Tuesday, November 25, 2008

Consumer Behavior Memo: 'Uber-Cocooning' -- Many American Consumers Staying 'Home For the Holidays' Out of Forced Economic Necessity

Yesterday we wrote and published this piece, "Consumer Behavior Memo USA: 'Life, Liberty and the Pursuit of Frugality' - America's New Consumer Frugality," about a trend we are calling the "new, frugal American consumer."

Jennifer Waters, a staff writer for the Marketwatch.com news and business Web site has a well researched and written article today, "Be it ever so humble: Cash-strapped consumers embrace 'home for the holidays,'" which we think serves as a good companion piece to our frugal consumers story linked above from yesterday.

Ironically, the old saying, "There's no place like home for the holidays," has always evoked warm thoughts and feelings among Americans because it reminds them of being home for the holidays as a child -- hearth and home and other such feelings of comfort. And many Americans do stay home for the holidays even though they don't have to. Having that choice makes doing so evoke even warmer thoughts and feelings, after all.

But this year, cash-strapped, house-poor, near 401-K retirement account-less U.S. consumers are in most cases staying home for the holidays not out of choice but because they need to from a financial standpoint. Home is not only where the hearth is this year, but it's where the money savings is.

In her story, Jennifer Waters uses a term we like to explain the stay-at-home 2008 holidays --"a forced rendition of cocooning." It appears the CIA isn't the only user of forced rendition these days -- so is the U.S. economy.

Cocooning of course is that popular term thought up a number of years ago by trend-forecaster Faith Popcorn to explain why at the time increasing numbers of consumers were staying home more rather than going out. The trend was towards more meals at home, renting videos and watching them at home rather than going to the movies, and other related at-home behaviors.

Ms. Popcorn is quoted in the article in Marketwatch.com, calling the 2008 version of staying at home "uber-cocooning," attributing it not to choice but to economic realities this holiday season.

Read the article, "Be it ever so humble: Cash-strapped consumers embrace 'home for the holidays,'" here.

"Uber-cocooning," or economically-forced home rendition, fits with our concept of the new, frugal American consumer. And while this new frugality poses challenges for food and grocery manufacturers and retailers, it, along with the fact consumers are spending more time at home -- and eating more at home than ever in recent times -- favors grocers as well as food manufacturers and marketers more so than any other consumer products and retailing industries. After all, even "Uber-cocooners" must eat.

In fact, sense many more consumers are spending the holidays (and the non-holidays) at home, this means fewer will be eating holiday meals out at restaurants. Instead more consumers will be cooking their holiday meals at home, meaning shopping at the supermarket, discount store or natural foods market for food and groceries this year. The upside to cocooning or hibernating of any kind is cocooners need provisions. The grocery store is where they must go to get them.

The challenge of course for food manufacturers and marketers, especially those in the natural, organic and specialty foods sectors, is to get these home for the holidays (and regular days and nights as well) consumers to buy their brands. With a huge surge in store brand purchases right now its advantage retailers. Of course many of these manufacturers produce the private label brands for the retailers so there's some saving grace there at least.

But overall, this year's home for the holidays trend should be good for the food and grocery industry as it will mean more shoppers, perhaps buying less, and since the Thanksgiving holiday for example is a four day holiday, cocooning consumers will need to stock up for those four days at home. The same should be the case for the rest of the year -- not just the holidays.

No comments: