Three out of five Britons believe London is doomed to become “a ghetto for the super-rich.” This is one of several provocative findings that surfaced in JWT London’s sixth Austerity Index report, revealing a boiling pot of anxiety and tensions that are condensing into a hard-line stance on housing market regulation. As competition rises and affordability dips, a backlash is finding its target in immigrants, “transplants” and investors: Over a third of respondents in our study would even make it illegal for non-nationals to own property in the U.K.
Along with tracking the usual metrics to gauge the effect of prolonged austerity on British consumers, the latest survey looks at housing, which is becoming a serious and emotive problem in Britain. As wages have stagnated and mortgage lending criteria have constricted, the outlook for aspiring property buyers seems bleak. JWT London’s survey shows that almost half of those yet to start on the property ladder make a direct link between home ownership and their own self-worth. And while 46 percent of those unable to get onto the property ladder fear for their futures, 48 percent have lost hope that their grandchildren will ever own property in the U.K.
Marie Stafford, Planning Foresight Director at JWT London, explains: “The significance of property in the population’s psyche is somewhat exceptional to the U.K. compared to our neighbours in Europe, where renting is the norm. The divide between the haves and have-nots is getting keener, and nowhere is this felt more strongly than in the property market.”
The full report is available to download at austerityindex.com, along with reports from previous quarters.
According to this video from Orangina, half of Croatia’s young population is unemployed, and the rest are overburdened with work. To give harried workers some unexpected fun, an Orangina campaign let people order a miscellany of offbeat surprises to be delivered to their offices. These included a magic show delivered by a magician whose trick of seemingly cutting people in two humorously addressed the issue of understaffed businesses. Other eclectic treats included giant pizzas, serenades from a “mini mariachi,” acrobatics shows and kisses from the runner-up world champion of French kissing. The campaign sought to bring Orangina’s “Shake Things Up” tagline to the workplace by providing “more than just moral support.”
As Europe continues to struggle with the economic crisis, brands can strike a chord with consumers by showing support not only for the unemployed but for overtaxed employees. Moreover, with some research showing that Millennials crave surprises in their day, Orangina’s quirky approach to rewards was a novel way to inject some serendipity into consumers’ workdays.
In Greece, going out for a coffee is a favorite leisure activity, as we’ve previously noted. But the financial crisis has slashed disposable income. Some major coffee chains like Starbucks and Costa Coffee have closed branches and, in some cases, left the market altogether. Homegrown brand Mikel Coffee Co., however, has been doing well since it launched in 2008 at the start of the crisis.
Mikel coffee shops are sprouting up like mushrooms, overtaking established local and international players, and soon there will be more than 100 branches in Greece. In 2013, Mikel reported a gross profit of €991,237. The secret to Mikel’s success is catering to a multitude of consumer needs. The prices are competitive, but not low enough to affect quality and brand perception (indeed, Starbucks has been forced to adjust its prices to be able to compete). Consumers also appreciate the generous freebies (small cakes, savory snacks, etc.) that come with the coffee. The stores are open longer than many competitors, with most operating from 5 a.m. till 11 p.m. or midnight. Mikel also offers home delivery, which is proving very popular, particularly for businesses.
The shops answer Greeks’ need to enjoy coffee out of home and socialize like they used to pre-crisis, and let them do so in an affordable way while still catering to the quality expectations Greeks have for their cafés. The chain has become very popular among youth, and the fact that it’s a Greek success story further helps drive brand preference. The moral of the story: When catering to the right needs with the right ingredients, you can succeed even in a crisis environment.
Photo Credit: Mikel Coffee Co.
This week, Banco Popular and JWT San Juan won a bronze Lion at the Cannes Lions International Festival of Creativity for “My Bank, My Space,” a response to Puerto Rico’s eight-year recession that focused on promoting customers’ small businesses. Banco Popular and JWT have been aiming to infuse hope into the Puerto Rican economy for the past few years. In 2011, the bank rewrote a popular song to help stimulate the economy by challenging a reliance on welfare (winning a Grand Prix at Cannes), while in 2012, another campaign transformed an Olympic hurdle event into a metaphor for overcoming life’s obstacles.
