Posts filed under ‘economic downturn’
The new 5Ps of marketing
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:
- 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.
- 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.
- 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.
- 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.
- 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.
3 February 2012 at 1:32 pm thenextwavefutures Leave a comment
Looking back on Looking Up
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.
23 December 2011 at 8:40 am thenextwavefutures Leave a comment
The new normal is still here, and here to stay
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:
- 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.
- 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.
- 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.
- 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 12th May. To find out more please contact Karen Kidson.
After bling
Alex Oliver writes:
There are some perks in being a consultant, and being invited to speak at a conference in Paris on managing change in consumer credit and debt behaviour, as I was last week, is one of them. The conference was organised by the European Financial Management and Marketing Association, and was hosted at the elegant Paris Concorde Opera hotel. The two day conference tackled a number of difficult credit management issues, including the best approach to sustainable and responsible lending in an environment still reeling from the shock of the global economic crisis, where regulation is increasingly restrictive and consumer demand remains sluggish.
Drawing on our Global Monitor international trends data, I explored the implications of the ‘New Normal’ for European consumers whose attitudes in relation to spending appear to have shifted permanently. Aspirations have changed: the era of ‘bling’ and platinum credit cards is behind us and although consumers may still be willing to spend, they need to be able to justify doing so. They’re searching for reassurance around value and reduced risk. And regardless of pressure from the regulators, consumers themselves are scrutinising choice in a way they may not have done before and looking for new tools to give them greater levels of control.
Other speakers also explored the attitudes and behaviours of the Millennial generation and whether this target is really attractive to credit providers or too fickle and costly to be of real value. Our data suggests the challenge for financial services providers is to be authentic and transparent in their dealings with this group, offering regular communication through multiple channels and inviting, sharing and acting on honest feedback.
The potential prize, for those willing to invest in the relationship, could be a loyal base of young customers, who become brand advocates and – as illustrated a fellow speaker from FICO with reference to US trends – are also willing to prioritise repayments for those credit providers with whom they feel affinity above others – thus also reducing the credit risk for providers who get it right.
The photo is from Donald Townsend’s photostream, and is published under a Creative Commons licence. It is used here with thanks.
25 February 2011 at 9:06 am thenextwavefutures Leave a comment
Winners and sinners in the Superbowl ads
Alex Steer writes:
I’ve been in the US a few months now, and still know nothing about American football. So when I watched the Superbowl last night, I watched the advertising. I was looking for ads that showed some insight into how consumers here are thinking and feeling in the recovery. There were some clear hits and some obvious mis-steps. Here’s my (personal) take on the most expensive 30-second slots in the advertising year.
Some winners
Everybody was talking about Volkswagen’s Passat commercial before the game, and with good reason. On the surface this endearing spot about a small child in a Darth Vader costume does no more than use some human interest to sell a minor product feature (remote engine start), it tapped into an insight about our desire for technology to fit around our lives in subtle, even ‘magical’ ways. Its gentle tone hit a sweet spot for consumers who are seeking more humanity in the marketplace.
The insight behind Best Buy’s ‘Buy Back’ offer was really smart. They recognized that if consumers are no longer in recessionary lock-down, they’re weighing up their spending (especially on big-ticket items) much more carefully. Best Buy is helping its consumers feel more futureproof, and that matters. The ad, with Ozzy Osbourne and Justin Bieber, was one of the most catchphrase-worthy of the night. (‘How many bloody Gs are there?’)
Verizon kicked off its ad with an almost-too-close parody of an iPhone 4 commercial – ultra close-up, heroing the product, a little overblown – before getting to the point: ‘Does your network work?’ Demand for utility is really strong in the US marketplace at the moment, and Verizon deftly exploited a gap between consumers’ opinions of the iPhone and the AT&T network, often criticized for poor call quality.
The real winner for me in terms of insight was Chrysler, with its ‘Imported from Detroit’ ad. It wasn’t the only car marque to run with a ‘made in the US’ message, but it was the only one to explore what that means in the United States now. More an ad about Detroit than Chrysler, it was one of the few spots of the night that showed foresight as well as insight, using Detroit (and the car) as shorthand for a recovering nation’s sense of injury, self-reliance and determination. There’s a lot of discussion – and divided opinions – about this ad in our US offices today.
