Posts filed under 'economic downturn'
Avocados, ethics and supermarket histories
Alex Steer writes:
The avocado pear’s name is the product of selective memory. Our word for the South American vegetable comes originally from the Nahuatl word ahuacatl, which means ‘testicle’. This unfamiliar word was borrowed into Spanish, but mishearing and confusion with the easier-to-remember word for ‘advocate’ or ‘lawyer’, avocado, led to this being used for the pear. Avocado was borrowed into English in the late 17th century, and has stuck.
The avocado has in recent weeks found itself at the centre of a standoff between two supermarkets. Sainsbury’s and Marks and Spencer have launched TV adverts – commemorating their 140th and 125th anniversaries respectively – in which they each appear to take the credit for introducing the avocado to Britain. The avocado is now an advocate in supermarkets’ increasingly fierce battle for market share, but it is arguing the case for both sides.
There has been no shortage of ads harking back to the past recently – Sainsbury’s, M&S, Hovis, Persil – and no shortage of commentators noticing this. Most have identified that behind these campaigns lies a perceived yearning by consumers for the securities of nostalgia and tradition. Hovis’s strapline – ‘As good today as it’s always been’ – resonates with wary, recession-weary shoppers who are longing for a little sanity. Nostalgia brands are brands that have stayed the course; brands you can trust.
But Sainsbury’s and M&S are not just saying they are reliable retailers. They are saying they are responsible, ethical ones, and that they always were: employing women, helping the planet, doing their bit for the war effort. These campaigns are histories, written to appeal to the values and good citizenship modern consumers seek from brands.
The demand for corporate social responsibility is relatively new, and it’s hard for older brands not to look like they’re jumping on today’s bandwagon, compared to new brands who have built CSR into their blood and bone. By framing their histories in terms of modern values, retailers are telling consumers that, unlike the avocado, they were always advocates, representing quality and fairness. It remains to be seen if consumers will buy this, or conclude that it’s all a load of ahuacatls.
The picture at the top – a photograph of a painting – is borrowed, with thanks, from Betweenland on flickr.
1 comment 15 June 2009
Old and unimproved
Andy Stubbings writes:
Pessimism is an often underrated emotion. In this dismal economic climate, brands like Schweppes (with their series of woodcut style print ads that send up British political figures) and even the Evening Standard (with their “Sorry” bus and tube advertising) have sought to capitalise on consumer discontent and, most probably, a simmering resentment towards our political and economic institutions (for a wonderfully vitriolic example of this anger, see Matt Taibbi’s ‘The Big Takeover’).
However, no mainstream brands appear to have done this as explicitly as Shredded Wheat in the US. The “Progress is Overrated” print ad above is part of a campaign by cereal manufacturer Post to publicise the simple, unchanged origins of their product. As you would expect, the long-copy form and type-setting feel of the print ad are wantonly old-fashioned, conveying “back-to-basics” message (although the slapstick tone of other campaign media feels at odds with this). What is especially interesting about the copy, however, is that it namechecks waste concerns, resource shortages and the impact of climate change as evidence that we have not progressed (though curiously no mention of the financial crisis. The people who buy Shredded Wheat are mainstream American consumers, many of them mums buying for their kids. The tone of the campaign (by Ogilvy & Mather in New York) implies that research has found this attitude reasonably prevalent in the target audience, which suggests that consumer discontent may be quite widespread.
While it may be difficult for established brands like Schweppes and Shredded Wheat to reinvent themselves as the Voice of Discontent, I think there is a substantial opportunity for less well-known brands to take this on, in the way that Mountain Dew reinvented itself as the ’slacker’ brand in the midst of the corporate greed of the 1980s. With so many brands offering similar messages of solidarity and empathy with consumers at the moment, it might be that pessimism proves a smarter and more distinctive position.
The picture is borrowed, with thanks, from Noise Between Stations.
1 comment 13 May 2009
Talking about Millennials and progress
Yannis Kavounis, the head of our Millenials Knowledge Venturing team, talks to Tom Ding
Tom: Yannis, I have been meaning to ask you about Millenials and the recession…
Yannis: Recession, anxiety, layoffs… I’m personally exhausted from all the speculation and debate around it. Let’s talk about something more uplifiting: change and our future.
