Question

1. Explain how consumers’ buying habits may change during a recessionary period.

Your post must be a minimum of 300 words.

Answer 1

Consumer behavior which is the process of how consumers exercise their decisions while making purchases behaves in a very erratic and irrational manner which remains unexplained by the existing literature on behavior. As I am writing an answer to this question, we are currently preparing for one such recession caused by the Coronavirus epidemic that has so far sent shivers to the global economy and by making 16 million unemployed with the figure only increasing by every day. As the world is grappling with this epidemic which has already sent the world to a possible recession, there is a larger question of how it might impact the buying behavior of consumers. Although recessions differ in their impact, their longevity, and who remain the worst hit, they offer some insights from which we can draw:

1. How previous recessions have made consumers act differently than what they used to be in the pre-recession period?
2. How far can we compare the present downturn with previous ones; What was the journey of consumers all along, taken to the present, what has made them go into this unusual consumer behavior and how do we shape their trajectory out of this behavior?

Following are the changes that take place in buying behavior of consumers because of recession:

• Recessions come up with stress and literature of previous recession suggests that it naturally inculcates the desire for simplicity among consumers. Consumers do not place heavy emphasis on lavish goods and are comfortable with the purchase of normal goods.
• During recessions, consumers feel this need for stretching their budget to purchase a whole set of many goods with the same money. Consumers often trying to act rationally during the recession end up spending irrationally by stretching it to an extent where the quality gets compromised.
• Consumers during recessions tend to act very thrifty and economize their expenses as well because they feel comfortable if they have savings at the back because they are not very optimistic about the state of the economy.
• Consumers in order to save more and their desire for more simplicity end up recycling more, purchasing used goods.
• Disposable income remains very low as the same income is diverted towards daily activities.
• Green consumerism taking a hit as consumers increasingly purchase cheaper products over expensive green offerings.

Total number of words; 381

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