23 December 2009

Study: How Consumers Adjust To Tighter Belts

The Dallas News

This was the year Americans mastered doing without. For some students at Southern Methodist University, the University of North Texas and Texas Christian University, the concept of making substitutions wasn't just an edict from home. It was a firsthand lesson in how consumers adjusted to the new economic realities.

For the second straight year, professors at the three colleges collaborated on an advertising class assignment in which students solicited volunteers to do without something they normally consume for two weeks. They tracked people who gave up denim, jewelry, flip-flops, bottled water, credit and debit cards, condiments, YouTube, Facebook and political blogs before the November 2008 election.

What they discovered was a product or brand meant more to subjects who couldn't wait for the two weeks to end, spewing reasons to their researcher about why they were suffering. Or the deprived people settled nicely into substitutions. Either result was valuable advertising research.

SMU senior Arleen Averill discovered when young women couldn't wear jewelry, they felt "naked, awkward and less girly."

"They missed how jewelry made them feel more mature and ladylike," Averill said.

When denim was removed from wardrobes, students "overdress for class," said Fernando Valdes, an SMU graduate who talked about his project during an interview that landed him a job at Atomic Design in Plano.

When volunteers couldn't drink bottled water, they thought they were going to substitute other drinks, said Caitlin Christopher, an SMU senior advertising major. "But they weren't satisfied with other drinks and drank tap water."

Alice Kendrick, advertising professor at SMU's Temerlin Advertising Institute, said the research has resulted in some big "aha" moments.

 "Even the most ardent brand fans, dyed-in-the-wool devotees of Nike shorts or religious users of denim, discover they can do without," she said.

Nike Tempo shorts are a wardrobe staple for coeds on many college campuses including SMU, said Kristina Kress, a junior advertising major. They come in a couple of dozen colors and can be had for $25 to $30.

Eight participants turned over a total of 40 pairs to Kress.

"I had people who found they were running late to class because they didn't know what to wear," she said. "For us, it's like wearing camouflage; if everyone is wearing it, we blend in. We like to save our cute outfits for going out."

Some wore jeans and dresses, and others bought substitute brands, Soffe or Adidas by Stella McCartney, Kress said.

Brittany Kemper, a senior advertising major at SMU, asked her volunteers to do without credit and debit cards.

"When they only used cash, they found they were spending less," she said. "They put things back on the shelf at the grocery stores. Instead of Chips Ahoy chocolate cookies, they bought the Kroger brand."

Not having plastic and carrying cash and coins also "made them feel like little kids again," Kemper said.

Students learned to use the reactions they gathered, said Peter Noble, executive-in-residence at TCU's Schieffer School of Journalism in Fort Worth. "That insight told an entire story that's useful to credit card companies. Their product is a rite of passage, and it can be molded into their message."

Sheri Broyles, advertising professor at UNT's Mayborn School of Journalism in Denton, said the deprivation project forces students to look differently at the world.

"They get how products – dolphin jewelry, for example – are such a part of a person's identity," she said.

The three professors all taught at or were students at SMU. Kendrick, who has been teaching at SMU for 25 years, was the link in connecting the three colleges in the project.

Ironically, the assignment was born out of deprivation, Kendrick said. In 2008, money was cut for research participation incentives and focus groups.

"We had to get creative without those funds."

 Unlike 2008, when Americans were shocked into abstinence, doing without was orchestrated this year.

Households delayed that new car or plumeria jewelry purchase. They also repaired that lawn mower, discovered cheaper stores, cooked more and dined out less, pulled the plug on landlines in record numbers, enrolled in community colleges to save on tuition, and found discount computer deals.

Some consumers made changes because of job losses and pay cuts. Others adopted frugality as a cautionary step.

As a result, savings as a percent of income has been mostly higher this year than in 2005, 2006, 2007 and 2008.

It was 4.4 percent in October and 4.6 percent in September, according to the Commerce Department's Bureau of Economic Analysis. November data will be released today.

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