3 New Characteristics of Consumer Spending

Market researchers are always trying to find the spending habits of the modern day household. Yet according to Mass Affluence by Paul Nunes and Brian Johnson, these spending habits have changed – changed to such a degree that it no longer makes as much sense to market your products using the same methods that have been popular over the last few decades.

Affluence According to the authors, most households are – on average – far more affluent than the similar “middle class” not long ago. Families and individuals have a greater level of income that can be used to make purchases, which means that the potential for creating sales is much higher than it was in the not-too-distant past. Frugalness Despite the increase in overall wealth for the middle class, spending has actually gone down, at least when it comes to the amount of money that consumers are likely to spend based on their income.

This frugalness has changed the value of the common consumer, so that marketers can’t expect an individual to make quite as many instinctual purchases with their money. Options The authors strongly believe that consumers these days want options, and they want these options to give them the amenities of someone that is affluent, without perceived affluence, because perceiving that the items are a luxury would counter the idea of being frugal. Customers want the benefits of their new wealth, but only if those benefits do not make the consumer feel as though they are wasting their money on something luxurious.

The reason these changes are so important is because they are likely to change the way your company deals with both its marketing strategy and its product offerings. The affluence of consumers allow you to potentially make more revenue for your company, but the frugalness and what the consumer is willing to spend their money on means that how you reach consumers needs to change. It will be interesting to see how many ways this mentality changes the current market.

It appears at first glance that the biggest change will be the need to innovate. Like Apple’s philosophy of bringing customers the things they need without realizing they need it, because that innovation will give the benefits of a luxury item without the appearance of a luxury item. If true, the market for products will change considerably in the next decade.