Why and how they have changed-New consumer attitudes

Shirley A. Roberts is the owner of Market-Driven Solutions, a marketing and sales consulting practice based in Mississauga, Ont. This is the first in a three-part series by Roberts on consumer rebellion against products and prices they once revered, and how...

Shirley A. Roberts is the owner of Market-Driven Solutions, a marketing and sales consulting practice based in Mississauga, Ont. This is the first in a three-part series by Roberts on consumer rebellion against products and prices they once revered, and how companies can thrive today not just in spite of the defection but because of it.

Consumers are now revolting against the very products they made successful in the 1970s and ’80s.

They are also rebelling against the very prices they gladly paid.

The experience has been quite sobering for many business managers who have witnessed the erosion of their market shares and profits.

What is certain is that new approaches are necessary.

However, it is less evident how consumer goods and services companies can adapt to these dramatically changed consumer attitudes and buying behavior, without jeopardizing profitability.

There is hope for the heroes of the ’70s and ’80s to prosper once again. An in-depth understanding of why and how consumers have changed is the first step to uncovering the road to prosperity.

That is what we will review in this first article. In my next two articles, we will focus on recovery strategies that successfully leverage this knowledge.

To understand consumers more intimately, let’s first look at a brief synopsis of how the world around them has changed.

The chart above lists the rapid shifts in the economy that we have all witnessed over the past 20 years, and the impact each change has had on consumers.

Consumers now choose from many more options than they had in the ’70s and ’80s:

- high- and low-end private label entries

- lower-priced category options

- buying favorite brand only on deal or best deal on any brand

- larger sizes or bulk packs

- global imports

- grey market or knock-off product substitutes

- alternative substitute categories

- alternative retail store options such as outlet, warehouse, u.s. and duty-free stores

- alternative shopping options such as tv solicitation and direct marketing

Consumers are choosing these options out of necessity because of unemployment, static salaries, declining housing asset values, higher taxes and often heavy debt accumulated in the prosperous ’70s and ’80s.

Additionally, aging baby boomers continue to have the financial responsibility of raising families, while, at the same time, taking on the extra burden of saving for their retirement.

Consumers are now more aggressively searching for, and finding, better prices than ever before. Let’s look at the evidence.

According to A.C. Nielsen, in the 12 months to March 29, 1993, annual grocery products tonnage grew by 4%, while dollars grew by only 2%.

Canadian consumers also redeemed a record 327 million coupons in 1992. This was a 13% increase over 1991.

A 1991 survey conducted by the Canadian Council of Grocery Distributors found that 28% of Canadians had switched supermarkets in the past year.

Forty-five per cent of shoppers said their search for better or lower prices was the No. 1 reason for switching stores.

According to the same survey, private label products were used frequently by 35% of Canadians, and, occasionally, by another 42%.

Private label entries are now encroaching on the last strongholds of mega brands such as cigarettes, pop, beer, and even golf clubs.

Consumers are demanding more for less money, and refuse to buy when they do not get their way. There is no easy sell anymore. These are tougher, better-informed, more discriminating consumers.

The chart below takes a detailed look at the specific attitude shifts that have occurred over the past 20 years, their impact on businesses, and the opportunities for smart consumer goods and services companies to leverage these changing needs.

Many of these insights are based on original consumer research conducted for my clients.

In my next article, we will explore in detail the following five principles of Consumer-Paradigm Realignment (cpr:)

1. improving consumer value

2. personalizing products and markets

3. cutting the fat out of marketing and sales budgets

4. increasing organization responsiveness

5. enhancing the selling environment

These recovery strategies will help your company successfully adapt to this very changed consumer, without jeopardizing profitability.