Europe’s Web of Debit – from Crunch and Dilemmas to Imbroglio and Hot Potatoes….

Consumer Behaviour Meltdown or a Moment of Truth?

Professor Luiz Moutinho

Foundation Chair of Marketing

Adam Smith Business School, University of Glasgow,

Scotland

Recession is an opportunity to Step Back and Rethink.

• Chance to pull back from hyper consumerist lifestyle and reflect on what we truly want.

• People want to be united in common cause, to invest time in something more substantive and significant than can fit neatly within a shopping bag.

Consumer Depression Echoes Societal Woes

• Compared to our grandparents, today’s young adults have grown up with much more affluence, slightly less happiness and much greater risk of depression and assorted social pathology.

• Our becoming much better off over the last four decades has not been accompanied by one iota of increased subjective well-being.

• Lands of plenty have not delivered the happiness promised.• Paradox of owning more and having less.• Increased focus on happiness index as measure of national achievement.• Stress of modern living taking toll on mental health.• Widespread dissatisfaction with modern life.

• Society is perceived as shallow…• Sense that we have lost sight of what truly matters in our endless

quest to consumer more and struggle less.• Consumers have lost confidence in society, seeing people as

somehow lesser beings than in generations past.• In light of this individual and collective downturn, prosumers are

experimenting with two kinds of reaction:• Desiring a reconnection with nature• Seeking zero risk

• Consumers want change and know they can count only on themselves.

….Manage their aversion to Risk…..• Consumers are worried about money (excessive debt, job insecurity,

supporting families over long term) and about the impact of their consumption choices.

Cheap Treats• No amount of Belt-Tightening is going to eradicate the occasional

treat.

• Delay spend on luxury/Big-ticket items, not all indulgences will be banned.

• Inexpensive products redefined as agents of pleasure

• Not just trading down, but more trading across and within categories.

Frustration Nation• People are becoming irritated with institutions and companies• Feeling of being ignored• Much reduced levels of trust• Deterioration of love for brands• A period of disengaged materialism

Prosperity Redefined• People are questioning what they really want, in an extended

period of austerity.

Timeless Quality

• Not to the “wear and tear” society• Ethical values and sustainagility as apposed to low prices

and huge volumes.• Overconsumption to end• Quality and sustainability in materials and design• Boom in the luxury second-hand• Price of product according to its total lifetime

Happiness• Materialism still in full swing but losing its appeal.• Identity not formed by owning or consuming but who you are, how you

live.• Search for meaning, spiritualism, self-introspection, authenticity and

realness.• The TMI and TMC syndrome….. To much information choice.

Good Karma• Making a difference…..• Taking responsibility. Conscious consumptions. Conscious capitalism• Responsible Luxury• Karma capitalism

Lotus Economy• From economic value to economic creativity. Measured by

creativity.• Personal transformation and innovation.• The unit of measurement is the primary unit of exchange –

Meaning!• Seeking a return to “REAL”• Create more “enchantment” – allowing the consumer to step

away from anxieties and fears, and engage in experiences that surprise and delight, indulge the senses, and offer a break from the everyday.

The Disaffected Youth

• One of key outcomes of the recession for advance economies is the lack of decent prospects for young people, who face high unemployment, tuition fees, rising living costs, a lack of affordable housing and the burden of supporting ageing populations in the future.

The Jinxed Generation• Believe the future is evaporating, being replaced by

disillusionment and cynicism of the younger people.• Public spending is also greying.• Development in Robotics, automation and data analytics, will

make jobs harder.

Generation Nice• Highly social adolescents focused on responsibility, fairness and

engagement.• Thank you economy.

From “Active Pessimism” to “Proactive Mindfulness”

In spite of their anxiety, people are resolved to change the status quo and take greater control of their present lives and futures.

The Four Paradigms of the New Consumer

Embracing Substance Growing Up

Right Sizing Seeking Purposeful Pleasure

Growing UP• Accepting Personal Responsibility• Building Individual Competencies• Selfishness is giving way to community

and collaboration.• Moving beyond immediate gratification.• A smarter, more empowered approach to

consumption.• New consumers are looking for brand

partners that help their live values….. (Mindful Consumption)

New Consumers are looking for companies that respond to a desire for re-enchantment

• In anxious, often depressing times, consumers seek concrete solutions to their aspirations for change.

• Companies can help pull consumers out of their doldrums by proposing – and helping to create – a more inspirational and meaningful universe.

• Provide consumption choices that minimise negatives (e.g., eco-toxic, antisocial, stress-inducing, unhealthful) and maximise positives (e.g., contributing to society, allowing more time with family, tightsizing).

Prosumers are driving a new approach to consumption• Focusing more on the environmental and/or social impact of the

products they buy.• Widespread sense of responsibility for impact of personal

consumption choices.• Majority of Prosumers are willing to put their money where their

mouths are (paying more for products that satisfy their consciences)• Seeking a deeper relationship with brands…• Majority looking for brands that share their personal values, and

around ½ seek out companies that have a purpose beyond profit.(Euro RSCG Worldwide and Havas Worldwide)

Paralysed by choices: “Consumer Vertigo”

• A more towards “intelligent Simplification”.• Wanting “less”• Buying local is more about giving than getting.

Life is a succession of crises and moments when we have to rediscover who we are and what we really want

(Jean Vamier)

In crises the most daring course is often safest.

(Henry A. Kissinger)