"Over the past year, consumer spending has been the primary factor holding up the nation's economy. Now in the face of this enormous national crisis, it is critical for American businesses serving the consumer sector to prepare for how consumer behavior will be impacted," Danzinger said. "Consumers in crisis are consumers under stress. When men get stressed, they go to bars, and women go shopping. Our research finds a substantial amount of U.S. household spending is driven by emotional, not physical, needs. This is largely the realm of discretionary spending. In the face of crisis, women, who do the bulk of American households' shopping, will continue to buy for emotional satisfaction, but their buying behavior will change."

Unity Marketing's research has found that consumer discretionary spending is divided into three basic categories that represent a continuum from the more practical to the most extravagant:

• Discretionary purchases are characterized by products people buy that they don't necessarily need but will make their life meaningfully better. Usually the purchases in the discretionary category have a practical or a functional component, such as a steam vacuum cleaner, water and air filters, small kitchen appliances, 100 percent cotton sheets, down comforters.

• Indulgences are life's little luxuries that bring consumers emotional satisfaction and which they can buy without guilt. Products like candles, bath lotion and oils, cosmetics, gourmet chocolates, fresh flowers, costume jewelry, toys, game, books and videos all fall into the indulgence category.

• Luxury purchases are perceived as something more than is needed and almost always about the brand, such as Calvin Klein, Tiffany, BMW, Bulgari. When consumers buy luxuries, they are making a statement about themselves, who they are and what they stand for.

For discretionary and luxury purchases, the consumer marketers and retailers need to stack the value equation in favor of the consumer to break down barriers and encourage consumers to buy. Enhancing the quality of the consumers' life is the number one justifier for all discretionary, luxury and indulgence purchases. Marketers facing a consumer market in crisis need to study the psyche of their consumers to really understand how their products contribute to the quality of the consumers' life, then communicate the new emboldened value equation to the consumers.

Unity Marketing expects this holiday season to be strong as consumers will crave the comfort and reassurance of family holiday traditions. For companies that market indulgence-type products, they can expect their businesses to be particularly vibrant. Now is not the time to raise prices, but to look at ways to engineer products or find new suppliers in order to offer more indulgence value for a lower price. Promotions that focus on delivering more to the consumers, such as two-for-the-price-of-one or buy-two-get-one-free, are on target for today.

Consumers will also crave the comfort of traditions, so there will be new demand for products that support family traditions, such as Christmas and Santa ornaments and decorations, tabletop and dinnerware for family get-togethers. Back-to-basic toys will give parents a chance to get down on the floor and play with their kids. Suddenly "Made in America" is a much more potent positioning statement, as buying American now is a patriotic duty. Nostalgia-themed products that hearken back to a better, simpler time and greeting cards may also be in demand.

In keeping with the new economic equation, consumers will focus their home purchases on smaller accent and decorative items as opposed to major appliance or furniture purchases which they will put off as long as possible. Inevitably consumers are going to change their shopping patterns, Unity found. Consumers are going to retreat to their home. When they shop, they will look to spend less time at the store. More consumer shopping will also be done from the home, with consumers turning to the Internet, mail order catalogs, even party-based and other direct-selling businesses for their shopping needs.

Reprinted from CyberAtlas.