Economic Recession and the 9ja Consumer
So, has the typical Nigerian consumer become truly ‘born-again’? Or are we just witnessing a band of temporarily ‘rational’ spenders who will immediately jettison the ‘austerity-mode’ once the economy picks up, making way for wanton frivolity with a return to the cool-spots and nightclubs?
On a global scale, trend watchers and researchers have tried to establish a clear pattern of recession-induced frugality among consumers. The economic outlook for 2009 was dire to say the least and four months into the landmark year 2010 prospects for respite remain starkly distant. Really, there’s not much reason to suppose that in actual terms for consumers, there’ll be much good news in 2010. As a matter of fact, household budgets are beginning to come under real pressure, occasioned by a number of inevitable trends that have been accentuated by the scenario playing out in the macro-economy.
The massive upheaval in the financial services industry, which has seen a phenomenal credit-call by affected mega-banks with tremendous multiplier effects on every facet of economic and social life, partly account for the austere times. The banks are downplaying loans and access to credit, focusing on initiatives that can encourage depositors to bring money in instead.
For salary-earners, payday has become a seriously elusive phenomenon … the truth is that everyone presently appreciates their pay-check more than ever before, no matter how minimal or paltry it was earlier deemed. … Salaries that were compelled to hit the bank accounts every 24th or thereabout (when the going was good!) now have employees feeling lucky to get them at best in the middle of the succeeding month in better instances. In many cases, a remarkable number of employees are being owed colossal backlogs while those lucky to have kept their jobs in the heat of the retrenchment (nay, right-sizing) gale that recently swept through corporate Nigeria have, in so doing, had to concede to pay-cuts of different proportions!
This is clearly not divorceable from the fact that from a business or entrepreneurial perspective, profit margins have never shrunk so remarkably within any period of time as in the period under discussion. We in advertising business somehow believe (and complain) we are hardest hit but seriously, one needs to interrogate other stakeholders engaged in different business ventures (save for just a limited few, for instance, our privileged kinsmen who are spending oil & gas currency!)
The foregoing trends have invariably led to different elements of belt-tightening both from individual and organizational perspectives with the focus being surviving these critical times. I’m sure some of the following scenarios don’t sound too far-fetched:
“Help…..The bank manager won’t give me Credit. The man doesn’t even pick my calls anymore!”
“Repayment schedule for my 2010 Toyota Avensis…… the bankers are on my case… Repossession of a Lagos big boy’s premium toy? God forbid bad tin o”
“Eyin boyz, Today na Friday but Swe bar na long tin this nite o…. ‘Pepper’ no rest at all!”
“Eiya! No TGIF party this month again???
An important plus-factor as far as the whole recession thing is concerned is that it has actually helped discerning individuals and businesses better prioritize their wants/needs. From a consumption perspective, consumers have clearly become a lot more careful and ‘rational’ about how they spend their money. They are much more aware of relative value for money and also of not taking claims at face value. I’m not sure whether frugal is the exact word I think savvy better describes the change in consumer behavior occasioned by the harsh realities of the economic meltdown.
More critical again is the revelation by analysts and economic watchers that the recovery process is going to be a long, slow and hard one.
More people are learning a lot presently. They’re learning how to spend their money more efficiently and they’re cleverer about it, making more considered decisions about what they’re doing. The question is whether the change in spending habits will remain and for how long after the recession subsides.
As for marketers on this side of the globe, it seems that the scuttle for the ‘meager’ disposable income left in the consumer’s wallet has reached a feverish peak or what would you make of this frenzied call-to-action SMS I got over the weekend from one of the three GSM network operators whose services I subscribe to? “Knock Knock! Bros, Abeg na top secret…..don’t tell anyone! Your name is among ***** favorites for tonight’s N2million CASH! Text WIN to *** and you can win! Costs N100/SMS.”
I understand that some folks have reported getting personalized SMS just like the one above … talk about innovation in marketing!
Tomi Ogunlesi is a strategic planner at Bates Cossé, Lagos.
