SOURCE: Faith Popcorn's BrainReserve

September 10, 2008 11:00 ET

BrainReserve Survey Details America's "Culture of Recession"

The American Mindset Is Deep in Recession

NEW YORK, NY--(Marketwire - September 10, 2008) - Americans have been living in a "Recession Culture" for months with significant impact on all major lifestyle indicators, according to a national survey by trend forecaster Faith Popcorn's BrainReserve.

"On the street no one is asking if we are in a recession, they're asking when will it all end and where will we be," said Faith Popcorn, whose BrainReserve tracks 17 trends comprising Faith Popcorn's TrendBank. "Our recession culture is the result of a disastrous E triangle of failing economics, environment and ethics. It has jolted consumers to take creative, innovative, even desperate actions to manage their lives in new ways. While it is a deeply painful experience, we may emerge the better for it."

For BrainReserve's "Culture of the Recession" survey, 1,011 people were interviewed online between May 29 and June 6, 2008, using SONAR's national panel of 50% men and 50% women over 21 years of age.

Women, the Household CEO in Control

"As the household CEO, women find themselves in the economic driver's seat," added Ms. Popcorn. "Since women control the family purse strings, the Moms will determine when it is safe to spend again, and ultimately, when the recession will end. To survive, brands and institutions must address all of her lifestyle/social and emotional needs throughout this period of seismic economic and cultural shift. Beyond mere product, price, promotion, corporations cannot afford to lose focus on the more emotional issues like ethics and the sustainability of the human race. We have a sense that there is a temptation to pull back on these critical factors. Our study shows there is already an expectation that the government will cut back on a broad range of food, water, energy and pollution policies and regulations in order to manage the municipal budget, as well as to give commerce a kind of free pass. Businesses that step into this void will benefit, those who shirk responsibility do so at their peril."

Inclined to stay home, buy less stuff

Straightened budgets due to higher prices for basic commodities are driving people back into their homes; 72% spend a good deal of time at home. "What it means is the next iteration of Cocooning, UBERCOCOONING -- home as the safe haven from the increasingly threatening outside world. It's why in all the retail doom and gloom, one bright spot is consumer electronics. Look for that to continue, as well as for modest home improvement. We'll want to feather our nests, but economically. We're facing the reality that in the current Mortgage melt-down, we're stuck with the house we own for some time to come."

In virtually every other category, consumers are rapidly turning off spending with 84% of those surveyed (90% female, 79% male) "inclined to buy less stuff." "Price increases have a straight-line impact on spending and we're treading in lethal waters as the costs of basics jump 10, 15 or 20 percent," said Ms. Popcorn. "The overwhelming reaction is to pare down, to simplify, as predicts our trend CASHING OUT. Nearly everyone (90%) is considering opting for a simpler life as we believe that there is a real relief in getting off the consumption treadmill. What may have started as an economic reality is rapidly becoming a bona-fide lifestyle preference -- even among those who can afford to spend."

Of course, for every trend, there is a counter-trend. For a sizable minority (35% of the sample, concentrated among younger people) uncertain times are a signal to cut loose, have some fun, and worry about the economic consequences later. So, nearly one of five (17%) is drinking more, smoking more; 19% are having more sex. The pleasure industries are alive; we expect to see more of them move to the Cocoon vs. on-premise.

The Price is Wrong, Wallets Slam Shut

For example, if the price of milk increases 20%, nearly half (44%) of those surveyed will cut back on purchases. At a 22% price increase, 25% will stop buying milk altogether. A 20% increase in the cost of dry cleaning will result in cutbacks by two-thirds (65%) of Americans while one-third (31%) will stop altogether. Should movie tickets increase 20% three-fourths (74%) will cut back while almost half (44%) will stop going to the cinema altogether. Nearly three-fourths (70%) will reduce their soda, juice and bottled water purchases should prices jump 20%, more than half (58%) will switch to store/generic brands and one-third (36%) will eliminate the category completely. A 20% increase in the cost of apparel would result in cut backs by three fourths (73%) of Americans. "There's very little that's safe in commerce today, beyond value channels and value brands in staple categories," said Ms. Popcorn.

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