Feeling the Pinch 5:
The Consumer Outlook - June 2011
Consumer Outlook
June 2011
Presented
by Helen
King, 2011
Senior Business Analyst
Helen
King,
9th June
Introduction
Consumer context
Consumer coping
Strategies & Tactics
Introduction
Consumer context
Consumer coping
Strategies & Tactics
2008
2009
2009
2010
2011
July
February
December
Sept /Oct
May
500
2000
Introduction
Consumer context
Consumer coping
Strategies & Tactics
How well do you think
things are going for the
economy these days?
Variable patterns of current economic growth are
being interpreted as poor economic performance
Republic of Ireland
100%
18
38
65
52
43
54
49
29
25
4
0 %
Aug 08
Jan 09
Don' Know
100%
Very Well
44
10
4
Nov 09
Fairly Well
Sep 10
Badly
50
6
May 11
Very Badly
Similar patterns are emerging in GB too…
Republic of Ireland
Great Britain
100%
18
38
65
52
21
43
15
36
55
54
59
61
49
25
29
4
0%
44
Don' Know
57
54
40
10
4
50
6
Aug 08 Jan 09 Nov 09 Sep 10 May 11
100%
25
Very Well
7
15
24
14
3
Jul 08 Jan 09 Nov 09 Sep 10 May 11
Fairly Well
Badly
Very Badly
Key indicators highlight to consumers that their
domestic economies are in poor condition
Key indicators highlight to consumers that their
domestic economies are in poor condition
“This is Ireland’s
last chance to
impress. Failure to
do so will have
serious negative
consequences.”
Alan McQuaid, chief economist at Bloxham
Stockbrokers in Dublin
Key indicators highlight to consumers that their
domestic economies are in poor condition
Key indicators highlight to consumers that their
domestic economies are in poor condition
“In 2011, real wages
are likely to be no
higher than they
were in 2005. One
has to go back to the
1920s to find a time
when real wages fell
over a period of six
years.”
Mervyn King, Governor of the Bank of
England and Chairman of the Monetary
Policy Committee
Do you know anyone who has
been made redundant in the
past 12 months?
The spectre of unemployment is still shaping
consumers’ feelings around the broader outlook
Republic of Ireland
Yes
No
Don't Know
Great Britain
100%
100%
13
24
80%
17
60%
80%
1746
40
50
49
72
47
46
40
50
49
48
50
40%
72
60%
52
57
48
50
20%
27
86
40%
75
82 Aug 0881
Jan 09
0%
Nov 09 Sep 10 Jan 09
52
52
20%
57
27
0%
Aug 08 Jan 09 Nov 09 Sep 10 May 11
Aug 08 Jan 09 Nov 09 Sep 10 May 11
What do you think are the
prospects for GB/Irish
economy over the next 310 years?
Consumers are not expecting things to change
even in the longer-term
ROI
GB
100%
40
41
7
9
42
39
8
11
0%
May 11
May 11
We will see periods of
economic growth
followed by periods of
economic decline as
world economy
becomes more volatile
We are destined
for low levels of
economic growth
How worried are you by
each of the following issues?
New financial pressures are emerging for all
% very worried
32%
+16%
19%
+5%
25%
40%
+8%
Cost of electricity
and gas
31%
+17%
Rising interest
rates
39%
+4%
Cost of Petrol
Great Britain
+5%
Republic of Ireland
Introduction
Consumer context
Consumer coping
Strategies & Tactics
How will your spending over
the next 12 months change
compared with last year?
