Marketing in the New Economy

Key Concept: Consumers are still willing to spend on brands and products which are aligned with their personal values.

Did You Feel That? Was that Thunder?

It was the “aspiration generation”—when consumers aspired for the “best” and were willing to pay for it.

The herd is on edge. Eyes are dilated. Adrenaline is pumping. Heart rates are up. Sometimes it feels like it’ll only take one more crack of thunder and we’re all going to bolt.

I’m not actually talking about cows, I’m talking about you and me. I’m talking about the tectonic shift in consumer behavior that’s been driven by the financial realities of the new economy. I’m sure you’ve noticed that things are different and the rules have changed—again.

At Delicious Design, we don’t spend much time wondering ‘why’ things are the way they are. Obviously we’ve all learned a great deal about how global markets work (or at least how they used to work), but to us, it’s just an academic distraction from the truly important question: “How has consumer behavior changed?”

Now let’s all take a deep breath. The thunder can’t reach us here.

Remember when the Grass was Lush and the Farmer had Soft, Warm Hands?

Bank accounts were in bloom, college kids were pre-approved for credit cards, and there seemed to be no end to the real estate boom. Ah, the good old days.

For about 30 years leading up to 2008, consumer behavior had been rock steady and our spending patterns were so consistent that they seemed to be ingrained in our DNA. It was the “aspiration generation”—when consumers aspired for the “best” and were willing to pay for it. Bank accounts were in bloom, college kids were pre-approved for credit cards, and there seemed to be no end to the real estate boom. Ah, the good old days.

It’s easy to look back now and say “greed got us into trouble,” but that oversimplifies the biological root of the behavior: buying the “best” directly stimulated the brain’s reward center. Zap. It didn’t matter if it was the newest iPod or superior fabric softener, status trumped sensibility because status payed off immediately, and sensibility’s benefits were often deferred. The brain simply isn’t stimulated by driving an economical, paid-off, rusty Honda.

Then a perfect storm hit. The grass was replaced with “feed” (made of who-knows-what) and the farmer bought a robotic milking machine. The glory days were over. And as herds do, this herd started to move…

Value and Sensibility are the New Status Symbols

Flash forward to 2009 and the most amazing thing happened: consumer behavior changed—in the blink of an eye. I’m not just talking about the obvious “they don’t have as much to spend so they’re spending less” change that we all expected. I’m talking about something much more profound.

I knew humans were highly adaptable, and I expected some financial “hunkering down,” but I didn’t expect that we’d be able to so dramatically re-wire our brains to feel reward for sensible behavior! It’s now “fashionable” and “cool” to do “what’s right.” And most importantly, it feels good. The world has turned upside down.

Where people used to boast about status purchases like a new iPod, they now boast about replacing a worn out battery at a fraction of the cost. “Look how much I saved!”

Where people used to boast about status purchases like a new iPod, they now boast about replacing a worn out battery at a fraction of the cost. “Look how much I saved!” And the behavior is reinforced by others: “You did good, that was smart.” Wow.

But it’s not simply an economic proposition—because thrift is almost always greener than excess. Our brains get a bonus reward for doing what’s right for the planet. That’s a lot of positive reinforcement.

Look around and I think you’ll see this new pattern of behavior abounds. It seems to be everywhere. Wow.

Onward to Greener Pastures

Companies which move swiftly and leverage creative strategies have a unique opportunity to align their brands with this “new marketplace” and experience growth and build long term brand loyalty—even while the competition is contracting. When this financial mess gets turned around—and we all know it will—someone is going to be leading the herd. It’s just a question of who it’s going to be.

Our Approach: Start with Ideas instead of Advertising

Here at Delicious Design we collaborate with our clients and craft business strategies that resonate with their customers—and drive action. To see how we can help you align your brand in this New Marketplace, head over to our homepage.