Fran Walton writes:

Earlier this week, we presented our latest research on the post-recessiom UK consumer, Feeling The Pinch 6, to clients in London. The overall message is one of gloom: 43% of consumers think the UK economy will get worse in 2012, and 46% plan to spend less. But that doesn’t mean that there’s nothing that brands can do.

So here are our new 5Ps for marketers:

1. Protection. How can you reduce the risks of purchase, or  help consumers manage risk in other parts of their lives? 63% of consumers now agree, ‘ I find myself thinking twice before making even the smallest purchase’. An interesting example is the German peer-to-peer insurance company, Friendsurance, which reduces insurance costs (and fraudulent claims) by letting people create groups of 15 people to help cover an insurance claim.
2. Practical. How can you empower people and help them to be self-reliant? 58% of UK consumers agree that ‘Since the recession I feel a greater need to be as self-sufficient as possible’. One response, from the Spanish food company Gallina Blanca: if you send them a a list of the ingredients you happen to have at home, they’ll suggest a recipe.
3. Purpose. How can you help consumers make new connections or make living with less a positive experience? 53% of UK consumers now agree that ‘since the recession I have learnt how many things I can do without and still be happy’. Sainsbury’s ‘living well for less’ campaign captures this well. It’s not just about the food. It also means making the most of the good things in life, sharing moments or maybe cooking memorable meals together. And without paying the earth.
4. Permission. How can you help consumers feel like they are achieving something worthwhile? Perhaps depressingly, 53% agree that ‘some of the goals I had before the recession are now probably out of reach’. Say it ain’t so! The French business Onefeat has a model where you set some goals, or ‘missions’, and get support from your friends to help you achieve them.
5. Pride. How can you help people take pride in small things or help people to be proud to be part of their community? In our qual research for Feeling The Pinch 6, one of our respondents observed that ‘the value of working with your hands seems to have been forgotten about’, also a theme of Matthew Crawford’s surprise best-seller. Transform Your Patch, launched in January. in which Pepsico and Britvic have teamed up with the charity Groundwork, is an ambitious scheme to create new parks and playgrounds and football pitches from waste land across the UK.

Of course, a lot of these are small things, but one of the lessons of the recession is that small things matter. The other lesson is that it’s more important than ever to be able to stand in the shoes of your customers and see the world through their eyes.

The picture at the top of this post is from the Swedish co-operative Lantmannen, which has a scheme which pairs singles to share leftover food. It is used with thanks. To find out more about Feeling The Pinch, and our research on consumer attitudes to the economy in Britain and Ireland, please contact Fran Walton. 

Walker Smith writes: For the past three years, since the economic crisis ballooned, I’ve been writing a regular column called Looking Up, on the ways for businesses to manage through recession and tough markets; I wrote the last one in the series earlier this month.

I wrote the first Looking Up in October, 2008, just over a month after the global financial system went to the edge of collapse.  (I’m not being melodramatic here; if you need a stark reminder of just how close we came to financial meltdown during the eight days from September 12 to September 19, 2008, James Stewart’s New Yorker essay “Eight Days” is still chilling).

The column had three purposes.  It translated financial concepts, to help people navigate the macro-economic news. It provided evidence and examples, to show that there were still opportunities in the market. And the third, and most important, purpose of Looking Up was to offer insights and guidance about how to reach consumers effectively during the Great Recession and subsequent stagnant recovery.  Over three years, Looking Up focused on delivering insight and inspiration to our clients.

And looking back on something like a hundred issues, I see that three themes repeated themselves over and over again. They’re worth repeating here.

Innovation.  The single most effective way to thrive in a downturn is to innovate. Reams of academic research have demonstrated this across past downturns and across geographies.  There are hundreds of examples of successful innovations introduced during the depths of past recessions, along with hundreds of examples of defunct companies that went bust waiting out a recession while competitors innovated. The logic is simple: innovation sparks new demand, creates new jobs and advances the overall productivity of the economy, which is the key to prosperity.

No other theme has been mentioned in Looking Up as often as innovation, one of the core practice areas of The Futures Company. If you had to take just one thing away from Looking Up, it would be: innovate!

