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.
With the Indian rupee depreciating to new lows against the dollar, Indians are expecting the worst. They’re anxious about shelling out 10 to 15 percent more for an education abroad and about paying more for both essentials and luxuries like imported chocolates. Now the Indian consumer will have to think twice before getting her hands on a ritzy new gadget or car. With the monthly expenditure of the middle class increasing by almost 20 percent, there is tension in the air and fear in people’s hearts.
Indian dairy producer Amul, known for its tongue-in-cheek advertising on current issues, illustrates the angst felt by the Indian consumer. An ad shows the iconic Amul girl in a sinking boat made of rupee notes, trying to grab onto a rupee. The headline, loosely translated, means “Save me from my rupee.” The sardonic sign off, “Valued highly,” adds to the dark humor.
The brand is clearly in tune with its consumers, as the pinch is being felt by every pocket. With the cost of imported raw materials, crude oil, medicines and fertilizers going up, all sectors are getting affected and in turn are affecting the consumer. Consumers are bracing for the actual brunt, which will be felt in the coming months.
As we’ve previously noted, over the past few years some brands have been playing up their domestic provenance to appeal to American and British consumers anxious about jobs disappearing and their nations losing ground as emerging markets rise. Now, at a time of swelling nationalist pride around the royal baby’s birth, John Lewis is promoting British manufacturing by emphasizing products made in the U.K.
Although two-thirds of the retailer’s goods are manufactured outside Britain, John Lewis is highlighting domestically made products by marking them with the Union Jack. On its website, the company explains that it’s working with around 130 British manufacturers “in celebration of the nation’s skills and craftsmanship.” Buying a British-made carpet, for instance, “means you support British farming,” since carpet makers are the country’s biggest users of local wool.
While John Lewis’s managing director acknowledges that locally manufactured products will never be the cheapest, he believes there is a sweet spot “in terms of design, quality and value.” With anxieties stemming from the economic crisis likely to linger even as consumer spending starts rising in the U.K., it’s a good time to appeal to national pride.
Britons are pulling out all the stops to keep their household coffers topped up through times of austerity, even to the point of engaging in actions they believe to be wrong. According to JWT London’s latest Austerity Index report, a small percentage of Britons (6 percent) reveal that austerity has forced them to do something they believe to be unethical. This underscores recent reports from charities and police federations noting a rise in desperate crime: people stealing to simply feed themselves or their families.
The most popular method our 600 respondents are employing to raise money is clearing out their attics, wardrobes and cupboards, with 46 percent hawking unwanted goods at car boot sales or online auctions. More poignant is the revelation that a fifth (22 percent) have been obliged to part with things they still wanted or needed to make ends meet. An enterprising 16 percent are resourcefully “flipping” items: buying goods with the intention of selling them at a profit.
Glimpses of an emerging peer-to-peer economy are discernible too: 15 percent of respondents are selling their skills and knowledge to others, and 4 percent are making money from unused assets in their home, like parking spaces, storage space or spare rooms. (Peer Power is one of JWT’s key trends for 2013.) Finally, a substantial number are taking their chances with Lady Luck: 42 percent are trying to win competitions, and 12 percent have started playing the lottery. Tough times are driving the nation to ever-greater levels of resourcefulness.
This Austerity Index survey was conducted in June using SONAR™, JWT’s proprietary online tool. The JWT Austerity Index is a quarterly study that analyzes the impact of prolonged economic adversity on British consumers and markets. The Q2 report is available to download here. The Q1 report is also available for download, here.
For the latest installment of JWT’s AnxietyIndex, we compared levels of anxiety across 27 markets, as well as the drivers of that anxiety. Using SONAR™, JWT’s proprietary online research tool, we surveyed people in Western Europe (Finland, France, Germany, Italy, Spain, the U.K.), Eastern Europe (the Czech Republic and Russia), the Middle East and Africa (Egypt, Pakistan, Saudi Arabia, South Africa), North Asia (China, Hong Kong, Japan, South Korea), South Asia (Australia, India, Indonesia, Singapore, Thailand), North America (Canada and the U.S.) and South America (Brazil, Argentina, Colombia, Mexico).
