In the news

Feb 22, 2010

Will Free-Spending Stage a Comeback?

Some changes, it seems, may be permanent

By Mark Dolliver

Folks spend more time together—instead of going out and spending money.

It’s a question that has preoccupied marketers ever since the economy went haywire: Will people revert to their free-spending ways once the economy recovers, or has their behavior been permanently transformed?

Some observers insist that people’s pre-recession acquisitiveness was rooted in basic human impulses and will largely reassert itself. Others say the long spending spree was an aberration and that human nature doesn’t fate us to be obsessive shoppers. A report released late last month by Context-Based Research Group and ad agency Carton Donofrio Partners makes the case that the downturn has indeed wrought a lasting shift in consumers’ thinking and not just a transitory change in their bank balances.

Titled “Coming of Age in the Great Recession,” the report draws on quantitative survey work fielded last fall as a follow-up to ethnographic research conducted in the aftermath of autumn 2008’s financial meltdown. So far, attitudinal changes noted in the earlier study (issued under the title “Grounding the American Dream”) have not gone away. Most broadly, the new report says 83 percent of respondents subscribed to the statement, “I have made permanent changes to how I spend and save.” Moreover, the survey finds them saying good riddance to their old understanding of the “American Dream” and the buying it entailed: 78 percent endorsed the statement, “The American Dream started as ‘the land of opportunity’ but became merely the land of opportunity to buy.” 

SEEING BENEFIT IN THE DOWNTURN
And they haven’t necessarily been dragged kicking and screaming to this new consciousness. Rather, a significant number of respondents sound a note of relief that the downturn has rescued them from an unsatisfying cycle of getting and spending. Forty-three percent agreed with the statement, “I feel that my life has been positively affected by the economic changes.” That, as much as anything, gives reason to think the changes in behavior will persist even after the economy has recovered.

And it’s noteworthy that such thinking isn’t confined to people whose finances have been slammed by the recession. “What was interesting to my colleagues and me was that the survey showed people who weren’t impacted—i.e., hadn’t experienced job loss, etc.—were acting as if they were directly affected,” says Robbie Blinkoff, principal anthropologist and co-founder of Context-Based Research Group, which brings the discipline of “consumer anthropologists” to the study of consumer behavior.

“Those who were involuntary thrown into dire situations changed quickly, but out of necessity,” says Blinkoff. “I’d say 50 percent of the change with this group was voluntary, since the trigger that activated their change wasn’t intentional, but the subsequent behavior modifications were by choice. For those who weren’t directly impacted, the change is 100 percent voluntary. Once they accepted what was happening to friends and family members, they altered their lifestyle. The great recession prompted us to examine how we live our lives.”

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