Consumer behaviour in an age of frugality
This New Year, the world has been awash with resolutions around fitness, health, weight loss and, from my own observation, minimising consumption of more than just food.
Indeed, being frugal is in vogue (at least TikTok trends would suggest it). Like them or loathe them, creators such as Bradley on a Budget and Diary of a Cheapskate have millions of likes and followers, and their comments sections are a rabbit hole down which you may find yourself never escaping. Think Martin Lewis for a Gen Z audience.
This can’t be surprising – the UK has been experiencing a period of economic stagnation and potential decline for a while now, marked by low growth in GDP and weak business investment.
From experience economy to experience selectivity
As a market researcher, however, what always interests me is how macroeconomic conditions play in consumer behaviour. During the last major economic crisis, the rise of the experience economy was undeniable. Music festivals, concerts, days out and personal memory-making opportunities outperformed traditional products and services. Supported by millennial-driven FOMO and the staggering rise and resurgence of aesthetic, performative social media platforms such as Instagram and Pinterest, demand for real-life experiences was at its peak.
Fast forward 10 years or so, and it’s a different story. There is a tension between the need to be seen in the now and the need to live your best life for longer.
Younger generations are praised for their increased focus on their health. Fewer are drinking alcohol, taking drugs, having sex or smoking compared with generations before them. And this, coupled with a desire to save the planet from what could be inevitable doom, is driving them to consume less in certain categories that would be expected historically – including quick service restaurants, alcohol brands, fashion retail and more.
Champagne sobriety and the rise of polarised consumption
What we’re seeing is not a simple retreat from consumption, but a creeping polarisation in behaviour – one that I’d like to compare with my own New Year’s resolution: Champagne sobriety.
For those outside the loop, this is the rule whereby you will only drink alcohol when champagne is an option. It reduces what could be a daily or weekly habit into a luxury-led moment of consumption, through basic necessity.
More importantly, it straddles the be seen in the now end of the spectrum, where larger and more significant social occasions are typically celebrated with a bottle of bubbles, and the live your best life for longer mentality, with which regular or excessive alcohol consumption is at odds.
How does this apply to what we’re seeing more broadly in consumer behaviour?
This is a compromise playing out all over the country in consumer choices.
Some prominent examples:
- Skipping the weekly trip to a quick-service restaurant and replacing it with a monthly or bi-monthly meal out somewhere ‘posh’ – giving up a frequent but largely functional meal in favour of an event experience.
- Trading down from the Friday night takeaway to an M&S Dine In for Two – saving money but not skimping on experience.
- Deciding against the three-day festival experience this year, replacing it with a series of smaller gigs throughout the year – breadcrumbing smaller treats to enjoy rather than one big blowout.
- Parking the monthly Shein haul and selling old stuff on Vinted to make way for that one luxury purchase – reducing volume, reusing and recycling in order to crave something special.
What does this mean for brands operating in this market?
Don’t sit on the fence and run the risk of mediocrity. Be a good way for consumers to spend their money when times are tight.
This can happen in two ways:
1. Be the smart alternative
This could come through absolute value – you offer them a low-cost alternative to a middling experience so they can save money to afford the real treat. For example, a good bottle of Cava or English sparkling.
2. Be the real treat
It could also come through being the real treat – reinforcing quality, bespoke products and experiences that are durable and long-lasting, either in physicality or memory. For example, that special bottle of Moët & Chandon sat at the back of the cupboard.
Final thought
In a world of champagne sobriety, never ever be cheap, warm Prosecco.
About the author
Frances has over 15 years of experience in brand, advertising and media research, with a particular focus on delivering actionable insight across the media space. She has worked with a wide range of blue-chip brands, helping clients turn research into meaningful strategic decisions.
At Researchbods, Frances heads up the Custom Insight offering, leading a diverse portfolio of ad-hoc research and insight projects across both quantitative and qualitative methodologies.
