Posts tagged ‘recession’
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
Cautious consumers, building buffers
Andrew Curry writes:
We’ve just published our latest report on the post-recession consumer, and the headlines are that although people are still concerned about the state of the economy, and are behaving cautiously as a result, there is less panic about the economic outlook than was shown in our previous research. But this is partly because people have changed their behaviour – the UK savings rate is now 8% (it was close to zero for most of the last decade, and even negative in 2008). As Futures Company Director Fran Walton said at the client launch, “People are building a buffer for what might lay ahead for them.”
A couple of insights from particular sectors are striking. The first is that people seem to have changed their grocery shopping behaviour – the proportion agreeing that ‘I am shopping at several shops to get the best prices, rather than doing one big shop at the supermarket’ increased from 22% to 36% between January 2009 and November, when the field research was done for the latest report. And there’s evidence that people are looking to spend less when they go out. There’s a more detailed summary of the data in WARC (subscription required).
News of the client launch event turned up in an unlikely place – Claire Myerscough’s Media Week in Brand Republic. She works for News International, and this was her take on the research:
Learn that consumers are still less trusting, with 53% worried about the price of petrol and 43% planning to spend less over the next 12 months. The mood of uncertainty is in line with our research: things have improved since this time last year but we are not out of the woods yet.
The Reconstructed Consumer is available as a paid-for report. For more information please contact Jennifer Childs on 020 7966 1824.
19 February 2010 at 6:49 pm thenextwavefutures Leave a comment
The new era of consequences
Andrew Curry writes:
The shape of the post-recession consumer landscape is becoming clearer. Our latest wave of Henley Planning for Consumer Change [PCC] research, launched to clients at recent breakfast meetings, maps this. The headline is that risk is back on the agenda, and as a result, consumers have found ways of living with uncertainty; they are looking for greater control; and they are considering the consequences of their choices.
Some of these changes were already becoming visible before the recession. As our UK Managing Director Will Galgey pointed out, it has been an accelerator rather than a catalyst.
For our UK business, the launch represents a return to selling an annual trends report containing analysis and data, which we last did in 2001. We’ve been able to do this because of the expertise of some of our Chapel Hill colleagues – formerly Yankelovich – in managing published services.
Some of the data in PCC are familiar. Obviously financial worries are on the up. Confidence in corporations has fallen – the proportion agreeing that “I can trust the following [sectors] to be honest and fair” has fallen across all commercial sectors, with utilities falling even faster than banks. But the research suggests that people are less rattled by the recession than they were a year ago, even though the economy is weaker now than it was then.
This has had some costs. People now feel under more time pressure than at any time since the late ’90s, though not for exactly the same reasons. And people’s desire for more control isn’t matched by their ability to achieve more control in their lives.
The biggest impact seems to be on consumers’ willingness to make connections between their immediate surroundings and the wider world. 50% of the sample, of 2,500, thought it “very or fairly desirable” that “we won’t be able to consume as many goods and services as we have in the past”. 32% think it not at all or not very desirable, while 18% aren’t sure.
Similarly, nearly 60% now think we are at fault as individuals for environmental change – and around the same numbers think that it is both their responsibility to do something about it, and that doing something will make a difference.
From all of this, the Planning for Consumer Change data suggests strongly that new consumer values are emerging around vigilance, optimism, self-reliance, resourcefulness, connectedness, and prioritisation. This is a more complex world for brands to navigate, although the smart ones are doing it already. The good news, though, is that this offers more strategic options (and more interesting options) than a race to the bottom on price.
But as Director Henry Tucker observed at the breakfast sessions, “You’re probably not going to be able to sell the same old products to the same old consumers”. They’re expecting something from you which is more helpful – and demonstrates that you’re in tune with their new values.
For more information about accessing Planning for Consumer Change, please contact our UK Marketing and PR Manager, Jennifer Childs. The ‘era of consequences’ icon, seen at the top of the post, was designed by Tom Warren.
10 November 2009 at 11:48 am thenextwavefutures Leave a comment
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.
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.
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)
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.
