January 11, 2010

Which are You? My parents and grandparents lived through the Great Depression and their experiences during those turbulent and troubling years greatly influenced how they managed the rest of their lives. Hearing stories about how they coped – moving in with family, living off savings that had been put aside for a rainy day, stretching every food dollar, taking whatever work was available no matter how dangerous or difficult – also profoundly affected me. I am who I am partly because of what I heard.

Today, we are in the midst of what might be termed the Great Recession. I got to thinking about how these times will influence all of us in the years ahead. Apparently many others – particularly marketers – are also wondering what the long-lasting effects might be. Will frivolity and the good-times return or will many remain cautious and frugal?

A segmentation study recently completed by Decitica Marketing Strategy & Research, a New Jersey research company (http://decitica.com/) concludes that:

1. The effects of the this recession on consumer behavior are so profound that many of the assumptions underpinning consumer segmentation are no longer valid; and

2. Marketing strategies that do not fully recognize the diversity of consumers’ recession experiences won’t have the desired potency in the post-recession world.

The study identified four consumer types that they believe will emerge from the recession, each posing its own challenges for marketers.

Steadfast Frugalists – comprising 20% of the population, this group (of whom I am a member) are committed to self-restraint, engaging in prudence with unequivocal enthusiasm (Wow! Look how much I saved in coupons today!) Six in ten (60%) are women, and while the group is comprised of individuals from all age groups, fewer are from Gen X and Gen Y.

Involuntary Penny-Pinchers – for the 29% in this group, the recession has been especially challenging. Over-represented by people in their 30s and 40s, frugality for the most part has been forced upon them. Half have not saved any money for emergencies and 87% are more worried about the future than other groups.

Pragmatic Spenders – also 29% of the population, these consumers have blunted the effects of the recession. Over-represented by people in their 60s, and from the Northeast and West, more than a third of the people with greater than $75,000 household income are in this group.

Apathetic Materialists – this group (22% of respondents) seem least changed by the recession. Over-represented by Gen Yers, they are the least changed in terms of their spending habits and future intentions. Only about 6% of this group find price comparison satisfying, compared to 85% of the steadfast frugalists.

Do you see yourself in any of these types? What about your customers? Are you prepared to confront the new reality of the marketplace?

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