The consumer has moved from a state of anxiety to a state of action in response to the global financial crisis, according to John Gerzema in a TED talk given in August. Personal savings as a percentage of income increased gradually from less than 5% in 1935 to over 10% by 1985, but over the course of the ensuing 20 years the savings rate gradually dropped to below 0%. The personal debt to income ratio went from 65% to 135%.
Consumers have now moved to more responsible leverage positions. Savings rates are now heading back towards 10%. Spending has dropped to its lowest level in 62 years. More people are using debit cards than credit cards. Consumers are toning down the bling and focussing on quality rather than quantity. Increasingly, consumers are demanding ethics and fair play from suppliers. They are looking for durability and value in every purchase.
Library usage is on the increase. People are increasingly building their own homes and growing their own food. Co-operative consumerism has taken off; people now trust what other people say about a brand far more than they trust advertising. Social networking tools are giving consumers the ability to demand transparency from their suppliers. The current crisis is real, but it is also a tremendous opportunity for consumers to change the marketplace for the better by values-driven spending.