliberately confused. They appreciate that you try to make their lives easier. Edit, curate, add meaning to your product assortment so they can understand the benefits they receive from different product categories and price points. Simplicity is meaningful to your customers.
We must be willing to explore new retail and business formats that make use of Internet based disintermediation. Our consumers are also tech savvy, adopting mobile at a very fast rate, and willing to experiment with the likes of an engagement ring iPhone app from Tiffany, or a geolocation gaming application like Foursquare. Be visible digitally and be sure to integrate your online and instore experiences.
What's your interpretation? How are you planning for the New Consumer Frugality?
~ Christine B. Whittemore
Simple Marketing Now, a consultancy focused on connecting with customers by integrating social media and content with traditional marketing
Contact her at firstname.lastname@example.org
Or visit The Simple Marketing Blog and Flooring The Consumer