Consumers are no longer looking to “leading brands” and expensive financing options, when it comes to making large purchases, such as furniture for their homes. According to research by Lelia Voinea and Alina Filip of Bucharest Academy of Economic Studies, consumer buying behavior has changed during the current economic crisis. Consumers have become more responsible, demanding and economical.
Consumers have become more responsible, demanding and economical.
Mansoor, D. (2011), International Journal of Business and Management, Vol. 6, suggested that a number of reasons have led to changes in consumer spending. One was the need for temperance. Consumers feel the need to show others and their children that excessive consumption is not a good thing. Consumers are also switching to smarter consumption. They are abandoning brand loyalty in favour of lower priced alternatives.
These changes make sense. Overspending and excessive financing were largely to blame for the economic crisis, so – in response – consumers have realised that a change in behaviour is needed to survive the crisis and avoid future problems.
The real cash reward
In addition to changes in behaviour due to the economic crisis, consumers now have access to more information, to enable them to make better buying decisions. Instead of being seduced by the advertising campaigns of expensive brands, they are doing their own research and opting for cheaper alternatives. So instead of buying a dining table, mattress, suite, or other household items for thousands of dollars, and using financing to fund their purchase, they are now able to find suitable alternatives for a fraction of the price and pay cash instead. In doing so, consumers avoid paying interest on their purchases which – for more expensive items – can save hundreds of dollars.
According to Vionea, and Filip, “Information is the fuel that operates the new consumer. Due to expansion of information technology and the Internet, information is now cheaper and more accessible than ever to consumers. The permanent need of the new consumer to be informed is justified by the fact that information, opening many ways to choose, permits him to make more careful judgments about future purchases, and thus providing greater control over expenditure.”
…consumers now realise that expensive brands are not always the best option, as a large proportion of the cost of the product goes into expensive marketing and advertising.
Because of these changes in consumer spending habits, brand loyalty is becoming a thing of the past. Many consumers now realise that expensive brands are not always the best option, as a large proportion of the cost of the product goes into expensive marketing and advertising. Also the economic downturn has taught them that using financing to purchase household items and furniture is no longer a smart choice. They no longer need to pay over the odds when they have access to information that enables them to buy good value, cheaper alternatives, without getting into debt.