While marketers wait for consumers to return to familiar spending patterns, economists and analysts predict that a new and long-term shift has disrupted the marketplace. This outlook is based both on consumer surveys of upper income families and analysis of income pressures on the middle class. A closer look at these numbers can help marketers determine the best way to position their goods and services.
One gauge of how well the economy is doing is the daily spending pattern of upper-income households. A recent Gallup Poll reveals that households earning over $90,000 annually spent as much as $185 a day in ”stores, restaurants, gas stations, and online” in January 2008. During the recession those numbers dropped and never reached more than $136 a day in January 2009. And in January 2010, that same demographic group was spending only $98 a day in those same categories. Gallup Poll analysts note that this group has more disposable income and access to credit than other consumers and until the higher-income households feel confident and begin spending, any recovery will be muted.
Pressures on middle-class incomes are also contributing to consumer caution. A report in The New Strategist highlights economist concerns about the drop in income for consumers in what had traditionally been peak earning years. For example, the median household income of consumers between the ages of 45 and 54 in 1978 was $64,152. That figure rose until 1998 reaching $71,429 but since then has dropped to $64,349 meaning that the middle-class is treading water. But for men, the traditional wage earner, the numbers are even more grim. The 45 to 54 year old age group has watched median income drop from $61,698 in 1978 to $53,331 in 2008.
Regardless of the causes of pressure on incomes, ranging from unfair taxation structures to economic globalization, consumers will continue to be cautious for the long-term. Marketers would do well to emphasize the value in the goods and services in order to win the business of the newly cautious consumer.[Sources: Jacobe, Denise. Upper-Income Spending Drops to New Low in February. The Gallup Poll. 8 Mar. 2010. Web. 19 Mar. 2010; The Decline and Fall of the Nation’s Peak Earners. The New Strategist. 11 Feb. 2010. Web. 19 Mar. 2010]