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.
In March, we offered up a lesson from Argentina’s past, looking at how one brand there responded to consumers during the country’s economic crisis in the early aughts. Several interesting case studies came out of that turbulent time, and today we offer one from Quilmes, a leading beer brand that struck a chord with soccer fans during the 2002 FIFA World Cup.
Argentina is a country that loves soccer, and its citizens would do anything to see the national team win the World Cup. Quilmes, which sponsors the national team, created a commercial in which its players cheered the nation, urging them to pull through and get past the crisis (which resulted in severe inflation and high unemployment, among other things).
When everything seems entangled and there’s no clear way out, brands can transmit positive messages by taking sides with the consumer and providing moral support—a very effective way of achieving a strong emotional bond.
In an era that’s given rise to the phrase “luxury shame”—as JWT reports in our latest trendletter, “The Recession and Its Impact on Luxury”—it’s not too surprising that sister companies Marshalls and T.J. Maxx have jointly launched commercials in which women literally shame a friend who “always pays too much for designer labels.” In one of these “interventions,” a woman chides the over-spender: “Everyone thinks it’s disgusting!” The solution is to “get the same designer labels for less” at either of the discount chains.
The ads are in tune with the times, yet “the sales pitch feels grating,” as Adweek’s Mark Dolliver notes, given that “the proselytizers seem to be enjoying themselves a little too much.” One good alternative approach might be to emphasize the “opportunity cost”— tell women what they can do with the money they’ve saved by not buying full-priced designer gear. A new study in TheJournal of Consumer Research found that most shoppers consider opportunity cost only when it’s made explicit; for example, people were roughly twice as likely to choose a 16GB iPod Touch over a 32GB model when the cost difference was described as “leaving you $100 in cash.”
Five months ago, Spain’s largest supermarket operator made the biggest splash in the country’s retailing history by eliminating 900 branded products from its shelves. The chain, Mercadona, owns the most popular private label in Spain, Hacendado.
Currently, the share of market for branded products in primary retail categories is more than 50 percent. The question is whether Spaniards’ bonds with brands are strong enough to avoid a shift toward a private-label-led retail model (as is the case in Germany).
Now Ipsos has issued a qualitative and quantitative study of Mercadona’s customers, finding that 40 percent are against the change and 30 percent are in favor of it. Another 30 percent are unsure. Overall, 55 percent said they are unhappy about having less choice, while 40 percent said they will shop elsewhere if they don’t find their usual branded products on the shelves. Sixty percent said there are some branded products they could not go without.
Meanwhile, a consumer movement, yoquieroelegir.com (“I want to choose”), has been created to defend the presence of brands in retail stores. And Pascual, the leading milk brand, is airing a TV ad explaining that private labels’ cheaper prices are the result of a real quality compromise.
It’s too soon to know if the Ipsos research reveals a solid sign of private label resistance, but it seems clear that in spite of the downturn, brand value is still healthy in Spain.
With sales increasing by more than 30 percent and 2.68 million vehicles sold, China took over the U.S. to become the world’s No. 1 vehicle market in the first quarter. Even as GM struggles at the verge of bankruptcy, its China operations have been experiencing fast growth. And in a recent market visit of Ford dealers across China, there was widespread sentiment that the financial crisis is welcome if it means China is now the largest auto market.
China has been exempt from a direct loss in the global financial crisis. The one badly hit part of the economy is the export sector. But with by far the largest economic stimulus plan in the world, China seems to have weathered the worst of it. Government policies aimed at developing the huge rural market and brands’ price promotions seem to have worked together to keep the economy out of trouble.
It’s no wonder most brands haven’t fine-tuned their messages to reflect a mood shift—there hasn’t been a detectable one as of yet. Indeed, brands have an opportunity to ride on and persuade skeptical consumers to keep spending.
Is nostalgia and heritage a winning formula when times are hard? No.
“Trying something new for 140 years: Sainsbury’s.”
“Tough but gentle for 100 years: Persil.”
“Quality worth every penny: M&S celebrating 125 years.”
Several brands have jumped on the nostalgia and birthday bandwagon, portraying themselves as having been with the British people for generations, influencing society, culture and individual’s lives, and promising they will continue to be with the British people today and hopefully for another century. It started last year when Hovis launched an epic 122-second TV ad looking back at the 122 years of British history a loaf of its bread has witnessed and announcing the brand’s return into stores.
Hovis managed to create a strong emotional connection, but the rest seems a bit of a miss. Heritage doesn’t mean much in a world where long-established institutions go bust and disappear overnight. Plus, nostalgia for a brand’s past is irrelevant if its values are rooted in what consumers desire today (Sainsbury’s: inspiring people to try something new every day; M&S: quality, value, service, innovation and trust). Nostalgia worked for Hovis because it’s the brand idea—not because of the current climate.
Pre-recession, luxury was big, bold and blingy. Now, the sector is shrinking—worldwide, the luxury sector saw a 20 percent year-over-year decline in sales revenue during the second quarter, shrinking from $220 billion in 2008 to $198 billion, according to Bain & Company. Bain estimates an overall net decline of 10 percent for 2009.
