Posts filed under ‘consumers’

Close to the edge

Sarah King writes:

Yesterday’s news reports indicating that seven million Britons were only one bill away from disaster came as no surprise to anyone at The Futures Company. Our Feeling the Pinch study has been taking the temperature of UK and Irish consumers in recessionary times since 2008. We have identified and tracked three broad swathes of consumers, the self explanatory ‘Plain Sailing’, ‘Choppy Waters’ and ‘All Hands on Deck’ groups.

Across the study we have seen a significant increase in the size of the ‘All Hands on Deck’ [AHOD] group as more people move down from ‘Choppy Waters’ into a more pressured position. 60% of AHOD say that the level of debt they have is ruining their quality of life, and 37% of them say they could only cover their living expenses for less than a month if they or someone in their household became jobless.

At a Kantar event last week, the sentiments and behaviour of these three segments were mapped across polling by our colleagues at TNS-BMRB and retail analysis by Kantar Worldpanel. This work demonstrated that while value-seeking behaviours are entrenched in all groups, strategies differ.  Those in AHOD buy offers that involve less outlay and actually reduce the volume of food they buy. It may be that they are wasting less food, but the possibility exists that some are going hungry.

Of course, at the other end of the spectrum, there are people who are much more comfortable, playing their hand carefully and tactfully in tough times but essentially doing fine. This is characteristic of recessions which tend to be spikey. The challenge for marketers is both to find ways to help one set of customers and to identify the pools of money that do exist out there, and which offer the ‘new sources of growth’ discussed in our latest Future Perspective report.
The image at the top of this post is from the personalfinance4ll blog, and is used with thanks.

21 June 2012 at 9:00 am Leave a comment

Re-framing well-being

Amy Tomkins writes:

A couple of things which have come across the desk this week reminded me of the increasing visibility of well-being as a set of social and public issues. The first was the latest edition of the United Nations Human Development Index (pdf), which combones health and education scores with economic measures to give an overall view of human development (Norwayis currently top, which is probably a tribute to how smartly they invested their North Sea oil revenues). The other is the UK’s first set of well-being data from the National Statistics Office.

As it becomes more important to people, it is increasingly under threat – from demographic change, economic volatility, climate change, and lifestyle pressures. Our Global Monitor data tells us that emotional wellbeing is declining, from 54% in 2011 to 46% in 2010.

With this in mind, we’ve recently explored how in a Future Perspectives report consumer attitudes to wellbeing are being reshaped. Our research suggests we are seeing the emergence of four new consumer wellbeing mindsets, each with their own implications.

  • ‘Reclaiming mental health’: consumers are increasingly engaging with mental and emotional wellbeing as a means of self preservation. Might we see the emergence of a more self aware society as a result?
  • ‘Search for new solutions’: globalisation and the desire for flexible wellbeing solutions are driving a fusion between East and West. Will this herald the development of a new global language around wellbeing?
  • ‘Coping with risk’: consumers across markets are acutely concerned about the threat from external risks. How will data from the physical environment help them to manage risk in the future?
  • ‘Safeguarding the future’; concern for the wellbeing of future generations is promoting the admission of responsibility from society. Will we see a shift to accountability as this becomes more widespread?

This may add up t the emergence of a Well-being Generation, which will expect products and services to deliver well-being benefits as well as functional benefits. They will exist within a more accountable society, where governments and companies are scrutinised for their impact on future well-being. Health practice will adopt – and adapt -approaches to well-being from around the world, which will create innovation opportunities.

The biggest challenge will be inclusivity. We expect the winners in the re-framed world will be those that manage to create mass market approaches  that drive engagement with well-being.

You can download Reframing Wellbeing from our website.  The image at the top of this post is from San Francisco State’s College of Extended Learning, and is used with thanks.

2 March 2012 at 3:56 pm 1 comment

Growing in a slow-growth marketplace

J Walker Smith writes:

It’s dangerous to take the news of late at face value.  While a Greek deal appears to be in place and the Council of Economic Advisors, headed by Alan Krueger, is opining that the US recovery is stronger and faster than expected, there is some way to go.

To put it bluntly, the developed West is in for a long slog. Slow growth is the new normal for Western developed economies.

The implications of this slow-growth West for brand marketers and business strategists are explored in our latest Future Perspective, Quickening the Pace.  For most business leaders, it’s a new situation. They came of age during the ‘Great Moderation’, a period of relative stability, greater predictability and virtually uninterrupted growth.  What marketers and strategists learned as they began their careers offers little guidance for the marketplace they face today.

