Feeling the Pinch?
Report No.3:The consumer outlook for 2010
1
Contents
Section
Contents
Introduction
About the report and approach
3-4
Executive Summary
Key findings
5-6
Chapter 1
The market context
Chapter 2
The key strategies and tactics of consumers
12-20
Chapter 3
Connecting with the new priorities of
consumers
21-37
For more information
Contact details
2
7-11
38
Introduction
•
The aim of this report is to provide insight into the prevailing attitudes and behaviours of Irish and
British consumers that are being influenced by the current economic crisis. This third report builds
on the themes explored in the first two reports to identify the likely effects of the recession in 2010
and the prospects for consumers.
•
Over a year on from the start of the recession, the promise of a short sharp shock has been
superseded by an impending sense that times will be tough for some time to come. Whilst the
economic indictors show signs of revival, consumers remain rooted in the realities of their own
worlds. What consumers feel, believe and consequently do is likely to be a function of their own
financial situation and the stability of their jobs. The improving top line economic indictors are
unlikely to dramatically raise consumer confidence in the short-term.
•
As such, 2010 is likely to offer many of the challenges faced in 2009 where a focus on value and
tight budgeting prevailed. However, it is important to note that as the crisis continued in 2009 many
consumers adapted, and found ways to survive and even thrive in the new opportunities a more
competitive market yielded. The key difference in 2010 for manufacturers is that there is likely to be
more certainty over in how consumers will navigate and respond to the marketplace.
•
Chapter 1 of the report provides a short update on the financial prospects for consumers in Ireland
and Great Britain (GB). Chapter 2 highlights the shopping behaviours that emerged in 2009 and are
likely to remain during the forthcoming year. In the final chapter of the report we highlight the
strategies and tactics that we feel could serve companies well through 2010. These have been
based on activity in Ireland, GB and other markets around the world. Some of these may or may
not work for your categories or brands, however they show ways brand owners can continue to offer
value, or even enhance their value in the marketplace whilst staying true to the their core brand
values.
3
Approach
• This report explores the results of a proprietary research study
carried out for Bord Bia by The Futures Company:
– The third wave of information was gathered in December 2009 using a
nationally representative online survey in Ireland and GB.
– The first wave was gathered in late July 2008 in the GB from a
nationally representative online survey of over 2000 GB adults (aged
18+) and the second wave conducted in February 2009.
– Comparative first wave information was collected in August for Ireland
with a nationally representative online survey of over 500 adults (aged
18+) and the second wave conducted in February 2009.
– Consumers were asked about their attitudes and behaviour with regard
to the economy and their personal finances over the past year and the
coming 12 months.
– Strategies in consumer spending behaviour have been explored in
depth.
• Examples of marketing communications have been gathered from
around the world using The Futures Company's Global
Streetscapes network.
4
Executive summary
The market context:
• Consumer spending may not pick-up even if the economy continues to do so. Consumer budgets are
likely be tightly managed in 2010 and the pursuit of value and a good deal is likely to continue as
consumers seek to spend within their means.
• Many of the strategies used to survive 2009 are likely to remain in place in 2010.
The key strategies and tactics of consumers
• A strong focus on promotional activity will be needed to gain the consumers attention; it will be
important to be aware of the activities of the competitive set to ensure appropriate and timely
response. Finding effective ways to maintain loyalty through the shorter-term may offer greater
rewards and flatten sales spikes.
• Creating effective promotional activity that enhances the value of the brand will be a key challenge;
the dangers of the longer-term erosion of brand equity are apparent as the consumers‘ and retailers‘
desire for a deal remain strong.
• Channel strategy becomes even more important as shoppers explore a wider array of channels;
creating a more ubiquitous presence may be key for larger brands. For small brands, the intelligent use
of channels may offer access to new consumers e.g. through markets in Ireland.
• New product and promotions will have a better chance if they tie into the broader lifestyle changes
consumers are making due to the recession; the home is becoming a key focal point for consumers
lives and consumers will continue to need to be resourceful to make ends meet. Equally, consumers will
be open to different lifestyle and entertainments choices.
5
Executive summary
Connecting with the new priorities of consumers:
• Helping consumers to cope and make the most of their tight budgets will be a key theme in 2010. The
pursuit of a good deal to ease the pressure on budgets has become commonplace. Consumers have
become programmed to look for and even wait for these deals, switching brands or choosing not to buy
when a deal is not on offer. However, critically this continued cycle of discounting will create longerterm threats to brand owners, ultimately permanently eroding their brand equity. It is critical for
brands to find ways to bring in and keep consumers loyal in ways which are not only driven by
promotional pricing.
• Retreat is likely to remain a key theme in 2010, however the desire to look for safe ground and block
out the world has been superseded by what the warmth and comfort of the home, and the known and
familiar now offers. The rich and positive sides of retreat have come to the fore, and with it strong
emotional territory for brands to explore and leverage.
• Escape and relief has evolved to the pursuit of fun. Times may be hard, but life is about much more
than the money we have in our pockets. People have adapted and are looking for the up side of life.
Brands can help consumers in this pursuit.
6
Chapter 1:
The market context
7
The market context
Some glimmers of improvement do not hide
the longer-term challenges faced by
consumers
Ireland‘s economy is technically out of recession, but the
economy remains weak as recent growth has been fuelled
by exports rather than a rise in domestic consumption.
