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.
Value deals and incentives proliferated during the downturn as consumers with shrinking budgets increasingly focused on finding deals. This includes “Buy one, get one free,” or BOGOF, offers. But encouraging consumers to get more than they need creates a huge amount of food waste, something the Department for Environment, Food and Rural Affairs in the U.K. is trying to fight. The Times Onlinereported last year on a government finding that British “households throw away 4.1 million tons of food each year that could have been eaten if it had been managed better.” The cost to the average household is £420 a year.
Tesco has addressed the issue by introducing “Buy one, get one free later” for perishable goods that may spoil before being consumed. This is an ingenious solution that still helps consumers who are cost-conscious and boosts Tesco’s sustainability credentials. Finally, it ties the consumer into repeat shopping in order to redeem offers, increasing brand dependency and footfall.
In Spain, unemployment—currently at 18.8 percent—is the main public concern, and we aren’t seeing the light at the end of the tunnel yet. This situation has hit one generation more than any other: youngsters who are neither studying nor able to find work. A recent study showed that 15 percent of 16- to 24-year-olds aren’t active. University degrees are no longer a guarantee of a job, and Spanish youth are apathetic and unmotivated. Their parents lack strong arguments to push them forward.
Naturally, a TV channel saw this as an opportunity for a reality show: Eight of these ninis (which stands for “no job, no studies”) live in a house where they’re learning everything from social skills to math, home economics and handy jobs. The results are not too promising so far. The kids don’t seem to be learning much from the experience, and the content aired so far is surely not making parents any less anxious than they already are.
In a downturn, sampling can transform from a call to buy into a generous gift from brands. A few weeks ago, so-called DanceBag parties were organized in several clubs around Spain; they were publicized through Facebook. More than 50,000 revelers left discos with free samples from brands including Axe, Trident, Bic and Smint.
HighCo Marketing House, the company responsible for the initiative, is also proposing a SkiBag (for handing out on the slopes), a GoldenBag (for luxury hotel rooms) and a SummerBag (for beachgoers). Let’s take two positive conclusions: Brands can collaborate to improve their efforts, and sampling is the best experience marketing you can propose to a society beset by the downturn.
In Spain, the downturn has not yet slowed, and the economy is still under a dark cloud. Brands are feeling this lack of oxygen, and new campaigns are few and generally conservative. One area where we’re seeing some activity is brand stores. This trend is being accelerated by the real estate crisis, which has created lots of cheap opportunities. Finally brands are playing with shops as experience spaces for consumers.
First, Danone opened up a store in Barcelona, a huge yogurt bar and restaurant project. Now Casa Knorr has launched in Barcelona and Madrid, with free cooking and nutrition workshops for kids and adults, as well as product tastings. Workshop attendees will learn to put together a weekly menu and prepare healthy snacks, and even be accompanied on instructive supermarket shopping trips by a chef and dietitian.
These consumer experience labs are a smart investment. It will be interesting to see whether they become a permanent part of the marketing mix once the downturn ends.
Walking around Dublin, you can’t miss the campaign from Unilever. “Who wants lower prices on the Flora range?” one ad on the side of a building reads. “Who wants lower prices on Cif sprays?” another plastered on a bus asks. “Who wants lower prices on Vaseline lotions?” yet another begs. Each time the answer—punctuated by a check mark in a box—is unanimous: “Ireland says Yes!”
Smartly, the campaign is riding the wave that followed Ireland’s overwhelmingly positive vote for the Lisbon Treaty, which includes a pulling together of all EU members in matters of legislation, trade, etc. Following the Oct. 2 vote, there was an air of good feeling (which is thin on the ground), a slight togetherness and almost a sense of maturity in the country. (When the treaty first came up for a vote in June 2008, Ireland was the only country to have a referendum out of the 27 EU states, citing reasons such as loss of sovereignty and a lack of clarity around the specifics.)
What’s even more smart is the fine print in the ads: Unilever says it’s reducing its prices for retailers “to help them reduce prices for you.” A press release about the campaign crams in the facts: “With 1.3 million Unilever products sold in retail outlets nationwide every day in Ireland and an average price reduction of 11 percent across 70 percent of its 900-strong brand portfolio, Unilever Ireland’s price reductions will play a significant part in delivering real value to consumers on premium brands.”
With Ireland’s unemployment rate hitting 13 percent, its citizens need all the help they can get. Unilever trimming prices positions the company as an ally in trying times and will help to instill good will in the consumer not only now but in the years to come.
In projecting Recessionary Living as a 2009 trend, we noted that out-of-home entertainment would suffer as homes became more important entertainment centers. One manifestation of this trend in the Czech Republic can be seen inThe Jihlava International Documentary Film Festival’s decision to transmit films directly to households.
The festival, held in late October, had fewer sponsors this year and could secure only three cinema screens, versus six in previous years. To increase audience capacity, organizers negotiated with households willing to host viewers in their living rooms (attendees had to text a code to the festival to get address details); the screening included video of the films’ creators, who speak at the festival. The small viewing groups then discussed the documentary in a homey atmosphere, which in some cases even included home-cooked food.
