McKinsey Report on Post Recession Consumer Behavior

McKinsey Quarterly recently published an interesting report on How the recession has changed US Consumer Behavior (this is a premium report). The report hints at the fact that more & more customers have started to rely on “cheaper” products, and have started to “like them”.

I will highlight a few interesting points from this McKinsey report on Post Recession US Consumer Behavior.

  • 18 percent of consumer-packaged-goods consumers bought lower-priced brands in the past two years when the country was in recession
  • 46 percent of the consumers who used “cheaper” alternatives, said these products performed better than expected
  • 34 percent of the consumers to switched to “cheaper” alternatives, said they no longer preferred higher-priced products
  • additional 41 percent said that while they preferred the premium brand, it “was not worth the money”

A great example at our hand is our custom themes for small business (sold from Business CMS Themes & soon will be available on Creative Themes Design websites):

  • all these business CMS themes (designed for multi ads sites, affiliate marketers, MLM business owners & individuals who make money blogging) are priced under $10 – compare this to an average price range of $100 – $150 of similar themes from other vendors
  • we are able to offer these quality business CMS themes at $10 by saving expenses on advertising & relying more on “word of mouth” of satisfied customers
  • we sold an average of 35% more of these business CMS themes for WordPress in the last 12 months
  • since the themes had to be created once & can be sold over & over again, our margins per business theme sold is now 50% higher than expected
  • we have not offered any additional discounts & no incentives were offered during this period
  • because customers could save over $100 in buying business themes from us, we had over 50% additional requests to provide additional set-up services to help them advance faster with their business website set up

The McKinsey report could be a clear trend during the post recession stabilization period. Clearly a large segment of the internet customers have started to realize that there are “cheaper” alternatives available & that such products or services are of good quality but without the added price for the “brand names”.

Source: Pro Media Blog

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