My buddy, Taly Weiss Shalev, published a report called “Consumer and Market Trends During Recession,” and I asked her to share the results. Recently, some people have declared that the recession is over. But is it really? Are there signs of consumer recovery? To better understand how Americans are coping during the recession, her firm, TrendsSpotting.com, collected data from main consumer markets and consumer’s behavior indications for the year 2009. These are the key findings:
Food. The food retail sector sees more frugal consumers eating at home and avoiding dining out. While people may not be drinking less coffee and alcohol, they are drinking more of it at home and looking for better deals.
Apparel. As the apparel industry declined throughout 2008, people are now looking to renew their wardrobe. In particular, statistics show that jeans are a breakaway hit—probably since people can wear them in a wide range of occasions, and the rich can wear expensive designer brands without feeling too extravagantly dressed. Also showing significant growth are outerwear and women’s dresses sales.
Electronics and media.This sector shows some positive trends: More consumers are embracing home broadband services as well as increasingly accessing the Internet from mobile devices (smart phones, netbooks, game consoles, and media players). So, while cell phone purchases are generally down, smart phones are getting hotter.
Personal computer sales in general were down for the first time in 2009, but Internet search queries for the PC category remain stable. Mobile PC sales led by increased demand for netbooks were up.
Consumers are cutting back on their cable and satellite TV subscription services, but HDTV and LCD TV markets are still on the rise. The video game industry, assumed to be immune to recession by many experts, took an unprecedented and unexpected hard hit.
Pharmaceutical. Another sector thought to be recession-proof, the pharmaceutical market, also had its growth take a hit this year. Non-prescription drugs were down while consumers are putting in efforts to maintain their health and are seeking solutions in the alternative medicine market.
Autos and travel. While the government’s Cash for Clunkers program did manage to drive up new car sales, it came at the expense of used car sales. The travel market is also down in 2009, but the online travel market will not feel it as badly.
Education. This seems to still be a priority for Americans but private universities appear to be out of reach. Although high school graduates seek less expensive schools this year, fewer consumers are willing to skimp on their back-to-school spending compared to last year.
Pets. Finally, Americans' love of their animal companions has made the pet business and veterinary services one of the few economic bright spots.
TrendsSpotting finds that contrary to some optimistic public statements, for the majority of industries, recovery is still some ways down the road. Many of the top markets previously powering American industry are going through a major shift. Observation of consumers’ reactions suggests that they are adjusting to the change in economic realities and adopting new consumer habits. They are focused on downsizing and are highly motivated by price. The period marking the beginning of the recession to the present has been a time of trial-and-error for consumers.
After initially cutting back across the board, consumers have reassessed their personal situation and begun to employ a new set of priorities. They are checking out private labels and, if found satisfying, they will become loyal to them. Consumers aren’t sacrificing electronics, but are reconsidering their options: for example, netbooks over desktop PCs or laptops; smart phones and Internet connectivity over careless talk-time spent on mobile phones.
Recovery will bring a new age of consumers, much more aware of their expenses and their priorities. Consumers will not revert to their previous habits as those were proven to be unsound. Recovery will come from markets matching consumers’ new priorities.
The “Consumer and Market Trends during Recession” report covers the U.S. market in the following consumer industries: Food and Beverage, Apparel, Media and Electronics, Travel, Health, Automobiles, Education and Pets. It provides a broad perspective on consumers’ changing behavior during the current economic downturn.Click on this link for more information and to purchase the report