In the future, such events could serve as a platform for brands to spread word of mouth during a recession.
In our AnxietyIndex Quarterly report on hope-fueled vs. fear-fueled brands “What Hope-Fueled Markets Can Teach Brands,” we urged brands to return to the core value of hope. More brands are doing this in the emerging markets of Brazil, India and China than in developed markets, which tend to be more fear-fueled than hope-fueled. Marketers from Coca-Cola in Spain to Havaianas in Brazil have sold hope as a way to overcome adversity and fend off anxiety.
Before Christmas last year, as consumers tightened their wallets, the Red Cross in Portugal decided to sell hope in a literal way. In a popular mall in Lisbon, it opened a store where little cards promoting “hope” were clipped onto hangers and stocked on shelves, just as normal goods would be; the cards sold for 10 euros apiece. “Hope” was positioned as a gift alternative for the holidays, a product that people can’t hold in their hands but can feel emotionally. Shoppers could get the satisfaction that comes with both a mall transaction and the act of giving.
It was a success—hundreds of people attended the opening night, and in its first day the store achieved a place in the mall’s top 10 for sales. The Red Cross extended the stores’ hours as well as its closing date. And the store not only helped raise immediate funds but boosted awareness for the Red Cross.
Where its messaging could have played on the guilt of previously generous patrons, the Red Cross spoke in a voice of optimism. A hope-fueled approach can only benefit nonprofits and regular marketers alike as another challenging holiday season approaches.
“Coke deckt den Tisch” (“Coke sets the table”), Coca-Cola’s new campaign in Germany, brings the whole family back to the table and successfully communicates that Coca-Cola is a perfect drink to serve at mealtime.
Families tend to come together during economic downturns and uncertain times, and they’re more likely to do so at home, since people are dining out less often. A recent survey by TNS Infratest on behalf of Coca-Cola confirmed this and also found that in Germany almost half of Coca-Cola drinks are served with food. And 40 percent of these drinks are consumed at home. The survey also found that 95 percent of families want to spend more time together and more than two-thirds want to eat at home together more often, but only half do so.
The DIY category tends to benefit from downturns, since many people prefer to save money by doing repairs and renovations themselves. Plus, since people tend to cocoon rather than go out, they want to make their homes as pleasant as possible—focusing on family needs and the home is seen as a solid investment.
So bauMax, an Austrian-based chain in Central and Eastern Europe that’s akin to Home Depot, was clever to revive its Selfman hero, who guides ambitious DIYers via a series of How-To videos. Each video segment is several minutes long and embeds advice and instructions within a humorous plot; a handy list of tools needed for the project is also included. The result: While the DIY industry in Austria had a sales decline of 1.6 percent between September 2008 and June 2009, bauMax sales increased 1.5 percent.
The global fashion retailer Mango has launched a lower-priced collection, Think Up. Some of the line’s 90 items are new, but most just feature new, lower prices; special price tags will distinguish the pieces. There’s also a Think Up blog, which chats about fashion, pop culture and the like.
The tagline, “Special prices for creative living,” adeptly taps into young fashionistas’ recent shift away from mindless spending and toward more creative solutions for looking good.
A few other retailers have followed this strategy—we wrote about one Israeli chain launching a “basic line” in a bid to retain customers without damaging brand perceptions. In Mango’s case, the Spanish retailer is seeking to hold on to newly thrifty customers who are being tempted away by value chains such as H&M and (in Europe) Primark. Watch for other fashion chains to become similarly aggressive in taking on their lower-priced rivals.
Value deals and incentives proliferated during the downturn as consumers with shrinking budgets increasingly focused on finding deals. This includes “Buy one, get one free,” or BOGOF, offers. But encouraging consumers to get more than they need creates a huge amount of food waste, something the Department for Environment, Food and Rural Affairs in the U.K. is trying to fight. The Times Online reported last year on a government finding that British “households throw away 4.1 million tons of food each year that could have been eaten if it had been managed better.” The cost to the average household is £420 a year.
In a downturn, sampling can transform from a call to buy into a generous gift from brands. A few weeks ago, so-called DanceBag parties were organized in several clubs around Spain; they were publicized through Facebook. More than 50,000 revelers left discos with free samples from brands including Axe, Trident, Bic and Smint.
In Spain, the downturn has not yet slowed, and the economy is still under a dark cloud. Brands are feeling this lack of oxygen, and new campaigns are few and generally conservative. One area where we’re seeing some activity is brand stores. This trend is being accelerated by the real estate crisis, which has created lots of cheap opportunities. Finally brands are playing with shops as experience spaces for consumers.
Walking around Dublin, you can’t miss the campaign from Unilever. “Who wants lower prices on the Flora range?” one ad on the side of a building reads. “Who wants lower prices on Cif sprays?” another plastered on a bus asks. “Who wants lower prices on Vaseline lotions?” yet another begs. Each time the answer—punctuated by a check mark in a box—is unanimous: “Ireland says Yes!”
The global fashion retailer Mango has launched a lower-priced collection, 