GB is suffering its worst and longest recession since the
WWII. Despite UK government‘s fiscal stimulus the
economy has only just to returned to growth and was, by
December 2009, the only G20 nation still in a technical
recession. Signs of up light are present in both markets
but the prospects are not great for consumers in 2010.
The spectre of unemployment:
The major factors affecting consumer confidence continue
to indicate that the prospects for consumers in 2010 will
be a challenging. By the end of 2009, unemployment
rates continued to grow and were 12.5% and 7.9% in
Ireland and GB respectively (Source: CSO and ONS).
Unemployment always shows a lag effect to the economy,
and it often creates more concern for consumers than
other economic indicators due to the immediate financial
hardship it can create. Equally, Unemployment can also
have a halo effect by creating fear and uncertainty
around the future for those still in jobs. The extent to
which this factor is prevalent maybe reflected by the
percentage of people in both countries that know
someone who has been made redundant: 86% in Ireland
and 57% in GB - (see chart 1). The fear of unemployment
is likely to drive greater caution over spending, especially
as forecasts show a worsening situation in Ireland in 2010
and the modest improvements in Q4 of 2009 in GB are
being treated with caution as many believe further job
losses are inevitable.
8
The effects of the recession get
closer to home
Do you know anyone else who has been made
redundant from their job in the past 12 months?
Don't know
Yes
Ireland
No
GB
13
24
46
47
40
72
86
75
52
52
57
27
1
1
Aug 08 Feb 09
1
Dec 09
1
Jul 08
2
2
Feb 09 Dec 09
The market context
Pay freezes and reductions:
Even for those who have jobs, many have experienced
pay freezes or pay cuts, and this may become even more
prevalent in 2010. The Irish Business and Employers
Confederation reported the average salary has been cut
for companies in the private sector in 2009. Looking into
2010, The British Chamber of Commerce estimated twothirds of companies in the private sector plan to freeze or
cut pay for 2010.
Reducing debt and building a savings buffer:
The household saving ratio has risen dramatically from
2% for both Ireland and GB in 2007 to 12% and 8.6%
respectively in 2009 (Source: the Irish Times and ONS).
Figures from the Central Bank of Ireland show
consumers are using fewer credit cards and for the year
to October 2009 repayments by card owners exceeded
new spending.
Consumers are facing the challenge of managing
expenditure within a tighter budget; spending more
closely reflects what comes into the home and where
feasible, consumers are looking to reduce the burden of
debt or build a buffer. The flurry of spending in Dec 09
that heralded an improvement in retail sales in GB may
have only been a short-term release during the festive
period.
9
An uncertain time for retailers
Four companies a day went out
of business in 2009 in Ireland,
with a similar rate of insolvency
expected for most of 2010,
according to new data compiled
by Insolvency Journal.
Hundreds of construction
companies were joined by
household names such as
O‘Brien‘s Sandwich Bars and
Budget Travel on the list of
liquidations.
On the back of a dismal
November where retail sales
fell by 0.3% month on
month. The British figures
from the British Retail
Consortium (BRC) suggested
the sector enjoyed its best
growth for the month in
eight years. Like-for-like
sales rose 4.2 per cent in
value in December as
consumers, tired of the
economic gloom, delivered a
welcome sales rush.
The market context
Past pressures are returning:
Price inflation rates have generally been favourable
through 2009 in Ireland and GB. Broadly, the global
recession eased the pressure created by the rising cost
of oil at the end of 2008 and, in turn helped reduce the
pressures on consumers‘ budgets.
Chart 2
The prospect of inflation returns
How worried are you about each of the
following issues?
Aug 08
70
Never the less, the full consequences are unlikely to be
obvious yet to consumers. In markets such as food
where the cost of shipping has a significant impact on
prices, effects on the shelf price are yet to come through.
Notably, during the last oil price high Canadian
investment bank CIBC World Markets, calculated that the
surge in shipping costs through higher oil prices was on
average the equivalent of a 9% tariff on trade. If these
patterns continue, these rising costs are likely to be
passed on to consumers during 2010.
%
Dec 09
Ireland
%
As the world economy begins to pick-up, the issue of
rapidly rising demand and the restricted supply of oil is
re-emerging. Oil prices have been steadily growing again
from the low of $34 per barrel in 2009 to its current level
of $84 a barrel in January 2010. Whilst some way below
the 2008 high of $147 a barrel the effects are already
being felt by consumers. Concern about the price of
petrol has begun to rise in both Ireland and GB from Feb
09 to Dec 09 - (see chart 2).
10
Feb 09
60
50
60
40
41
30
48
45
41
32
20
10
0
80
70
60
50
40
30
20
10
0
The cost of petrol
The cost of food
GB
68
62
53
43
The cost of petrol
49
43
The cost of food
The market context
The consumer outlook is pessimistic:
Not surprisingly, Irish consumers are pessimistic in their
outlook for the next 12 months with around two in three
(67%) consumers believing they will be worse off. This
has risen progressively in duration of the 3 waves of
research. The general outlook appears to slightly better in
GB and there seems to be some improvement in
consumers feelings about their financial prospects for the
next 12 months. Albeit, that a sizeable proportion of
consumers believe they will be worse off (40% - see chart
3). Consequently, in both markets consumer anticipate
their spending will reduce either a lot or a little in the next
12 months; 75% Irish consumers and 45% British
consumers respectively. Consumers appear to be set for
another difficult year ahead.
Implications:
•
Budgets will remain restricted. Consumer spending
may not pickup even if the economy continues to do
so; consumers may choose to reduce debt or save, and
price inflation may return to offset gains in disposable
incomes.
