Monthly Archive for June, 2009

Stealth consumption, brought to you by Manduka

Published by Lois Saldana - New York on June 30, 2009 in North America. 0 Comments Tags: , , , .

2imagephpTime recently reported that high-end yoga mats are bucking today’s frugality trend. These mats—the priciest of which cost about $100—are made by a company called Manduka, whose sales rose 55 percent in the first four months of 2009. Manduka now has a distribution deal with nationwide retailer Dick’s Sporting Goods.

The article points to several reasons why sales are soaring: the continuing popularity of yoga, the “superior traction” and “extra cushioning” of the mat, etc. But I believe the driving reason behind Manduka’s success is outlined in our recent paper “The Recession and Its Impact on Luxury,” in which we discuss the future of luxury and what it means for health and wellness: People are re-evaluating luxury altogether. In some cases, this means redefining it in non-materialistic ways—time with family, doing good, being healthy. It can also mean spending more for products that conform to the highest green standards … or for things that enhance health and well-being.

Manduka’s pricey mats fit perfectly into the new mold of luxury: They allow people to invest in their health and wellness while simultaneously flaunting their wealth to those in the know. Call it stealth consumption rather than conspicuous consumption. Bad news for the Guccis of the world, good news for Manduka.

Social PR 2.0 and viral marketing in a new form

Published by Said Seihoub - Vienna on June 30, 2009 in Europe. 0 Comments Tags: , .

untitledz2In economic downturns, people are less willing to donate to charity. But then, they are likely more willing to spend their time—the new currency—or other resources to support a good project. The new Austrian platform SOS Mother Nature, initiated by the Austrian environmental organization Global 2000, works with this assumption: It gives people an opportunity to support the fight against global warming simply by creating a profile and spreading the word by providing a new-media channel like a personal Web site, an online banner, a screen saver, wallpaper, e-mail, mobile or SMS. SOS Mother Nature platform gets an enormous below-the-line push for free, while participants get a quieter conscience and little bit of publicity too.

Still eating caviar, but buying it at a discount

Published by Marie Stafford - London on June 29, 2009 in Europe. 1 Comment Tags: , , .

It used be that most people who took advantage of vouchers, deals and discounts were living on a shoestring. Today, it’s simply a sign of a savvy shopper, whatever their income. This recession has seen the rise of the deal-seeking affluent, and brands that have not traditionally catered to an affluent audience should be doing all they can to appeal to this new breed of discount shopper. By luring in these consumers now and offering them a good experience, brands may well retain their custom beyond the recession.

One example from the U.K., which I highlight in our Balancing Health, Wellness and Budgets presentation (download in the Trends and Research page), is discount supermarket chain Aldi, which swiftly added luxury items such as whole Canadian lobster (£5.99) and premium caviar (£1.69) in response to an influx of high-income customers. One trend forecaster has labeled these shoppers “the Aldirati,” while some call them NFAs (no-frills affluents), as an article in the Times of London points out. A recent Aldi campaign hit the nail on the head with the tagline: “Don’t change your lifestyle, change your supermarket.”

The Rise in DIY

Published by Lois Saldana - New York on June 29, 2009 in North America. 1 Comment Tags: , , .

thumbnails_diyDIY isn’t just what you do after a shopping spree at IKEA. Today, do-it-yourself is influencing a range of categories, including entertainment, food, beauty and fashion. From locals organizing and promoting their own parties and events to teens formulating at-home beauty treatments, the ethos of DIY is becoming increasingly pervasive.

A confluence of factors is shifting this movement from the fringe to the mainstream, chief among them the anxiety brought on by the Great Recession—DIY is simply cheaper than the alternatives. DIY also seems like the savvy, even chic thing to do at a time when frugality and anti-consumerist sentiment are proliferating. The Internet is also a key factor, helping DIY-ers learn from and inspire each other. And in a world where mass-produced goods dominate, DIY allows for a sense of discovery and a way to stand out from the crowd.