Tom: Sure. But where will the change come from?
Yannis: Well, not from government and politicians. They are only trying to resolve the problem using the same tools and context that caused it. So what’s left? Us – ordinary people, and Millennials of course. Millennials are connected and aware of the power of the collective. They have the technological and creative tools to take risks. And most importantly they’re young, not jaded and realise that grassroots overhaul of our economy and values is the only way forward.
Tom: I have seen a few diffferent versions of Millennials and Generation Y, what is your definition?
Yannis: At The Futures Company we say Millennials are the cohort of people born between 1979 and 1992, or roughly those aged between 16 and 29 at the moment.
Tom: OK. So give me some examples of these new values you talk about…
Yannis: So, for instance, I love how some of us are still rooting for ownership (intellectual or physical) as a fundamental principle of our economy. Well, guess what, Millennials are teaching us that modern business models can be based on more fluid and open concepts such as access and open source. Think of a world where you don’t ‘own’ but you ‘share’ – as and when you need to. Who needs iTunes when you have Spotify?
Tom: Yes and everyone I know has started using Spotify all of a sudden. I read that they just got their millionth subscriber in the UK, around the same time that the billionth application was downloaded for the iPhone – which I guess is open development, if not true open source. But is all this generational change about technology?
Yannis: Well, hasn’t generational change always been about technology, through every stage of human evolution? The interesting thing about current technology is how Millennials are using it and the role it plays in their lives. For them, it’s the means to an end, not the end itself – it is the greatest facilitator of societal change at the moment. I see Millennials as the generation that will use technology to help us enter a new age of realisation … be that in the economy, consumerism, or through our social values.
The picture is borrowed, with thanks, from wearesuperfamous.com
(edit: The Futures Company definition of Millenials is those born from 1979 to 1992, not 1982 to 1992 as originally written – a typo, apologies)
1 comment 7 May 2009
Consumer responses to recession
Andrew Curry writes:
We recently launched our second report on changing consumer attitudes to recession – The Reconstructed Consumer. Henry Tucker and Chris Grantham presented to clients new UK data, collected in February, which suggests that consumers are coming out of the hangover stage of the spending boom and are starting to think consciously about how to reshape their behaviour.
In Feeling The Pinch, which we published last August, we found that consumers’ initial response to the recession was to buy things more cheaply rather than change shopping patterns. Now, falls in food and energy prices, and in interest rates, have eased some of the immediate pressure on household budgets – but pessimism has deepened about how long and deep economic recession will be.
Over half now think that things are “going very badly” for the UK economy (the other half merely think that things are gong badly). The data, perhaps unsurprisingly, show sharp declines in trust in banks, and also in CEOs and large organisations. Local independent organisations, in contrast, have seen gains in trust.
There are some interesting findings within the grain of the research, which goes into some detail at category level. One is that people’s attitudes to categories depends on how they classify it in terms of their ‘mental wallet’. We asked people to classify different expenditures by whether they thought of it as ‘Basic’, ‘Lifestyle‘, ‘Sanity’, or ‘Indulgence’. Spending gets trimmed at both ends: ‘basic’ and ‘indulgence’ expenditure gets cut back to pay for ‘lifestyle’ and ’sanity’ spending. Of course, different consumers classify categories in different ways.
And consumers seem to be responding to brands which demonstrate confidence in the face of recession – in particular, the majority think that brands which have cut their prices were probably over-priced to start with. This seems to play better for those brands which were already at lower price points – witness McDonald’s positioning itself against Starbucks in the US with its “four bucks is dumb” campaign, or Tesco struggling to win over enough Aldi shoppers with its ‘Britain’s biggest discounter’ strategy.
The Reconstructed Consumer is available as a paid-for report. For more information please contact Jennifer Kivett on 020 7966 1824.
