As the recession starts to bite, people are now looking at different products and services to solve persistent needs, making trade-offs and cuts-backs that reflect both conscious and subconscious decisions.
In the last recession, this was called "The Lipstick Effect". An article on makeup sales in Criticaleye, written during the last recession pointed out that: "...as budgets tightened, women still sought out ways to address their need to flaunt a little and sales of cosmetics went up". In the greater scheme of things, a small splurge on a luxury item isn't going to break the bank but the feel-good factor can be out of all proportion to the spend.
So while companies are focused on cutting back, the consumer's own imagination and initiative keeps them one step ahead. Companies who understand how people with tight budgets re-frame their problems can not only figure out unexpected consumer spending, but also identify new opportunities. Think about people's wider needs and you could uncover ways to get into new markets or markets that may have once seemed inaccessible.
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