We (you and I), people who are in the eye of the recession and were in the eye of the unrealistic boom are one of the most interesting consumer segment I have come across during my marketing career.
Economic crisis, Natural disaster, Wars have shaped us. Now in the following presentation I am investigating the post-recession consumer. I believe the world is going through an optimism divide i.e. hopeful BIC (Brazil, India & China) vs. the rest of the world. The insecurities and the charged passion is changing marketing landscape.
3. The Great Depression vs. The Great Recession
Consumer Insights with Ayesha Saeed
Great Depression Great Recession
9,096 – 50% of banks 57 – 0.6% of banks
Bank failures
(Jan. 1930 – March 1933) (Dec. 2007 – May 2009)
Unemployment rate 25% 8.5%
-26.5% -3.3%
Economic decline1
(1929 - 1933) (Second quarter 2008 - first quarter 2009)
Biggest decline in
-89.2% -53.8%
Dow Jones
(Sept. 3, 1929 – July 8, 1932) (Oct. 9, 2007- March 9, 2009)
industrial average
Strong
-25% +0.5%
Change in prices
(1929 – 1933) (Dec. 2007-March 2009) Recession –
Emergency 1.5% of GDP for 1 year
2.5% of GDP for 2 years
(2009 American Reinvestment and
Post recession
spending programs (Increase in 1934 budget deficit)
Recovery Act) consumer
States’ response Raise taxes, cut spending
Federal stimulus plan gives fiscal relief to should be risk
states to lessen impact of tax increases
averse
Increase in money
17% 125%
supply by Federal
(1933) (September 2008 – May 2009)
Reserve
Source: CNN Money
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4. But it introduced A new global divide: OPTIMISM
Fear fueled economies Hope fueled economies
Flat is the new up Up is the new up
Pessimism Optimism
Eyes on the past Eyes on the future
Attenuating the risk Taking risks
Playing not to lose Playing to win
Source: JWT Anxiety index
5. C o n s u m e r ’s P e r s p e c t i v e
Consumer Insights with Ayesha Saeed
Recession wiped out $11 trillion of consumer assets. Source: Clear debts now
“The current downturn in consumer spending is actually the beginning of a 15-to-20-year period of lower consumer
spending in general across the U.S.” - Mark Zandi, chief economist for Moody's Economy.com
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6. Consumer’s Perspective
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UK: Jobs (online & print) Dropped by 50%
Job loss in USA: 2.5 million jobs
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Source: Impact of recession in UK by ACNielsen
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Source: CNN money
7. Types of customers emerged after recession
Consumer Insights with Ayesha Saeed
•Do not alter their purchasing •Take drastic action to greatly •Slightly affected by the •Tend to be younger, larger
habits reduce living expenses and downturn and will cut back households known as
cut back in all departments on spending for luxuries such “young, bustling families”
to do whatever it takes to as entertainment and dining and often represent plain,
save money out rural living. They buy generic
brands or store labels.
Recession Recession Switch to
Panic Stricken
Indifferent Insensitive Private Label
•Typically represent older and •Generally older couples who •Consumers who typically live •Will switch from name
smaller households who take live in a comfortable affluent in cosmopolitan centers and brands to generics or brands
advantage of light coupons situation and are know as will switch stores looking for on sale looking for the best
and sales “empty nesters”. This group the best deal. deal.
remains loyal to name
brands, but depends on
coupons and sales to stock
up while they can
Light Coupons Stock-up & Switch Stores
Brand Disloyal
& Sales Save for Best Deal
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Recession proof consumers by ACNielsen
8. Implication: Cut Costs
No fancy packaging, no unnecessary razzmatazz
Consumer Insights with Ayesha Saeed
7 out of 8 consumer segments are seeking costing cutting –
REASONABLE is the new Black
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9. Implication: Simple, Small & cheap
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www.asaeed.wordpress.com Source: Trend Watching February trend
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10. Implication: Avoid Suspicions
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Debt stricken
consumer will
Be Transparent
read the fine
print
Privacy
Online Presence legislation
(Guide ‘em)
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11. implication:
Inexpensive
Consumer Insights with Ayesha Saeed
Icing
mood lifters
required
When the economy is shaky,
sales of lipsticks increase as
the women boost their
moods with inexpensive
lipsticks. Leonard Lauder The
chairman of Estee lauder
companies
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12. Good Enough is good enough:
Realism Not Perfectionism
Consumer Insights with Ayesha Saeed
Psychologically
Natural Disaster
Recession rewarding
and War
purchases
Recession will bring more mindfulness to the buying equation - which means that
consumers will be calculating purchases in a more complex way.
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13. The Optimism divide
Consumer Insights with Ayesha Saeed
THEME: EMBRACE CHANGE POSITIVELY THEME: READY TO BEAT THE ODDS
•Inject Hope & Confidence •Add fuel to aspirations
•Be Reasonable from communication to • Sell the dreams boldly
product design
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14. What it means for Government
Consumer Insights with Ayesha Saeed
-Inject Hope in the economy
-Inject confidence in investor
-Inject Policies to curb suspicions from
online privacy to hidden costs of
products/investments
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15. What it means for Brands - Be transparent
Consumer Insights with Ayesha Saeed
- Create something new for the emerging
consumer category – “realistically full of life”
-Cut the fat – cut down all redundant costs
-Investigate your brand’s DNA – Be reasonable
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16. Consumer Insights with Ayesha Saeed
Consumer Insights with Ayesha Saeed
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