The Great Recession has left the marketplace smaller and more polarized than ever.  Consumer confidence has reset at a lower baseline and frustration and anger have boiled over into the street.  Every corner of the world is on edge about the trade implications of weak, stagnant demand in the developed West.

There are still growth opportunities for smart companies. But only the smart companies will grow, for there is no longer a rising tide to lift all boats.  Quickening the Pace reviews seven ways in which brands can revive their value propositions for economically challenged consumers.  Three are worth special mention.

First, consumer reference points have changed from high to low.  Aspiration now seems risky, even out of reach. Worse, the prospect of losing it all seems closer than ever. As a result, consumers no longer compare themselves to those with more; instead, they worry about winding up like those with less.

Surrounded by so many who have hit the bottom, consumers are worried that they might wind up there themselves.  So rather than being attracted by those with more, consumers now live in fear over those with less.  While this is different for brands, it is not impossible for brands able to take the risk out of buying.

Second, debt has become a more important marker of financial well-being than income.  It is a better targeting criterion.  It is a more predictive of spending.  It is more strongly correlated with confidence.  The overhang of debt is keeping consumer spending in check, so contrary to conventional wisdom, growth opportunities are to be found by analyzing what people owe, not what they earn.

Finally, lifestage assumptions are being turned on their head.  The traditional focus of marketers on young people and their lifestage transitions has been undercut.  A suffocating job market has kept younger consumers from even getting started.

But the same economy that has made young people less attractive to marketers has made older consumers more attractive.  Battered by economic losses, many older consumers have changed their retirement plans and are planning now to work longer, which will extend their peak consumption years.  Marketers will have to change, too.

The brands which lrearn these new rules – and adapt to them – could have breakout success.  Not every ship is grounded by an ebbing tide. Some brands will find the enduring pockets of dynamic spending potential.  There is less spending to go around, and not all brands will succeed. The battle for share will go to the savviest, those best able to take advantage of the principles for success in a slow-growth West discussed in Quickening the Pace.

The image at the top of the post is from, and is used with thanks. Quickening the pace, and another economics report, The future of the eurozone, also published this week, can be downloaded from our website.

23 February 2012 at 3:09 pm 1 comment

Beyond the eurozone crisis

Andrew Curry and Matthew Lynn write:

As the Greek financial crisis plays out on the streets and in the council chambers of Europe, it’s hard to look beyond the day-to-day drama to the longer term. But that’s what we’ve tried to do in our new Future Perspectives report, which we have published this week. And the results are surprising. The crisis will end, because ecomnomies don’t continue is a state of permanent crisis. To do that, Germany will have to export less, and the peripheral economies will have to export more – and there’s a lot of opportunity in that economic re-balancing.

The report has developed five scenarios for the future of the eurozone, ranging from its survival in its present form to a return to national currencies. From this it forecasts three big changes, looking out to 2020.

One: New powerhouses will emerge. Italy will be one of the big winners of the pos-euro crisis economy, just as it was in the ‘dolce vita’ economy of post-war Europe. If it leaves the euro, it will renege on its debts, and massively devalue. That will massively boost the economy, enabling it to rapidly catch-up with its more prosperous Northern neighbours. Meanwhile, countries such as Poland – with big populations, low debts, and strong growth – will emerge as the powerhouses of Europe.

Two: Germany will have become a consumer society – and rely less on exports. That will mean boosting retail and leisure spending, property development, and industries such as financial services, where it has not been very innovative. Paradoxically, while the UK is trying to re-balance its economy to become more like Germany, Germany will need to become more like the UK.

Three: There will be huge opportunities for companies that read these trends right. New markets will open up in Germany as retail, leisure and property grow – all areas where domestic German companies are not very strong. In Spain, youth unemployment will come down dramatically, meaning that young people will start spending. In Italy, a growing economy will see a huge rise in female participation in the workforce – changing the shape of consumer demand. We’ve done some analysis of the impact of that change on the Italian economy, and reckon that it’s worth around €48 billion a year – or 3% of Italian GDP.

Four: Europe’s banks will be the big losers. Debt will be written off, sooner or later, and as a result, most will end up in public control.

In short, businesses will have to redraw their mental maps of what the European economies look like, and where the opportunities will be found.

Andrew Curry is a Director of the Futures Company in London, Matthew Lynn runs Strategy Economics. The report, The future of the eurozone, is published as part of The Futures Company’s thought leadership programme, Future Perspectives. We are also publishing this week a report on doing business in slow-growth economies, called Quickening the pace, which will also be available from the website.  The picture at the top of tjhis post is published by Wikimedia Commons.