This is occurring not only because consumers can’t afford the luxe life but because attitudes toward conspicuous consumption have shifted dramatically, especially in developed markets where consumers are experimenting with “brown bag” luxury. Corporate misdeeds have cast the new rich as the new villains, and their luxury lifestyles are no longer an aspirational fantasy.
Luxury manufacturers are rethinking their strategies, shifting away from fast fashion and masstige. They’re returning to their roots—producing the ultimate that money can buy—and they’re responding to new definitions of what luxury is, emphasizing green credentials or playing up health and wellness benefits.
While the appetite for luxury goods is waning in the developed world, however, emerging markets are just getting started. In fast-growing countries like China, India and Brazil, the new meritocracy want to show off their success, and they’re doing so by embracing Western luxury brands.
Our latest trend report explores these themes and more—you can download the report from our Trends and Research page.
In the tone of an emotional manifesto, JWT Argentina has created a commercial for Wal-Mart that says:
Don’t save
Don’t save air, don’t save words
Don’t save change
Don’t save laughter, don’t save tears
Don’t save love, nor kisses
Don’t save playing
Don’t save living
Just save money.”
These days, when everyone is saying how critical saving is, Wal-Mart tells you to do just the opposite: Live with no limits, don’t restrain yourself, except in your spending. The timing couldn’t be more perfect. Based on the brand’s global idea of “Save money, live better,” this campaign offers a clever twist; a simple, insightful and powerful approach that will enable Wal-Mart to make a stronger connection with people.
Recently published manga: Grass-Eating Man’s Love Study
In Japan, there’s been a lot of buzz recently around soshoku-kei danshi, which translates as herbivorous or “grass eating” men. Political correctness aside, this term refers to the growing number of men age 20 to 34 who display less “masculine” traits than the “meat eaters” dominating the preceding generation. But before you start envisioning an overdue triumph of feminism in Japan, the reasons for—and results of—this shift in gender attitudes are not particularly positive.
Soshoku-kei danshi are generally considered to have a combination of the following attributes (based on research conducted last year by Tokyo-based market research firm Infinity): lack of ambition at work, preferring to avoid competition; limited life aspirations; low interest or even a negative attitude toward love, sex, dating and marriage; extremely tight with money (saving for the future is a high priority); and sensitivity and concern about their appearance, from fashion to hair and personal care.
It’s estimated that roughly 60 percent of men 20 to 34 fit the bill. If that sounds exaggerated, note that in a survey of 500 single men in their 20s and 30s by Lifenet Seimei Insurance, three-quarters said they regard themselves as soshoku-kei danshi.
There’s much debate as to the roots of this trend, but a common theme is the link to anxiety. These men have bleak economic prospects—they grew up after Japan’s bubble economy burst in the late ’80s and have never known what it’s like to live in good economic times. With a huge opportunity and wage gap compared to men over 35, the defensive response has been greater caution and limiting of life aspirations. As I wrote in a previous post on the high levels of anxiety in Japan, when these young men look to the future, they don’t see much to be hopeful for. Continue reading ‘The rise of ‘herbivore man’ in Japan’
Talking to consumers one hot day in a lower-income neighborhood of Manila, we stopped by one of the street stores called “sari-sari” (roughly translated, “we sell all kinds”) for refreshment. Excitedly, the storekeeper offered us the hottest drink among the street toughs—Nutri-C, a do-it-yourself, two-in-one energy drink/vitamin C concoction.
Here’s how it works: For three pesos (roughly 75 American cents), you get a small 12 gram sachet of powder. Then comes the DIY part: Mix this with the small bottle of drinking water you brought from home, and voila! You get your daily portion of vitamin C (or so says the label). And because the DIY mixing requirement mimics how adults drink the energy beverage Extra Joss, my street kid informer noted, “It feels like it is not just my vitamin C, it is also my Extra Joss!”
Consumers will improvise and mix their own in a recession—how can brands take advantage of their desire for involvement?
Is it true that in a recession, for everything that goes down, something else goes up? Here are some contrasting news items from recent Indian newspapers: Private-sector jobs are down, while the public sector is recruiting talent. Holidays are down, but spas—which have gone from luxury to healing method—are up. Luxury cars are down, used luxury cars are up. Jobs are down, education is up (IT companies are sending benched staff on extended training programs, etc.). Auto is down, the bicycle market is up. Payments on loan installments are down, paying insurance premiums is up. Gold jewelry is down, fake jewelry is up. Big houses are down, small is up. Urban demand is down, rural is up.
Finally, one happy fallout: Roses are selling more. And one sad fallout: Some out-of-work women are turning to egg donation to pay back loans.
Physical and mental health, security, frugality, coping and relationships emerge as key themes. Brands need to rethink their formats, their SKUs and their geographies, redefine their value propositions, and present their products and services in new contexts that resonate with the emotional needs of the day.
Talking to consumers one hot day in a lower-income neighborhood of Manila, we stopped by one of the street stores called “sari-sari” (roughly translated, “we sell all kinds”) for refreshment. Excitedly, the storekeeper offered us the hottest drink among the street toughs—Nutri-C, a do-it-yourself, two-in-one energy drink/vitamin C concoction.
