The context of today’s consumer
1
Volatility has become the new status quo
Euro zone debt
crisis
Downgrading of
credit ratings
Emerging markets
overheating?
Erratic food and
commodity prices
Political unrest and
regime change
Natural disasters,
extreme weather
Terror attacks
(or fear of)
Confidence crisis
in the west
Continuing instability has exacerbated the sense of risk and uncertainty continuing into 2012. Consumers
in many countries have seen little improvement—or even a worsening situation—this year. They are more
wary and vigilant, so it is becoming more difficult for businesses to engage with them in the marketplace.
2
The challenging economic situation is a top of
mind theme in many of Europe‟s markets
‘Things are going very/fairly well
financially in my country these days’1
% Agree
2009
2010
2011
80
70
70
67
61
60
50
40
26
30
20
10
0
18
17
18 20
27
24
24
19
10 12 8
Ireland
UK
Western Europe
USA
BRIC
Source: 1. Global MONITOR. See appendix for base sizes.
3
The job markets remain a key driver of poor consumer
confidence and prospects look challenging for the
coming years
Unemployment in Spain has risen to its
highest level for almost 15 years.1
Figures published by Eurostat show that
Ireland has the fifth highest rate of
unemployment in the European Union.2
Independent forecasts show
unemployment will increase and be just
shy of 3 million in 2013 in GB, at 9.3%
of the workforce.3
Source: 1. BBC, 2011; 2. Eurostat / RTE News, 2012 3. Ernst &
Young’s ITEM Club 2012
4
As concern remains high, people are finding new
strategies to cope with their new reality
•
People are coping by focusing on ‘my world’, prioritising things
that have tangible benefits for them and their families.
•
Consumers have become more demanding and pushier about
getting the most for their money
„I am very/fairly worried about….‟
of global consumers agree
Having enough money to retire on
(% agree)
56%
+2%*
54%
+4%*
Keeping up with the cost of living
(% agree)
of global consumers agree
Source: Global MONITOR. See appendix for base sizes.
* Percentage change from 2009 to 2011
5
There are four main strategies that consumers are
employing in order to best cope with this uncertainty
Control
Taking more control over their spending and
reining in the desire to spend impulsively
Consideration
Spending more time evaluating purchases and
researching products
Good deals
Seeking out the best products at the best
possible price
Self sufficiency
Relying on themselves or on friends and family
6
Control is now a feature in all aspects of people‟s
spending
‘Even if I have the money I don’t
feel good about over indulging.’
„I like to splurge on some products and
services, even if it means I have to
economise more radically in other
areas‟
-7%*
39%
of global consumers agree
Source: Global MONITOR. See appendix for base sizes.
* Percentage change from 2008 to 2011
7
People are more considered in the way they
approach the marketplace
“I am increasingly likely to spend time researching a
product before making a purchase”
% Agree
100
2010
2011
90
80
70
67
66
68
70
66
60
56
59
64
56
54
50
40
30
20
10
Ireland
UK
Western Europe
USA
BRIC
Source: Global MONITOR. See appendix for base sizes.
8
The focus on price is strong but this does not
necessarily mean buying the cheapest
“Getting the best price on everything I
buy is very/extremely important in my
personal life”
% Agree
100
2010
2011
2010
2011
90
80
72
65 66
70
60
56
50
61
66 66
55
65 66
50
53
57 57
68
53 53
57 55
50
40
30
20
10
Ireland
UK
Western Europe
USA
BRIC
Source: Global MONITOR. See appendix for base sizes.
9
People are looking to become more self sufficient
in their lives
“Becoming as self-reliant as possible will better
increase my chances of succeeding in today's world”
(vs. seeking the help and guidance of experts or
professionals)
% Agree
100
2011
90
2010
2011
80
70
65
57
60
50
63
57
70
68
57 57
62
74
64
51
44 45
50
40
30
20
10
Ireland
UK
Western Europe
USA
BRIC
Source: Global MONITOR. See appendix for base sizes.
10
But it has not all been gloomy, adjusting to uncertainty
has also brought some unexpected positive shifts
Need to scale
back
Budgeting well
has become more
important to
consumers
Consumers are
reprioritising the
things that are
important and
necessary
Consumers are
becoming more self
reliant
+
Realising
what‟s
important
=
Positive Lifestyle
Choices
+
They are eating
out less, cooking
from scratch more,
experimenting
more
=
Unexpected
health benefits
They are staying at
home more, traveling
less and shopping less
More time to
connect and less
pressure to keep up
They are learning new
skills, joining
networks, getting
support etc.
Renewed focus on
goals,
rediscovering
interests / passions
+
+
=
=
11
Food is one of the core elements that underpins
these positive shifts in lifestyle
Budgeting
Rethinking food budgets has become a
helpful way for consumers to save
money more generally
Purpose
Food has given some consumers a new
sense of purpose
Connection
Food provides a connection between
family members and between family
and friends
Health
Food offers consumers more control
over their health
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Food is helping people get more from life in
uncertain times
Budgeting
Connection
Cutting down on unnecessary
items, trading down and
making things from scratch
helps consumers to manage their
budgets more effectively.
Consumers have discovered that
spending time cooking with family
and friends helps to strengthen
the bonds they have to these
people.
Purpose
Health
Many of those who have learnt to
cook or are cooking more in order
to save money have found that
they enjoy it – cooking has
become a personal interest.
Cooking from scratch and
buying more raw ingredients
makes it easiest for consumers to
buy things that are healthy for
them.
13