I was reading an interesting article in MSNBC, on how American consumers are preferring Cash over Credit Cards. This is a trend seen very recently by retailers in the US where Americans want to be a lot more "prudent" than ever before. It's moving back to pretty much the days similar to what their grandparents used to do - buy only what's needed.
It made me wonder how should marketers re-orient their marketing efforts and messages given this trend. This I believe will be something most countries will witness as customer buying behaviour, over the coming year. Here's my take on what could they do:
- Marketers who embrace value & savings theme will get the attention of consumers. But, this can't be just lip service or mere messages. They need to identify products within their portfolio that can really deliver this benefit. Since consumers tend to be more " rational" now, fluffy propositions and benefits will never fly with them. Imagine how "fuel-efficient" Japanese cars caught the fancy of American consumers several years back. They genuinely delivered cars that were easier to maintain and run. Similarly marketers need to identify such benefit in their products. In my opinion, this could lead to packaging innovation. Moving to smaller packs unlike giant sized packs which drove "unwanted consumption" some years back could be an option. Consumers might not stock and consume but they might buy more often as need arises.
- Payments could move prepaid - Imagine as a retailer, if there was budget cards for customers. Pre-paid loaded value cards that offer more value for the same amount of money. It could have pre-loaded offers, savings coupons etc. as a part of the pre-paid cards on offer.This can help track cash payments which often become difficult to track during these times. This also ensures there's a lock-in for repeat visits from the same consumers.
- Service Innovation could trigger and extend existing customer relationships - Imagine an existing environment where customers want to extend the life of their existing products. This can lead to service innovation for white good manufacturers. Imagine an extended warranty offer for next 12 months for say just few tens of dollars more. This could be offered to existing customers as an option. Or an AMC contract that protects any additional spends due to breakdowns during the next 12 months. Companies will have to start thinking service innovation in these difficult times. But, surely they are bound to resonate with consumers as they would be totally genuine and thoughtful.
- Converting assets into cash - If the world earlier was "Buy now and Pay later", this is an environment for financial innovation, when liquid & priced assets bought in the past can be valued and turned into cash for their customers. It's needs prudent financial re-engineering like never seen before by financial services companies.
The key answers if you see is turning the traditional marketing thinking on its head. That's the real challenge marketers will face in the days to come.