Add comment 14 April 2009
Recession 2.0
Giles Powdrill writes:
“A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter-and getting smarter faster than most companies.” So said the Cluetrain Manifesto almost exactly a decade ago. The prescience of the work lay in the authors’ clear understanding of the connective potential of the web and the shift in power from companies to individuals which would accompany its growth.
However, despite witnessing this shift in power, the majority of organisations still haven’t adapted their business practices to embrace the internet. They are not making use of the networks, the empowerment or the easy conversation and collaboration made possible through the social media technologies broadly described as ‘Web 2.0′ to help create new types of relationships with their customers. For many, the internet is still just another channel.
But maybe this is beginning to change: perhaps the current recession, the first of the truly digital age, will be looked back upon as being the spur to growth of new types of online commerce. We are already witnessing the growing success of online shopping, price comparison websites and digital advertising in the downturn, but these are only first steps – doing old things in a new way. The real challenge is about greater engagement; working with and for consumers in an open way. It is about companies demonstrating that they know enough about customers and their behaviours to deliver a benefit. Combining transparency with networked data and new technological infrastructure can create situations where all gain, customers and companies alike, but if companies don’t work out how to use these new networks, they may find themselves bypassed as people decide to do it for themselves instead.
A good example of a company getting it right is Zopa, the social lending site set up by banking professionals on which people lend directly to borrowers online. Borrowers bid for funds, and lenders choose whether to respond. Lenders get good returns, and borrowers get lower cost loans. Zopa makes its margin by charging both parties a fee. Default rates are low and lenders can see their borrowers and follow the progress of the their loan. Zopa has disintermediated the banking business by adding social networking and a human touch. In terms of Recession 2.0 it’s a sign of the times. As the Cluetrain Manifesto said: markets are conversations.
The picture, ‘the garden of Zopa’, is from a digital campaign by the social lending site to demonstrate the benefits of personal involvement and mutual help.
1 comment 26 March 2009
Most recent Henleymail now online
Jo Phillips writes:
The latest edition of HenleyMail (our free regular think piece email) is now available to read online here. There’s a chance to consider responses to the economic downturn in both the lead article by our UK managing director on how brands can adapt to a recession, and a perspective from Yankelovich in the United States on undermining the ‘fear factor’. There’s also an article on some of the work we have been doing on long-term futures – sharing some of the learnings and indeed the challenges that arise when we look to expand our strategic horizons in this way.
After over 60 issues, this is the last edition of HenleyMail – but only because we’re changing the name. As a result of our merger and rebrand, from now on the newsletter will be known as Futureproof. If you’d like to receive it you can sign up here.
The picture at the top of this post is ‘Hard Times’, by the 19th century painter Sir Hubert von Herkomer. From The Victorian Web.
1 comment 19 January 2009
Repairing the material world
Emily Pitts writes:
Demos’s recently launched ‘It’s a material world’ argues for the social value of heritage conservation, at a time when budgets for conservation courses are being slashed and the future of the discipline seems threatened. It calls for a national conservation strategy that includes education in schools, involves local communities in preserving the public realm, more support from government and a call to arms directed at professionals in the conservation and cultural sectors. If we don’t make the effort to be inclusive in how we look after the public realm, they argue, and make choices collectively about what to conserve, then social capital also declines.
An increasing interest in preserving social capital and a renewed vigour in community life is something we have been tracking for a little while, and early signs are that the economic downturn is increasing the extent to which we think of collective good. According to Yankelovich Monitor, 41% of American consumers define being a good citizen as ‘Not buying a home that is larger than you really need to help reduce energy usage’ compared to 34% just a year ago. Our data from the UK, whilst not directly comparable, hints at a similar sense of personal empowerment and responsibility, with the majority of consumers agreeing with the statement ‘I feel that I can make a difference to the world around me through the choices I take and the actions I make’. Interest in community life is also strong; according to our Planning for Consumer Change survey, since 2005 more people agree that the quality of life is better improved by looking after the interests of the community than those of the individual.
