Distinguish Accelerating from Slowing Trends

Retailing professionals—especially those who gained most of their experience during the fifteen bountiful years that preceded the global economic crash—know the rules have changed, but they’re not sure how. Which changes in consumers’ thinking are accelerating, so retailers need to move quickly to stay ahead of the curve? Which changes are slowing, so retailers might want to rein in resources being expended on them?
     To answer those questions, researchers at London-based Trajectory Partnership analyzed the effects of previous economic downturns and recoveries on consumer psychology. They then took into account how bad the latest downturn is compared to those previous ones, and they overlaid all this on consumer psychology trends that are operating independently of the downturn.
     Here are two changes in consumers’ thinking that seem to be accelerating:

• A desire for simple alternatives. A recent New York Times article begins with the tale of a couple who achieved greater happiness by giving away loads of their possessions—including their cars—and finally moving to a studio apartment. Most consumers won’t go to those extremes, but the article gives more evidence of seeking simplicity. A corollary of this is that people are spending money on experiences—where the memories don’t cost much to maintain—instead of merchandise that has to be cleaned, repaired, and eventually replaced. In a Euro RSCG Worldwide survey of 5,700 adults residing in France, the Netherlands, England, the U.S., Brazil, Japan, or China, about 70% said they wished simple products were available to them.
• Seeking variety. The Trajectory researchers call it “a tendency to flit from one offering to another.” There will continue to be less brand loyalty and more openness to trying out unknown brands. Give your shoppers choices so they feel in control and do not feel as if they’re being manipulated.

     On the other hand, here are two trends that seem to be waning:

• Green consumption. The Trajectory researchers believe this trend will resume its prerecession upwards movement when the economy recovers, though. Target stores will be ready. They now sell what they call green-friendly home products along with more than 700 organic food items.
• Seeking extreme experiences. Experiences are in, but for most consumers, risk tolerance is way down for the count. The Trajectory researchers point out how many people who lived through the Depression pinched pennies for the rest of their lives.

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