New research from WWP looks at consumer confidence after the recession
Published: 02 October, 2009
A year on from the Lehman Brothers collapse and consumers are spending again. But they’re buying less.
This is the conclusion of new research from WPP, the world’s largest advertising agency, called Playbook 2: The Sky Did Not Fall. WPP argues that consumers will move through the recession in three stages, just like individuals cope with grief.
Last winter consumers were in Stage One: Acute Distress. Now they are solidly in Stage Two: Acceptance. Consumers are shopping again, in stores and online, relieved that economic decline avoided total meltdown. But chastened consumers are not yet ready to enter Stage Three: Moving On.
“Consumers are purchasing primarily to fill basic needs,” said David Roth, CEO Europe Middle East, Africa and Asia for The Store - WPP. “They’re tentative about the state of the economy and are ready to snap their wallets shut at the least provocation.”
Even when the economy strenghtens, this shift in consumer behaviour will not be easy to reverse. Retail is set up to become simpler for the supplier, retailer and consumer. In an effort to control costs, “smaller and less” is replacing “bigger and more” in terms of size and range.
“Retailers need to reconfigure their space” says Roth, “or else they will be left with large stadiums designed for a sport that customers no longer want to play.”
