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.
Recent American Express advertising in the U.K. attempts to reverse the brand’s luxury image, telling consumers they should no longer just consider it for “posh nosh” and “vintage bubbly” but also for burgers and shampoo (bubbles for your hair, not your glass). What’s interesting is that American Express has spent years creating its luxury image. But in this post-recessionary world, it’s frowned upon. Many of us are worried about being associated with the overtly upmarket or luxurious. Gone are the days of flashy watches, over-the-top cars and flashing the credit card that suggests you’re loaded. Frugal is still the new flash.
Consumers seem to like the ads—they garnered positive feel-good scores in a recent study of digital outdoor advertising by Clear Channel Outdoor and Kinetic that used new face-tracking technology. And what better cure for anxiety is there than that?
With 79 percent of respondents saying they are nervous and anxious, according to JWT’s latest AnxietyIndex survey, Argentina is among the most anxious of the 16 countries we’ve surveyed over the past year. The poll of 328 Argentineans aged 18-59, conducted in January, found that two key drivers of anxiety are the state of the economy and the cost of living.
Argentineans are accustomed to economic turmoil—they’ve lived with various forms of economic crisis for decades. And Argentina, which is not experiencing the same recession as most of the world, has been grappling with permanent price fluctuation under the ghost of inflation since the 1970s. So consumers are adaptable, expanding and shrinking their spending in accordance with the times. But the concept of saving money has lost credibility—people don’t believe it’s possible to save much. As a consequence, they feel that a happy life with friends and family is more important than focusing on money and materialism.
The opportunity for brands is to offer optimistic messages and a positive brand experience, standing out by counteracting the negativity dominating Argentinean society. For example, communicating from a positive point of view, Walmart’s proposal “Save money. Live better” tells customers that by saving, they can actually have a more enjoyable life. Click here to download the full Argentina AnxietyIndex report from the Trends and Research page.
Ever since the words “credit crunch” and “recession” have filled the papers, companies have been reacting with money-off offers here and price reductions there. And with every brand claiming to be cheaper than the next, it’s become easy to block out the numbers. So it’s interesting to see Confused.com’s response.
A price comparison website for insurance policies, Confused.com could easily have gone down the straight money-saving route. Instead, it seems to be purposely avoiding this by representing potential savings with the items you might have purchased had you saved with Confused.com. In this ad, a woman and her husband watch a ghostly pair of jeans, the pair she “would have bought with the money I could have saved on the car insurance if I had gone to Confused.com.” It’s a clever way of making the savings tangible. And a clever way of standing out from the crowd in a post-recession battleground that remains number-fueled.
The latest tactic to motivate shoppers to spend: the members-only sale site. These online outlets require “membership” (usually just a matter of signing up but sometimes a bit more involved), then run flash sales of designer goods or services. The concept started a decade ago with French fashion site Vente-Privee, according to The New York Times, but is a more recent phenomenon in the U.S.—one that makes a lot of sense at a time when most shoppers are still hesitant to shell out for higher-end brands.
It started about three years ago with fashion, a category now largely dominated by Gilt Groupe andideeli but getting more crowded and expansive (beauty offerings are a new feature). More recently, members-only has spread to travel (Gilt-owned Jetsetter, among others), home furnishings (Décor Insider) and mom-and-kids stuff (e.g., bTrendie and The Mini Social).
The concept is a smart one, providing not only the thrill that bargain lovers seek but a sense of urgency that can help override a shopper’s more cautious instincts. For brands, it’s a great way to discount when necessary without cheapening their image (since only members see sale prices, these don’t pop up in Google or aggregator sites). Plus, happy customers may well come back at full price. “We’ve had brands tell us that after one of our sales, the traffic on their own sites has increased in the double digits,” the VP for beauty at HauteLook told The New York Times.
One thing recent times have taught us is that it’s important to have control over our money. Eighteen months of cold recession winds biting at our extremities have left an impression that will last a while. So why do we still open our household energy bills with the type of face normally reserved for a horror flick?
I’ll tell you … come closer … a bit closer … BOO!
Did I get you? Nobody likes a surprise! So first:utility, a challenger in the U.K. energy market, is responding with the Smart Meter, a small box that lives in your house and provides up-to-date readings of your total output, current output and bill to date. In a market where more than 80 percent do not know how much they pay for their gas and electricity, and one in 10 never looks at their meters, this move could mean the warmth of total control for the consumer and a chill down the neck of the major players in the market.
