Since the economic downturn picked up speed in fall 2008, consumers have re–evaluated what the American dream means to them, putting more emphasis on personal relationships and frugality and less on acquiring material possessions, according to a new report.
The study comes from Context–Based Research Group, an ethnographic firm with a global network of consumer anthropologists, and Carton Donofrio Partners, an advertising agency based in Baltimore, Md.
One of the most interesting findings is that 78% of respondents agreed that the “American dream began as a land of opportunity but became merely ‘the land of the opportunity to buy’. ” Though people who have been personally impacted by the recession were more likely to agree with the statement, representatives of all demographic groups said it resonated.
“However, based on responses, we see that a new dream—focused on freedom and ideals rather than material possessions—is being born,” says Robbie Blinkoff, principal anthropologist and co–founder of Context–Based Research Group. “In our studies, we found people reaching this epiphany and then going through a ‘coming of age’ process that’s leading to new attitudes and new ways of interacting with the world.”
During the downturn
In 2008, Context–Based Research Group and Carton Donofrio Partners looked at how consumers were reacting to the decelerating economy. According to their report, “Grounding the American Dream: A Cultural Study on the Future of Consumerism in a Changing Economy,” consumers were passing through five distinct stages as they adapted to shifting financial realities:
Stage 1 Goodbye homo economicus In this stage, consumers realize they don’t want to be defined by their shopping habits and possessions.
Stage 2 My life is not a loan As they move into the second stage, consumers start to pay down debt and start saving money.
Stage 3 From a ‘me’ to a ‘we’ economy At this point, people focus on family, friends and building relationships.
Stage 4 Unstuffing our lives In this stage, people declutter their houses and lives, getting rid of things of little value and retaining only what they’ve decided is important to them.
Stage 5 The grounded consumer By this final stage, people feel they are more strategic and smarter. Consumption and lifestyle choices are based on meeting well–reasoned emotional and social needs.
Blinkoff and Jamie Rice, Carton Donofrio Partners chief strategy officer, presented detailed findings from their first report at the International Sleep Products Association’s Industry Conference and Exhibition in November.
‘Coming of age’
People “come of age” when they have a major epiphany about life. It triggers a rite of passage or major life change and leads to new attitudes and ways of acting. Research shows consumers have definitely come of age in the past couple of years.
Interestingly, the most recent research, “Coming of Age in the Great Recession: A Grounded Consumer Follow–up,” shows that 43% of respondents think the recession has positively affected their lives.
“With this kind of positive reinforcement, we now see the potential to maintain a healthy balance between our consumer and nonconsumer sense of selves,” says Cleve Corlett, Context–Based Research Group director of quantitative research.
Respondents most likely to see the silver lining in the recession were single–parent households, Hispanics and those with household incomes between $50,000 and $74,000. They also were more likely to have felt the effects of the downturn personally.
Other findings show significant changes in how consumers think and act:
- 93% of consumers say they have become more strategic when making buying decisions and think more about how items fit into their lifestyles.
- 88% have taken steps to spend less money.
- 83% have made permanent changes to their spending and saving habits.
- 62% still seek some luxuries in life but will spend less for them.
- 61% had decluttered their homes, donating or selling items.
“We believe the changes in behavior represent a permanent shift because they come from a deep evaluation of personal beliefs,” Corlett says. “Our studies portray a society moving into an era where we measure the quality of our lives in social terms before economic ones.”
The research team found that the changing economy has pushed consumers into four distinct segments, each with its own post–recession mindset.
- Rational These consumers (26%) say they understand the true value of material possessions and how they fit into their lives. People in this group have taken steps to spend less this year and are making permanent changes in how they spend and save. Those who haven’t been directly impacted by the recession are more likely to fall into this group, as are lower–middle income and low–income consumers.
- Relational Consumers in this group (23%) emphasize social relationships over financial and consumer transactions. They have decluttered their homes and plan to devote more time to volunteering and to spending time with friends and family. Older consumers (age 50 and above) and empty–nesters are more likely to fit into this group.
- Balanced These consumers (26%) say they are spending money with thought and care, but allowing themselves to have some fun shopping, too. Respondents in this group may be spending as much as they did in the past but are doing so in different ways and on different items. They still are seeking luxuries, but want to pay less. Balanced consumers are more likely to be male; young (under age 35); middle, upper–middle or upper class; and well educated.
- Joyful Consumers in this last group (25%) say they are experiencing true joy, often in “nonconsumer spaces.” Joyful consumers are likely to have been personally affected by the recession but say the impact has been positive. They are more likely to be female and very young (under age 25).
The latest survey, administered by Western Wats, was conducted among 1,000 U.S. adults nationwide from Oct. 7–11. The sample was balanced to ensure representativeness of the U.S. population in terms of gender, income, race, age and geographic region. To download the full “Coming of Age in the Great Recession” report, visit www.groundedconsumer.com.
Study: No more ‘average Americans’
2010 census will show diverse U.S. population
What big purchases does the “average American” plan to make this year? Where will she shop? How much discretionary spending does she have? What media best reaches her?
If you’re trying to design, manufacture and market products aimed at the average American, your efforts are likely futile, says demographics and consumer marketing expert Peter Francese. Francese is demographic trends analyst at Ogilvy & Mather and is founder of American Demographics magazine.
“The concept of an average American is gone, probably forever,” Francese writes in “2010 America,” a white paper for the online marketing and media news site AdAge.com. “The average American has been replaced by a complex, multidimensional society that defies simplistic labeling.”
Francese and Bradley Johnson, who edited the white paper, call the 2010 U.S. Census the biggest market research project of the decade. It’s expected to find that 309 million people live in the country—and, Francese says, show that Americans no longer fit into a tidy demographic, or even several clearly defined demographics. The U.S. Census Bureau is expected to spend $15 billion to count the population as of April 1 and will begin releasing data in spring 2011.
Francese predicts the census will show a population marked more by variations and differences than at any time in history.
The many faces of families
Americans completing the census this year have a choice of 14 ways to describe their household relationships, allowing “the Census Bureau to count not only traditional families but also the number and growth since 2000 of blended families, single–parent families and multigenerational families, as well as multiple families doubling up in one household,” Francese says. He expects households of married couples with no children and those of single people to be the most common structures, though neither will be dominant.
“This census will show that no household type neatly describes even one–third of households,” Francese writes. “The iconic American family—a married couple with children—will account for a mere 22% of households.”
Minorities no more
It’s long been predicted that sometime this century, minorities will, in fact, become the majority in the United States. In some areas of the country, including the 10 largest cities, it’s already happened.
“One fact says it all,” Francese says. “In the two largest states (California and Texas), as well as New Mexico and Hawaii, the nation’s traditional majority group—white non–Hispanics—is in the minority.” Given that the country’s youngest generations are the most diverse, this trend will only continue. Francese predicts the census will find that 80% of people age 65 and older will be white non–Hispanics. But 54% of children under age 18 will be white non–Hispanics.
A nation on the move
Though migration has slowed with the recession, during the past decade, Americans relocated frequently. About 85% of the population growth occurred in the South and West, according to Francese.
“During the still–nameless decade from 2000 to 2010,” he writes, “a total of about 3 million people have moved out of the Northeast and another 2 million have left the Midwest” for warmer climes.