Puerto Rico’s economy is still struggling, and after its credit rating dropped to junk status, the bank took its efforts a step further. Focusing on actively generating fiscal development rather than simply inspiring it, the “My Bank, My Space” initiative gave 140 small-business customers the marketing platform and budget to fuel their enterprises. Banco Popular built a full-scale production studio to produce TV and radio spots, using its entire advertising and corporate media budget for the project, which included print ads and an online platform for these businesses to promote their products. The campaign garnered significant media attention, providing additional promotion for the small businesses and for the bank.
Banco Popular successfully combined corporate and human interest to help stimulate growth, not merely speaking to customers’ monetary troubles but tackling them head-on with a pragmatic expediency.
It seems many young Mexicans would enjoy a change of pace at work. According to a survey by job search site Trabajando.com and Universia, 54 percent of young Mexicans feel their workplace has a bad environment, 26 percent feel unsatisfied, and 24 percent feel awkward at work. Targeting workers who are demoralized, Halls launched the campaign “Jobs That Inspire,” encouraging young people to apply for a chance to work in their dream job for a week (fashion photographer, food critic, etc.).
Contestants filled out applications on the Halls Mexico website, selecting their dream job and writing why they deserve it the most. Contestants were encouraged to share a registration code on social media with friends who could help them accrue points. Those with the most points won the opportunity to work their selected dream job. In this way, Halls motivated young Mexicans to address their frustration at work by presenting the opportunity to follow their hearts and re-evaluate their current jobs. “Jobs That Inspire” stemmed from the overarching campaign “Breathe and open up to more,” staying true to the brand’s core message.
Photo Credit: Halls
“Edible escapism” is how Brits are getting themselves through the slow economic recovery, according to JWT London’s latest Austerity Index. In a survey for the fifth Austerity Index report, 69 percent of British respondents acknowledged splurging on treats in the last three months, with 41 percent of these indulgences in the food or drink category. Treating, it seems, is eating. The report identifies foodie treats being used not only as a coping mechanism for therapeutic purposes but also as a social lifeline, a way to share experiences.
2014 marks the fourth year of austerity measures in the U.K.—strict coping behaviors are now ingrained, living standards have declined, and weariness about austerity remains unchanged. But our Austerity Index data reveals pockets of positive uplift, and the U.K.’s splurging habits suggest that these little mood-boosters are fueling optimism, even when household finances are barely surfacing.
“The way to Britain’s heart is surely through its stomach,” says Marie Stafford, Planning Foresight Director at JWT London. “It is a sign of the power of the experience economy, our need for social contact and a marker of how far Britain has come in its relationship with all things epicurean that food and drink should become our chosen indulgence.” However, this throws the country’s polarization into sharp focus: “It seems even more unfair that many households struggle to purchase nutritious food,” says Stafford.
The full report is available to download at austerityindex.com, along with reports from previous quarters.
Photo Credit: JWT London
As the U.K. budget is announced, JWT London launches the fourth quarter of its Austerity Index report, marking a full year of data tracking the impact of prolonged economic adversity on British consumers and markets. The report reveals that the younger generation are taking matters into their own hands. Meet the Resilients, aged 18-39, who set themselves apart via a strikingly proactive and entrepreneurial approach to their finances, coupled with a comparatively upbeat attitude. Rather than waiting for rescue from any institution, the Resilients are taking their own measures. They are significantly more likely than any other cohort to have found an extra job or taken on more work (35 percent), bought items specifically to “flip” for profit (20 percent) and even started their own business (11 percent). Their resilience is also in evidence when it comes to a startling willingness to make tough decisions and sacrifices: 4 in 10 regularly skip meals to save money, nearly a third (30 percent) are selling items they actually still need or want, and 18 percent have moved to a cheaper city or town.