Some sinners
We’re a bit divided, too, over the Motorola Xoom piece, which tried to do to Apple exactly what Apple did to Microsoft in its famous ‘1984’ ad. I don’t think it reflects a genuine insight into how people think about the iPad. For that reason it’s less strong than Windows Phone’s amazing ‘Season of the Witch’ and ‘Really’, which tapped into exactly how a lot of us feel about smartphones.
Like the VW spot, Chevy’s ‘Status’ commercial was a fairly human take on a minor product feature, but it the feature was baffling. A voice that reads your Facebook status updates as you drive feels like an awkward attempt by a car to borrow the brand halo of a social network, but just when enthusiasm for ‘always on, always sharing’ feels like it’s waning.
My worst offender, by far, was Groupon, whose campaign idea, ‘Save the Money’, is based on the idea of treating money like it’s a precious resource. The insight’s not bad, but their three ads badly misjudged US consumers. By making light of the threats to whales, Tibet and forestation, they seemed shallow and self-obsessed, and worse, prompted an immediate backlash online. Even if consumers find environmental concerns slipping down their list of immediate priorities, it doesn’t mean they want to mock them.
In all, it feels like the most-loved ads were those which had a powerful and durable insight behind them. The Superbowl’s the one night of the year when we pay real attention to the ads, but we expect those ads to be paying attention to us, too.
Millennials and money
Alex Oliver writes:
We’ve been out and about talking about the millennials generation and their financial attitudes and behaviours. At the Financial Services Forum event in the City of London recently I presented some of our proprietary research about the millennial cohort growing up and ‘coming of age’ with lifestyles to match. Millennials are now fluent consumers and intuitive users of technology, and are clearly adept at navigating the increasingly blended worlds real and virtual, work and play, but their self-stated lack of engagement and frequent misunderstanding of financial matters is stark. Tough economic times, alongside a general lack of interest in managing their finances means millennials need support to weather the storm.
But although this ought to be an opportunity for financial services providers, there is something of a mismatch between the brand values and service propositions which millennials look for and those which financial services providers tend to have. Millennials want to see ‘authenticity’ in brands, and they want easier access to services (for example when they’re ‘on the go’ or using dead time to catch up. There are some easier wins for financial services providers – for example, they may be able to nudge them to some good but low engagement behaviours (such as saving more for retirement) by smart service design. But there’s potentially a big win here. The provider which gets this right, at a time when many millennials are financially squeezed, could capture a cohort of customers for life.
The picture is from dcist, and it’s used with thanks.
After the floodtide of prosperity
Andrew Curry writes:
Our chairman, J Walker Smith, was one of the experts invited to contribute by Marketing to its ‘Forward Thinking‘ essays this year. His theme: that we’ve reached the end of “the floodtide of prosperity”, which is changing consumer behaviour, and that marketing will have to follow suit.
But, as he writes in his contribution, this is about more than just the aftermath of the financial crisis:
Three major cycles are coming to a close nowadays, only one of which is economic. One is technological; one is demographic. All three are opening onto something new in the face of unprecedented resource constraints. … Based on where we see these three dynamics headed, the macro consumer trend to watch will be the emergence of lifestyles reflecting an overarching outlook of ingenuity.
And this is made more necessary by the emerging environmental constraints we face, which include a whole range of scarcities – from water to fish to timber – as well as climate change. The result is that we’re moving into a new world in which the new consumer assets are ‘vigilance’ and ‘resourcefulness’.
Consumers are being forced back onto their own skills and smartness. There are no ready answers about what to do in a world in which economic risk is top of mind, technological engagement is ubiquitous, generational priorities are upended, and resource limits necessitate temperance.
All of the ‘Forward Thinking’ essays can be found here.
24 January 2011 at 9:17 am thenextwavefutures Leave a comment
Holiday collection # 3
Joe Ballantyne: Whoops, by John Lanchester
For my money, Whoops is far and away the best book I’ve read about the financial crisis. It’s clear, concise and at times even funny. John Lanchester is first and foremost a novelist – but then perhaps it takes someone who produces fiction to write effectively about a crisis caused by made up money.
