After a year of holding off on purchases, consumers are ready to start spending again, but they're still not feeling financially secure and their spending habits have changed, said Betsy Frank, Chief Research and Insights Officer for Time Inc.
One thing that's changed: Spontaneity has dropped out of the shopping process -- everything is a "considered purchase," preceded by research, said Frank.
She described the results of Time Inc.'s consumer attitudes survey at a Poynter conference Thursday called "
A Post-Recession Advertising Strategy: Where Will the Money Go?"
Advertisers are even more interested in what consumers are thinking than in the past because they are so concerned with high-yield ad spending. Even as the economy improves, one participant warned, media companies shouldn't assume that ad spending will increase.
Time Inc. has done four surveys of consumer attitudes during the recession: a week before Thanksgiving 2008, another the following Christmas, one in March 2009 and then in September. Frank summarized the results of the latest survey with three themes: optimism, aspiration and accommodation.
The trend is an inching downward of negative feelings and inching upward of positive ones. And while optimistic about their own situations, consumers aren't as positive about the economy. There's still a tremendous amount of uncertainty: 44 percent of consumers are worried about a job loss in their household in the next six months and almost two in five believe their salary or benefits will be cut.
Frank showed two Wordles, one based on the results of open-ended questions about people's moods. The biggest words (indicating the greatest prevalence) were "optimistic" and "hopeful." Next biggest and impossible to overlook: "depressed."
When asked about the mood of the country, the two biggest words were "cautious" and "depressed."
"As long as this fear [of losing one's job] continues," Frank told me later, "it can't hurt to save a little more than spend."
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James Stem
Betsy Frank, chief research and insights officer for Time Inc., spoke at Poynter's "A Post-Recession Advertising Strategy: Where Will the Money Go?" |
Yet, Frank said, consumers are anxious to start spending again. More consumers, especially men and young people, are saying they think now may be a good time to buy. Top on the list: clothing, vacation and travel, groceries and food, minor home improvements.
They're approaching this holiday season conservatively, with half saying they plan to spend less this year than last. And last year, Frank pointed out, was when some families put strict limits on the number of gifts purchased and how much they'd spend.
There seems to be higher stakes on gift-giving this year, Frank said. People don't want to buy something others don't want or need. The solution: 61 percent say they'll buy gift cards. Way at the bottom of the gift list: big-ticket electronics.
This led to Frank's third point about how consumer habits have changed for the time being. "Consumers are continuing to play this balancing game between what they want and what they actually buy," she said.
Many people surveyed said they wait longer to make purchases or they use discount stores or coupons more often. When they go to a store, they buy what they want and may not buy anything else. They're eating at home more and at restaurants less.
Even magazines, she said, are "considered purchases," with people wondering if they should buy a $5 magazine or more groceries.
People are researching their purchases more and more, whether online, by talking to friends and family and through Sunday circulars (which Frank said are a key part of research on electronics). "They're going into Best Buy feeling, I know more than these guys with blue shirts because I'm the one who's been doing more research," Frank told me.
Patterns of seeking information for purchasing decisions, of course, correlate strongly with seeking information simply to stay informed. Such readers, Frank said, believe they'll know the right time to act. Those people who will lead the more hesitant consumers out of the downturn.
In a later presentation, two panelists involved in the retail and automobile industries (among the strongest advertisers in mass media) expressed similar sentiments about consumers.
Dealers, said Jim Gillespie, who heads a local auto dealers association, are optimistic about their products and future. "That doesn't mean the benefit of that optimism will be immediately translated into advertising."