Sourcing growth.  The biggest challenge facing companies at the moment is sourcing growth.  Unemployment, stock market volatility, cuts in government benefits, deleveraging and housing price declines all mean that household budgets remain tight. But there are pockets of strength in the consumer marketplace; more can be found through close scrutiny and shrewd analysis.  A number of MONITOR methods, such as Dynamax, have been developed to identify this enduring spending potential.

Practice optimism.  Consumers take their cue from businesses.  Optimism is contagious (as research has shown time after time).  If you want consumers to be buoyant again, you need to help. Conversely, if your marketing echoes their worst fears, don’t expect them to be cheerful. There’s a virtuous circle here: if businesses look up, then your customers will too.

Global MONITOR is an innovative, strategic, future-focused Global Insights programme for clients and agencies. It identifies the key dynamics shaping the world and the consumer marketplace, as well as potential implications for your clients’ businesses. If you want to know more about Global MONITOR, please call Simon Kaplan in the United States, or Deniz Erdem in Europe.

The picture at the top of this post was originally published by Global Envision – well worth a visit – and is used with thanks. 

Phil Soanes writes:

I spoke earlier this week at a WPP workshop run by The Store on the future of retail , and the form was a series of short sharp presentations (for example, by Kantar Retail, Fitch, and Ecommera) with discussion. My theme was the future of consumer segmentation in the age of austerity, but what I wanted to do here was to share – unattributably, unfortunately – the ten big things I heard during the day from the different presentations.

1. Retailers are moving away from their traditional segmentation models.  The classic segmentation combines a ‘Why’ (need-state) on one axis with a ‘What’ (value or attitude) on the other. Now retailers are segmenting occasions and missions. As one speaker said, there are fewer missions than consumer types so it’s easier to segment that way. For me this feels like the easiest way to segment, and closest to point of purchase, but it doesn’t negate the need to understand what’s driving the consumer.
2. Retailing is now about data. There’s lots of it and the winners will be the ones who can collate and understand it to their advantage. Getting to a ‘single customer view’ (with integrated data sources) is the holy grail, but it’s a massive task and most retailers won’t achieve it. Retailers are reluctant to hand their data over, but may need to if they’re to make the most of it. One other implication of this: less market research. People will have less need to collect survey data.
3. The discount noise in the market is deafening. This isn’t surprising given the economic climate. But when you look at who is doing well (or less badly) it shows that the secret of good retail is still having a great proposition at the heart of the business, and this defines the ‘value for money’ test. This also means that brand really matters, probably more than before.
4. Consumer motivation to buy and shop for different categories differs widely. so working this out is important. Close up, motivation by category looks different, while there is a repertoire of behaviour within categories. It is also clear that making shopping easy is the tipping point in some categories. And the need to deliver ‘easy’ is replacing the need to optimise customer satisfaction.
5. Trust and transparency matter more than ever. It was true before austerity struck. It keeps on getting more true because in tough times consumers expect, more than ever, that brands won’t take advantage. They’re less concerned with the ‘fluffy’ idea of ‘on your side’ as with a ‘fair deal’. Getting found out has more severe consequences for brands than it used to.
6. The future will be multi-channel. But not in the way people sometimes think. The purchase path is increasingly complex, with consumers jumping between online and offline as they go. But offline retailers need to understand better why their customers are there instead of in front of a screen.
7. The value exchange on a shopping mission is critical. What do consumers need to get out of a shopping ‘trip’, actual or virtual, to make it worthwhile for them?
8. Shopping mind states fall into three groups. One contributor conceived shopping ‘mind-states’ as falling into three types: locate, explore, dream. For another this division was more operational, via stages of a shopper journey: plan, search, select, and buy. Consumers switch between offline and online within many of these stages,  so understanding the role that each plays at different time is crucial draw out. I think we’d say there’s more work to be done here, in particular in understanding the role of ‘reviewing’ and who’s involved in that, and also to map how these behaviours apply to different categories. And conventional shopper journeys also tend to neglect the shopper relationship after purchase, from service to sharing to word of mouth. One more thought on mind-states: what is the potential to offer ‘dreaming’ online?
   
