Even after the national economy recovers from recession, consumers will not restore the consumption habits they once had in the pre-recession period. Companies cannot apply the same marketing strategies in the post-recession period to restore their business.

At the ceremony to release the FAST500 report, the report of the 500 fastest growing enterprises in Vietnam, Professor John Quelch, who is well known as a mater of marketing art, now Dean of the China Europe International Business School CEIBS,  and former Associate Dean of Harvard Business School, shared his interesting findings about consumption trends in the 21^st century in the post-recession period.

Consumers will think carefully when spending money

Economic recession causes unemployment and makes people’s income decrease. As a result, they have to be more frugal.

People will cut down the consumption volume and shrink their demands for products and services in both quality and quantity. He related that Tide, a well known detergent brand in the US, provides a wide range and hierarchy of products. It has a product with the words “standard detergent” on the packs, which means that the detergent is of good enough quality to clean clothes, but has the price lower than other higher class products. It is clear that consumers can choose to use this kind of detergent to save their money.

Price and quality are always the two things which have direct impacts on purchase decisions. In difficult periods, consumers can be easier about quality, but they will be very choosy about the prices.

Consumers will spend more time hunting for cheap products and compare the prices of similar products, listen to “consultancy channels” (families, colleagues or friends). Instead of going shopping whenever they like, consumers will reduce how often they shop and try to buy products for discount prices during sales promotions.

In a recession period, people cannot ignore brushing their teeth, or people cannot advise others to brush their teeth once a day instead of two times a day. They still have to purchase essential goods, but it is clear that consumption behaviors change considerably in the recession period.

Consumption tendency cannot be restored

A question has been raised whether or not consumers will restore consumption habits they had before the recession. The answer is “no.”

According to Professor John Quelch, a Deloitte’s survey showed that 26 percent of US consumers will not consume as much as they did in the pre-recession period. As for Avon, only 13 percent of people said they will restore their consumption habits. Meanwhile, Ford said it cannot return to the peak production age it once had in the past.

The research of the professor has pointed out that there are four main tendencies in consumption habits of consumers after the recession. Consumers tend to look to simplify consumption, consume responsibly,  serve themselves, and make online purchases.

Young consumers, for example, decide to choose one brand because the enterprise is committed social responsibility or makes contributions to solving global problems. Wall Mart in the US or Tesco in the UK, for example, are encouraging manufacturers to declare the carbon volume used in the manufacturing process and show the figures on the packs. This allows consumers to easier to make decisions when seeing the figures on the packs.

Online consumption will develop more strongly than ever because recessions give people more time to work on computers and surf websites, allowing them to discover the facilities computers and websites can bring.

Finally, the marketing expert stressed that in order to succeed in doing business, CEOs should not simply sit in their offices. They should spend time going to the markets and watching them. They also need to discuss with their staff and listen to input from clients.

Pham Huyen