Consumers intend to curb their spending in the
months ahead
Republic of Ireland
Increase
a lot
2%
Great Britain
Increase
a little
Increase
a little
Increase
a lot
10%
4%
30%
10%
35%
Stay
about
the
same
Stay
about
the
same
Decrease a
lot
Decrease a
little
33%
24%
Decrease
a lot
Decrease
a little
28% 21%
Consumers intend to curb their spending in the
months ahead
Republic of Ireland
Increase
a lot
2%
Great Britain
Increase
a little
Increase
a little
Increase
a lot
10%
4%
30%
10%
35%
Stay
about
the
same
Stay
about
the
same
Decrease a
lot
Decrease a
little
33%
24%
Decrease
a lot
Decrease
a little
28% 21%
“I find myself thinking twice
before making even the smallest
day to day purchases”
RoI
70%
GB
62%
“ I’m much more aware of
price now. I probably spend
2 seconds more on every
product comparing and
seeing which is the best
value.”
Older family, Female, Ireland
“I need to treat myself to something
nice/fun even if I have to tighten up
my budget in other places”
RoI
70%
GB
61%
But consumers’ experience of the current
situation varies
But consumers’ experience of the current
situation varies
But consumers’ experience of the current
situation varies
The importance of each group varies by
market
Republic of Ireland
Great Britain
100%
100%
90%
90%
80%
36%
34%
70%
60%
60%
50%
50%
41%
48%
30%
20%
20%
23%
18%
0%
48%
47%
40%
30%
10%
23%
80%
70%
40%
18%
345%
10%
31%
0%
Sep 10
May 11
Sep 10
May 11
How long could you cover living
expenses if you or someone in
your household suddenly became
jobless?
43%
Less than 1 month
5%
9 months or more
22%
Less than 1 month
20%
9 months or more
7%
Less than 1 month
45%
9 months or more
% agreeing strongly their level of
debt is ruining quality of life
33%
3%
1%
Profile
Feeling a slight sense of
shame
Allowing resentment to
build
Anticipating a rocky road
ahead
Profile
Feeling a slight sense of
shame
Allowing resentment to
build
Anticipating a rocky road
ahead
Profile
Behaviours
Feeling a slight sense of
shame
Using creativity to replace
spending
Allowing resentment to
build
Negotiating whenever
possible
Anticipating a rocky road
ahead
Resorting to extreme
measures to save
Profile
Behaviours
Feeling a slight sense of
shame
Using creativity to replace
spending
Allowing resentment to
build
Negotiating whenever
possible
Anticipating a rocky road
ahead
Resorting to extreme
measures to save
Profile
Feeling torn between saving
and spending
Watching prices very closely
indeed
Determined to reward
themselves
Profile
Feeling torn between saving
and spending
Watching prices very closely
indeed
Determined to reward
themselves
Profile
Behaviours
Feeling torn between saving
and spending
Prioritising what is essential
and what is expendable
Watching prices very closely
indeed
Trading up and trading
down
Determined to reward
themselves
Delaying big ticket
purchases
Profile
Behaviours
Feeling torn between saving
and spending
Prioritising what is essential
and what is expendable
Watching prices very closely
indeed
Trading up and trading
down
Determined to reward
themselves
Delaying big ticket
purchases
Profile
Feeling relaxed
Rooting out value, even if
they don’t need to
Sensitive to the prevailing
mood
Waiting for ‘social
permission’ to spend
Profile
Feeling relaxed
Rooting out value, even if
they don’t need to
Sensitive to the prevailing
mood
Waiting for ‘social
permission’ to spend
Profile
Behaviours
Feeling relaxed
Helping others when
possible
Rooting out value, even if
they don’t need to
Bargain hunting to prove
that they are responsible
Sensitive to the prevailing
mood
Drawing up new plans
Waiting for ‘social
permission’ to spend
Profile
Behaviours
Feeling relaxed
Helping others when
possible
Rooting out value, even if
they don’t need to
Bargain hunting to prove
that they are responsible
Sensitive to the prevailing
mood
Drawing up new plans
Waiting for ‘social
permission’ to spend
Summary
Not all consumers have been affected equally by
the recession. Nor, do they face the same
challenges in the year ahead.
Not all consumers have been affected equally by
the recession. Nor, do they face the same
challenges in the year ahead.
