The current recession is having a considerable impact on how consumers spend their leisure time, according to the latest surveys. Find out about the latest research, and how location-based leisure facilities can position themselves for success as consumers' leisure habits change.
The Great Recession is affecting all aspects of consumers' lives. Consumers are adjusting not only when, where and how much they spend, but also their overall lifestyles. This includes their leisure-time activities. Rather than socializing in restaurants, they're socializing online. Rather than going out for entertainment, they're staying home to watch TV and DVDs, play computer games or even old-fashioned board games. They're gardening more. They're hibernating, hiving or nesting -- whatever you want to call it.
A March 2009 study by Informational Resources, Inc. found that 67% of Americans reported spending more time at home with their families than in the past, and 67% are eating more family meals together. That's basically because 70% are eating less often in restaurants. One-quarter reported going out with friends less often and 44% said they are entertaining friends and family at home instead of going out.
Families are slowing down and spending more time at home. As a result, they are discovering the joy of spending time together and bonding differently than in the past. Moms, as well as all family members, are enjoying the experience of a stronger family unit. A January national survey by DDB found that 38% of adults said the economic downturn has showed them what's important.
What this means is that consumers are forming new values and habits of how and where they spend their leisure time. And some of these new ways could be more fulfilling and rewarding than the old ways of going out to both dining and entertainment destinations. Even in the future when the economic hardships and angst of the recession have gone away and the cost of out-of-home entertainment is less an issue, consumers may stick with their new habits instead of returning to their old ways. What used to be considered an out-of-home leisure necessity may well be considered a luxury. This does not bode well for restaurant, entertainment and eatertainment destinations or for shopping centers and malls that rely on them as anchors to generate foot traffic for retail stores.
To counter this possible trend, location-based leisure venues need to examine their offerings and realign them with the new Grounded Consumer's leisure time values.
We are seeing several trends that can be tapped to create greater appeal. One is small indulgences. Even in hard times, consumers seek out small pleasures. Things like cosmetics and chocolate can serve as mood enhancers for consumers in today's down economy, according to assistant marketing professor Nancy Upton, PhD of Northeastern University, who is an expert in the effects of mood on consumer behavior. She notes that this has been the case during other periods of economic strain, including the Great Depression.
Upton says consumers under pressure still want to feel good, so they buoy their spirits in little ways. They eschew the major purchases, like automobiles, homes, and luxury items. Instead, they buy quick pick-me-ups, like lipstick or takeout food, or spend their money on practical items that can be justified, she says.
"During the Depression, we saw something referred to as the Lipstick Effect, which showed an increase in the consumer purchase of cosmetics, especially lipstick," she says. "What we saw was consumers trying to make themselves feel better through small, indulgent, hedonic consumption."
It appears the Lipstick Effect is in action during the current recession. Many chocolate companies are seeing increased sales. When consumers consider a leisure-time offering as a small indulgence, its appeal is greatly enhanced during tough economic times. This may be a contributing factor to the current boom in movie theater business, with ticket revenues up 15% and attendance up 12% compared with last year.
The "staycation" trend, in which consumers seek out more affordable leisure options near home rather than expensive vacations, also works to the advantage of community-based entertainment facilities. Movie theaters, family entertainment centers (FECs) and other community-based affordable attractions can benefit not only from the staycation trend, but from the consumers' need to get out of their homes occasionally to escape reality into another world for a few hours.
One of the last things parents will cut spending on is their kids. A Synovate survey asked Americans what they gave up when they had to cut back to save money in 2008. At the very bottom of the list was "treats for their children." Only 1% said they did so, compared with 22% cutting back on restaurant visits with family or partners. Any out-of-home attraction that appeals to parents for their kids stays a high priority, even during tough economic times (see story in this issue about Chuck E. Cheese's 1st quarter 2009 sales). LINK
Repositioning leisure destinations as an opportunity for families to bond and have fun together also will greatly enhance their appeal during times when people are going back to basic values.
As discussed in this issue's article about eco-conscious consumers, aligning a location-based leisure (LBL) facility with consumers' green values also makes the destination more attractive.
Yes, these are challenging times for any location-based business. The secret -- not only to survival but to current and future success -- is to align the business to be relevant with the new Grounded Consumers, their values and lifestyles.