Experts explore impacts of consumers’ spending pattern amid economic woes
By Felicia Nwosu
Leading experts across industries have brainstormed on some of the adapting and coping mechanisms employed by today’s consumers to stay afloat and its resultant effects on brands as economic headwinds heighten.
Focussing their discussion on the topic: “Economic Crossroads: Decoding Consumer Trends for 2024″, during a webinar organized by Pierrine Consulting, the experts explored how consumers are adapting in the face of the current economic challenges.
They also examined how these adaptations could affect brands’ growth as well as impact on government policies and the rising cost of production on brands.
Taking a look at how consumers are adapting during an economic cross-roads, one of the speakers, Ibukun Badejo, Senior Manager, Pierrine Consulting, affirmed that at a period of economic crossroads, that consumers adopt a mechanism known as pragmatic spending by prioritizing items such as food, skincare, transportation while foregoing ostentatious needs which are probably less important at the period due to the economic austerity.
She explained that the militating impact of the economic downturn has helped consumers to live each day with a well-laid down financial plan, thereby drawing a daily scale of preference in all their dealings.
“In terms of spending, they are very pragmatic. Before now, they could go out for leisure but that is not happening anymore. If it is not important, I cancel it, but if it is, I can plan by doing cluster outings so as to do everything around that place at the same time. These days people choose to cook instead of eating out, so they are now really very focused on pragmatic spending.”
She attributed several factors pushing the forces of various trends, which are bringing a shift in consumers’ consumption and purchasing behaviour, while adding that in such a period, consumers tend to down-trade.
“Another thing is down-trading, when this happens, there is pressure on the disposable income, salaries are not increasing, and things are getting more difficult, Dollar has gone up , people tend to down-trade, moving from one particular brand to the other.”
Temitope Adekunle, Insights & Analytics Manager at Mondelēz International, who focused his contribution on the direct influence of forex on production cost and investment, acknowledged that manufacturers will continue to incur high production cost as long as they rely on forex for their all-round production processes.
According to him, since every business is out to make profit, such high cost will be transferred to the consumer to the brunt, which may also lead to a change in the consumer’s consumption pattern as well.
“But when such is passed on to the consumer, the consumer will also be kicking back, whether they are down-trading or out-trading completely, they will quickly move to the nearest option, saying it is not compulsory to embrace such luxury brands. At such period, you will see people innovating in all sorts of home -made alternatives at the expense of the things that they regularly buy previously.
“When the revenue declines, it also means that the business shareholders are looking at their investments, because they are into the game to make money, at that point, what they are thinking is, should we pull down our investment.”
RECOMMENDED ARTICLES
Comment
No comments found.