Consumers are becoming less loyal, more rational
The 2008/2009 recession has fundamentally changed Canadian consumers' attitudes and spending behaviour, according to a survey jointly conducted by American Express Canada and LoyaltyOne (operator of the Air Miles programme in Canada).
The survey's findings showed changes in how Canadians live, and particularly how they spend, and suggested that these changes are potentially as fundamental for the current generation as the changes that the Great Depression brought about in the 1930s.
The survey polled more than 1,000 Air Miles collectors, and found that most Canadians now feel that the recession is behind them. In fact, no less than 62% said they feel more positive about the economy now, and 58% feel more positive about their personal financial future. However, almost half (48%) still feel nervous about their personal financial situation.
For three quarters of those surveyed (75%), impulse shopping has become a thing of the past, and most people are now being much more cautious about their discretionary spending, and being more careful about purchase decisions.
"Canadians are now much more careful and deliberate about how they spend their money, or how they pay off the money they already owe," explained American Express Canada's president and CEO, Denise Pickett. "The recession has made consumers rethink what's really worth their hard-earned money."
At the same time, while more Canadians said they are now bargain hunting (62%), the survey's results also suggested that price is not the primary motivating factor for consumers. Quality, value, service and trust have all risen to the top (for 74% of those surveyed) in terms of importance and impact when making purchase decisions.
According to Pickett, Canadians now need a rational reason for buying a product or service, and they think a lot harder about where they're spending their money, focusing more attention on overall value than in previous years. Additionally, there is a growing group of former impulse shoppers who are now holding to a pre-determined spending budget - many for the first time.
"This increased emphasis on service and quality is something marketers need to pay more attention to, particularly as Canadians are far less loyal to brands than they wbefore the recession," Pickett concluded. LoyaltyOne's president, Bryan Pearson, concurred: "The key to capturing consumers' loyalty in the post-recession era is to focus on rewards, recognition and relevance. In the new economy, the way to create customer engagement and relevance is to connect with consumers in ways that show them you understand who they are and what they care about."