With Brexit on the horizon, inflation is rising and we’re starting to see consumers reign in their spending. Economists predict a ‘shallow recession’, but it’s unlikely we’ll retreat back into full recessionary behaviour. This time, we’re prepared – we’ve learned valuable lessons from the previous recession, knowing exactly where to save and where to splurge. Rather than buying into value ranges and cheap fast fashion, consumers instead are looking to invest their limited means more wisely on long-lasting items of a good quality, or indulgences that elevate the everyday and provide a sense of pleasure.
LESS BUT BETTER
We can see a ‘less but better’ sentiment emerging – particularly in fashion. The ‘slow fashion’ movement at present sees consumers taking time to collect high quality staples that will last, rather than continually topping their wardrobes up with cheap clothes destined to break after a few wears. This means consumers are shopping less, but they’re shopping savvier and spending more when they do.
The recent Marks & Spencer campaign taps into this brilliantly by telling customers to make the most of life and not being afraid to say “no to the ordinary, and yes to the best”, urging them to reject food, clothes and experiences which doesn’t “stir your soul”. Vicki Maguire, Chief Creative Officer, said the heart of the advert is to communicate that: “life’s short, so spend it well.”
In difficult times, consumers look to self-care and treating in order to facilitate a feeling of happiness. This means people thinking carefully about what matters most to them as individuals, cutting back in order to spend on the things that mean more on a personal level. Experiences are at the height of this, as they allow us to create priceless memories and provide a much needed sense of escapism.
The first half of the year saw consumers spending more on holidays, eating out and day trips, as they recognise the value of spending time with family, enjoying oneself and having a little luxury even when budgets are tighter.
Brands like Travelodge are recognising this in their recent £5 million investment in premium economy SuperRooms. Rooms cost an extra of £20 and include branded coffee machines, mood lighting and a free KitKat. Equally airlines are cutting back on first class space to invest in premium economy. These initiatives are putting a better, more luxurious experience within reach as consumers see the value in investing a little bit more for a more enjoyable time.
NOT AFRAID TO SAY NO
Consumers are much more confident, and we’re seeing them actively reigning themselves in from impulse buys and instead are planning in their indulgences.
The cosmetics industry for example, is experiencing a ‘beauty haul’ backlash. Where previously influencers would encourage and celebrate buying large quantities of expensive make-up, now make-up enthusiasts are asking fellow users to “talk me out of it” or “TMO” when they are tempted to buy more cosmetics than necessary. Online communities are sharing and celebrating stories of saying no to new products. Empty containers of cosmetics are being posted online (known as Pan Porn) to praise people for using up items in their makeup bags, encouraging each other to use up all old make up and save for a new luxury palette or lipstick when needed. Brands like Ecco Bella and Zao Organic Makeup have cleverly made their ranges refillable to tap into this sentiment – helping to avoid waste, to encourage finishing products, and to keep users coming back to refill.
WHAT DOES THIS MEAN FOR BRANDS?
For brands, this means if we’re faced with a financial squeeze, consumers won’t simply be scraping back and choosing the lowest budget options. Instead, they’ll be spending more wisely and choosing brands that offer and promote high quality, durability and memorable experiences. However, with our sense of ‘value’ even more fine-tuned, these offerings have to be worthwhile to justify the extra cost. Consumers will be cutting out impulse buys and products they don’t need – meaning brands need to be clear in explaining how items are worthwhile in the long-term rather than relying on impulse tactics.