•
Budgets will be tightly managed in 2010 and the
marketplace approached with caution.
–
–
•
The pursuit of value and a good deal is likely to continue.
Consumers are likely to spend within their means:
Absolute outlay may be important and new debt avoided.
Many of the strategies used to survive 2009 are likely
to remain in place in 2010.
11
Chart 3
A negative outlook remains
How do you feel about your personal financial
situation over the next 12 months compared with
the last year?
I will be worse off over the next 12 months
I will be about the same over the next 12 months
I will be better off over the next 12 months
Don't know
Ireland
GB
41
50
56
46
40
67
43
40
31
42
49
24
14
3
8
1
5
4
9
4
9
3
9
3
Aug 08
Feb 09
Dec 09
Jul 08
Feb 09
Dec 09
Chapter 2:
The key strategies and tactics of consumers
12
Strategies and tactics of consumers
An array of strategies are deployed to
manage tight budgets in Ireland and
Britain. Many consumers plan to use these
more in 2010.
Table 1
Money saving shopping strategies Ireland
Stripping pleasure and indulgence from shopping
in Ireland:
The continued harshness of the economic situation for
Irish consumers is reflected by the significant numbers of
consumers who say they are less likely to ‗shop for fun
and pleasure‘ or ‗purchase indulgences or treats for
themselves and their family‘. A greater focus on the
essentials is likely to prevail in 2010 in Ireland (see table
1).
Action
Irish consumers are planning to use an
increasingly wide array of strategies and tactics to
get a good deal:
‗Shopping on deal‘ and ‗paying more attention to prices‘
are the intended top strategies for Irish consumers.
However, many more strategies exist in their armoury
such as ‗brand switching when prices go up‘, ‗using
coupons and vouchers‘ and ‗searching the internet‘.
The notable and emerging strategy is to ‗put of
purchases until the sales‘. Here consumers are likely to
have learnt that a ‗sale‘ is likely to be a common feature
of retailer strategies to draw shoppers into the store.
13
Aug08
Feb09
Dec09
Chg
Aug08
Less likely to do in the next 12 months:
Shop for fun and pleasure
51
63
66
15
Purchase indulgences
51
61
60
9
Give money to charities
40
46
46
6
More likely to do in the next 12 months:
Choose special offers and deals
77
85
85
8
Pay more attention to the price
of grocery products
76
86
84
8
Put off buying until the sales
66
74
82
16
Look for cheaper options when
eating out
64
71
81
15
Switch to a cheaper brand if the
price goes up
67
71
81
14
Use coupons and vouchers
68
78
77
9
Search the internet for cheaper
prices
67
81
77
10
Actively look for cheaper brands
66
73
77
11
Keep track of spending
66
80
76
10
-
-
75
-
61
69
70
9
Go to a cheaper retailer
Buy own label brands
Strategies and tactics of consumers
Less pursuit of pleasure and indulgence in
shopping in GB:
Whilst many consumers say they are less likely to ‗shop
for fun and pleasure‘ or ‗purchase indulgences or treats
for themselves and their family‘ in GB, fewer consumers
plan to use this tactic to save money than at the start of
2009. More scope for indulgent and pleasurable shopping
appears to exist in GB versus Ireland, albeit a
challenging environment for manufacturers in these
sectors (see table 2).
British consumers plan to stick with tried and
tested strategies and tactics to get a good deal:
‗Paying more attention to prices‘, ‗using coupons and
vouchers‘ and ‗shopping on deal‘ are the intended top
strategies for British consumers to save money. Here the
use of coupons is a well established strategy by retailers
and brand owners alike that seems to resonate with the
GB shopper.
Similar to Ireland, the internet is a key weapon in the
pursuit of a good deal and the best prices for British
consumers. Like their Irish counterparts, the notable and
emerging strategy is to ‗put off purchases until the sales‘.
A factor that may help explain the bumper retail month
in GB in December.
14
Table 2
Money saving shopping strategies GB
Action
Jul08
Feb09
Dec09
Chg
Aug08
Less likely to do in the next 12 months:
Purchase indulgences
52
56
50
-2
Shop for fun and pleasure
51
58
49
-2
Give money to charities
50
50
44
-8
More likely to do in the next 12 months:
Pay more attention to the price
of grocery products
73
73
74
1
Use coupons and vouchers
71
71
74
3
Choose special offers and deals
71
73
74
3
Search the internet for cheaper
prices
70
71
71
1
Put off buying until the sales
63
64
69
6
Switch to a cheaper brand if the
price goes up
64
67
67
3
Keep track of spending
65
67
66
1
Actively look for cheaper brands
64
66
64
0
Buy own label brands
62
64
60
-2
-
-
51
-
Go to a cheaper retailer
Strategies and tactics of consumers
Shopping around for the best deal:
A common theme across both markets is the widening of
channels used by consumers. In both Ireland and Britain
more consumers are shopping at several shops to get
the best prices. In Ireland the growth is notable with
55% of consumers in Dec 09 agreeing with the
statement ‗I am shopping at several shops to get the
best prices, rather than doing one big shop at the
supermarket‘, this has increased from 34% in Feb 09.
The increase is significant in GB too, rising to 36 % from
22% over the same timeframe (see chart 4).
This pattern of shopping around is also reflected by the
changing frequency of shopping. More consumers are
choosing to shop more frequently for grocery and
household items, with the biggest increase in those
choosing to shop twice a week.
