After a year spent surveying brand and consumer response to the recession through our AnxietyIndex.com, we have released our top 10 brand lessons from the Great Recession.
“The Recession Handbook: Brand Lessons from the Great Recession” emerged out of the quantitative and qualitative research that we conducted during the downturn. Over the past year, we have tracked nearly 400 brand responses to consumers’ recession-related anxiety in 27 markets. At the same time, we have quantitatively measured the levels and drivers of consumer anxiety in 13 markets.
Our hope is that this will serve as a primer for future downturns, beyond simply making the case for maintaining or increasing brand spend during a recession. We believe our recommendations will hold up in recessions to come, helping brands better address the challenges that come with economic upheaval.
Our 10 brand lessons from the Great Recession:
1. Find your value voice.
2. Remove the risk from price.
3. Don’t shy away from tackling anxiety head on.
4. Leverage public sentiment.
5. Give consumers more control.
6. Provide a real service for consumers.
7. Inspire rather than empathize with consumers.
8. Return to the core value of hope.
9. Re-imagine how your products are sold.
10. Use the recession to achieve a higher goal.
You can download the report from the Trends and Research section or by clicking here.
It was a bit shocking to see that Saudi Arabia is the third most anxious country among the 13 that JWT has surveyed since February 2009. (See the Trends and Research page for a full listing of reports.) According to JWT’s October 2009 AnxietyIndex survey of 484 Saudi adults, our nation’s anxieties are centered around unemployment and health.
While Saudi Arabia is one of the world’s richest countries, people have been very worked up about the high rate of unemployment—young men aren’t able to find jobs with salaries that keep up with the cost of living and social expectation, and women find it difficult to compete with men for jobs due to social constraints. The Saudi stock market crashed before the global recession, which has affected many companies here; hiring freezes are prevalent.
It was less surprising, however, to see health and disease register as a major driver of anxiety among Saudis. Although health care is free for all Saudi nationals, the system is very slow, and many people go to costly private hospitals. That said, at least we aren’t upset about the price of gas.
To download the entire report, click here.
In a country with a melting pot of cultures—local citizens make up only around 20 percent of the population—anxieties vary greatly among residents. Since locals have the security of strong government support (free education, health care and assisted housing loans), it’s not surprising that anxiety levels for Middle Eastern expats are higher across all areas of concern.
According to our most recent AnxietyIndex survey of 503 adults conducted in October and November 2009, the greatest source of angst in the UAE is economic and financial, as the nation saw drastic layoffs and organizational restructuring starting in the second half of 2008. After the collapse of the real estate market, the inflated cost of living did not drop fast enough to reflect the end of the period of speculation, placing purchasing power and family security high on the list of anxiety drivers.
Middle Eastern expats are concerned about a shift in societal values, health issues (we saw a surge in health advertising and psychological advice) and the rising unemployment rate. Locals are not as concerned about societal values, as theirs are preserved within a close-knit community. Interestingly, for a nation criticized for its lack of environmental care, locals’ major concerns revolve around the impact of global warming and food prices.
The outlook for the next six months is pessimistic, with anxiety centered around the cost of living and food prices. Job security, however, is expected to improve.
Click here to download the full UAE AnxietyIndex report from the Trends and Research page.
While much of the Western world is still anxious about the global economy, the sentiment in Asia is quite different. Nielsen’s most recent Global Consumer Confidence Index, released in October, showed significant spikes in Asia. Many Asian countries registered much higher increases in consumer confidence than the global average of 9 points, including Vietnam (+24), Hong Kong (+23), Korea (+22), Indonesia (+21), Singapore (+16) and Thailand (+13).
However, these improvements in sentiment haven’t yet translated into consumer behavior. Across various categories, consumers in many Asian markets appear to be eager to spend—but only if the situation continues to improve. It seems then that anxiety in Asia is no longer centered around the recession but rather the recovery—i.e., a desire that it just happen already so things can go back to how they used to be.
Brands that haven’t already need to shift the conversation from damage control to “How can we help people prepare for the eventual recovery?” We wrote about hope-fueled vs. fear-fueled marketing in our second AnxietyIndex Quarterly report, and amid the anxiety over recovery, nurturing optimism and hope seems to be more relevant than ever.
After almost a year spent surveying brand and consumer response to the recession through our AnxietyIndex.com, we found that only a handful of the 350 examples we collected across 24 countries truly stood out. Creating innovative work isn’t easy in any economic climate; it’s even harder when marketing budgets are low and risk aversion is high.
Our AnxietyIndex Brand Hall of Fame salutes 10 of the most notable responses to the recession that we’ve seen. We believe these will hold up in years to come as case studies of work that transcend typical approaches to a downturn. Our third AnxietyIndex Quarterly explains why we think so.
Our Top 10 in ascending order:
10. American Express
9. Caixa Econômica Federal
8. Woolworths
7. Financial Times
6. Portuguese Red Cross
5. JetBlue
4. Cash for Clunkers
3. The Economic Times
2. Levi’s
1. Hyundai Motor America
You can download the whole report from the Trends and Research section or by clicking here.