Sarah King: Gauguin, Tate Modern
Tate Modern’s blockbuster Gauguin show runs till 16th January in London. It is lucid and contains some wonderful things but I found it full of unexpected comedy. Famously curmudgeonly, Gauguin lived a life of self conscious provocation; the frontage he made for his house in the Marquesas Islands bore a legend roughly translated as house of fun, aimed, with as much venom as wit, at his pious neighbours. He seems to have died of sheer rage in a dispute with colonial tax officials in his adopted home. But the most absurd feature of his immersion was his failure over many years to learn the language that surrounded him. He picked up snatches of it to use with his art, only to discover the banality of their meaning later. Art is full of contradictions and that his reputation is a triumph of positioning and image making was a theme of the show. His magpie-like plundering of everything around him was a means to his end but for this viewer, along with the myth making, there was a strong whiff of fraud.
Andy Stubbings: It’s All Their Fault
The favourite thing that I’ve stumbled across this year was probably the anti-Boomer manifesto It’s All Their Fault. It’s a real angry screed, but at the same time it expresses the kind of frustration I have been surprised (and maybe a little disappointed) not to see more of this year, directed by the younger generation towards their elders. Maybe we need to wait for 2011 for that. I liked it so much I got a t-shirt made (and then found that nobody in the UK knew what a Boomer was).
30 December 2010 at 10:30 am thenextwavefutures Leave a comment
Is small always beautiful?
Eleanor Cooksey writes:
I had the opportunity to attend a public sector conference last week where my colleague Alex Oliver was giving a talk about our recent research on the Big Society. The focus of the conference was to examine the strategic challenges facing those who manage our public services – people, as we kept being told, who will need to ensure they can deliver more for less – much less – in a time when budget cuts are going to be considerable.
A variety of speakers touched on different aspects to this overall challenge, but one recurrent theme which struck us was the idea that ‘small is beautiful’. Let me explain more what was meant by this – picking up on the three examples:
- Small government – This goes without saying: departmental budgets are to be slashed by 30%.
- Small and medium-sized enterprises – Francis Maude, Minister for the Cabinet Office, highlighted that 25% of government contracts will be awarded to SMEs (in terms of volume).
- Small customer base – Many services will now be commissioned and delivered at the very local level. Andrea Hill, Chief Executive of Suffolk County Council, described how, instead of tendering an unprofitable rural bus route, the service was delivered by a Demand Responsive Transport scheme, which can include people using their own cars.
If some things are getting smaller, it begs the question of what’s getting bigger. There is an obvious answer: ‘Society’.
However, there are some other ‘bigs’ implicit in the ‘smalls’ outlined above, which challenge the notion of ultra-responsive, locally-driven operations. John Collington, Head of Government Procurement at the Cabinet Office, talked about the need to consolidate the existing 16 government procurement frameworks into a smaller number. With possibly less choice at the very top and a plethora at the bottom, one of the challenges will be to ensure all decision-makers, at whatever level, feel confident they understand what their customers want and need, and are able to navigate this range of choices to deliver it effectively – for less.
The photograph at the top of this post was taken by Daniel Greene. It is from the blog Konsthuset.se, and is used with thanks,
Government 2020
Rebecca Nash writes:
We’re only a week away from our Government 2020 event – which we’re running jointly with Oxford Economics – so we’ve been putting the final touches to a new set of scenarios about the future of Britain’s political landscape.
The scenarios have been developed by our internal Knowledge Venturing team on the future of the public sector, and we’ve built them up by identifying the drivers of change of government, public finance, and public service, and also by conducting a range of interviews with experts in different parts of the world (New Zealand, Sweden, the UK, China, Latin America, and the US).
I’m not going to give away the scenarios here – they’ll be unveiled on Wednesday – but having gone through a pretty robust development process, they seem to add a dimension to our Feeling The Pinch research (here and here) which suggests that the experience of the financial crisis and economic downturn could lead to deep changes in political and social attitudes.
Oxford Economics, through its thought leadership team, will be offering an assessment of the economic impact of the spending plans in the government’s Comprehensive Spending Review, and also adding an extra economic dimension to our understanding of the scenarios. The panel is looking feisty as well: David Muir, previously an adviser at No. 10; Dominique Lazanski of the Taxpayers’ Alliance, Anne McCrossan of Visceral Business, and Nick Temple, of the School for Social Entrepreneurs. We look forward to seeing you there.
25 November 2010 at 3:56 pm thenextwavefutures Leave a comment
