While the current downturn has certainly changed the economic landscape, it may also have fundamentally altered the behavior of many U.S. consumers, according to a new McKinsey Research study. Consumers are now learning to live without expensive products. Many companies with strong premium brands, according to McKinsey, are anticipating a rapid rebound in old consumer behavior, but they are likely to be disappointed.
New McKinsey research found that, in any given category, 18 percent of consumers bought lower priced brands in the past two years. Of the consumers who switched to cheaper products, 46 percent said the products performed better than expected, and the large majority said the performance was much better than expected. As a result, 34 percent of the switchers said they no longer preferred higher priced products, and an additional 41 percent said that while they preferred the premium brand, “it was not worth the money.”
As a result, a growing number of consumers are now in play, according to McKinsey. The percentage up for grabs varies by category and depends on how many consumers switch from higher priced brands, their experience with cheaper ones, and the way they revise their buying intentions.