9. Online retailers have to get everything right to be successful. Contrary to the received wisdom, online retail is a less forgiving environment than physical; ‘everything’ includes vision and planning as well as ‘enablers’ and delivery. Amazon are the only one to hit all the numbers and this is partly down to a relentless focus on what they can control.
10. There are some important questions where we don’t really know the answers yet. For example:

• Does impulse exist?
• How do you measure loyalty?
• What categories will and won’t work online? I know; after more than a decade you’d have thought we’d have cracked this, but it seems we haven’t.

The picture at the top of this post was taken by Peter Curry. It is published here under a Creative Commons licence: some rights reserved. If you’d like to see a copy of Phil’s slides from the conference, please contact him.

Henry Tucker writes:

The Futures Company has recently released the latest edition of Global MONITOR, our large scale syndicated future-focused Insights Programme. Global MONITOR’s analysis is underpinned by a survey of 27,000 respondents in 21 markets, and its research underpins much of thinking about social, cultural, and consumer change. Over the next few weeks we’ll be running a series of blog posts on themes from this research.

One of the most important themes of Global MONITOR 2011 is about consumer volatility. Three years into the financial crisis, those in richer nations have experienced long periods of austerity, unprecedented since the last World War. Eleswhere, pressures of growth are causing their own problems, from pollution to poisoning, in the case of China’s food scandals. This has made consumers feel both vulnerable and vigilant. And some of the data are striking:

• 42% agree that they ‘usually buy the cheapest product available’
• 51% of consumers, globally, agree that they are making more of an effort to buy less than they did before.
• 62% agree that ‘the world feels like an increasingly hostile and uncertain place’ (a high level of agreement for such a strongly worded question).

These tensions are expressing themselves culturally as well as economically. In most markets, the proportion of those agreeing with the statement ““I appreciate the influence other cultures have on our way of life in this country” has fallen quite sharply over the past two years. People are drawing in.

What we’re seeing as a result is that consumers are becoming as self-reliant as they can, reducing their exposure to an uncertain world wherever possible. Of course, ‘self-reliance’ conjures images of people storing clean water and tinned food in their cellars, but the emerging trend is, instead, about networked reliance. People use social connections, both to find new information, to look for deals, and to lean on each other for support. As they do so, their expectations of what business should be doing for society have become sharper. The proportion agreeing that “Companies have a responsibility to help support the society in which they operate” has seen a significant jump year on year in many markets. It’s another layer of complexity that many businesses could do without in tough times. But get it wrong and consumers will punish you for it.

The picture at the top is from Global MONITOR, and shows people’s perceptions of how their countries are doing and also how they are doing.

Global MONITOR is an innovative, strategic, future-focused Global Insights programme for clients and agencies. It identifies the key dynamics shaping the world and the consumer marketplace, as well as potential implications for your clients’ businesses. If you want to know more about Global MONITOR, please call Simon Kaplan in the United States, or Deniz Erdem in Europe.

Lawrence Wykes writes: The idea of the generational cohort as a unit of social research and analysis goes back to the definition of the ‘boomers’ – America’s immediate port-war generation, now clipping to retirement. Since then we’ve had waves of new cohorts, from Gen X, to Gen Y, to the latest addition, Millennials. Millennials (the people, not the label) were born in the late ’80s, or so, approaching adolescence or adulthood by the turn of the century.

But the question of whether the Millennials are a coherent cohort is still open – the data has never quite added up. And our recent analysis, based on our Global Monitor data, suggests that as a group the Millennials are a fragmented cohort, refracted by technology.

In fact, we found four different groups (although more may have been lurking in the data) and these already suggest a more fruitful way of thinking about this generation.

• Striders have been relatively unscathed by the recent economic downturn; they are marching forth with enthusiasm, and keen for success and all the material frills they perceive will come along with it.
• Steppers have been hit hard by the downturn, which has left them price conscious and feeling negative about their future. They are cautious, considered, and want to make the most of what they’ve got.
• Satellites are optimistic about the future and know how to use the resources available to them, especially technology (they are tech-mad), to get what they want.
• Spirits are poster children for the Millennials generation; they are socially conscious and interested in things happening at a global and local level.