Leveraging new channels
Chart 4
I am shopping at several shops to get the best prices,
rather than doing one big shop at the supermarket
Feb 09
34
Ireland
55
22
GB
%
36
0
10
15
20
30
40
50
60
Chart 5
Recency of purchasing goods from retailers in
Northern Ireland
In the last week
Cross border shopping is growing in Ireland:
Cross border shopping has become a key feature for
many Irish consumers as the pound has weakened
against the Euro. Nearly 1 in 5 Irish consumers have
purchased goods from retailers in Northern Ireland in the
last month and only 43% now claim to have never done
so. The CSO approximated that €435m was spent on
Irish cross-border shopping trips in the year to July
2009.
Dec 09
In the last month
6
7
Feb 09
Dec 09
12
11
14
14
In the last 6
months
15
Longer than 6
months ago
24
52
Never
% 0
43
10
20
30
40
50
60
Strategies and tactics of consumers
Discount retailers find their niche:
The recession has proven to be a good opportunity for
discount retailers. In 2009, more consumers in both
Ireland and GB claimed to now shop more at discount
retailers such as Aldi and Lidl. In Ireland the increase is
notable rising to 52% of consumers in Dec 09 agreeing
with the statement ‗I shop at discount retailers more
than I use to‘, up from 37% in Feb 09. In GB the
increase has also been significant rising to 29% from
22% over the same timeframe (see chart 5).
The use of discount retailers is likely to remain a key
feature of shopping for grocery and household products
for some time to come. The perception of the quality of
the goods sold in the stores has risen (see chart 6) and
with it the perception of the retailers.
The growth of new channels
Chart 6
I shop at discount retailers more than I used to
Jan 09
Dec 09
37
Ireland
52
22
GB
%
29
0
10
20
30
40
50
60
Chart 7
Discount retailers sell good quality products
Markets make a return in Ireland:
Markets have also become a more important channel for
consumers. In Ireland 10% of consumers claimed to
‗shop at markets more than they used to‘ in Dec 09, up
from 4% in Jan 09. The absolute level is comparable in
GB at 9% but with lower growth across the year.
Jan 09
Dec 09
63
Ireland
68
46
GB
%
16
50
0
10
20
30
40
50
60
70
80
Strategies and tactics of consumers
The changing use of leisure time:
The recession has led to many consumers cutting back in
their leisure expenditure. They are looking for low-cost
ways to include fun and entertainment in their lives. As a
result, many more people are staying at home during
leisure time in order to cut down on spending. The home
has been re-energised as a focal point for consumers‘
lives.
In both Ireland and GB more and more consumers see
‗finding new ways to spend leisure time‘ as a key
strategy to save money in the forthcoming year: 73% of
consumers in Ireland and 61% in GB plan to do this over
the next 12 months (see tables 3 & 4).
The growing resourcefulness of consumers:
A notable number of consumers in Ireland and GB claim
that they will ‗cook from scratch rather than purchase
ready meals‘ in the next 12 months; 66% in Ireland and
54% in GB. This increased willingness to do it yourself is
perhaps also reflected by the numbers of consumers in
each market saying that they are likely to ‗socialise with
friends at home‘ to save money; 68% in Ireland and
51% in GB. Being resourceful as a means to manage
budgets and save money is likely to be a key feature of
2010 and whilst it will strongly reflect in food preparation
and home entertainment it is likely to spread more
widely across aspects of leisure time.
17
Table 3
Money saving leisure strategies Ireland
Action
Aug08
Feb09
Dec09
Chg
Aug08
More likely to do in the next 12 months:
Look for cheaper options when
eating out
64
71
81
7
Find new ways to spend leisure
time
62
70
73
11
-
-
68
-
Eating and drinking out less
often
65
60
66
1
Cook from scratch rather than
purchase ready meals
63
67
66
3
Socialise with friends at home
Table 4
Money saving leisure strategies GB
Action
Jul08
Feb09
Dec09
Chg
Aug08
More likely to do in the next 12 months:
Look for cheaper options when
eating out
56
55
61
5
Find new ways to spend leisure
time
55
57
60
5
Cook from scratch rather than
purchase ready meals
54
57
54
0
Socialise with friends at home
-
-
51
-
56
49
51
-5
Eating and drinking out less
often
Strategies and tactics of consumers
Technology provides new forms of entertainment:
The development of in-home technology has meant that
this is an increasingly viable solution for cash-strapped
consumers who are still struggling with the effects of
recession. Technology is providing a cheaper solution and
products like the Nintendo Wii have turned gaming into a
family event.
Gambling has come more to the fore in Ireland and GB in
recent years and has been fueled by the access provided
by online providers. For 2008 the provisional revenue
figures indicates that in excess of €3.6 billion was
gambled in 1,093 betting shops nationwide in Ireland – a
rise of almost €300 million since the previous year.
Incredibly, this figure does not include on-course bets,
National Lottery or online gambling.
In GB, onlinebingoalerts.com, the UK online comparison
site for internet bingo, reported record growth in traffic
figures at the start of 2009, suggesting that this might
be one sector that is less affected by the current financial
climate. The uplift in traffic to the bingo portal,
onlinebingoalerts.com was in the region of a 20%
increase over the last 2 months of 2008.
18
New forms of entertainment
Japan's Nintendo Co
Ltd said sales of its
Wii video game
console in the United
States hit a record
high in December
2009.