This animation highlights some of our topline findings. Watch for a report on our findings in the coming weeks.
Four years after the financial crisis began, banks in the U.S. are still working to combat consumers’ negative perceptions of Wall Street. With good reason: According to a recent study we did, around 4 in 10 Americans consider financial institutions’ credit and lending practices an impediment to achieving the American Dream.
Back in 2010, we wrote about a campaign from JPMorgan Chase that sought to assure viewers by depicting the brand as an icon of responsible practices and an institution that’s all about helping the little guy. Now, Chase (the firm’s banking subsidiary) is showcasing how its Business Banking unit is assisting small businesses and communities in a campaign called Mission Main Street. A series of ads begin with the line “Every small business has a mission. At Chase, it’s our mission to help,” and then tell the story of one business (longer versions are housed on the campaign’s microsite). One shows the co-owner of a toy business explaining how a friendly Chase rep (“He understood our business, he had children himself”) allowed him and his partner to build their company. “With a little luck, with a little help from our partners like Chase and with a lot of hard work, Green Toys could be the next great American brand,” he says.
As we noted in our recent report on the American Dream, Americans currently see a range of obstacles to achieving the Dream; brands can position themselves as part of the solution, helping to enable success and knock down impediments. This campaign is a good example of a brand demonstrating how it’s doing this for small businesses.
With America’s national political conventions on the horizon, the economy remains a hot topic. A new campaign for Norfolk Southern Railway, a large freight train company, acknowledges America’s prevailing anxiety with a message centered on resilience and rebuilding. Targeted at political heavyweights, the spot positions Norfolk Southern as a catalyst for growth and recovery.
“City of Possibilities” delivers the message in a lovely dreamlike execution that harkens back to the imaginative world of childhood and kids’ fascination with trains. A boy plays with a train in his bedroom, and a toy city forms around him. The message taps into the idea that children believe in limitless possibilities, with the voiceover conveying the optimistic message, “Wherever our trains go, the economy comes to life. Norfolk Southern. One line, infinite possibilities.” The spot makes its message relevant by alluding to our economic anxieties but through a positive lens, laying the rails for other messages promising growth and commitment to the nation’s recovery.
A supermarket in Rome, now owned by Carrefour, was looking to celebrate the 50th anniversary of its opening. Meanwhile, battling the economic crisis, Italians had started to cut back on groceries. The solution was a one-day promotion in which some prices were rolled back to 1961—a time of economic boom in Italy. That also meant posting prices in lira rather than the newer, controversial euro. For further nostalgia, the campaign copied the look and feel of ’60s ads.
The campaign went beyond a simple discount event, because more consumers visited the store for a few days even after the event ended. (The event itself attracted 20,000 customers, and over the next few days, the supermarket got a 25 percent boost in traffic.) People usually yearn for the past in times of economic crisis, and this promotion managed to provide a sense of the security and trust that today’s consumers associate with times long gone by.
Even as economies are easing out of the downturn, we’ll again see brands digging into their bag of recession-era tools to motivate anxious shoppers to spend. That’s because the price of most consumer goods is rising, even as climbing gas prices squeeze consumers still trying to recover from the downturn. Wegmans, a family-owned supermarket chain operating in five Northeast states, has launched an initiative to address consumers’ cost-of-living concerns (driven both by actual increases and by media buzz around the topic).
The company is pledging not to change prices on “40 of the products most important to families” through 2011; most of these are the house brand, and in the video here, company president Colleen Wegman says they include “essentials” like ground beef, chicken, orange juice and bananas. She also pledges to “do our best” to keep storewide price increases to a minimum. “We’re very concerned that rising prices will cause budget difficulties for many of our customers,” Wegman says.
The well-timed move looks like a smart one. As Brand Channel puts it, Wegmans “can ease shoppers’ fears about price inflation at the same time that it has an opportunity to boost regard for its own fare, perhaps picking up market share from CPG brands for the long term.” Watch for more brands and retailers trying to assure customers anxious about price or to prove that they’re worth a steeper price.
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.