So if Millennials are fragmented and so easily segmented by their differing technology use and attitudes, why do they look like a generation to researchers?

I think Millennials look like a generation because there is a social-technology breakpoint between their cohort and all previous generations. Millennials are the first generation to have grown up with modern technology proper – and this is manifested in the fluid way they use technology to construct their identities and manage their environments.

But, in terms of social analysis, defining a group by technology – rather than their underlying attitudes and values – has problems. Technology evolves and changes, and it seems unlikely that the Millennial generation will grow older while remaining as inventive with technology as they have been in their young adult lives. And the next generation – however they get labelled – may well turn out to be just as creative with technology as we were

More usefully, though, this does open up a promising research question: do the different uses of technology by these different Millennial groups reflect differences in underlying values and attitudes? In other words, will these groups remain distinct as they get older? It seems possible – but so far, we just don’t know.

David Bersoff writes: In the US, the current thinking is that ‘green’ and sustainability have become flaccid consumer touch points. But while The Futures Company has found decreases in the level of green activity, our analysis shows that these decreases are not evenly distributed. Instead, the biggest declines in green behavior were disproportionately centered among those with the least commitment to living green.

Apparently, without a tide of marketplace excitement, media attention and green chic to sweep them along, the least committed dropped many of the behaviors in which they were previously engaged. In contrast, the more committed became somewhat less zealous in some areas, but stepped up in others for a net gain in green activity participation.

In contrast to the behavioral data, the attitudinal trends show a significant cooling towards environmentalism even among the greenest consumers.  While it is not uncommon for behavior sometimes to outstrip attitudes, this is not a stable state of affairs. Decreased attitudinal support may over time lead to the erosion of green activity participation if left unaddressed, especially regarding those activities that are not perceived to yield secondary benefits. In addition, with a less fertile attitudinal soil to plant them in, it becomes much more difficult to introduce new sustainability-oriented behaviors into the marketplace, especially those that require significant lifestyle change.

Ultimately organizations need to develop long-term strategies for helping people lead greener lives that can be effective even in the face of consumer passivity and lack of interest. Going forward, to the extent possible, green needs to baked into marketplace offerings, and not offered as an option that consumers can take or leave.

But the history of sustainability over a generation has shown quite sharp peaks and troughs in consumer engagement. There are real risks for organizations in deciding to wait until the next crisis before taking decisive action on sustainability issues. If they do, they may find that the severity of both the expectations and the necessary speed of response will be far more expensive and disruptive than taking the lead today on sustainability issues – regardless of the current environmental ennui in the US marketplace.

The image at the top of this post is from Carbon Rally, and is used here with thanks.

Andy Stubbings writes: We were recently asked to present at a retail conference,  (“Digital Retailing 4.0”) organized by The Store and WPP, on how mobile devices will change shopping.

On the surface, this already seems to be quite a familiar future, with a familiar set of litanies (“shopping will be freed from the confines of physical space”; “all shopping becomes social”; “mobile will be the ultimate disintermediation device” etc). That’s not to say they’re not true, but there are plenty of other blogs where you can find this sort of thing.

We wanted to understand the patterns, to identify a coherent theory to explain the effect of technology on the evolution of retail (this would also help make sense of some of the more familiar visions of the future in a more systematic way). To do this, we went back to first principles about how the system of retail works and how it might change, basing some of our thinking on the TRIZ model of the evolution of technical systems. The theory and evidence on the TRIZ model is complicated – engineers and inventors have spent whole careers understanding it and applying it – but in essence it can be used as a way to understand how systems and their components evolve over time, from rigid, to modular, to programmable through to autonomous states (you can read more here). One simple analogy might be the evolution from a single toy brick (rigid), Lego (modular – can be combined and moved around in the system, albeit not dynamically), to Lego Mindstorms (programmable – components in the system can communicate with each other dynamically), to an automated artificial intelligence Lego system (autonomous – components respond themselves to changes in the environment).

