What’s Happened to the American Dream?

The Downturn Generation is changing behaviors to weather the storm.

By Diane Toops, News & Trends Editor

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For at least the past decade, consumer packaged goods (CPG) companies focused on new product development to generate incremental revenues, and shoppers have been willing to pay more for these new innovations. Today, shoppers are much more focused on price and will react to re-engineering an existing product to cost less as opposed to creating a new product that might perform a function a little bit better but at a higher price point. Thus “good enough” is good enough, points out IRI.

And the Downturn Generation will take significant convincing before they believe it is safe to open their wallets and purses again. Unlike Boomers, Gen X’ers and others, this generation is not defined by age but by mentality. This group has less long-term optimism and a much more cautious outlook for the future than their predecessors.

“We see that shoppers are altering their spending habits across all significant lifestyle categories,” Blischok continues. “CPG retailers and manufacturers must plan for the continued practice of these new behaviors in order to meet consumer needs and continue to thrive in business. CPG innovators can inspire the Downturn Generation by providing promotion strategies that match their desires, speaking to them through online sources, and realizing that a product that is good enough is really good enough. These strategies can help brace us for the new conservative consumer.”

Cutting back

Even though gas prices have declined as much as 50 percent from the highs of fall 2008, 73 percent of surveyed shoppers state rising gas prices “Impacted” or “Strongly Impacted” their financial situation during the past six months. And 75 percent note rising food prices “Impacted” or “Strongly Impacted” their financial situation, even though food prices have largely leveled off or declined since summer 2008.

Consumers are becoming more resourceful and strategic when planning their purchases for meals, wardrobe, home and automobile maintenance and personal care. New approaches identified include consumers turning to the plethora of information available on the Internet to help prepare for purchases, clip online coupons and research reviews, commentary and opinions on products and services before making a purchasing decision. In fact, more than 44 percent of shoppers are using online resources to find coupons today, and 55 percent of them plan to continue this practice into the future.

Shoppers’ weakened financial conditions are profoundly affecting how they shop and what they buy: More than 69 percent are more likely to look through retailer ads for deals; Nearly 82 percent are more likely to look for sale prices once in the store; and 65 percent say price is becoming more important than convenience in brand purchases.


Low prices and sale items continue to dominate shopper decisions at stores, and consumers are increasingly collaborating with friends, family and neighbors to share information, split membership costs and divide bulk goods purchased at a lower cost. Fifty-nine percent visit multiple stores for the lowest prices, and 42 percent of those shoppers will continue to do so into the future, 30 percent are making bulk purchases with others not in their households to secure low unit prices, and 35 percent of those shoppers intend to continue doing so, and more than 34 percent are collecting, sharing and trading coupons with others, with 40 percent of those shoppers planning to continue this behavior

Consumers are also cutting back on their healthcare costs, opting to treat themselves at home versus visiting a doctor and increasing their use of over-the-counter (OTC) medications. Nearly 44 percent of surveyed consumers are trading their doctor for information on the Internet and half of those shoppers will use this strategy in the future.

Additionally, individuals are limiting spending on new clothes and foregoing home projects, vehicle upkeep and home cleaning rituals. A significant 70 percent of shoppers are cutting back clothing purchases, with 56 percent of them noting they will do so in the future. And 60 percent of individuals are wearing clothing multiple times to reduce laundry costs, with half planning to continue to do so.

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