The new normal

18 October 2010 at 5:40 pm Leave a comment

Jo Phillips writes:

We are officially ‘out of the recession’, but uncertainty, and even fear, remains. The fourth wave of research in our UK consumer tracking study Feeling the Pinch (which Fran Walton and Eleanor Cooksey launched at a breakfast briefing in London last week) shows that consumers are in the ‘doldrums’ – a place which is both quiet and uneasy, a place where you are stuck. Two-fifths of consumers say they are worse off than last year (the same proportion as in November 2009) and just under half know someone who has been made redundant in the past twelve months.

With Wednesday’s Spending Review ensuring that job cuts are never far from a front page, and rising prices meaning that people need a bit more money to feel like they are staying still, it’s no wonder that consumers remain anxious. But we believe that this new reality is starting to stick. We’re seeing a deeper shift in consumer outlook: welcome to the New Normal.

With the New Normal comes our new acronym, SCANT, to help organisations and brands understand current consumer attitudes and thereby navigate this sea change. Here’s a brief introduction:

  • Scepticism: many brands have been so focussed on price through the recession that they have stopped talking to people, leaving a trust void. 77% of consumers agree that the banks serve their own interests, not the interests of their consumers, and 58% now have less faith in the government to tackle the big issues of the day. Brands urgently need to  rebuild trust.
  • Control: 65% of consumers agree ‘it is important for me to get a greater sense of control in every aspect of my life’ (up a very sharp 13% since November 2009), and 60% feel a greater need to be as self-sufficient as possible since the recession (up 9% from November). We’re seeing people’s relationship with time change fundamentally. Pre-recession, people would do almost anything to save time, including spending money. Now they are willing to use their time to gain greater control. Brands need to help consumers feel in control of their lives again.
  • Acceptance: 53% agree that this recession will change consumer culture for ever (up 11% on November), and 45% that ‘some of the dreams I had before the recession are now out of my reach’. Categories that may have been seen as essentials may now be considered to be luxuries. Brands which are affected by this change may need to reposition themselves. Waitrose is a great example of a brand that has found a way to tell a different story.
  • New aspirations: 53% agree that ‘Since the recession I have learnt how many things I can do without’ (up 5%). Expectations have been re-calibrated. People are focusing on smaller, everyday treats. One example of a business that has responded: as flying becomes an increasingly unpleasant experience, with security and health concerns, Virgin has positioned its “Upper Class” offer as taking these frustrations out of flying.
  • Treading carefully: 60% agree that they have ‘become more likely to consider the potential risks of a decision they make’. People think twice before buying. And so the warranty has become the new battleground for the car industry. Kia opened this up with a 7-year (or 100,000 mile) warranty earlier this year, and Toyota later introduced a 5-year warranty. Since then Vauxhall has announced a ‘lifetime’ warranty (which also turns out to be 100,000 miles). We expect this sort of security to become part of a new relationship between organisations and their customers.

There are limited places available for a repeat of this breakfast briefing on 9 November. To find out more please contact Karen Kidson.

Entry filed under: brands, consumers, economic downturn. Tags: .

Rising East Feeling the squeeze

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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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