This theory of the evolution of systems works quite well for retail. Simplistically, we can identify the components in the ‘system’ of a store as four Ps:

• People (staff, customers, suppliers and others, e.g. passers by)
• Products (inventory, display products, customizable products)
• Places (displays, exterior, payment points, ambient environment)
• Prices and information (product information, advertising, service information)

When you look at it this way, shopping really hasn’t changed that much over the last 2,000 years or so. We have gone from a ‘rigid’ state (fixed stalls dispensing one type of product), to a ‘modular’ state (department stores and big box retail with movable concessions, changeable in-store environments and more control over inventory), and we are now moving to a ‘programmable’ state.

The main technology in enabling the transition from rigid to modular was electrification. For the shift to the programmable store, the key technology will be mobile devices and a whole host of information and communication technologies (ICT) that allow data to be stored, transmitted, analysed and displayed between people and things.

What will happen when a store becomes programmable? In essence it allows different elements in the system of retail (our new 4 Ps) to communicate and interact with each other in a dynamic way. So we night see:

• data (including prices) dynamically linked to products, meaning that prices can be changed on the fly more easily (or different prices will be visible to different consumers)
• products linked to other products (meaning that you will be able to create associative tags between products to form shopping lists or unique categories like ‘Scottish’, ‘ethically sourced’ or ‘related to the life of Robert Burns’)
• places – the distributed store continues to ‘talk’ to its products about their maintenance status  throughout their working life
• people (not just staff), controlling the retail environment (e.g. changing the lighting or wallpaper in store, or looking through the walls of a store from outside)

These are just some first thoughts, and I’m sure there are more. We plan to return to this subject, to develop our thinking on the idea of ‘the programmable store’, so we’d be interested to know what you think.

And the autonomus store? That might have to wait.

Eleanor Cooksey writes:

“I’ve found the cost of living has gone up substantially and it has had a huge impact on my life. I am not buying luxuries as often and I will change the way I deal with my finances.”

This sobering quote comes from a Scottish man we spoke to as part of our fifth in-depth review of how UK consumers are responding to the current economic situation. In our breakfast briefing held in London last week to launch this review, we highlighted four themes which describe the current environment:

1. The New Normal is firmly embedded: Reflecting the broader economic uncertainty, individuals feel the outlook is gloomy: 25% feel the UK economy is going very badly these days, an increase of 10% compared to when the survey was last carried out six months ago. People are even less optimistic about their personal financial situation with almost half thinking they will be worse off over the next 12 months. The message is clear: no one expects things to go back to how they were and we are learning how to cope.
2. Rising prices are hurting:Though inflation has recently dropped a fraction, our data showed levels of anxiety about rising prices similar to those seen in 2008. Many of the people we spoke to were highly sensitive to these changes, whether this was about an increase in the cost of petrol or bell peppers.
3. Savvy shopping matters to consumers: 43% of consumers have had to dip into savings to make ends meet and they are trying hard to make their money going further. Deals and special offers are still very much part of this, but consumers are doing more than that: they are giving serious thought to what they really need and what they really don’t. One lady in Staines realised she didn’t have to spend £70 every six weeks at the hairdresser and could use a £3.50 home dye kit instead. However, she wasn’t going to cut back on her expensive make-up and perfume.
4. It’s a constant struggle to stay on top of things: In our last survey, we identified three groups who represent the various responses to the current financial downturn, and this time round, ‘All Hands on Deck’ were the only group which had increased in size. Though people in this group feel the struggle to make ends meet most acutely, making the most of your budget is relevant to everyone, even for the relatively unaffected ‘Plain Sailing’ group. All want to feel they can loosen their belt without losing it.

I’ll finish with a quote from a young woman in Sheffield which sums up the dilemma the New Normal presents for some:
“I could lose my job tomorrow, so I should plan to protect myself against that – but then again, I could lose my job tomorrow…so why not live for the moment?”.

There are limited places available for a repeat of this breakfast briefing on 12^th May. To find out more please contact Karen Kidson.

Alex Oliver writes:

Looking for better sex? Interested in ways to save money and lose weight? Want to be a better parent and live a long and happy life?

If these questions got your attention, they certainly grabbed mine at the recent Global Social Marketing Conference held in sunny Dublin last week, where Josh Hunt and I spent an intense couple of days presenting our recent behavioural insight work, chatting to academics and practitioners from across the globe, and attending seminars on the latest thinking in social marketing theory.