We’d love to hear your thoughts. Do you agree with our choices?
JWT’s AnxietyIndex research in India found that apparel is the primary category where consumers intend to cut down their purchases. One way apparel brands are already reacting is with a barrage of mobile messaging on sales. The usual suspects when it comes to promotional text messages are insurance brands, cellular operators and telephone services. It’s unusual to be getting texts from fashion brands, but in the past month I’ve been receiving sales alerts with a frequency and a ferocity not seen before. For instance:
• Satya Paul (a designer brand): sale up to 60% last 2 days.
• Wills Lifestyle invites you to the end of season sale, enjoy discounts up to 60% off. Hurry offer valid till stocks last! conditions apply
• Chemistry end of season sale just got better, now up to 70% off on tops, tunics, dresses. Valid at all chemistry outlets from the 17th of July 2009
While women generally welcome news of sales, fashion retailers must be careful not to weaken their brands with a slew of “buy now” bargain-basement messages. The trick is to convert discounts into sales while keeping the brands’ aspirational integrity. Perhaps one way to do this would be to limit the number of people who get these text alerts (perhaps sending them only to frequent shoppers), so that recipients feel they’re in on an exclusive deal.
Photo credit: Mareen Fischinger
Japan is the most anxious market among the 10 we have studied in the course of our AnxietyIndex research. The country has become an increasingly fast-paced and complex place in the last few decades, but as anxiety grows, many are seeking a simpler life and reassessing what really matters to them.
So rather than providing ever more options and functions, or pushing the “have it all” aspirations of the ’80s and ’90s, brands would do well to strip down their offering and focus on simplicity, sustainability and the truly important things in life. Already many businesses are taking advantage of the fact that Japan is one of the fastest-growing markets in terms of LOHAS (lifestyles of health and sustainability).
Aveda Japan, for example, has had great success with its LOHAS-lifestyle salon, spa and vegan restaurant, Pure Café. Radish Boya, a company that delivers organic vegetables and additive-free foods to its members, has seen dramatic growth since 2003; it now has roughly 100,000 members, and annual sales revenue of 22.8 billion yen (US$244 million). And Mujirushi, the clothing and lifestyle retail pioneer also known as MUJI, has succeeded with its core philosophy of simplicity, sustainability and stripping away the unnecessary. Annual turnover is around 145.5 billion yen (US$1.5 billion), and its success in Japan has allowed for rapid expansion—there are now 98 stores around the globe.
For more on the recession and its impact on the environment in Japan, download the presentation from the Trends and Research section of this site.
As long as the motivation is strong enough, consumers are still willing to trade up. And currently, Japanese infant milk brand Meiji is taking advantage of a unique opportunity in the Chinese market.
JWT’s latest global AnxietyIndex survey revealed that while Chinese consumers are the least anxious in the world, food safety stands out as a key source of anxiety. No surprise, considering that last year’s melamine scandal nearly destroyed the Chinese dairy industry. Wary of local infant milk brands, affluent Chinese consumers swarmed to Hong Kong and Tokyo, sweeping the shelves for Japanese brands, which are sold at a price premium and not widely available in mainland China.
Japanese milk brands had shied away from the competitive Chinese market—which is full of strong players both local and international—but now Meiji is launching its brand in China. The time is right: Japanese food products have long been regarded as high-quality and safe, and affluent Chinese parents are more concerned with finding trustworthy milk for their only child than with finding a bargain price.
Meiji, which is airing its first television commercial in China, emphasizes on its Web site that all products are produced and packaged in Japan, with milk sourced from Japan, Australia and New Zealand.
Peter England, a leading mid-priced menswear retailer in India, is re-strategizing and starting a “value retail format” that will offer only lower-priced labels (these were formerly sold by another business operated by Peter England’s parent company). “Value retailing is a concept based on offering quality brands with huge savings for consumers,” explains India’s Economic Times.
Consumers here have been trading down when it comes to apparel: In our recent survey of 500 Indian adults from Delhi, Mumbai and Bangalore, a third of respondents said they would consider buying less branded clothing, and a third also said they would consider trading down or stop purchasing their regular brand of clothes.
Rather than cheapening the Peter England brand by slashing prices, the company is smartly trying to keep its brand image intact while simultaneously appealing to customers who are trading down. J. Crew in the United States and Crazy Line in Israel offer similar case studies.
The Economic Times in India reports that companies that hiked ad spend during the slowdown last year recorded higher revenues and profits. Of the 250 publicly listed firms studied, 140 increased their ad and marketing budgets over the last fiscal year. The aggregate revenue of these firms rose 26 percent year-on-year, while net profit rose 20 percent. By contrast, the firms that didn’t increase marketing budgets saw revenue rise 17 percent and net profit grow 10 percent.
This reinforces the long-held argument—based on data from past downturns—that marketers that maintain or increase spend through a recession tend to fare better than their competitors, especially once the economy improves. (JWT’s report on historical thinking about why marketers should spend during down times—an audit of material published by ad organizations, researchers, marketers, journalists and consultants—can be downloaded from the Trends and Research page.)
For more on how Indians are faring on the anxiety factor, download our latest India research here.
