Monday, August 31, 2009
The Frugalista - the new cool
Consumer behavior has changed dramatically since the global recession hit. People are acting more conservatively, curtailing their spending, reducing debt, putting more money aside and looking for greater value. According to a study by McKinsey, spending fell in all categories and the reason for belt tightening was both by choice (55%) as well as out of necessity (45%).
What I find interesting is that the savings and debt averages we’re seeing today are in line with long term trends and are not considered abnormal. What has been abnormal is the broad based consumer spending and debt levels seen over the past two decades fueled by easier access to credit.
So what is the new normal going to be?
There is no reason to think that the new frugality mindset will change any time soon. The implication for marketers is to understand how this profound behavioral change will affect strategies fundamental to value creation and sustainable growth for their companies – everything from product development and life-cycle management through to building meaningful relationships and flawless customer service.
Being frugal, however, doesn't mean you can't be cool. Target is jumping on this and even created a new word - the "frugalista". Target is the expert on making discount shopping trendy - now with their "New Frugalista" advertising, blog and videos featuring well known voices in fashion, they want to make being frugal stylish.
My bet is that we'll see a shift in communications and advertising that will celebrate frugality and we'll see more products that are fashionable, affordable and smart because they use recycled materials. Again, Target is doing something innovative in this space with artist designed billboards in Times Square that will launch Labor Day weekend and later be converted into stylish, one-of-a-kind totes designed by Anna Sui.
Expect more, pay less - $29.99 actually.