22 February 2012 at 5:44 pm 2 comments

The new 5Ps of marketing

Fran Walton writes:

Earlier this week, we presented our latest research on the post-recessiom UK consumer, Feeling The Pinch 6, to clients in London. The overall message is one of gloom: 43% of consumers think the UK economy will get worse in 2012, and 46% plan to spend less. But that doesn’t mean that there’s nothing that brands can do.

So here are our new 5Ps for marketers:

  1. Protection. How can you reduce the risks of purchase, or  help consumers manage risk in other parts of their lives? 63% of consumers now agree, ‘ I find myself thinking twice before making even the smallest purchase’. An interesting example is the German peer-to-peer insurance company, Friendsurance, which reduces insurance costs (and fraudulent claims) by letting people create groups of 15 people to help cover an insurance claim.
  2. Practical. How can you empower people and help them to be self-reliant? 58% of UK consumers agree that ‘Since the recession I feel a greater need to be as self-sufficient as possible’. One response, from the Spanish food company Gallina Blanca: if you send them a a list of the ingredients you happen to have at home, they’ll suggest a recipe.
  3. Purpose. How can you help consumers make new connections or make living with less a positive experience? 53% of UK consumers now agree that ‘since the recession I have learnt how many things I can do without and still be happy’. Sainsbury’s ‘living well for less’ campaign captures this well. It’s not just about the food. It also means making the most of the good things in life, sharing moments or maybe cooking memorable meals together. And without paying the earth.
  4. Permission. How can you help consumers feel like they are achieving something worthwhile? Perhaps depressingly, 53% agree that ‘some of the goals I had before the recession are now probably out of reach’. Say it ain’t so! The French business Onefeat has a model where you set some goals, or ‘missions’, and get support from your friends to help you achieve them.
  5. Pride. How can you help people take pride in small things or help people to be proud to be part of their community? In our qual research for Feeling The Pinch 6, one of our respondents observed that ‘the value of working with your hands seems to have been forgotten about’, also a theme of Matthew Crawford’s surprise best-seller. Transform Your Patch, launched in January. in which Pepsico and Britvic have teamed up with the charity Groundwork, is an ambitious scheme to create new parks and playgrounds and football pitches from waste land across the UK.

Of course, a lot of these are small things, but one of the lessons of the recession is that small things matter. The other lesson is that it’s more important than ever to be able to stand in the shoes of your customers and see the world through their eyes.

The picture at the top of this post is from the Swedish co-operative Lantmannen, which has a scheme which pairs singles to share leftover food. It is used with thanks. To find out more about Feeling The Pinch, and our research on consumer attitudes to the economy in Britain and Ireland, please contact Fran Walton

3 February 2012 at 1:32 pm 1 comment

Looking back on Looking Up

Walker Smith writes: For the past three years, since the economic crisis ballooned, I’ve been writing a regular column called Looking Up, on the ways for businesses to manage through recession and tough markets; I wrote the last one in the series earlier this month.

I wrote the first Looking Up in October, 2008, just over a month after the global financial system went to the edge of collapse.  (I’m not being melodramatic here; if you need a stark reminder of just how close we came to financial meltdown during the eight days from September 12 to September 19, 2008, James Stewart’s New Yorker essay “Eight Days” is still chilling).

The column had three purposes.  It translated financial concepts, to help people navigate the macro-economic news. It provided evidence and examples, to show that there were still opportunities in the market. And the third, and most important, purpose of Looking Up was to offer insights and guidance about how to reach consumers effectively during the Great Recession and subsequent stagnant recovery.  Over three years, Looking Up focused on delivering insight and inspiration to our clients.

And looking back on something like a hundred issues, I see that three themes repeated themselves over and over again. They’re worth repeating here.

Innovation.  The single most effective way to thrive in a downturn is to innovate. Reams of academic research have demonstrated this across past downturns and across geographies.  There are hundreds of examples of successful innovations introduced during the depths of past recessions, along with hundreds of examples of defunct companies that went bust waiting out a recession while competitors innovated. The logic is simple: innovation sparks new demand, creates new jobs and advances the overall productivity of the economy, which is the key to prosperity.

No other theme has been mentioned in Looking Up as often as innovation, one of the core practice areas of The Futures Company. If you had to take just one thing away from Looking Up, it would be: innovate!

Sourcing growth.  The biggest challenge facing companies at the moment is sourcing growth.  Unemployment, stock market volatility, cuts in government benefits, deleveraging and housing price declines all mean that household budgets remain tight. But there are pockets of strength in the consumer marketplace; more can be found through close scrutiny and shrewd analysis.  A number of MONITOR methods, such as Dynamax, have been developed to identify this enduring spending potential.

