The last couple of blogs deal with factors that will affect how a person’s spending habits are impacted by this recession. Some of those factors have to do with the person – changes to their resources, and their psychological response to the recession. Some of those factors have to do with the product under consideration – its price relative to its competitors, the nature of the item, loyalty to the item, etc. And the impact of these variables for any one product is likely to be pretty idiosyncratic.
What we don’t know is how long lasting any impact of the recession will be on consumer behavior. This recession will have a long lasting effect on people when these conditions are met:
It hurts: lots of negative emotion and poor coping strategies (high anxiety, lots of tension in the home, etc.)
- It’s an obvious effect: A meaningful reduction in lifestyle
- It isn’t going away: No clear, quick resolution or return to former lifestyle
For people who experience these three elements strongly (a lot of anxiety and tension, a big reduction in lifestyle, it drags on) this will be a searing life experience, and they will not be so quick to consume even if their resources rebound.