New era of frugality dawns

A new era in marketing is opening up as credit crisis-hit shoppers re-evaluate their attitudes to consumerism. With unemployment rising and those lucky enough to have cash determined to conserve it, people are reining in their spending.

But there are also signs of a profound shift in attitudes as the conspicuous consumption that powered the 20th century economy is called into question. Recent research suggests that consumers have been struck by a blinding revelation about what is important in life.

The results of a survey of attitudes confounded market researchers, who expected the public to be angry, bitter and frightened about the economic uncertainties. Instead, they have uncovered a Blitz-like British fortitude and a willingness by consumers to re-evaluate their ethical values in response to the worsening economic conditions.

Three-quarters of respondents to the survey of 1,000 UK adults commissioned by The Communications Agency agreed that “the downturn is encouraging me to evaluate what is really important in life”, while 50% agreed that “harder times can bring positive outcomes for society as a whole”.

The idea that the crisis could have an ethical silver lining does not, of course, imply an unalloyed optimism about the demise of naive consumerism. The crisis will cause real economic pain for those losing jobs, homes and futures. Many people never had much to begin with.

Even so, TCA claims the research is a boon for marketers keen to conjure up the zeitgeist as they seek insights into how they should address consumers following the financial crash.

TCA chief executive Adam Leigh says: “The glib ‘all your dreams will come true’ approach to marketing will have to be re-evaluated. Brands will have to take care with the language they use and how they talk.”

He points to LG Electronics recently playing down its Life’s Good strapline to reflect the mood of austerity. “Advertising will become more honest and direct. It will be essential to tell the truth and acknowledge the economic environment. There will be a spate of ads beginning ‘In times like these…’,” he adds.

But Leigh believes the research also identifies a shift in people’s aspirations. “They will be less materialistic and they think this will make them better off morally.”

Naturally, some religious leaders may be expecting this reassessment to stimulate a renewed interest in spiritual values. They are trying their best not to adopt a “told you so” stance about the crisis of consumerism.  But it is only human to stick the boot in when your once-ridiculed predictions come to pass. Marketing Week spoke to some of the UK’s top religious leaders to glean their insights on the crisis and its implications for people’s attitudes.

“The downturn is like a chastening,” says Indarjit Singh, director of the UK network of Sikh Organisations and a journalist. “People are realising they were living far too materialistically. It is not good for people to suffer, but it does make them re-evaluate their priorities. Real contentment comes through living responsibly and a life of service to others.”

And Bishop John Arnold, of the Roman Catholic Diocese of Westminster, believes people will turn to faith in the absence of consumerist values. They may also redefine their conceptions of “quality”. “This definition moves away from having the latest gadgetry to those things that improve our quality of life, our ability to live simply.

 “People start to feel they can’t get to the goodness in things because they have so much stuff. When comforts are taken away, we review our basic priorities and real values. We start looking for real fulfilment in different ways.”

However, the Church of England’s Bishop of Ripon and Leeds, John Packer, warns against being too quick to welcome the re-evaluation of consumerism. “We need to emphasise support for one another and for those badly hit, such as the poor people at Woolworths who have lost their jobs.”

Meanwhile, Lokabandhu, a member of Friends of the Western Buddhist Order, says: “The consumer illusion bubble has been pricked. Many consumers will either now retreat into a tribal mentality and just worry about looking after number one or they could decide what really matters are genuine virtues and stronger fellow feelings.”

He admits the financial crisis is hitting donations to the Order’s Indian charity the Karuna Trust and says that a new policy of keeping in touch with lapsed donors and empathising with their predicament is being implemented in a bid to maintain their support.

At the same time, others less famed for their spiritual approach have also noticed a profound change in people’s attitudes to consumerism.

Andy Bond, chief executive of Asda – the UK’s second largest supermarket chain –  summed up the feeling of many retailers last week when he said: “We are moving into an era of the frivolous being unacceptable and the frugal being cool.”

He predicts a new age of thrift similar to the post-war austerity years. For instance, Bond foresees an end of the boom in ready meals among Asda’s “middle England” shoppers. Indeed, the category’s sales at Asda have fallen 40% this year. But sales of Thermos flasks are booming as consumers shun café-made lattes in favour of homemade drinks. “The era of conspicuous consumption is over. Saving money by cutting out waste of all kinds will be the priority,” he said.

Much of this shift in attitudes was identified before the collapse of the financial system. WPP chief executive Sir Martin Sorrell said earlier this year: “All our instincts as clients, agencies and media owners are to encourage people to consume more. But our view, counter to what you expect our industry to argue, is that conspicuous consumption is not productive and should be discouraged.”

When one of the nation’s top retailers and our most senior advertising boss concur so readily with religious leaders about the end of consumerism, that really does herald a radical departure for marketing. Now it is up to marketers themselves to make sense of these changes and map out a pathway for brands to thrive in the new world.    

Additional reporting by Mary-Louise Clews


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