UK bingo gambling has perhaps become the
favourite past time for the British community
superseding other sources of entertainment like
lawn tennis tournaments and golfing events.
Strategies and tactics of consumers
Traditional entertainment comes back in vogue:
Cinema attendance has boomed in the recession. Box
office revenues were set to pass £1billion in 2009 in GB
for the first time, and cinema owners were expecting to
report box office growth of up to 15% from 2008-09
(Source: Timesonline 2009). Cinema admissions in
Ireland are up 12% year-on-year as people seek out a
cheap form of escapism. Carlton Screen advertising
tracks cinema admissions for this country and the
business was booming. Figures for May 09 showed
admissions were up by 12.2% in the Republic on the
same month in the previous year.
GB showed the biggest increase in TV viewing in 2008
across 11 western countries including France, Germany
and the US, with each person watching an average of
3.75 hours a day, according to research published by
Ofcom. This average daily viewing figure of 3.75 hours
was ahead of the European average, at 3.5 hours, but
slightly lower than the figure in Italy, Poland and Spain.
These traditional forms of entertainment are likely to
feature strongly still through 2010 and may offer greater
opportunities for new products or promotional mechanics
that link to them. Traditional advertising may also offer
greater value through the downturn as a result.
19
The resurgence of traditional
entertainment
The boom in computer gaming has given a boost
to traditional board games in Ireland, largely
because the board games were transferred onto
computer and then back. Current best sellers
include Scrabble, Operation, Buckaroo,
Mousetrap and Monopoly.
(Source: Independent.ie 2009)
Even popcorn sales have
been rising. Odeon UCI
reports a steady rise of sales
in its ―popcorn index of
economic confidence‖ which
it says mirrors the rise in the
FTSE 100 index.
(Source. Timesonline 2009)
Strategies and tactics of consumers
Implications:
•
A strong focus on promotional activity will be needed to gain the consumers
attention as they shop around:
–
–
–
•
Channel strategy becomes even more important as shoppers explore a wider array of
channels:
–
–
•
It will be important to be aware of the activities of the competitive set to ensure appropriate
and timely responses. Competitive sets may be wider and sit beyond the classical confines of
the category e.g. ready meals will also compete with takeaways or other dine at home
solutions.
Waiting for the sale or a promotion may be a key consumer strategy in less essential
categories; finding effective ways to maintain loyalty through the shorter-term may offer
greater rewards and flatten sales spikes.
Creating effective promotional activity that enhances the value of the brand will be key
challenge; the dangers of the longer-term erosion of brand equity are apparent as the
consumers‘ and retailers‘ desire for a deal remain strong.
Creating a more ubiquitous presence may be important for larger brands.
For small brands, the intelligent use of channels may offer access to new consumers e.g.
through markets in Ireland. Clear communication of comparative prices may prove effective
in highlighting value and securing a greater share of purchases.
New product and promotions will have a better chance if they tie into the broader
lifestyle changes consumers are making due to the recession:
–
–
–
The home is becoming a key focal point for consumers lives.
Consumers will continue to need to be resourceful to make ends meet, although as their
confidence grows needs may evolve from the more everyday solutions to more social
solutions.
Consumers will be open to different lifestyle and entertainments choices. Providing new
options or reflecting those that are remerging can help build empathy.
20
Chapter 3:
Connecting with the new priorities of
consumers
21
Connecting with the new priorities of
consumers
In the last report we introduced three themes that were designed to help companies think
about how to connect with today‘s consumer. These 3 themes remain broadly relevant
today, however as we have seen consumers adapt and evolve, the themes have been
evolved to reflect today‘s marketplace:
Helping consumers to cope and make the most of their tight budgets will be a key theme
in 2010. The pursuit of a good deal to ease the pressure on budgets has become common
place. Consumers have become programmed to look for and even wait for these deals,
switching brands or choosing not to buy when a deal is not on offer. However, critically
this prolonged cycle of discounting will create longer-term threats to brand owners,
ultimately permanently eroding their brand equity. Other routes to show support and help
consumers to cope exist other than price discounts or 2 for 1 offers.
Retreat is likely to remain a key theme in 2010, however the desire to look for safe
ground and block out the world has been superseded by what the warmth and comfort of
the home and the known and familiar now offers. The rich and positive sides of retreat
have come to the fore.
Escape and relief has evolved into the pursuit of fun. Times may be hard, but life is about
much more than the money we have in our pockets. People have adapted and are looking
for the up side of life.
22
The New Priorities of Consumers
Strategies and tactics that help to connect with the
consumer’s current mind set
Getting the best value from the marketplace
Cope
-
Lower barriers to access
Enhance value
Resourcefulness
Reward loyalty
Values to promote value
The comfort of the home and the known and familiar
Retreat
- The home as a focal point
- The rewards of family life
- The comfort of the known and familiar
Finding new ways to bring fun and indulgence back into life
Fun
- An excuse to indulge
- Make the mundane fun
- Traditional forms of fun and enjoyment
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Cope: Making your money go further through
smart choices
Helping consumers to cope and make the most of their tight budgets will be a key theme in 2010. The need
to communicate value will be critical. With consumers and retailers alike demanding the best deal, price
discounting will be the biggest pitfall facing brand owners in 2010. Other ways to offer value whilst building
brand values exist.
Key strategies that may serve companies brands well in 2010 are:
Reduce the barriers to purchase: The unknown will represent risk and larger ticket expenditure create
pressure on already tight budgets. Providing a real experience of your product for free (or, next to nothing)
or for contact information may be rewarded by more purchases in the future.