The conference covered a range of social policy challenges from contraception in African sex workers to breast feeding amongst Texan minority ethnic groups, to reducing extreme racist behaviour in deprived inner city London councils, and a whole bunch of interesting subjects in between.  But in amongst the many theoretical debates, one basic but hitherto understated insight was repeatedly reinforced for me.  That traditional social marketing theory has relied far too heavily on fear as the lever to challenge behaviour, rather than using pleasure or happiness as a motivator to drive change.

Academic research does show that fear can be a highly effective lever in motivating behaviour change. When it comes to men and drink driving, for example, the more that risk of death is highlighted, and the more grisly the description of death, the more likely the subjects are to report a change in attitudes.  And it’s not difficult to think of any number of government campaigns across the globe that have applied the same principle – the famous AIDS campaign of the 1980s, the motorcycle campaign (which I still can’t watch – my husband being the owner of a BMW 850R), and the ‘Heroin Screws You Up’ campaigns of the 1980s and 1990s. (The posters for these became fashion statements, opening up the idea of ‘heroin chic’.)

But it’s possible that over-exposure to these many frightening messages over time has de-sensitised us, or worse, made us angry and caused us to reject the moralising messenger? This was the compelling case argued at the conference by Professor Nadine Henley from Edith Cowan University Western Australia.

She proposed an alternative: that social marketers should make their subjects the heroes of the campaigns rather than the villains or victims.  So, instead of scaring people with the consequences of diabetes and heart disease, we might celebrate weight loss through game shows like The Biggest Loser. Or we accept that teenagers will have sex and tell them what types of contraception fit best with their lifestyle, however debauched it may be.

In practice, good social marketing campaigns will always use a range of levers and messages. But whether supported by academic research or not, intuitively it makes sense that we need to feel good about ourselves and the world we live in – a lesson that commercial marketers have certainly learnt, but governments perhaps need to think a bit more about.

Rebecca Nash writes:

If you’ve been following the ‘happiness debate’, you’ll know that policy makers are increasingly asking if it is potentially a better indicator of social progress than the economic measures represented by GDP. But diving into the happiness sciences you quickly find that it raises as many questions as answers: What is happiness? According to whom? Can it be measured? And if we can measure it, what will the policy response be to unhappiness? What practical steps can be taken to make people happier?

And another question from our end: What does happiness mean to business? Generating happy moods is nothing new to consumer goods manufacturers, where short-term happiness and consumption go hand in hand. But there are a number of potential happiness platforms which business can work from to create more sustainable happiness – building social justice, delivering meaning and value, employee satisfaction on organisational levels, and simply being associated with happiness in its pure form (but beware of ‘happy wash’).

In the research on this which I’m leading for The Futures Company, I’ve become really interested in ‘restoration’ – an approach to happiness which involves making people happy who once were not, and I think it produces challenges that matter to both business and government. When I attended a happiness panel earlier this year at the Institute for Contemporary Arts in London, panellists drew strong links between happiness sciences, psychotherapy, and opportunities to self-repair. Psychotherapist Phillipa Perry advised a laughing audience that, if we want to be happy, we should ‘choose our mothers very, very carefully’. She also gave us tips on how to be happier if early childhood didn’t give us the personal tools we needed for a happy life.

Perry’s take on happiness as something that needs to be re-learned drew some connections for me between what is happening on individual and broader social levels. It reminded me of a recent drivers scan we did for our Government 2020 project, a project on the future of government. One of the most influential drivers of change which emerged – to our surprise – was a trend toward anger, which shaped a few of the future worlds we brought to life. Happiness is more private (although the notion of ‘social wellbeing’ can give it a public face).  Anger is evident and more public, and we’re seeing more of it, more often, in public protest, in generational conflict and in economic frustration.

A key challenge, then, for any organisation taking on happiness, is how to tackle other complex emotions – because as we’re seeing, if happiness goes public, so too can its opposite.

The picture at the top of this post is taken from Stephanie Price’s Borderline Personality blog, and is used with thanks.