JWT’s AnxietyIndex is designed as a place to discuss how brands and consumers are responding to the global recession. With daily content updates, AnxietyIndex.com includes contributions from around JWT’s network, offering a truly global perspective.
During crisis, people learn to live with losses (jobs, homes, savings, luxuries) and uncertainty, making them more sensitive to what really matters. As in every extreme change and loss situation, people start pondering the meaning of their lives.
Brands can take part in this process by inspiring people. Coca-Cola Spain’s new “Open Happiness” campaign tackles the meaning of life via the concept “What would you tell someone who has just arrived in the world in times like these?” (a question that becomes viral and interactive through www.destapalafelicidad.es).
A 90-second TV commercial brings together a spry 102-year-old Spaniard with a newborn. The recession is acknowledged head-on, with the old man telling the baby, “Most people will say, ‘What a bad moment you’ve chosen to come into the world.’ We’re in crisis, that’s not a good thing.” But his message is hopeful: “Well, it’ll make you stronger. I’ve lived worse moments than this one, but in the end, you’ll remember only good things.” His answer to life’s meaning: “Go find what makes you happy because time goes by very quickly.”
It’s an emotional, relevant and timely spot that perfectly supports the “Open Happiness” message.
Three key factors—increasingly savvy store brands, an economic environment that’s pushing consumers to reconsider their brand choices, and manufacturer brands decreasing their marketing spend—are combining to form a perfect storm in favor of private labels.
Store brands aren’t new, of course. But in boom times, consumers had fewer compelling reasons to consider alternatives to the brands they’d bonded with over the years, even if they cost significantly more. The current environment, however, is different from anything we’ve seen in our lifetime.
In Japan, a major retailer, Aeon, saw 40 percent growth for its private brand, Top Valu, in February. Across its 2,000 stores, that translated to 371 billion yen (around US$3.8 billion). It’s likely that with better control over production costs and therefore a keener ability to defend its margins, Aeon will add more of its own products into the mix and take up even more shelf space.
Given that private label products can be 30-50 percent cheaper than their branded rivals, it’s more essential than ever for FMCG manufacturer brands to defend the bonds they’ve built with consumers—yet most are slashing their marketing budgets.
Many brands have suffered at the hands of competitors that eat into market share and profits alike using just one big weapon: unthinkably low prices. Years of marketing efforts turn out to be in vain once brands get converted into commodities.
Today, even hitherto unaffected categories are being threatened. So what’s a brand to do? It’s usually not possible (or advisable) to match the price points of these competitors.
Instead, Sundrop, a cooking oil brand, talks about Oryzanol, a compound found in its oil that helps reduce cholesterol and keep the family’s heart health in check. Similarly, ICI Dulux promotes the water-resistant qualities of its Weathershield Max exterior paint.
By finding and highlighting unique features in their products, both brands shift the consumer’s focus away from a direct price comparison, shielding their products from the jaws of cheaper rivals.
Just when we thought home kitchens were becoming purely ornamental—their functionality overwhelmed by the steady movement toward ready meals, takeaway food and eating out—it seems cooking is enjoying a renaissance of sorts, fueled in part by the economic downturn.
Cooking isn’t merely a cheaper way to eat, however—there’s something deeper and more profound at play here. Cooking demands complete engagement, encourages creativity and ensures a degree of control. Cooking is leisure, meditation and reward all rolled into one. So it’s no surprise that many stressed-out folks are wrapping themselves in this cocoon as an antidote to the turbulent environment outside.
In the U.K., a Young’s Fish TV spot that demonstrates how to cook a frozen salmon filet might have given more consideration to the prevailing mood. Young’s misses the mark tonally with its hard sell for the brand, the protagonist speaking directly to the camera. By pulling the camera back for a more relaxed mood and focusing on the pleasure of cooking, the brand would likely have sold itself.
The recession isn’t bad news for every marketer, and along with Wal-Mart and McDonald’s, it seems Israel might be a beneficiary. The country—always striving to boost its Jewish population and to strengthen ties with American Jews—is positioning itself as “A Better Stimulus Plan” for recent graduates with bleak job prospects who are looking to volunteer, intern or study. “Relief is in sight. Invest in your life,” says copy on abetterstimulusplan.org, launched earlier this month by MASA, an organization that provides grants to young adults who join long-term programs in Israel.
Their timing is certainly perfect. And while “stimulus” wordplay is getting old—the Brandfreak blog feels that all marketing evoking the stimulus package has officially jumped the shark—here it works rather well for a target looking to kick-start their lives.
Spurred by limited budgets, a revival of interest in tradition and a new affinity for natural products, more women here are using everyday supermarket items to make homemade beauty products. They are using traditional formulations for nourishing hair, skin, nails, etc.—passed down through the generations—or coming up with their own and sharing them among friends. The modern twist? Web sites and blogs that bring these beauty secrets to a wider audience.
While this trend poses a challenge to established beauty brands, those that focus on natural beauty and/or ingredients at recession-friendly price points could benefit. DIY beauty can be fun for a while, but the time-strapped consumer will come to appreciate the convenience of a packaged product.