Offer better value in a way that enhances your brand: The promotional landscape is likely to be as
competitive as 2009. Look for promotions that meet wider lifestyle needs and reinforce the value of your
brands.
Help consumers to be resourceful: Help consumers make the most of what they buy. Show them that
they have a great ingredient / resource that offers cost effective and tasty solutions, and that never needs to
be wasted.
Reward loyalty and show your longer-term commitment: Make the process of coming back rewarding
and find ways to show that their loyalty is well placed.
Use values to promote value: Show the wider benefits of purchasing your product and what you as a
company are doing to address many consumers wider concerns around the environment and the prosperity
of the local community.
24
Cope: Making your money go further through
smart choices
Reduce the barriers to purchase
Introduce new
payment methods
to improve access
to products
Levi's jeans in India is offering payments in instalments to its customers. This is
common for many Indians when purchasing a car or another big consumer durable,
but for a youth fashion brand to offer this is very new and inDecative. The company
has teamed up with two leading Indian banks to offer a 3-month zero-interest
payment to anyone purchasing Levi's products of Rs 1500 and above (approximately
US$30).
How can you help consumers manage their levels of financial outlay?
Es lo último (That‘s the latest), is a new outlet in the heart of
Barcelona that offers a low risk way to trial. Clients can buy and try
products at a 6 months flat rate of 5 Euros. That gives them the right
to take home 5 different products (usually ready made food and
cosmetics) every 2 weeks. When coming back to the shop buyers are
asked about their opinion (e.g. vote for the product of the year).
Reduce the
risk of trial
How can you reduce the cost of getting the first real experience of your product?
Give the option
to reduce costs
or remove
unwanted frills
TELEPIZZA, the leading pizza business in Spain and the second
largest fast food restaurant in Spain after McDonald's, has started
to offer significant discounts if food is ordered online and picked up
by buyer. This approach is helping to manage costs within the
business more effectively
How can you encourage consumer behaviour that helps you to manage your costs?
25
Cope: Making your money go further through
smart choices
Offer better value in a way that enhances your brand
In October 2009 Muller is offered free Peppa Pig books to consumers. To receive a
book consumers needed to redeem four promotional codes found on promotional
packs. The books are worth £3.99 each and six titles were available. The promotion
proved such a success, and the online redemption so easy, that reprints of the
books were needed to meet demand. The book offer clearly resonated with mums
keen to find cheap forms of entertainment for their little ones.
Provide rewards
that help with
wider lifestyle
needs
How can you provide solutions that help to meet broader lifestyle needs?
Enhance the value
by selling the
product when it is
at its best
Some of the computer geeks at Poke created a BakerTweet machine. It is
a wonderful piece of hardware / software for alerting customers to the
latest oven output from the Albion bakery. Customers are now notified via
Twitter when bread is fresh out of the oven and ready for sale. Customers
now know when they can get the bread at its best.
How can you help consumers to get your product when it is at its best?
Reach out to your
customers rather
than wait for them
to come to you
Coolhaus sells handmade ice cream sandwiches from a pink
and chrome converted postal jeep, featuring local and
organic ingredients whenever possible. It's being followed by
legions of devotees who track its whereabouts via Twitter.
Consumers get a great product that otherwise they may find
hard get hold off and Coolhaus get legions of new fans.
How can you improve access for your customer beyond the usual channels?
26
Cope: Making your money go further through
smart choices
Help consumers to be resourceful
Help consumers
to make the
most of what
they buy
The Philly team at Philadelphia cheese offer over 110 fabulous recipes from, from
party bites, breads and bagels, soups and light lunches, to salads, pasta, fish and
seafood dishes, chicken, rice and risotto, and of course lots of sweet treats and
divine cheesecakes. Every single recipe has a handy Top Tip, and there are easyto-follow, step-by-step instructions for Philly Decices and cooking experts alike.
You can even watch a video by a well known chef online on the website.
What new skills can you teach your consumers and tips can you offer to save money?
In the recession many Russians have reverted to making their own soup.
Campbell‘s is seeking to offer a practical halfway solution through its ‗Home
Classics‘ range – inexpensive packets of ingredients containing the foundation
for good soup which consumers can make at home by adding whatever other
ingredients they like.
Provide the
base for
something
good
How can you make it easier for your customers to create their own solutions?
Make sure that
there are no
leftovers
Loving leftovers saves you money and helps prevent food
waste. Sainsbury‘s are passionate about encouraging
consumers to cook healthy, tasty food and inspiring our
customers to use every morsel of the delicious fresh food they
buy from their stores.
What tips can you provide on ways to use the leftovers once the product is past its best?
27
Cope: Making your money go further through
smart choices
Reward loyalty and show your longer-term commitment
Make sure they
always get the
best deal
Gap has launched an intriguing experiment in Canada: a service called Sprize,
which promises to end the irritation of buying something, only to watch its
price fall a few days later in a sale. With the Sprize card if what you purchased
goes on sale within 45 days, you get credited the difference, and you can
spend it at The Gap.
How can you guarantee the best price all the time?
Make the
repurchase
process fun
O2 rewards its Pay & Go customers every time they top-up with its
Surprise program. After selecting rubber ducks on its website, users
win free mobile features such as minutes and prizes such as shopping
vouchers, cinema tickets, or spa packages.
What new ways can you reward your loyal customers and keep them coming back?