Businesses will do well by understanding the
mindsets of each group and aligning their
proposition and messaging.
Not all consumers have been affected equally by
the recession. Nor, do they face the same
challenges in the year ahead.
Businesses will do well by understanding the
mindsets of each group and aligning their
proposition and messaging.
The discrepancies between ROI and GB highlight
that the prospects in Britain are better and a
larger consumer base exists that still has a high
capacity to spend.
Introduction
Consumer context
Consumer coping
Strategies & Tactics
Looking for opportunity amidst a gloomy
outlook
SCEPTICISM:
Cutting through the clutter and cynicism to make
sure you are offering genuine value
CONTROL:
Help consumers feel they are on top of it all
ACCEPTANCE:
It‟s here to stay - balance realism and optimism
NEW ASPIRATIONS:
Demonstrate why your products count as „essentials‟,
not „expendables‟
TREADING CAREFULLY:
Reassure cautious consumers about the worth of their
purchases
Scepticism: Cutting through the clutter and
cynicism to make sure you are offering genuine
value
“Promotions like 'buy one get one
free' are just a way for shops to
make more money.”
56%
RoI
54%
GB
“I‟m not interested in loyalty cards, it‟s just a
marketing thing . They‟re getting more out of it
than you are.”
Pre-family, Male, Ireland
Create promotions that catch the eye
Implications
Help consumers feel good about themselves
as they manage their money
Implications
Move beyond a focus on price
Implications
How can you show
consumers different ways
of assessing value?
Control: Help consumers to feel they
are on top of it all
“It’s important for me to get a
greater sense of control in every
aspect of my life.”
81%
RoI
64%
GB
“I plan my meals more and cook for two nights running – for
example spaghetti bolognaise can be easily reheated two
nights running. Then it‟s cheaper and there‟s no waste.”
Family, Female, Ireland
Help consumers know the deal is
available
Can you leverage sites like
Groupon to reach new
consumers?
Give consumers flexibility in financial
payment
Help consumers check they have got
the best deal
Can you offer price
matching or demonstrate
that they are getting the
best deal?
Acceptance: Balance realism and
optimism
“Since the recession, I
have learnt I can do
without many things
and still be happy.”
71%
RoI
51%
GB
“I had to a take a pay cut last month, at the same
as the mortgage went up. I’m still down €300 a
month but I’ ve adjusted and am ok with it now.”
Pre-family, Female, Ireland
Reward a smile
Connect with your customers’
concerns
Give consumers licence to look on the bright
side
New Aspirations: Demonstrate why
your products count as essentials, not
expendables
“Some of the dreams I had
for myself before the
recession are probably
now out of reach.”
64%
53%
RoI
GB
Recreate products to create new
affordable treats
Innovate to create new forms of value
and appeal
How can you make your
products and brands fresh
and newly appealing?
Treading Carefully: Reassure cautious
consumers about the worth of their
purchases
“Lately, I’ve become more
likely to consider the
potential risks of each
decision I make”
74%
RoI
60%
GB
“When we renew our house insurance,
we will ring 8 or 9 providers and the
same with car insurance.”
Family, Female, Ireland
Make sure you are represented fairly
in consumer conversations
Do you know what kind of
conversations consumers
are having about your
products?
Build longer-term commitment to the
brand
Find new ways for people to sample
Closing thoughts
Pressures are again building on
consumers:
Play intelligently to the
desire for a good deal to
protect brand equity and
reach new audiences
Help consumers find
moments of reward
Closing thoughts
Consumers’ experience of the
current situation varies:
Make sure you understand
the mind set of your
consumers to define the
right solution
Consider how you can reach
the consumers with more
capacity to spend and what
it will take to unlock their
wallets
Explore export markets; GB
is in far better shape and
the pond is bigger
Feeling the Pinch 5:
The Consumer Outlook - June 2011
Thank you
Helen King, 9th June 2011