Spend Less and Save More: The New Consumer Mantra amid Economic Crisis

    Spend Less and Save More The New Consumer Mantra amid Economic Crisis

    Increasingly, consumers are spending less and saving more with a clear focus on economic costs, due to the pandemic.

    With the global economic downswing, customers are focusing more on their savings lately In the light of the financial situation picking up, brands that restore their value could elevate sales – with savings turning to spend. GfK’s latest monthly consumer confidence index revealed that people are currently spending less.

    The cost of the coronavirus crisis to the UK economy is now becoming understandable. The index found that the significant purchase intent has come down to -26. This is drastically lower than the score of four YOY – however, there is slightly an increase compared to the rating of June. This savings index was up five points month over the month to 21, while this was somewhat behind that of July 2019.

    Re-aligning the Customer Strategy in the Post COVID-19 Era

    People have been wise and saved funds amid the initial lockdowns. Lately, customers have started to feel more confident in their financial situation. The score for the next one year is up with four points to zero, compared to last month. Considering the previous 12 months, the consumers have raised scores by five points to -4.

    The research data suggests that the repercussions of the pandemic on the economy as well as audiences’ situation were clearly visible. With job cuts mounting and end of the furlough scheme approaching, there had been the least to motivate consumers’ feelings about the global economy. The overall confidence has begun to recover from as low as -34 in April. In May, it continued rising three points to -27 weighed against June.

    Consumers Want the Brands to be Sensitive and React to the COVID-19

    According to Joe Staton, Client Strategy Director at GfK, as mentioned in the company blog post – “The way we perceive our ‘future wallets’ is key as it’s the one area over which we have day-to-day control and is a good indicator of our personal financial outlook for the year to come.”

    The perception of the economy currently indicates a modest sign of improvement. The views on the broad economic situation in the past year fell two points to -61. Besides, they remained down on where they were a year back – as measured -32.

    However, the opinions about the general economic circumstance over the next 12 months are up from -48 to -41, i.e., month over month. It is still down on -32 measured in last year’s July. While most consumers are avoiding on spend, some of the industries are hopeful throughout.

    Marketing Strategy amid COVID-19 – Marketers Need to Rethink, Not Fear

    For instance, brands in technology, DIY, food, and drink, online tools, etc. are seeing a rapid increase – suggesting that there could be a productive opportunity if businesses get their messaging strategy right. With consumers feeling positive about their finances, the near future will turn these savings into spending.

    Clearly, this is a prime time for businesses to restore their value in customers with the right plans and loyalty programs.