Show that
their loyalty
make sense
The owners of London‘s Prufrock Coffee are so confident that they make the
best cup of Joe in East London that they‘ve debuted a Dis-Loyalty card.
Customers take the card to eight rival coffee houses, receiving a free cup from
Profruck when it is returned completed. This Decel approach helps to highlight
to the existing customers that their loyalty makes sense as they get the best
coffee around.
How can you help your customers realise that their loyalty is well placed?
28
Cope: Making your money go further
through smart choices
Use values to promote value
Show your local
ties and your
contribution to
local prosperity
Arumchan kimchi stands out because it is manufactured by the Korea Farmers
Cooperative Bank, Nonghyup, and ingredients used for production (cabbage, pepper,
garlic, etc.) all come from a network of local farmers, providing support for local farming
communities. The brand has also been very popular against the series of scandals that
have mired kimchi companies that were operating overseas, particularly in China.
Show the ways have you been helping the local community to thrive?
Help people
connect with
the local
community
NYCGO.com offered a free bus service around Harlem on Sunday afternoons
during the Christmas holiday season, stopping at local landmarks and shopping
destinations. The service was meant to boost revenue and foot traffic for local
shops and spaces. The added convenience and fun factor encouraged
consumers to make the Harlem neighborhood a destination during holiday
shopping.
How can you help people connect with the local community?
Highlight
effective
performance
whilst offer
savings
Ariel is asking us to "Turn to 30" when using the washing machine. Recent
research has shown that when people "Turn to 30" they save, on average, an
astounding 41% on their energy consumption during the wash cycle! The New
Ariel Gel that offers effective cleaning at 15 degrees promises consumers even
more savings through cold washing.
How can you help your customers save money through using your product?
29
Retreat: The safety of the home and the
known and familiar
Retreat is likely to remain a key theme in 2010, however the desire to look for safe ground and block out the
world has been superseded by what the warmth and comfort of the home and the known and familiar now
offers. This is a positive and rich territory for consumers and brands alike. 2009 forced consumers into the
home as a means to reduce expenditure and to find stability and footholds in uncertain times. What has
emerged is a new found energy for the family, home life and the brands that have always stood buy us.
Key strategies that may serve companies brands well in 2010 are:
Help energise the home as a focal point for social activities: As consumers become more resourceful
their confidence is likely grow, the role of the home is likely to widen to include other social occasions. Show
how you can help make putting on an event easy or, help consumers bring fine dining into the home.
Highlight the rewards of family life: Look for ways to help connect families around food preparation or
meal times and highlight how your brand adds to family life.
Highlight the comfort of the known and familiar: Tradition and heritage has been a story frequently told
in the recession. As many brands jump on the bandwagon, keeping this connection fresh and relevant will
require revisiting the values that really matter to consumers in today‘s market place. Show consumers the
depth of your values and your determination to kept to the promises you made to them through the good
and bad times.
30
Retreat: The safety of the home and the
known and familiar
Help energise the home as a focal point for social activities
Provide tips
on how to
put on an
event
Many major newspaper and media (e.g. ITV4) websites now have
dedicated sections on giving tips and ideas on how to host great
dinner parties or in-home hosting events.
How can you consumers create a special event?
Make fine
dinning at home
accessible
At The Kitchen in London you can create a weeks worth of meals with a
Michelin Star chef for as little as £35, cheaper than eating out or cooking
from scratch. Patrons can also come down to The Kitchen with their
friends to prepare dinner and eat it there. The Kitchen is licenced so you
can even enjoy a glass of wine while you're chopping!
How can you help consumers deliver restaurant quality food?
Help run the
event for people
A new party planning company started in Australia in 2009 that offers inhome gourmet food tasting. The principle is similar to the Tupperware
party idea where the host can also get a share of the spoils. The Foodie
Parties allow you and your guests to sample delicious deli products as
well as being provided with cooking and entertainment ideas.
How can you make an event at home a profitable endeavor?
31
Retreat: The safety of the home and the
known and familiar
Highlight the rewards of family life
Create an reason
for family
participation
Kellogg‘s launched a competition which invited families to submit
photos of themselves baking something with Kellogg‘s cereals. The
winning families were chosen as those who appeared to be having
the most fun.
How can you create a family moment?
Remind people of
the positives of
family life
Coca Cola ran an advert in Italy in 2009 featuring a little girl who
claims that she finds happiness in enjoying her mother‘s ragu and
spending her holidays at her Grandma‘s house. Coca Cola appears
at the end of the advert on the family dining table as another
‗home comfort‘.
In what ways does your product or brand add to family life?
Show how you
can help bring
the family
together
Cameo make simple ready mixed cake mixers. At the heart of
their campaign is the idea that preparing and consuming a cake
is a great way to bring all the family together after a hard day.
In what ways does your product bring the family together?
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Retreat: The safety of the home and the
known and familiar
Highlight the comfort of the known and familiar
Show that you
that you have
been there for
the long run
A Flora ad campaign in Ireland celebrates the heritage of the brand
and showcases its bond with a girl in the 1960‘s through to the
present day who eats Flora as part of her diet, with the statement
―running for the bus every morning and the Flora that mum put on
my toast, have helped keep my heart healthy over the years‖.
How have you contributed to the consumer’s life over the years?
Show that you
that your core
values have
remained un
changed
Parachute Coconut Oil reminds the Indian consumer that ―your grandmother used it,
your mother used it, you use it too‖ when talking about their hair care products.
