Consumer Duality. Amid the challenging economic cycle, consumers worldwide are exhibiting predictable behaviors. Some are opting for store brands, as seen in a European McKinsey study where 62% of consumers have already done so or plan to. Meanwhile, the "lipstick effect" also emerges, where consumers indulge in small luxuries when they can't afford big-ticket items. Brands' positioning during this time will play a crucial role in how consumers respond to the economic difficulties.
This trend originates from the report:
WARC - The Marketer’s Toolkit 2024
A European McKinsey study showed that 62% of consumers have done this, or plan to, and the German discount grocer Aldi, a relative newcomer to the US market, has reported double digit year-on-year US growth. On the other hand, a more enjoyable coping mechanism is the so-called “lipstick effect”, wherein consumers indulge in small luxuries when Big Ticket items become unaffordable. The consumers’ response to the economic difficulties will, in part, be determined by the way in which brands position themselves during this period.