For a long time we believed there was a way to grow as a country and we grew tired of that attempt failing, no matter what political side it came from.
Post-pandemic, ideas about that way of growing began to crack. The proposition arose that it was necessary to shuffle and give again. The Argentine said: “that’s not how it is” and made a decision.
All the indicators show that the support for the current Government, except for the hard and ideological core, is based on the request: “dismantle the previous model and I will be able to move alone. Disarm me of an economic model in which I believed, in which I trusted and that does not work for me.”
So they endorse this disarmament, despite the fact that the unarmed are the victims. Many feel that, in a disjointed country, they always managed to find their way. They continue to bet that, if this system is completely disorganized, they will be able to find their own path with greater freedom.
Living in a prolonged crisis or war economy helps one not to trust and seek total disintegration.
Consumption no longer drives economic growth. This economic plan is very intense in the process of dismantling structures and marks how, unlike other times, the country’s GDP and mass consumption go along very separate paths.
Let the adjusted bank the adjustment. From January 2024, a very powerful adjustment begins. It is the first time that a Latin American country asks for the cut and approves it. And paradoxically in Argentina, one of the most fractious countries in this regard. Citizens accept to be adjusted.
Future expectation is a key indicator in Argentina. In Chile, for example, consumption follows the real salary, but not here. Our people consume strongly according to what they believe is going to happen tomorrow, as a kind of future consumption, which at this moment they apply and explain.
In 2023 the positive expectation about the future of the country was 39%. Today it is around 46%. This shows why, even in the midst of so many difficulties, consumption does not completely collapse.
This effort comes at an enormous cost: a lot of stress, fatigue and bad social mood. Society seeks it out, but at a very high price. You work longer hours, get more stressed, and put in more effort, only to remain in a restrictive mode or mostly paying off debt.
Engineering your own path. The Argentine consumer seems to be already qualified to work at NASA. For years, we lived with high inflation that induced us to burn silver before it lost its value. That affected the consumer, the merchant and also the industrialist. It was a form of liquidity engineering.
Today, the way is different and is crossed by the question of how to make it to the end of the month or even the beginning of the month. This requires a new organization. The income of the middle class is not enough. The basic basket, today, is on par or just below the average income of an employee, a salaried employee, a journalist, a doctor… That is the universe of a good part of the middle class. That income is out of step with the cost of living.
Faced with this panorama, the question arises: did society become completely rational and prepare for a kind of war economy or did it enter some regime of austerity, beyond political colors? In part yes, because you have to survive. But it’s not just about surviving, there’s also something else… Small yes, that make it possible to sustain constant restriction.
The Argentine likes to consume. For years it served as a source of pleasure. And although today it does not have a handle, it continues trying to do so and thus appears, once again, a kind of liquidity engineering. When you buy, you do so because you carefully decide, first, everything you don’t buy, so that you can then indulge yourself.
Restriction also produces heavy emotional exhaustion. That permanent “no” brings a lot of stress and frustration. When we ask people what they would most like to happen in their life, the answer is usually very simple: “not having to think about money for a while.”
The consumer wants to consume. Faced with salary difficulties, he invents a mechanism that we call “triple infidelity”: to the channel, to the brand and to the flag.
To the brand: after many years without growth, second brands appeared with very good quality and more competitive prices. This has a full impact on the leading brands. At the same time, many consumers stopped trusting advertising so much and believed more in the experience or recommendations of others. Logically, in the context in which we live, we tend to believe the person next to us more than the person above us.
To the flag: the purchase of imported products or in very cheap stores grows to optimize money. Not because the national industry is not supported, but because it needs to maximize every peso. It is not an attack, it is rather a way to defend his salary. Accessibility and price in crisis generate volume.
The impact of changing logic. In the business model, we move from the values of the brands to the values of the people. This also affects companies, brands and behaviors, reconfiguring the entire scenario. Although infidelity to the flag can be read ideologically, in reality it is convenience that rules. At the same time, we live in a moment of strong nationalism, but it is reconnected to some values of Argentina: the junta, the mate, the barbecue, friendship. And the public university also appears in that group, for example. Whether you’ve been there or not, it’s about shared identity.
The closeness. Today the most important indicator for a brand is not how much it is mentioned or how much prestige it has, but how close (genuinely and coherently) it is to people. Closeness is something similar to accompanying a friend who is going through a difficult time: sometimes there is nothing new to say, but the important thing is to be there. And many companies are not prepared for that type of link.
*CEO of Moiguer Strategy Consulting.
by Fernando Moiguer
