Archive for February, 2010

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 Leave a comment

Scenes from office life

© Jake Goretzki

15 February 2010 at 10:05 am Leave a comment

Death – now guaranteed

Claudia Rimington writes:

I’ve been doing some work on funeral planning products, and a number of providers, notably Age Concern, are advertising the guaranteed nature of their funeral plans – payment plans where you pay for a funeral in advance.

It is guaranteed because you can guarantee that it buys a ‘set’ funeral in the future – unlike a savings plan, which might not keep up with rising funeral costs, leaving relatives or friends to cover the difference.

So why is this interesting?  The focus on ‘guarantee’, combined with the remarkable recent success of funeral plans, points to a prevalent consumer trend.  The Telegraph suggested recently that the guarantee was the reason for the success of these products.  Our own research in Planning for Consumer Change suggests the same.  With consumers living in a world of greater uncertainty, we know that they look for where they can exert grater control.  Guarantees provide this – indeed as they did in the 19th century when funeral plans were common (to insure against being buried in a common grave).

I also like the straightforward way Age Concern sells its offer. The funeral plan is simple and transparent – you pay for a certain number of things at a set price and they guarantee you get this. Other companies offering guarantees don’t always do this.   Prudential, with its Guaranteed PruFund investment fund, explains that its guarantee results from their special ‘smoothing formula’, which is almost impossible to understand from reading their website, and which undermines the desire for control which makes the offer attractive in the first place. And of course, the whole point of a ‘guarantee’ is that you know what you’re going to get.

12 February 2010 at 9:29 am 2 comments

The Darwinian Gale and the era of consequences

Walker Smith, in Chapel Hill,  writes:

I’ve been thinking about  the nature of the recession, and consumer responses to it, for The Darwinian Gale. a large report we’ve just published.  The prevailing view of the Great Recession of 2008/2009 is that the recessionary experience of frugality has ushered in a new era of thrift.  Another says that  consumers will pick up spending right where they left off the minute they can. Our research suggests that both views are wrong.

Instead, we concluded that the defining dynamic of the recovery consumer marketplace will be an overhang of uncertainty about economic risk.

The Great Recession blew away the keen consumption and liberal globalization that drove the global economy for three decades.  But consumers still have aspirations for a better life; although they will re-channel these ambitions, and perhaps redefine what they mean by ‘better’.

As a result, the most important question facing marketers is what sort of value will animate the connection between consumers and brands in a recovery consumer marketplace coming to terms with uncertainty. But it’s not about frugality. Where it happened (and not all markets contracted), it is best understood as a coping mechanism. The risk for marketers is that if they focus on the frugal, they will miss the bigger issue of the changing value equation.

Indulging in economic risk, as consumers did in the run-up to the recession, meant not worrying about consequences.  Now, after the recession, every aspect of every decision is up for review, along with the the full range of consequences from those decisions. A considerable part of redefining value will involve focusing on the possible consequences.

This focus on consequences will be the hallmark of value in the recovery consumer marketplace to come.  Our research suggests it will be guided by a potent ambition of responsibility that will entail a greater emphasis on vigilance and resourcefulness.  Spending will be shaped by the necessity to prioritize as consumers orient their shopping in coordination with networks of interests that include but also go beyond their own selfish concerns.

The Futures Company has developed a white paper called A Darwinian Gale (available here) that explores the story of the overhang of uncertainty and examines the implications.  The Futures Company’s “unlocking methodologies” enable clients to identify the new value equations in their markets.

9 February 2010 at 9:43 am Leave a comment

The Futures Company blog

The Futures Company was created through the merger of Henley Centre HeadlightVision and Yankelovich in 2008. This is the blog of the new company - but the former posts from the former Henley Centre Headlightvision blog still can be found here.

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