Practice optimism.  Consumers take their cue from businesses.  Optimism is contagious (as research has shown time after time).  If you want consumers to be buoyant again, you need to help. Conversely, if your marketing echoes their worst fears, don’t expect them to be cheerful. There’s a virtuous circle here: if businesses look up, then your customers will too.

Global MONITOR is an innovative, strategic, future-focused Global Insights programme for clients and agencies. It identifies the key dynamics shaping the world and the consumer marketplace, as well as potential implications for your clients’ businesses. If you want to know more about Global MONITOR, please call Simon Kaplan in the United States, or Deniz Erdem in Europe.

The picture at the top of this post was originally published by Global Envision – well worth a visit – and is used with thanks. 

23 December 2011 at 8:40 am Leave a comment

Ten notes on the future of retail

Phil Soanes writes:

I spoke earlier this week at a WPP workshop run by The Store on the future of retail , and the form was a series of short sharp presentations (for example, by Kantar Retail, Fitch, and Ecommera) with discussion. My theme was the future of consumer segmentation in the age of austerity, but what I wanted to do here was to share – unattributably, unfortunately – the ten big things I heard during the day from the different presentations.

  1. Retailers are moving away from their traditional segmentation models.  The classic segmentation combines a ‘Why’ (need-state) on one axis with a ‘What’ (value or attitude) on the other. Now retailers are segmenting occasions and missions. As one speaker said, there are fewer missions than consumer types so it’s easier to segment that way. For me this feels like the easiest way to segment, and closest to point of purchase, but it doesn’t negate the need to understand what’s driving the consumer.
  2. Retailing is now about data. There’s lots of it and the winners will be the ones who can collate and understand it to their advantage. Getting to a ‘single customer view’ (with integrated data sources) is the holy grail, but it’s a massive task and most retailers won’t achieve it. Retailers are reluctant to hand their data over, but may need to if they’re to make the most of it. One other implication of this: less market research. People will have less need to collect survey data.
  3. The discount noise in the market is deafening. This isn’t surprising given the economic climate. But when you look at who is doing well (or less badly) it shows that the secret of good retail is still having a great proposition at the heart of the business, and this defines the ‘value for money’ test. This also means that brand really matters, probably more than before.
  4. Consumer motivation to buy and shop for different categories differs widely. so working this out is important. Close up, motivation by category looks different, while there is a repertoire of behaviour within categories. It is also clear that making shopping easy is the tipping point in some categories. And the need to deliver ‘easy’ is replacing the need to optimise customer satisfaction.
  5. Trust and transparency matter more than ever. It was true before austerity struck. It keeps on getting more true because in tough times consumers expect, more than ever, that brands won’t take advantage. They’re less concerned with the ‘fluffy’ idea of ‘on your side’ as with a ‘fair deal’. Getting found out has more severe consequences for brands than it used to.
  6. The future will be multi-channel. But not in the way people sometimes think. The purchase path is increasingly complex, with consumers jumping between online and offline as they go. But offline retailers need to understand better why their customers are there instead of in front of a screen.
  7. The value exchange on a shopping mission is critical. What do consumers need to get out of a shopping ‘trip’, actual or virtual, to make it worthwhile for them?
  8. Shopping mind states fall into three groups. One contributor conceived shopping ‘mind-states’ as falling into three types: locate, explore, dream. For another this division was more operational, via stages of a shopper journey: plan, search, select, and buy. Consumers switch between offline and online within many of these stages,  so understanding the role that each plays at different time is crucial draw out. I think we’d say there’s more work to be done here, in particular in understanding the role of ‘reviewing’ and who’s involved in that, and also to map how these behaviours apply to different categories. And conventional shopper journeys also tend to neglect the shopper relationship after purchase, from service to sharing to word of mouth. One more thought on mind-states: what is the potential to offer ‘dreaming’ online?
  9. Online retailers have to get everything right to be successful. Contrary to the received wisdom, online retail is a less forgiving environment than physical; ‘everything’ includes vision and planning as well as ‘enablers’ and delivery. Amazon are the only one to hit all the numbers and this is partly down to a relentless focus on what they can control.
  10. There are some important questions where we don’t really know the answers yet. For example:
  • Does impulse exist?
  • How do you measure loyalty?
  • What categories will and won’t work online? I know; after more than a decade you’d have thought we’d have cracked this, but it seems we haven’t.

The picture at the top of this post was taken by Peter Curry. It is published here under a Creative Commons licence: some rights reserved. If you’d like to see a copy of Phil’s slides from the conference, please contact him.

2 December 2011 at 9:53 am 3 comments

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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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