Our latest trend report explores how DIY ideas and attitudes are affecting consumer behavior and purchasing habits in a range of categories, and looks at what it means for brands and marketers. You can download the report from our Trends and Research page.

Starbucks vs. McDonald’s plays out in Thailand

Published by Shanaree Laohapongphan - Bangkok on June 26, 2009 in Asia Pacific. 0 Comments Tags: , , .

mccafe-thailandWith “the java wars intensifying” in the U.S., as The Boston Globe puts it, a Starbucks-McDonald’s rivalry is also heating up around the globe. In Thailand, Starbucks has run a limited-time promotion offering half-price coffee in the afternoon to customers who already bought one in the morning. Now McDonald’s McCafe is fighting back with a two-year-anniversary special: a free upsize of any cup of coffee. Customers can get extra caffeine without extra spending.

Even while running promotional offers, the McCafe brand still does well in maintaining its image as a premium coffee brand that’s available in a nice environment, complete with free Internet access and a variety of magazines. Price promotion doesn’t have to dilute brand image, as long as a brand can figure out how to talk with consumers so that the key message they take away is “It adds value to your life” rather than “You can now afford it.”

GM’s skies seem bluer in Colombia

Published by Cecilia Davit - Bogota on June 26, 2009 in Latin America. 0 Comments Tags: , .

untitledzWith media outlets filled with stories on General Motors’ downward spiral, one wouldn’t suspect that a GM brand, Chevrolet, continues to lead Colombia’s auto industry. Chevrolet has been the top brand in Colombia for two-plus years, a period in which it’s invested more than $60 million Colombian pesos in media (Renault, in the No. 2 spot, spent $45 million). And Chevrolet hasn’t been pulling back as much as might be expected; spending is now on par with Renault.

Lately, Chevrolet has sealed its commitment to the Colombian consumer with the “Number 1 Chevrolet Fan” campaign. During the first phase, people who submitted a picture with an explanation as to why they are the brand’s biggest fan were eligible to win an HHR, the newest Chevy model. People who voted for the Number One fan online could also enter to win a Chevrolet Spark Go. The campaign also reminded consumers that Chevrolet offers a low interest rate.

Chevrolet doesn’t seem to be losing momentum as of yet, but we can only wait and see if it can keep moving at the same pace under GM’s “reinvention.”

Credit provider launches ‘Responsible Credit’ branding

Published by Maya Eisen and Tal Chen - Tel Aviv on June 25, 2009 in Middle East. 0 Comments Tags: .
Translation: "Seeking for a credit solution that suits you?"

Translation: "Seeking for a credit solution that suits you?"

Last year, Israeli credit provider CAL shifted its advertising message from “It’s easy to want more” to “It’s easy to live right,” focusing not on getting customers to spend more but on assuring them that it’s safe and wise to use credit cards and other financial services. Now, CAL is unifying its range of credit services and products—which include no-interest loans, all-purpose loans, revolving credit and re-deployment of installments—under the title “Responsible Credit” with a $1 million TV campaign and full media coverage.

Surveys conducted by CAL showed that while customers need credit, they are focused on finding a funding source they can trust and one that provides customized service that takes into account their needs and budget. With “Responsible Credit,” CAL is aiming to give its various services an aura of responsibility and reliability. As part of this initiative, CAL is launching a Web site offering tools for monitoring the family budget and choosing the most suitable financial services, as well as financial tips, articles and other useful services. It’s also offering customers free coaching sessions and financial workshops.

This effort follows on the heels of similar initiatives by financial institutions from Australia (where Ubank is producing “Recession 101″-themed Webisodes for young consumers) to the U.K., where NatWest is advertising its “MoneySense” advisers. For a public fearful of getting into difficulties with debt, financial institutions are wise to position themselves as supportive and dependable—a friend to the customer, rather than a threat to their future financial stability.

J. Crew offers something for all price points

Published by Lois Saldana - New York on June 25, 2009 in North America. 0 Comments Tags: , .

w_instantgratification_v2_m56577569830534135In a recent post, I declared that while cheap is cheap, value is relative. In other words, value doesn’t always mean bargain-basement prices: In the case of Olay Professional Pro-X, for example, a $60 jar of face cream is still a heck of a lot cheaper than an afternoon with a Botox-wielding dermatologist.

