In 2014, we suspected that despite the tentative signals and promises of economic recovery following the recession, a significant number of UK consumers were actually still feeling the pinch.
We decided to take a more detailed look at how consumers were coping in this post-recessionary world, conducting quantitative and qualitative research that confirmed that for all the apparent indications and talk of recovery, the majority of respondents were not seeing any benefits.
Indeed, the research revealed that 61% of the UK population were now being forced to take extraordinary measures just to pay for their everyday essentials. We called this stretched, cash-poor and budget-savvy group, the Marginalised Masses.
The idea of value – what constitutes value to them, how it can be obtained and how it has evolved beyond pricing – was central to their thinking and reflected in many of their new spending habits.
In 2016, it feels like we are still living in a time of economic uncertainty. We were keen to see how the Marginalised Masses have evolved and coped.
We conducted further research, examining consumer habits and spending, and found that once again, 61% of UK consumers belong to the Marginalised Masses group – resorting to anything from using their credit card to pay for groceries to downsizing their homes just to make ends meet.
The 2016 qualitative research documented just how much this group’s shopping habits had changed – with a clear emphasis on extracting as much value from household budgets as possible – and that they were here to stay.
So we heard in detail about people’s ‘money-stretching’ strategies, where everyday measures include checking out Freecycle on a daily basis, doing small frequent food shops to reduce waste and taking advantage of discounted products close to their sell-by-dates.
Inevitably, a lot of what we heard was about the effort that went into seeking out the lowest prices. But that wasn’t the only value story. As these consumers were keen to articulate, for today’s self-conscious shoppers value is about quality and durability too, with people willing to consider and work out the benefits spending more on premium products – ultimately to avoid the risk of wasting money.
As one respondent said:
“…our car needs tyres and we’ll get Michelin ones because we know they’ll last longer. It’s about getting those individual things that you’re willing to spend more on…”
Longevity matters. Brands like outdoor clothing company, Patagonia, are embracing the idea of products for life, tapping into a number of trends and social themes, and in doing so are becoming relevant to thrifty, savvy shoppers who will recognise the value of their proposition. For this audience, quality can be reframed to represent savvy investment rather than indulgence.
The value equation extends beyond this price-quality relationship too. Limited budgets are forcing people to prioritise in new ways – to work out what’s really important to them and what they are willing to make sacrifices for.
For many, memories and the creation of memories held the greatest value of all. As we heard, people were more than happy to exchange everyday pleasures if it meant they could enjoy experiences that would be remembered for a long time.
As they told us:
“…I would rather have one great night out once a month or even less, rather than a few drinks once a week…”
This idea of multi-dimensional value affects all product, service and retail sectors as well as all economic groups and so it cannot be ignored. An understanding of these dimensions of value can help brands directly influence the shopping strategies and behaviours of the increasingly significant Marginalised Masses.