The State of the Consumer in 2010
Insurance Experts' Forum, March 3, 2010
The recent downturn has tempered—not traumatized—consumers.
My colleague, Alex Vorro, recently surfaced the results of new studies that finds consumers are slowly—very slowly—recovering from the economic maelstrom that hit between 2007 and 2009.
Financially, they're getting stronger and more enlightened. The new report by Financial Finesse, for example, says consumers are getting a firmer grip on their own financial situations—they continue to cut costs, reduce debts and increase savings. The firm tracked the types of inquiries into its services between 2008 and 2009, and reveals that budgeting and saving calls increased from 25% to 34%.
Such inquires are now close to parity with debt calls, indicating that “consumers are dramatically shifting their attitude towards their money and the way they manage it to become more responsible consumers, savers and investors.” As the report put it: "Instead of becoming victims of the crisis, they are using it as an opportunity to get their financial house in order—recognizing that they can't control the swings in the market or the actions of their employers, but they can control how they spend, save and invest their money.”
Also, today's “post-crisis” consumer is more likely to be value-conscious and community-oriented. John Gerzema, chief insights officer for Young & Rubicam, and co-author of “The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It,” says consumers expect the companies they deal with to be more socially responsible and transparent in their dealings. He articulated his observations on this shift in consumer attitudes at the TED conference at the end of last summer.
The key for businesses is getting out in front of this new thinking through social networking engagements, Gerzema recommends. He calls this emerging trend “cooperative consumerism”—consumers working together to get what they want out of the marketplace. Gerzema urges companies to get out in front of the cooperative consumerism trend and become “community organizers.”
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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