Recovery is still some ways down the road, Cross–Industry Research Report

TrendsSpotting.com finding says, consumer’s confidence still low, consumers taking extra caution before buying into media and political reports.

TrendsSpotting has captured the consumers’ shopping behavior indications for 2009: Food & Drinks Media & Automobiles Education Communications Recession Trends

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1. Food Consumption of consumers eat dinner at home more often 56% than before the downturn & nearly the same percentage are eating dinner less often at restaurants. More than one-third (37%) of consumers surveyed report going to bars or clubs less often.
2. Buying Habits • A greater tendency to buy larger package sizes (42%) • Buying more U.S. products (28%) • Purchasing more locally made products (25%) • Known products (23%) versus experimenting with new ones • Private label food (7.4% increase in sales).
3. Restaurant Traffic 2.6% Decline in total US restaurant industry traffic for 09 spring quarter versus the same quarter last year
4. Restaurant Traffic Household with kids, cut back their visits to all segments of restaurants • Over 50% of industry’s decline traced to fewer supper visits from parties with kids. • Traffic was down 2% at quick service restaurants. • Casual dining declined 4% and midscale was down 6%.
5. Coffee Purchase 83% of American consumers drink coffee more at home ( up 5 points from a year ago). Coffee consumption pattern did not change as 54% drink coffee daily.
6. Alcohol 50% of American consumers are actively seeking out best deals. 24% of wine consumers choose less expensive drinks. One third of beer, wine and spirits consumers order fewer drinks.
7. Pet Foods And Veterinary Services 22% of American put a high priority on pets compared to Canadians (17%), French (15%) and Italians (12%). The pet industry is expected to generate $51.6 billion this year - 1.3% more than in 2008.
8. Home Broadband home broadband adoption, is up from 55% in 2008. 63% 34% of home broadband users said they subscribed to a service that gave them faster access speeds, an increase from 29% in 2008. A growing share of broadband subscribers pay for premium service that gives them faster speeds. . They are also paying more for the extra speed than they did a year ago .
9. Cell Phone Services of cell phone users (19% of all adults) report that in 22% the past year they have cancelled or cut back cell phone service. Cell phone users are economizing on service plans.85% of adults report to have cell phone service, up from 77% at the end of 2007.
10. Smart phone ownership continues to rise, with 37% of respondents now reporting they own a smart phone. 14.4% say they plan on buying a smart phone in the next 90 days, the highest percentage ever recorded in a ChangeWave survey.
11. Cable TV Services 22% of US adults have cancelled or cut back cable TV service in the last year. More than a quarter of consumers plan to reduce or cancel their satellite or cable TV subscriptions, according to the research, up from 15% six months ago.
12.  Video Games Drop to $863 million in video games sales were registered in May from the same period a year ago. 23% Sales of hardware (consoles and hand-held devices) dropped 30% while sales of software fell 17%, to $449 million. In June - domestic retail sales of hardware and software fell 31% - the largest monthly drop since September 2000.
13. Americans' dependence on the 20% family car remains strong (88% rate an automobile as a necessity) - 2009 auto sales are expected to decline by 20.5 percent, or 10.5 million vehicles.
14. Hybrid Cars On February 2009, only 15,144 hybrids sold nationwide, down almost two-thirds from April 08, when the segment's sales peaked and gas averaged $3.57 a gallon.
15.  Education Planning of high school guidance counselors saw an increase 71% in the number of students who this year chose less- expensive colleges over their "dream school."
16. About the report: Food & Drinks Media & Automobiles Education Communications 50 pages detailed report across 8 industries Over 50 consumer studies and web metric trends analyses

Conclusions: TrendsSpotting finds that contrary to some optimistic public statements, for the majority of industries, recovery is still some ways down the road. 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. 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.


John Gerzema says there's an upside to the recent financial crisis -- the opportunity for positive change. Speaking at TEDxKC, he identifies four major cultural shifts driving new consumer behavior and shows how businesses are evolving to connect with thoughtful spending.

From consideration to advocacy or is it the other way??

If the post on the purchase funnel and the consumer decision journey was a little too academic , then meet Dave, and follow his idealised journey from initial consideration to becoming an advocate:

The purchase funnel is no more

The purchase funnel has always been one of the main tenets of marketing theory.

We’ve intuitively known for while that it no longer holds true (if it ever did), but despite many attempts, we’ve had nothing come along that’s replaced it. For example,Forrester had a go a couple of years ago with the diagram below, but crucially it failed to provide a model that was easy to visualise, and it failed to catch on (surprisingly, neither did Giles Rhys Jones’ simpler alternative).

Now, finally, we have a viable alternative model, along with the science to back it up.McKinsey have conducted a study examining the purchase decisions of almost 20,000 consumers across five industries and three continents, and come up with what they callthe consumer decision journey:

The funnel concept fails to capture all the touch points and key buying factors resulting from the explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer. A more sophisticated approach is required to help marketers navigate this environment, which is less linear and more complicated than the funnel suggests. We call this approach the consumer decision journey.

Because of the shift away from one-way communication — from marketers to consumers — toward a two-way conversation, marketers need a more systematic way to satisfy customer demands and manage word-of-mouth.

We hate the word ‘consumer’ (we are all people as far as We Are Social is concerned), but that doesn’t make their model any less valid. David Court, Director ofMcKinsey’s global Marketing & Sales practice, has an excellent presentation that explains the research and what it means for marketers. The most salient parts being:

You have a trigger of some sort, where people start across the decision journey — they are now going to move towards purchase. The first stage is initial consideration. In many industries, people actually start in their initial consideration of a brand with a relatively narrow list, we believe because of the busy lives and bombardment of media — it’s just very difficult to get through all this clutter in this consumers initial consideration set. However, once the consumer decides they are going to buy a product, they move into a stage that we call active evaluation. It is here that the number of brands they are considering increases. Which is exactly the opposite of the premise of the funnel, going from broad to narrow. This is the stage when the consumer is intent on purchasing and they are actively researching the product.

What marketers should know
The most important thing for marketers to do is to make sure that their marketing activities are aligned against how their consumers research and buy products [...] companies need to look at their messaging in light of where they have the greatest opportunity. For example, companies’ messaging is all about trying to get into the initial consideration set, and yet, when the consumer reaches out during their active evaluation stage, they’re not providing the right facts and testimonials that the consumer is looking for [...] most companies are going to have to make fundamental investment in what we would call consumer driven marketing

Consumer versus company driven touchpoints
We analytically looked at which touchpoints were most influencing the consumer’s decision. We found two types — company driven versus consumer driven. In consumer driven, the consumer is reaching out to get information — they’re talking to their friends, doing internet searches, seeing what’s said on third party sites.

In the initial consideration it was still very much still company driven — the advertising was a very critical part of the touch points that influenced the consumer. However, when we got into active evaluation, two thirds of the influence of those most powerful touchpoints were from consumer driven touchpoints — word of mouth, talking to friends and family, searching on the internet.

And that is a very big change — you need to develop ways for people to talk about your product, so that word of mouth works. Be represented on independent internet sites where people will go and research and buy products. Because, if you don’t have enough presence on those types of consumer driven approaches, when the consumer is reaching out during active evaluation, you’re not there for them to find.