With changing attitudes towards community in evidence, the time might be right for the cultural sector, and conservation in particular, to push away from the individualistic outlook of the early ’00s and emerge in the schoolrooms and town halls of every community as a mainstay of our society. But is it possible for conservators to be more professional and more inclusive of the public at the same time, as Demos asks? Resolving conflict between public priorities and those of the experts could prove tricky, but rather than seeing these clashes of opinion as either/or tradeoffs, can we instead look to them as latent energy areas for future innovation?
The image is of the filming of the final of the BBC series ‘Restoration’ Village‘at the Weald and Downland Open Air Museum. More images can be found on their Flickr site.
Add comment 22 December 2008
Understanding consumer attitudes to saving
Giles Powdrill writes:
Since 2004 The Futures Company has worked with Aviva, one of the world’s largest insurance companies, on an annual survey focussed on understanding consumer attitudes to saving and investing. In total, more than 100,000 people have taken part in the survey since its inception. Geographically, the scope has grown year on year from 11 countries in 2004 to the 25 covered in 2008.
2008’s global survey was also topped up by an additional omnibus survey of key tracking questions in six markets, to understand how attitudes were changing as the credit crisis intensified, in late October 2008.
The results formed the basis of a recent speech given by Amanda Mackenzie. Aviva’s Group Marketing Director, at Chatham House (opens in pdf). To summarise some of the main findings:
Short termism – In 2008, the majority of people surveyed, in every market, said that the short term (within the next 5 years) was the most important timescale for them when thinking about savings and investments and the importance of this short term context overall has been a growing trend since the survey began.
Financial vulnerability – People feel financially exposed. The 2008 survey revealed that across the markets surveyed only one in four people felt that they had enough savings or investments to cope with the unexpected. Although this sentiment was felt most strongly in many of the Central and Eastern European countries, the omnibus research in October showed that feelings of vulnerability in more economically mature countries like the US and Germany have increased noticeably over the preceding nine months.
Aversion to risk - Less than a third of those interviewed in 2008 agreed that they were prepared to accept a higher level of risk for their savings in return for a higher possible return and although this figure had remained consistent across the five years of core research, the omnibus survey showed evidence of this risk aversion strengthening in the more mature economies since the credit crunch took hold. The research has highlighted consistently that when people think about financial returns from their savings they tend to prefer products which offer safer or guaranteed options over those which offer the highest or most competitive returns.
Barriers to saving - The greatest reported barriers to saving more have consistently been lack of affordability and existing debts, however lack of trust in financial institutions as a determining factor has risen dramatically over the course of this year. For instance only 8% of respondents in the US cited it as a barrier in Q1 2008 but this had then risen to 25% by Q4. Over the same period it rose from 15% to 27% in Ireland and from 13% to 22% in the UK.
Retirement concern – In almost every country surveyed the majority of pre-retired people said that they were worried that they wouldn’t have enough money when they retire to provide an adequate standard of living, and this has been the case since the survey began. However, significantly fewer people in most countries said that they were actually regularly setting aside money for use in retirement (despite also acknowledging that saving or investing regularly was the most practical way to secure a comfortable retirement). A mismatch between anxiety and action which creates some potentially worrying pension provision gaps.
Working later – One response to this potential lack of retirement provision, from a consumer point of view at least, may lie in simply working until later in life. In fact, rather than seeing this an unappealing prospect, in 2008 the majority of pre-retired people agreed that they would like to work, either full time or part time, after the usual retirement age. There was considerable geographical variation in answering this question though; the more established Asian markets such as Hong Kong, Singapore and Taiwan expressed the greatest desire to carry on their employment into their later years whilst those in Continental Europe (France, Germany, The Netherlands and Belgium) were least enamoured with the idea.
Countries covered in the 2008 research: Hong Kong, Singapore, Taiwan, China, Russia, Ireland, India, Australia, Romania, USA, Italy, Lithuania, Turkey, UK, Sri Lanka, Poland, Canada, Spain, Czech Rep, Malaysia, Hungary, Belgium, Netherlands, Germany, France.
A summary report of the key findings from the research has now been published and is available for download on Aviva’s website.
