Oct 08
28
The Trend Toward Trading Down-a media buying experience
In this fledgling economy, a noticeable shift in consumer purchasing has become apparent: Shoppers are taking drastic steps to save money: trading down SUVs in favor of economical vehicles and going from designer labels to private labels. (See Peter Koeppel’s ERA article on the decline in consumer spending.)
Consumer confidence tumbles. Climbing gas and food prices, an unstable real estate market and a looming credit crisis have resulted in the lowest consumer spending in several years according to a recent Wall Street Journal article.
The article reports that consumer confidence has plummeted to a mere 38 percent since it first peaked with 57 percent of consumers revealing to an annual survey that their finances had become even worse. This is the highest reported figure since the survey began back in 1946.
Profiting during troubled times. Despite the dismal economic forecast, some retailers still managed to make a profit. Discount stores like Walmart, Dollar General and Family Dollar Stores have managed increased sales.
And even though American car manufacturers have taken a hard hit financially as more motorists downgrade their vehicles for more fuel efficient models, Japanese car manufacturers Toyota and Honda are reaping profits with certain models. The Toyota Corolla is currently the number-one selling car in the U.S.
Why are these figures and trends so important in our world of direct response television and media buying? It’s so important for retailers to pay close attention to consumer spending trends. For example, are shoppers participating more in one-stop shopping, buying groceries once a week to save gas, making more bulk purchases, using coupons and comparison shopping to find the best deals?
Savvy marketers appeal to shoppers based on changes in their spending habits. This is key to success as they compete in this changing market – that much has not changed.
