By Christina Cheddar Berk, CNBC News Editor
Marketers beware . . . a recession-hardened consumer has turned the tables on you. Recent research from Deloitte reinforces the idea that manufacturers are selling their products to a new type of consumer. Forced to tighten their belts during the worst economic downturn since the Great Depression, consumers realized they weren't missing much. In fact, many are still regretting their wasteful habits and the amount of things they accumulated during the free-spending, pre-recession years. "There was a lot of pent-up guilt and remorsefulness on behalf of the shoppers in our focus groups," said Pat Conroy, vice chairman and Deloitte's consumer practice leader in the U.S. No doubt the depth and severity of this recession forged this new behavior. Some 40 percent of all Americans have been directly touched by the recession in terms of lost jobs, pay cuts or reduced hours. And they are working hard to rid themselves of the burdens of past debts. But rather be beaten down by this, consumers feel empowered. This new consumer no longer laughs at Depression-era grannies who reuse wrapping paper and gift boxes, and stash Sweet 'n Low and condiment packets in the cupboard. They are too busy re-washing their plastic baggies to use in the lunches they bring to work. They also take pleasure in beating retailers at their own game. The vast majority of Americans -- some 92 percent of those in the survey -- have made some kind of change in the way they stock their pantries. Under the old way of shopping, consumers bought products indiscriminately and often didn't know what items they had in their cupboards, forcing them to frequently throw out items because they bought too much, Conroy said. The new way of shopping is much more deliberate. Some 84 percent said they have become more precise in what they buy. This manifests in many ways. For example, many consumers traded down to private-label brands and found they were just as good, if not better, than the branded product. Consumers are now much more willing now to try private-label brands.
"We had some people saying, 'It only costs me a dollar to try it, what do I have to lose?'" Conroy said. In fact, there were "less than a handful" of categories where consumers feel they would go out of their way to purchase the branded product. "People's brand loyalty has really shifted and shrunk," Conroy To be sure, not all of this was forged by the recession. There were undercurrents that may have pushed consumers this way anyway. For example, washing those little plastic baggies will save you money, but it also is a behavior that is more friendly to the environment and could reflect a desire to be "green." But the need to save, reinforced the behavior.
In some cases, companies may be wise to go direct to the consumers and build a closer relationship, as Procter and Gamble ( PG) is doing by selling products directly through its own Web site. Conroy also wants companies to rethink packaging and realize that shoppers don't always think bigger is better anymore. Shoppers also are more willing to see saving money as a game and enjoy playing it. So much so that even 55 percent of those who reported cutting back on spending said they had suffered no decline in income, but simply felt they "should be cutting back." "If you ignore it, you ignore it at your own risk. There is a 'new normal,'" he said.
- Pet food, tea, candy and beer brands scored the highest among the categories where consumers would be the most brand loyal. Produce, frozen food, meal kits, and juice were among the categories where consumers were most apt to be less loyal.
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