Synonymous with pure coconut oil in the market, Parachute is positioned on the
platform of purity. In fact over time it has become the gold standard for purity. From
a loosely available commodity to a path-breaking brand.
What core values have to kept and why are they relevant today?
Reinforce the
benefits of
tradition in a
relevant way
Zingerman Zzang Bars is a popular candy bar in Philadelphia whose
packaging emphasises its use of the simple ingredients originally
used in American candy-making – brown sugar, honey nougat and
milk chocolate. They brag that their product takes candy making
back 100 years. Their website claims that ―Some folks say this is
what a Snickers would taste like — if it was made by hand with great
ingredients.‖
What benefits does the past bring today’s consumer?
33
Fun: Finding new ways to bring fun and
indulgence back into life
Escape and relief has evolved to the pursuit of fun. Times may be hard, but life is about much more than the
money we have in our pockets. People have adapted and are looking for the up side of life. Finding new
social and leisure activities that do not draw too heavily on budgets are likely to continue to gain traction in
2010. Smaller moments of reward and indulgence are likely to feature more in everyday life as bigger ticket
items are forgone; consumers may not need too much of a push to partake and excuses may be plentiful in a
year that may offer as many downs as ups.
Key strategies that may serve companies brands well in 2010 are:
Give consumers an excuse to indulge: Provide them with a reason, no matter how small, to indulge or
take time for themselves. Think about how a shared moment can be created; treats are easier to justify if we
convince ourselves that they are for others more than us.
Make the mundane fun: Even the smallest task can be made more fun and enjoyable. Consumers are more
likely to comeback if partaking offers the chance to win or a hidden surprise.
Revive more traditional forms of fun and enjoyment: Look to the past for inspiration for ideas on how
to bring fun and enjoyment back into people‘s lives without the cost.
34
Fun: Finding new ways to bring fun and
indulgence back into life
Give consumers an excuse to indulge
An ad in India promotes the idea of pehli tareek (the1st of the month)a wonderful occasion to treat yourself to a Cadbury‘s because it is pay
day.
Make an event
of an everyday
occasion
How can you create a reason for indulgence out of an everyday event?
Encourage people
to create a
moment of joy in
others lives
Nestlé has launched small boxes of Kit Kats in Japan that can be
mailed as if they were a postcard. The product launch was timed
with the university exams season, so that friends and relatives
could wish students good luck in their studies and lift their mood
during their revision period.
How can you help consumers give a small reward to others?
Show the
positives of
selfishness
Radox‘s latest adverts focus on relaxing bath products, telling
women to ‗be selfish‘ and focus on themselves, in a luxurious
bubble bath or with one of their ‗relaxing‘ body scrubs. The
website offers tips on how to be selfish and claim sacred ‗me‘
time - and lists the benefits of focusing only on oneself as a way
to escape the pressures of everyday life.
How can you encourage people to take time for themselves?
35
Fun: Finding new ways to bring fun and
indulgence back into life
Make the mundane fun
Make a game
of it
UK group Spar launched an online game called Shelf Sniper, where players
‗zap' products on a fast-moving shelf with a barcode scanner, and win
discount vouchers if they pass level two. Since its launch in late
September, Shelf Sniper has been played by 350,000 unique users and
4000 have down loaded the £1-off coupons.
Make the pursuit of value and deals more fun?
Bring some
spontaneity
back to life
US‘ Taco Bell has an iPhone app called Why Pay More Shaker. The
app randomly chooses three value menu items for users based on
their budget. The user simply has to shake their phone and slot
machine-like display automatically shows the results.
How can you bring an element of surprise into choice?
Provide an
unexpected
reward
Absolut Vodka installed a number of cash machines in Berlin which gave out free
money during happy hour. In total, 12,000 Euros was given away for free. The
campaign drew long queues and hype from media and word of mouth.
How can you shock and delight consumers at the same time?
36
Fun: Finding new ways to bring fun and
indulgence back into life
Revive more traditional forms of fun and enjoyment
Give a reason to
include others
in a fun activity
The Tasting Game in The Netherlands comprises four small (0.375 litre)
bottles of red wine in a carton that folds out to create a board. Four
blank stickers are included to hide the bottles' labels. The game‘s
objective is to guess the types of wine - Merlot, Cabernet Sauvignon,
Pinot Noir and Shiraz.
How can you create a reason for collective participation?
Bring back
simple ideas
of fun
At the Bermondsey Square Hotel, for £10, a guest can order a pillow fight
via room service. After the order is placed, two members of staff will come
up to the guest‘s room, dressed in pyjamas and bearing pillows. The guest
can then choose which one to fight with, and the other will referee.
What simple forms of fun and games can you bring back?
Make light of
the financial
crisis
Inspired by the credit crisis, a new satirical card game in Britain invites players to take
the role of banking executives, secretly embezzle their banks‘ assets, pay themselves
gigantic bonuses and use government bailouts to secure as much personal wealth as
possible while ensuring their customers‘ trust. The card game, called ―Crunch,‖ is the
brainchild of the Web designer Andrew Sheerin (from Cambridge, England), his friend
Andy Tompkins and the children‘s book illustrator Tom Morgan-Jones.
How can you make fun of the current times?
37
For further information
• For further information about Bord Bia‘s Consumer Lifestyle
Trends Programme and this report, please contact
Infromation Services:
– Tel: +353 1 668 5155
– Email: info@bordbia.ie
• More in-depth content for all the trends and a copy of this
report is available at www.bordbia.ie
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