Despite being among the hardest hit by the austerity agenda—experiencing higher unemployment and negative earnings growth—the Resilients remain pretty positive. Their Austerity Index measure is 22 points below average, indicating that their assessment of austerity’s impact on their lives is less severe than most. Their positive outlook stretches to their appraisal of others, too: They are more forgiving toward brands and institutions, including the government.
Some of this positivity is likely down to youthful optimism, but we suspect that it’s also due to the generation’s sense of connectedness. This is the cohort that has grown up witnessing and harnessing the power of social networks, so they have greater faith in themselves and their communities to wield influence and to drive change. They may well be more in control than most in the face of austerity.
For details on the ongoing study, see austerityindex.com.
The economic downturn has fostered a certain type of commercial that aims to reassure Americans anxious about the decline of domestic manufacturing—that goods are still being made in America and that the marketer in question is helping to ensure this. There’s generally a portentous voiceover, reading copy that strives to be stirring and poetic. “The things that make us Americans are the things we make,” began a Jeep Grand Cherokee commercial that we wrote about back in 2010. “This has always been a nation of builders, craftsmen, men and women for whom straight stitches and clean welds were matters of personal pride.” Parent company Chrysler continued the theme with the Super Bowl spot “Halftime in America,” with Clint Eastwood telling Americans that “This country can’t be knocked out with one punch.” Levi’s centered artsy ads around the failing steel town of Braddock, Pa.
Now Walmart joins this list, promoting its investment of $250 billion over 10 years in products that support “American Jobs.” In “I Am a Factory,” we see a shuttered factory as Mike Rowe of Dirty Jobs intones: “At one time, I made things. I opened my doors to all. And together, we filled pallets and trucks. I was mighty, and then one day, the gears stopped turning.” We see the factory comes to life again, as the voiceover concludes with determination, “But I’m still here, and I believe I will rise again.” Two other ads skip the declarations and rely on music instead: “Lights On” depicts a factory coming to life, and “Working Man” uses the Rush song of the same name, showing folks laboring in factories.
The ads won’t silence criticism of Walmart’s labor practices—Rowe has found himself defending the retailer’s initiative on social media—but may help retain some loyalty among a customer base that’s largely still grappling with the effects of the downturn.
British Chancellor George Osborne’s Autumn Statement brought positive news for the U.K. economy. The forecast GDP growth for this year improved to 1.4 percent from 0.6 percent and was revised up for 2014, to 2.4 percent. Osborne claims that austerity is working. JWT’s latest Austerity Index suggests this is not the full picture and that many Britons are not seeing evidence of a recovery where it matters most: in their wallets. In fact, almost half of the 800 respondents we polled for our Q3 study reported having somewhere between nothing and £50 in disposable income each month.
At the same time, some have been able to relax the purse strings a little. The “Efforts to Restrict Spending” Index figure has fallen 81 points since Q2. While this is still small-scale movement in the greater scheme of things, it might suggest that consumer confidence is building in places. This suggests a two-speed recovery, one where some find their lives getting back to normal while others continue to struggle. The JWT Austerity Index shows wide disparities in the impact of austerity, with a difference of 251 points between the highest and lowest income groups.
Our finding is supported by recent analysis from Manchester University’s Centre for Research on Socio-Cultural Change, which shows that London and the Southeast have recovered more rapidly than other regions of the U.K. and that higher earners have become more prosperous since the crash compared with middle and low earners. With the U.K.’s first “social supermarket” for those on welfare opening in Yorkshire, it’s poignant to note that 13 percent of parents said they have been obliged to skip meals so their children can eat.
This polarization is not going unnoticed: In our study, 81 percent agreed that austerity has deepened the social divide in our country. And they want businesses to do their part: 65 percent call for brands to help those most affected by austerity. Contrary to Osborne’s assertion, austerity is not working for everyone, and as systems and institutions fail to address the growing chasm, there is a clear opportunity for businesses to seek ways to even out the disparities in economic fortune.
The Austerity Index survey was conducted 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 Q3 report is available to download here. The Q1 report is also available for download, here, as is the Q2 report, here.
Photo Credit: JWT London
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.
Photo Credit: Amul