Add comment 12 December 2008
Designing for austerity
Andrew Curry writes:
Alice Rawsthorne has an interesting article on the impact of recession on design in the International Herald Tribune. It seems it’s all good news. This shouldn’t be a surprise; innovation thrives on scarcity and constraint, and design is no different. And certainly the historical evidence bears this out. The Bauhaus and the Modernist movements emerged in the 1920s and ’30s, and the Italian post-war design boom from the depths of its post-war austerity.
The current financial and economic crisis requires that we think again about how our systems work, and – as she writes – designers excel at simplifying complex issues and collaborating with other disciplines. Rawsthorne anticipates that designers will help companies to cut costs by thinking about new ways to use materials and by imagining new service models (for example part-ownership or ‘renalism’ rather than outright purchase, as is happening with the Parisian Velib bicycle initiative – or Streetcar and Zipcar, come to that).
Beyond this, there are whole new approaches to service and system design, and she commends the work of Live|Work, which has redesigned support services, for example in its work in Sunderland, to put the user at the centre and access resources from multiple agencies rather than being caught between them.(It also works in the private sector).
The final bit of good news? The market for expensively designed objects has tanked. Half of the lots at Sotheby’s design auction last month went unsold.
Thanks to core 77 for the tip. The picture of a Velib station at the top of this post is from an article about the Velib scheme in Post-Carbon Cities.
Add comment 1 December 2008
Credit crunch cliches
Andy Stubbings writes:
One of the great lines in the film Network is when the news anchor Howard Beale covers the news of the 1970s recession by telling viewers,
“I don’t have to tell you things are bad! Everybody knows things are bad. It’s a depression!”
But in the days of 24-hour rolling news channels and multi-supplement newspapers, such brevity is no longer good enough. There’s a correlation between the amount of actual ‘news’ anyone can report, their level of knowledge of the subject, and the amount of cliche they generate. The formula for this is probably M x I = C, where M is how massive the story is, I is the journalists’ general level of ignorance, and C is the volume of cliche. There are even blogs which celebrate the best crunch cliches. Here’s my list of current favourites.
- Brokers with their hands on their faces. The first and possibly still the best.
- The dramatic falling red line on a graph. It’s like the classic cartoon graph, which plunges off the edge of the chart, and never (well hardly ever) has scales or axes.
- The knock on effect. The human interest story designed to explain economics’ multiplier effect: the local corner shop skimps on window cleaning, so the window cleaners have cut back, so the chammy leather business is struggling, and in no time at all we’re at 3 million unemployed by Christmas.
- The unlikely winners. The little-known (but still beaten-to-death-in-popular-journalism) phenomenon of unlikely goods, usually discretionary luxuries, succeeding in the prevailing economic environment. Examples cited include pizza home delivery, condoms, dining in for a tenner, and even Karl Marx.
- The unfortunate loser. Sometimes seen alongside number 4. This sometimes appears to be the publication’s revenge on things it’s never liked much, from smoothies to BMWs.
- The credit crunch as Malthusian check to greed and selfishness. To achieve full cliche status needs to include the phrase ‘financial wizardry’.
- The undeserving bankers. If they aren’t about to be sacked (see number 1), they will be drinking champagne at an ING-sponsored party on the proceeds of the tax-payers’ bail-out.
- The worst….since the great depression. Or other periods of general purpose crisis, such as the Second World War, Roosevelt’s New Deal, rationing, the Blitz, etc. The Sun is the runaway leader here. Its “Backing British Business” campaign even uses the slogan “Your country needs you“.
- The list (ahem). Usually money saving tips which can be constantly recycled from one story to another.
- ‘The credit crunch’. The biggest cliche of the lot. Used as shorthand for everything, and shoe-horned wherever possible into every other Sunday supplement article e.g. ‘credit crunch chic’, ‘credit crunch lunch’. And now being seen in other company as well – as in “the oil crunch“.
Thanks to Josh Hunt and Joe Ballantyne for their contributions. The picture at the top of this post comes from Brokers With Hands On Their Faces, and there’s a lot more there.
1 comment 20 November 2008
