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By Nancy Hallberg
The headline in the 5/18 issue of min was another grim one, reflecting the impact of the recession on our industry: “Monthlies’ first-half 2009 ad pages are the poorest ever.” While it’s tempting to think that it can’t get any worse and we must be bottoming out, leading economists are loathe to predict with any certainty when that will happen—and those that do venture a guess generally don’t agree with one another.
In the absence of any signs of optimism from industry and financial leaders, we at Parenting decided to turn to another group of execs for a different perspective. As CEO of the household, most moms are on the front lines dealing with today’s tough economic times. We know that 87% are responsible for bill paying and managing their family’s daily finances. And while they may not be able to predict when things will turn around, perhaps they can give us an early indication that things are turning around.
To test this hypothesis, we surveyed our MomConnection panel about the recession, asking how they’re adapting their behavior to today’s conditions; whether those changes are permanent or temporary; and, if the latter, which behaviors they’ll reverse first. We found that while they’re adapting in ways that create some challenges for brands that traditionally serve the mom market, their behavioral shifts also open up some new opportunity areas for marketers who may have viewed them as a secondary target. Most importantly, we learned that their future behavior could indeed be an advance signal of imminent recovery.
It’s no surprise that 90% of our responding moms feel at least some effect of the recession, but we found a full 20% rethinking their priorities and making lasting changes. And while another 50% say they are trimming their budgets but not making radical changes, the “small changes” they are making loom large in areas that affect our advertisers and marketing partners the most:
- 73% are clipping coupons more often
- 54% are shopping for groceries less frequently
- 51% are shifting to store brands
- 42% are bringing lunch to work
- 37% are shopping at thrift stores
Even more significant is the fact that two-thirds of our moms are making three or more of these small changes—adding up to significant pressure on marketers’ volume and margins. The irony is that while brands often react by slashing marketing budgets (and we in the print industry feel it in virtually every category), they would be better served by actively communicating why and how they still deliver the right value equation.
When it comes to the bigger areas for economizing, moms are cutting spending in the obvious discretionary areas—vacations, out-of-home dining and entertainment. But they’re also making considered trade-offs elsewhere to minimize the impact on their children: cutting spending on name brand clothing for themselves, but not as much for their kids; and eliminating personal and home services that might save them time or make them feel and look better, but cutting less on those for their children, such as lessons, daycare and education. With spending down on spas, gyms, salon treatments and cleaning services, the opportunities for DIY products in both personal and home care have never been stronger, particularly since moms do not think their spending will return to pre-recession levels in those service categories anytime soon.
Moms do plan on reinstating many of their previous expenditures when the economy rebounds, and they have a clear priority ranking. Based on their responses, we can expect to see spending patterns return to “normal” first in these categories:
Top rebound categories – family expenses
1. Groceries
2. Dining out
3. Vacations
Top rebound categories – children’s expenses
1. College savings
2. Lessons for kids
3. Brand-name kids’ clothing
Certainly brands in those categories that stay relevant and in touch will benefit from being top of mind when moms do start spending. Even if mom is “on hiatus” right now, they’ll have a head start on building share of wallet when she’s ready to open it again.
For the rest of us, we ought to keep an eye on moms’ spending in these categories, looking for any signal that they’re loosening the purse strings on their top priorities. While it may not mean that the recessionary fog has entirely lifted from our economy, it does indeed seem that, like the proverbial canary in the coal mine, moms may well be our best early indicator that the air is clearing.
Minsiders columnist Nancy Hallberg is chief strategy officer, The Parenting Group.
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