Donal Clancy of Lionsai Consulting and DCU Lecturer and Robert Flavin, Consumer Insights and Planning Manager of Diageo shared their views, insights and research into consumer spending during the Recession and how to understand the new consumer.

Donal's macro perspective put the changes in context, with consumer's incomes in decline and savings increasing from 2 to 12%, the combination has withdrawn a substantial level of spending power from the economy.  Donal also highlighted that government centrally and locally has a significant influence on costs and pricing through setting commercial rates, VAT, minimum wage and a multiplicity of regulations, and asked the question: can you have perfect competition when minimum prices are being set like this?  However, the increase in car sales in the first quarter of this year are a positive sign, and the consistency in new lower pricing across the grocery sector are both positive indicators of stability and growth, critical to encourage investment and spending.

Robert's presentation delved into the consumer mindset, how are consumers making decisions today.  He saw three distinct stages: stage 1 - Indulgence - where at the height of the Celtic Tiger pleasure, me-time, instant gratification were core values; stage 2 - Recession Mindset - which saw the hunt for bargains and value, but also gratitude and concern for others; stage 3 - Era of Consequences - which is what comes next with a better understanding that all actions have a reaction and spending decisions will still required justification. 

He pointed out that there are opportunities and products that highlight the following values or reposition themselves can succeed. Current consumers seek one or more of the following: Control so special occasions have once again become events to celebrate e.g. Carling birthday advert, Security and established traditional brands are well positioned to benefit in this area and Robert highlighted the campaigns of Virgin, Hovis and Denny; finally Escape with moments of indulgence and the record year in cinema attendance in US and Ireland clearly illustrate how a well matched proposition to this value can be rewarded.

A lively Q&A session followed with some interesting outcomes.  Both Robert and Donal thought it would be challenging for a completely innovative product to succeed in this market without a wider brand support.  However, both speakers highlighted the importance and the opportunity of the route to market strategy as being as important as every other aspect of your product offering, for example, The Porterhouse's success in bringing microbrew products direct to consumers.  The frequency of dating has declined in the Recession but the birth rate has gone up, and Donal quipped ‘does this indicate an increase in productivity?!'.  Finally, the final question of the evening was ‘Are we spending yet?' the fear of spending is gone but we are still in the trough brought the event to an upbeat  ending.