These are some of the factors that I think will determine the impact of this recession on spending habits for a particular product category. Each factor is a continuum. If you are researching issues around demand for a product, it might be worthwhile to consider some measurement of these variables, to use as diagnostics in the analysis. It’s a moving target right now, as the economy continues to shift rather quickly. More now than ever, the more deeply we understand shoppers’ current state of mind, the better a company can position its products and target them.
Factors that have to do with the shopper’s resources right now:
1. How deeply the shopper’s finances have been touched: this could be seen as a continuum from sole breadwinner of a household laid off, hours reduced, no increase in salary this year to no impact on finances at all.
2. The shopper’s perspective on the duration of the recession’s financial impact on them: long lasting (unlikely to ever get another job, pension lost)…short term (ex: federal gov’t employee with lots of seniority, might experience a small dip in bonus this year but that’s all). Can they recover from this and how fast?
3. Their emotional response/emotional resiliency: might range from extreme anxiety, worried about losing job, complacent, or taking it in stride with equanimity.
4. Their perspective on locus of control – do they think they can do anything to fix their situation or is it beyond their control?