The new consumer mindset.(On Marketing)(Conference news)(Viewpoint essay)

CONSUMERS' PRIORITIES, CONFIDENCE and behavior have all been on a rollercoaster--OK, mostly just a downhill roll--since 2008.

Marketers, investors, legislators and others are all trying to predict the answers to some big questions. When will things turn around? Will the American consumer again be the engine that pulls the economy back? What, if anything, will go back to the way it was?

In late April, I served as moderator for a corporate marketing and economic forum in Chicago. At that event, I was joined by nationally known economists, industry experts and consumer analysts such as Kate Muhl, a senior director at the consumer research agency Iconoculture, based in Minneapolis. Muhl and her firm have developed some interesting thoughts about changed consumer mindsets in this New Economy.

The focus during the event was on food and beverage consumption trends. Consumers' behavior has changed dramatically in only a few months. But our discussions also encompassed larger trends in housing, trade, inflation, investments and consumer psychology.

It is the consumer psychology angle that I wanted to share with you. Tell me what you think.

The analysis from Iconoculture synthesized spending data and interviews and produced three big, and sometimes overlapping, trends:

1. "The Hard Bargain." More consumers are combining new-technology tools with an old-school haggler's attitude to keep as much of their old lifestyle as they can. Thrift, savvy and responsibility are the key ideas in this mindset. The Hard Bargain plays out in ways both low-tech (consignment shopping) and high-tech (ScanLife, howtohaggle.com, shortcuts.com). In the food and beverage worlds, consumers are staying home more often, entertaining friends and sticking to their grocery lists.

2. "The Uncertainty Principle." Consumers are understandably struggling in this turbulence, trying to keep their heads on straight when it comes to their own desires and spending patterns. Many Americans are coming to grips with their shopping-dependent ways of the past.

3. "The Great Concession." It appears that many Americans are adapting to the New Economy by building a different model of consumption. They are treating the current day not solely as an exercise in deprivation but also as a longer-term opportunity for simplicity, individuality and self-sufficiency. You can see evidence for this mindset in many small ways, both offline, such as the increasing number of food gardens, and online, such as the interesting site LendAround.com.

The categorization is appealing in the way it captures the conflicting moods of consumers in 2009. But could this go beyond a description of the current consumer landscape--and perhaps predict the next decade or so? Muhl and her colleagues at Iconoculture make the case that these trends will be around for a while. They say the three mindsets were already beginning to emerge before the economic crash; economic pressures and the erosion of trust, in both business and government, simply pushed these ideas squarely and more quickly into the mainstream of consumer thought.

So what should be the impact, if any, on your marketing decisions? I expect consumers to release some of their pent-up demand during the next few quarters, as the fear factor recedes and markets stabilize. But that doesn't mean consumers will completely go back to the way they were. People still aspire, but many have also made some fundamental changes about the nature of those aspirations and where consumption fits into their lives.

As the Iconoculture team advised its food and beverage clients, when you look at the balance of this year and into 2010, think about touting experiences over stuff, authenticity over luxury, and relevance over indulgence.

Are your company and its brands prepared to win if this new consumer mindset proves to have staying power? If so, the New Economy might turn out to be a new opportunity for increasing your market share and profitability.

Jim Karrh is a Little Rock-based marketing consultant, speaker and trainer. E-mail him at jimkarrh@aol.com.

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