Four Distinct Types of Consumers Emerge Post-Recession
The economy is on the road to recovery, but marketers can expect the impact of the past 18 months to have a lasting effect on consumer behavior according to a new study by marketing strategy and research firm Decitica.
“Marketers need a fresh lens through which to view consumers in the post-recession world,” says Dr. Val Srinivas, principal at Decitica. “Marketing strategies that ignore the diversity of consumers’ recession experiences won’t have the desired potency.”
In its study, entitled, “Marketing to Post-Recession Consumers,” Decitica identified four distinct consumer segments marketers need to keep their eye on now. These are:
Steadfast Frugalists: About one-fifth of American consumers, representing all income and age groups, these consumers are committed to self-restraint and engaging in prudence with unequivocal enthusiasm. “Marketers will find this group to be the most challenging, as they are the least brand loyal and most likely to discount marketing messages,” says Dr. Srinivas. Eighty percent of Steadfast Frugalists say the new behaviors they have adopted will likely stay with them for a long time. This is in contrast to 24 percent of Apathetic Materialists who feel this way.
Involuntary Penny-Pinchers: About 29 percent of the population, these consumers have been severely affected by the recession. They are mainly made up of households with less than $50,000 in income, with more women than men. According to the study, this segment has been forced to embrace thrift like never before. Presently, their actual behaviors do not differ widely from those of Steadfast Frugalists. Where they drastically diverge is in their aversion to expending effort in money-saving strategies. Only 17 percent find buying store or generic labels to be satisfying, compared to 59 percent of Steadfast Frugalists. Also, the recession has had a heavy emotional impact on Involuntary Penny-Pinchers; they admit to be more scared (77 percent), stressed (81 percent) and worried (87 percent) about the future than other groups.
Pragmatic Spenders: The most attractive group for marketers because of their higher spending power, income has blunted the effects of the recession on this segment which represents 29 percent of consumers. “While it is true that they have also curbed their spending, they are the most capable, both psychologically and financially, to willfully resurrect their past spending patterns,” Dr. Srinivas notes. Only 28 percent of Pragmatic Spenders feel the recession has changed what and how they will buy in the future, compared to 55 percent of Steadfast Frugalists.
Apathetic Materialists: The Apathetic Materialists segment has more men (55 percent) and younger consumers (72 percent are below the age of 40), and seem least changed by the recession. They have not embraced the new frugality to the same extent as others and get minimal satisfaction from such behaviors. Only about six percent in this group find price comparison to be satisfying, in contrast to 85 percent in the Steadfast Frugalists camp. This group is the least driven by price: only 8 percent admit to being very focused on value compared to 30 percent of Pragmatic Spenders and 52 percent of Involuntary Penny-Pinchers.