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A survey published this week by IP Luxembourg, in conjunction with the Confédération luxembourgeoise du commerce (clc), indicates that consumers are thinking more and more about their options when deciding how to spend their disposable income.
The crisis has not yet drastically changed the shopping habits of Luxembourg’s consumers, according to Lou Scheider of IP Luxembourg. But with 20% of the population predicting they will have less disposable income over the next few months, it is clear that many local residents will be looking long and hard at how they spend their money. Scheider presented the survey on the “new behaviour of consumers” at the second Shops & Trends conference, which focussed on awareness of the crisis and how to deal with its consequences. TNS-ILReS was commissioned to conduct the survey during the last week of January.
The results confirm that the crisis is having an effect on consumer confidence. In addition to the one-fifth of workers who fear their disposable income will fall (63% said they thought it would remain stable, while 13% thought it would increase); the survey also revealed that57% believe the economic crisis will last at least two years; that is until at least the second half of 2010.
Changing consumer habits have manifested themselves in shoppers either seeking out cheaper goods, deciding to buy less of a certain type of product or, in a few cases, foregoing “luxury” items altogether. Price clearly plays an important role, whether it is seeking out temporary offers or making price comparisons. But choice, quality and brand names remain decisive factors. It will come as little surprise that Scheider advocates a continuation of advertising and stresses the importance of staying “top of mind”. He cited a Millward Brown survey of Profit Impact Marketing Strategy that reveals that companies who cut investment in advertising lost 0.8% of market share two years after the end of a recession, while those that maintained their level of investment increased market share by the same percentage. But those who increased their advertising during a crisis ended up with a 2% gain in market share.
The IP survey concludes that businesses must continue to employ targeted and efficient and creative communication to seize the opportunities available when the crisis ends. Quoting a report published by American Business Media titled “Making a Recession Work for You”, Scheider’s presentation concluded with the following words: “When times are good, you should advertise. When times are bad, you must advertise.”