On the other hand, it still helps to offer some bargains in order to retain customers who might be tempted to trade down. One brand that’s doing this while still maintaining brand equity is J. Crew. The 26-year-old retailer is offering a greater number of knits and pants priced under $80; these and other items priced under $100 are now listed in an “instant gratification” section of jcrew.com. At the same time, the brand continues to promote its premium J. Crew Collection.

While J. Crew is faring poorly at the moment (profits were down 33 percent in Q1 2009), the company is confident that it can weather the recession, in large part because the days of $800 high heels are over, as CEO Mickey Drexler colorfully told Neiman Marcus CEO Burt Tansky at a conference last January. Ideally, affluent shoppers will spend more time and money at J. Crew while budget-conscious middle-class shoppers will trade down to lower-priced items. This smart strategy is likely to help J. Crew weather the recession with its gauze ruffles intact.

A Filipino ice cream chain coolly captures the pleasure-price ratio

Published by Pam Garcia - Manila on June 24, 2009 in Asia Pacific. 3 Comments Tags: , .

icecreamstoresaDuring a recent in-home consumer visit, a local orthodontist confessed to us that her secret simple pleasure is discovering new ice cream experiences. To her, this is the best reward after a hard week of fitting dentures for her clients. Her lament is that beyond the usual brands, her discoveries tend to be on the premium side. Häagen-Dazs Cafe, for example, has not added branches in Manila.

Enter the seemingly generic Ice Cream Store sa ___ (roughly translated, Ice Cream store at ___).The branch owner fills in the blank with the relevant street name for that homey neighborhood feel. According to blog reviews, the taste, presentation and variety of the ice cream concoctions, as well as the impulse products, are comparable to those of big-name brands Selecta (Unilever-Walls), the local Magnolia brand from San Miguel, and Nestlé Ice Cream, which has a single store, Nestlé Ice Cream House.

Now with more than 20 branches around the Philippines, restaurant meals in Ice Cream Store sa ___ start at only 39 pesos, or about 81 cents; for 89 pesos, or roughly $1.80, you can get a full rice meal. (After all, what is a Filipino restaurant without rice?) The dine-in customer experiences a bright, diner-like, neighborly atmosphere without the snooty feel.

In times of difficulty, consumers will always seek small indulgences. And that may be as easy as going down the street.

USA Today: The recession generation?

Published by Ann Mack - New York on June 24, 2009 in North America. 0 Comments Tags: , , , .

Earlier this year, we conducted a survey on the recession and its impact on the Millennial Generation. As you may remember, we found that while there is a pervasive sense of resentfulness among Millennials, who feel they’ve been dealt an unfair blow because of the recession, they are finding advantage in adversity. A good portion of twentysomethings, for instance, see this as a market for first-time home buyers and entrepreneurs.

A story in yesterday’s USA Today, which highlights some of the results from our AnxietyIndex survey, illustrates how teens and twentysomethings across the U.S. are responding to the recession, whether leading a simpler life, looking for end-of-season sales instead of shopping constantly, or starting their own businesses.

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Source: JWT survey in February of 243 people age 18-29 (among 1,065 Americans surveyed)

The recession is clearly shifting the conversation from Millennials’ narcissism and sense of entitlement to their ingenuity; from their conspicuous consumption to their conscious and creative consumerism, where cheap is chic, bargain-hunting begets bragging rights and doing more with less carries greater badge value than the latest It bag or logo-laden attire.

Brands can get behind Millennials by subtly acknowledging their tough situation and helping them navigate the recession with easy-to-understand guidance. They can also tap into the aspirations and optimism of these young adults, whose eyes are open to all opportunities that may present themselves during this rough patch. A good way to build confidence is through hope—giving young consumers a chance to be proactive and plan practically for their future.

To download our study on the recession and its impact on the Millennial Generation, click here.