We know they’re out there – the big spenders surfing through the resession with their wallets still open. It’s just a matter of finding them.
SmartCompany asked a range of business owners, creatives, demographers, researchers and social behaviouralists to help us spot the spenders. These consumers are not grouped in generations, but by the spending habits that they adopt, what they eat, what they buy, what they value and what they are prepared to pay for in this global financial crisis.
In a recession, consumer priorities can change dramatically. Worldwide chairman of M&C Saatchi Tom Dery says “rusted on” customers become available as they look for better value.
“They are looking around to make sure they are on the best deal,” he says.
In a recession, brands don’t necessarily have to change, but they have to be sensitive to the economic situation. A brand with a clear personality has a significant advantage. For example, brands such as Apple and Ikea already have strong relationships with consumers.
According to leading creative agency the Glue Society’s creative director Jonathan Kneebone, a brand with personality can adapt to the recession in much the same way a person behaves differently at a funeral and a birthday party. Holden and Kia have done this in their recent campaigns that acknowledge that times are tough.
“The more human you are, the more you can engage with other people,” says Kneebone.
While the big-spending baby boomers are reeling from superannuation write-downs, new spenders are surfacing. Dery believes that the right approach is to target a core segment of the market – such as middle incomes earners in steady jobs or people with a big redundancy payout, then plan ways to ‘own’ this market.
“The returns on a smart, focussed strategy could be greater than ever,” he says.
Here are the groups still spending:
Best marketing approach: The New Austeres see the recession as therapy, a blessing in disguise to halt rampant consumerism. According to demographer and KPMG partner Bernard Salt www.bernardsalt.com.au the recession has triggered “a new morality”. Saving money is not just a result of the recession, it’s about values. New Austeres are definitely spenders but they will never be considered extravagant. They love getting thrifty tips from Grandma.
Motto: Less is more.
What’s hot: Downsizing, penny pinching, cutting up credit cards, local farmers’ markets, slow food, knitting, vegetable patches, simple living, home cooking, sewing, taking lunch to work, beekeeping and animal husbandry.
Love: vegetable gardens, bartering, DIY, quilting, swapping, supporting local business, cheap mobile phone plans.
Loathe: Waste, conspicuous consumption, luxury brands, debt, marketers who want them to take on loads of debt in order to instantly buy their product (sorry Gerry Harvey).
Best marketing approach: Make it eco-friendly and they will come. Demand for clean and green products and services is booming as the realities of climate change and carbon emissions hits home to consumers. Role models include Al Gore, Jacques Cousteau and Hayden Panettiere.
Motto: Reduce. Reuse. Recycle.
What’s hot: Solar energy, self-sufficiency, bicycles, insulation, Flexi Cars, ethical investing, green hotels, water tanks, carbon offsets, philanthropy, saving the planet and volunteering.
Love: Toyota, Honda, Aveda, Ikea, Macro Wholefoods, Treehugger.com, Earth Hour, beekeeping, animal husbandry, renewable and alternative energy, camping trips, eco-travel and sustainable living.
Loathe: Greenwashing (false green marketing), two dollar shops, cheap imports, heavy carbon emissions, plastic bags and water bottles.
Best marketing approach: The stable whites especially those with jobs connected to major government infrastructure upgrades in schools and on roads. They are enjoying lower interest rates, cheap petrol, K Rudd handouts and tax rebates. Dery believes this group is being ignored. “They are in the sweet spot between Government assistance and steady income, and as such are actually feeling better off right now.” What are you waiting for?
Motto: If it ain’t broke, don’t fix it.
What’s hot: New car tax rebates, economic stimulus cash, modest renovating, eBay, big TVs and cable television.
Love: Government tax rebates, Bunnings, job security, JB HiFi, Dan Murphy’s, regular pay cheques.
Loathe: Being flashy or over-the-top, corporate greed.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