The term “cocooning” was coined during the last recession to describe how people were retreating into their homes rather than going out to be entertained and socialize. Home-entertainment products and services have a big opportunity to benefit from the current economic conditions by offering consumers a way to spend money in order to save money.
Foxtel, Australia’s leading subscription TV provider, began a campaign last year that does exactly this. The key message of its TV commercials, featuring a husband installing Foxtel as a surprise for his wife, is that the company’s new subscription offer brings “good news,” a contrast to the household’s increasing “bad news,” such as mounting bills, the credit crunch, etc. An additional rational driver is the new shortened contract length, easing consumer anxiety about signing up.
A July 2008 Newspoll National Omnibus reported that during difficult financial times, there is a significant increase in those who consider subscription TV as “good value entertainment” and “a good way of keeping the household entertained.” Foxtel recently reported a 13 percent rise in revenue for the second half of 2008 and a solid 7 percent growth in its direct subscriber base.
Mobile phone giant Vodafone recently issued a 10-page publication as an add-on to the daily Ahram newspaper. The publication, “Moment,” features 39 ideas for saving money. The insert addresses all areas of life—shopping, food, electricity, entertainment, cars and, of course, the ways in which Vodafone can help you save money. While suggestions such as carpooling with your neighbor, shopping monthly instead of weekly and making beauty masks at home may seem simple, they also reflect people’s real-life issues. Not only does this publication tell consumers that Vodafone recognizes their current economic difficulties, but it automatically associates Vodafone with spending less.
“Small splurges … still necessary!” tempts a sign advertising discounted spring styles at a Nine West shoe store in Brooklyn. A “small splurge” is an oxymoron, a “necessary” splurge even more so—but it’s certainly true that for most of us, little indulgences are necessary to keep spirits up. However, while Nine West is a mid-market retailer, many consumers can’t (or won’t) make truly discretionary purchases right now.
So what little indulgence do people still regard as “necessary”? The sweet stuff, according to a New York Times story headlined “When Economy Sours, Tootsie Rolls Soothe Souls.” “They put candy in their actual budget,” the owner of a San Francisco candy store says of her customers. Candy companies thrived even during the Depression, reports the Times. After all, those Tootsie Rolls are cheap, they give a satisfying little sugar high and they’ve been a balm to most of us since childhood.
The bottom line for marketers is that people are now craving simple pleasures, while splurges (even small ones) seem overly indulgent. But looking polished, on-trend and sexy are as important as ever to certain shoppers, and it’s this need that retailers like Nine West will have to play into.
On Adweek.com today, I write about one of our 10 trends for 2009: “the collective consciousness.” With a new global mind-set and enabled by today’s digital technologies, people are thinking less about “me” and more about what “we” can do—collectively—to address the challenges of modern society.
I can hear it now: In a recession, doesn’t self-preservation trump the “We’re all in this together” ethos? My response: They shouldn’t be mutually exclusive.
Take a Finnish government campaign, which I’ve highlighted here before, which calls on citizens to put aside their self-interest and keep the economy afloat by spending. Posters feature a demonic-looking piggybank that reads, “Don’t feed the recession.” Sure, it’s a hard sell during a time when the pig is getting plump on all our knee-jerk binge saving, but it may help Finland avoid the “paradox of thrift” by appealing to the power of the collective.
Businesses that can successfully tap into the collective consciousness will have the ability to connect and form allegiances with consumers that go much deeper than the superficial and transactional. And in today’s climate, that is music to any brand’s ears.
Three key factors—increasingly savvy store brands, an economic environment that’s pushing consumers to reconsider their brand choices, and manufacturer brands decreasing their marketing spend—are combining to form a perfect storm in favor of private labels.
Many brands have suffered at the hands of competitors that eat into market share and profits alike using just one big weapon: unthinkably low prices. Years of marketing efforts turn out to be in vain once brands get converted into commodities.
The recession isn’t bad news for every marketer, and along with Wal-Mart and McDonald’s, it seems Israel might be a beneficiary. The country—always striving to boost its Jewish population and to strengthen ties with American Jews—is positioning itself as “A Better Stimulus Plan” for recent graduates with bleak job prospects who are looking to volunteer, intern or study. “Relief is in sight. Invest in your life,” says copy on 
Spurred by limited budgets, a revival of interest in tradition and a new affinity for natural products, more women here are using everyday supermarket items to make homemade beauty products. They are using traditional formulations for nourishing hair, skin, nails, etc.—passed down through the generations—or coming up with their own and sharing them among friends. The modern twist? 
Mobile phone giant 
“Small splurges … still necessary!” tempts a sign advertising discounted spring styles at a Nine West shoe store in Brooklyn. A “small splurge” is an oxymoron, a “necessary” splurge even more so—but it’s certainly true that for most of us, little indulgences are necessary to keep spirits up. However, while Nine West is a mid-market retailer, many consumers can’t (or won’t) make truly discretionary purchases right now.
On 
