Dynamics of the Downturn

Price comparison, category switching and “social” online shopping could all increase in the downturn as consumers reappraise routine behavior and choices.

This theme connected the four presentations at the Future Foundation “Changing Lives” event in December 2008 which looked through a recession-tinged lens at prospects for the UK economy, consumer attitudes, technology take-up and eco-consumption.

Millions of Britons will probably sail untroubled through the downturn in terms of their personal wealth, according to this analysis. However a prevailing slump “mindset” - we were told a recession can be “psychologically national even if it is economically marginal” - will encourage most groups to re-evaluate their habits to some degree and will force brands to respond, especially on pricing.

In the UK specifically, recent recessions have tended to be shorter and less damaging than those from previous decades. And average UK household disposable income continued to rise during the recessions of the 1980s and 1990s.

Nevertheless, the key elements in determining the UK consumer’s state of mind in this context are the health of the property and labor markets. Serious, long-term declines in both could give this downturn a different shape to its predecessors.

Above all, recession will mean “an insistent and potentially rewarding invitation to consumers to reconsider everything they do/buy/desire”.

This will result in a fiercer scrutiny by consumers of all claims, and declining tolerance for unsatisfactory experiences. “Where decline is already under way."