Tagged 'economy'

JWT London sees under-40s as most proactive and positive in face of austerity

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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.

Walmart plays up the glory of American manufacturing

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.

JWT London’s Austerity Index charts austerity era’s widening social disparity

Austerity Index

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

Indian brand Amul depicts rupee crisis as drowning the common man

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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

John Lewis stirs nationalist pride with ‘Made in UK’ effort

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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.

Photo Credit: John Lewis

Austerity Index Q2: Economy driving some Brits to desperate measures

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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.

Photo Credit: JWT London

What’s keeping the world up at night? Anxiety around the globe in 2 minutes

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.

Chase showcases its ‘mission to help’ small businesses

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.

Norfolk Southern positions the railway as enabler of ‘possibilities’

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.

In Rome, a Carrefour market taps into nostalgia

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.