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BizReport : Ecommerce archives : February 24, 2010

Report: Consumer cutbacks an opportunity for marketers

The recession taught Americans at least one thing: how to save more money, or at least get spending under control. According to a recent Harris Poll, about two-thirds of Americans are buying generic brands and brown-bagging lunch. All because of job losses, lowered spending and general economic turmoil. The bright side? For newer brands, this could also be an opportunity to gain ground on category leaders.

by Kristina Knight

For marketers American's newfound thriftiness may not seem like a plus, but by thinking outside the box marketers can flourish even as American's cut back. First, despite the fact that consumers are spending less, they are still spending. Everyone needs staples, most workers will always love their morning mocha fix and there are only so many months a woman can go without a great manicure. So, even though American's are cutting back there are ways for marketers to reach into the consumer base to increase revenue.

First, the poll results.

The Harris Poll found:

• 45% of Americans are now brown-bagging lunch, Gen-Xers are most likely to brown bag it
• 39% are getting hair-cuts/personal services less often
• 34% are using refillable water bottles rather than buying bottled water
• 33% have cancelled a magazine subscription, Matures are most likely to cut out subscriptions

Smaller or regional brands and even trusted brands with newer products, priced correctly, could easily gain ground in times such as these when the bigger brands continue to use pricing from pre-recession days. As those big brands continue selling paper towels for $3.99 a roll, consumers are picking up more rolls of papers towels from lesser-known brands. So, for every $3.99 roll they would have purchased post-recession, they may now be purchasing 2 rolls at $1.79. Brand B, who has always had a lower price, is now in a position to gain ground because more consumers are cutting back on the most expensive brands in favor of spending with cheaper brands.

Why? Because consumers are looking for good products at lower prices. Smaller brands can capitalize by keeping their prices lower than the bigger brands or by offering special loyalty savings, coupons or online discounts.

Tags: consumer spending, Harris Poll, online spending, recession, shopping habits

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