This article discusses one of the trends from the Top 10 Global Consumer Trends 2021 white paper.
Financial uncertainty considering the global pandemic, job insecurity, and reduced household incomes will make consumers more cautious when spending and discretionary purchases are likely to become less popular in ‘the new normal’.
Thinking with a recessionary mindset
Thoughtful Thriftier tend to prioritise products and services which offer higher value for money outcomes. Low levels of consumer confidence will encourage Thoughtful Thrifters to engage in more budget spending and increasing their savings. According to Euromonitor International’s Lifestyles Survey, 49% of consumers indicated they would be putting more of their money into savings at the beginning of 2020.
As economic growth continues to decline in many parts of the world, discount retailers are proving to be popular much like after the 2008 global financial crisis. Aldi and Lidl for example, experienced a 10% growth in sales between 2019 to 2020, demonstrating that consumers’ shopping needs and buying habits are changing. Limited disposable incomes are also benefitting from off-price retail formats and flexible payment schemes like buy now pay later, and subscription models that offer convenience, safe product accessibility, and bulk discounts.
This is not to say premium goods are completely off the table, but consumers now want to understand the story behind them and purchase goods and services which take health and wellness, self-care, and mental wellbeing into consideration. Premium brands have adapted by launching lower-priced products to appeal to price-conscious consumers and improve market competitiveness. For example, Apple recently launched a second generation of the low-cost iPhone SE to offer high-quality products at an affordable price.
Outlook for Thoughtful Thrifters
As consumers switch to generic brands amidst economic hardship, it is essential for companies to identify and market key qualities that consumers are willing to pay a premium for. Readjusting product portfolios, distribution channels, promotions, and supply chains to cater to Thoughtful Thrifters will futureproof businesses for a new normal. There is no one-size-fits-all approach.