A friend of mine was a loyal customer of Dale & Thomas Popcorn, the gourmet popcorn maker, until they eliminated their PopClub Rewards program. She felt they were punishing all their loyal customers and has been boycotting their store.
A recent Wall Street Journalcolumn lamented changes in loyalty programs run by Starbucks and the New York drugstore chain Duane Reade. Basically, customers have to buy more than before to get the same type of reward. Loyal customers now feel like something is being taken away from them, even when they’re still getting rewarded; they feel cheated.
At a time when customers are choosing cheaper alternatives, companies need to give consumers more reasons to remain loyal, not fewer incentives. And in the age of social media, dissatisfied customers often vent via social networks, amplifying the problem. A simple solution in today’s hyper-connected world is clearly communicating changes well before they occur and grandfathering in older customers.
In Turkey, people have stayed away from bank loans, and economic instability has only heightened this tendency. But unlike in the U.S., the Turkish banks want to make loans.
A leading bank in Turkey is trying to stimulate activity by tapping into anxiety over unemployment and bank lending in a hopeful and positive way. Garanti’s campaign explains the process of recovery and the role of the banking industry in a simple format using animated childlike drawings. In one spot, a child talks about her wish for 2010: her brother finding a job. She explains that people should deposit their money in banks so a businessman will find credit and make a major investment that will create jobs. In the end, everyone will be happy. “Boosting the economy is Garanti’s job,” says a voiceover. “The bank that revitalizes Turkey is again on your side in 2010.”
With this clever ad, Garanti not only outlines a complex issue in an innovative and appealing way, it also creates an emotional impact for anxious and confused consumers via a naive and positive spokesperson. It’s also a good example of Visual Fluency, one of our 10 Trends for 2010.
In the past year, price competition has intensified in Japan, especially in the apparel, furniture and food categories, and appears to have accelerated the country’s deflationary trend. Brands are shifting to provide both good quality and low price to attract consumers with tight purses and discerning eyes.
Last year the casual-clothing chain Uniqlo helped spark this deflationary trend by surprising consumers with the “g.u.” jeans line, priced at just ¥990 ($9.99) a pair. In response, rival brands released even lower-priced jeans at other big retailers (Aeon Co., Daiei Ltd., Walmart-owned Seiyu Ltd. and Don Quijote Co.). For spring, Uniqlo is now launching “UJ,” and changing the current perception of jeans in the process with a line that offers a new standard of quality, design and price—between ¥1,990 ($19) and ¥3,990 ($39).
This trend is a threat for the authentic jeans brands (Levi’s, Edwin and Right-on), which come with a substantially higher price tag, from ¥6990 ($69) all the way up to ¥30,000 ($300). These brands will have to react as soon as possible now that cheaper products are no longer cheap quality.
As we discussed recently, too many choices can paralyze consumers, creating anxiety and deterring people from making any purchase at all. So Nokia’s new naming convention for its phones is a step in the right direction for a company with a multitude of products.
The phones are grouped into four series by function: N (most advanced), X (social networking), E (business) and C (basic functions). Within each series, phones are assigned numbers from 1 to 9 that signify the range of features available and, hence, cost. So buyers know from the start whether they’re looking at a highly sophisticated device (rated 9) or a stripped-down one (rated 1).
Nokia’s solution—paring down information to its essentials—allows consumers to more easily weigh price range, features and functionality and more quickly determine what they want. This takes some of the anxiety about making the right choice out of the equation, especially at a time when diligent consumers must do a great deal of work to wade through the fine print.
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.
Recent American Express advertising in the U.K. attempts to reverse the brand’s luxury image, telling consumers they should no longer just consider it for “posh nosh” and “vintage bubbly” but also for burgers and shampoo (bubbles for your hair, not your glass). What’s interesting is that American Express has spent years creating its luxury image. But in this post-recessionary world, it’s frowned upon. Many of us are worried about being associated with the overtly upmarket or luxurious. Gone are the days of flashy watches, over-the-top cars and flashing the credit card that suggests you’re loaded. Frugal is still the new flash.
Jeans Savings Regret..
