For the most part the “new” consumer is much like the “old” consumer as most of the traditional motivations are still in place. The subtle differences between the consumer that dominated in the early part of this decade and the one that dominates now matter tremendously. The most important change in consumer behavior over the last century has been the ability of ordinary people to use credit but Credit has come under some severe attacks of late. There are some obvious issues that have contributed to the decline in the economy. It is hard to avoid the conclusion that much of the collapse can be attributed to the poor decisions that were made regarding credit by the government, by the banks, by investors and by consumers. Nobody looks very good in this examination.
The rush to major luxury living has faded dramatically and once again the media is reflecting it as shows on ostentatious spending have been replaced with ways to live frugally. Now the consumer is in transition again and the goal of the business community is figuring out what makes them tick now. There are three characteristics that have started to emerge as long term adjustments:
- The first is the most obvious and possibly the shortest term adjustment. People are feeling pinched and are reacting with frugality.
- The second trend may last a bit longer as this has to do with the latest attitude shift. Consumers are now seeking to be more “responsible” in their purchases.
- The third trend that seems to be emerging is that people are shifting focus from themselves to others – usually their immediate family. One of the outcomes of a recession is that people become a lot more attuned to their personal safety net.
Courtesy of Dr. Chris Kuehl, Armada Corporate Intelligence
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BIIA Comment: The newfound frugality of the USA consumer has serious implications on the cross border trade between the rest of the world and the USA. For the information industry there will be less cross border transactions because the information consumption will shift from new credit assessment to monitoring and liquidity management. With regard to domestic credit the implications are the same, less new credit applications means less transaction based information solutions and the current concentration on monitoring and liquidity management will prevail.