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.
We’re seeing retailers ushering in holiday promotions yet earlier this year: More are already holding “Black Friday” promotions (rendering meaningless the reference to the day after Thanksgiving) and running holiday-themed campaigns. It’s a response to consumers who not only remain cautious about spending but have become very savvy and, trained by recession-driven sales, hold out for deals. Holiday messaging like Kohl’s “Give, save and be merry!” acknowledges this mind-set.
All this may dampen what’s termed “self-gifting,” according to a recent Accenture survey in the U.S., in which half of respondents said they generally spend less on themselves around the holidays in order to buy gifts. Accenture believes this may mostly impact the women’s apparel category. So J. Crew is urging customers to think about the merriment involved in being a little selfish. “Before you lavish your loved ones with gift upon gift,” its website urges shoppers, “take the time to treat yourself”—because its featured accessories “are sure to make your holidays happier.”
Shoppers today need a go-ahead to live a little, especially as they start budgeting for the holidays. Placing the shopper herself in the holiday picture may help J. Crew plant the seeds of a me-too mind-set as customers make their lists.
For many Americans, this recession has meant putting the brakes on freewheeling consumerism while at the same time learning to enjoy the simpler pleasures that come with more time spent at home among family and friends.
L.L.Bean does a nice job tying these two trends together in a holiday commercial that shows a family frolicking in slow motion in a snowy wonderland. Backed by what sounds like hand bells being quietly struck, the voiceover tells viewers: “Every penny counts. So does every moment. Make the most of both this holiday season with free shipping from L.L.Bean.” (Accompanying copy on YouTube and Facebook also advises shoppers to “Slow down and enjoy the season.”) To further back up the first part of the proclamation, the Maine-based retailer is offering a $10 gift card with a purchase of $25 or more.
“This holiday, America will be inspired to believe again,” says Macy’s chief marketing officer Peter Sachse. The department store’s “Believe” campaign expands on last year’s holiday promotion of the same name. It includes a contest that asks participants to explain “why you believe in the magic of the season” via a video clip or brief essay (the prize is a trip to next year’s Macy’s Thanksgiving Day Parade in New York). Macy’s has also designated Dec. 11 “National Believe Day”—street teams across the U.S. will recognize and reward random acts of kindness and generosity.
As we noted in our second AnxietyIndex Quarterly, rather than take a defensive approach to the recession, brands should go on the offensive, finding opportunities where everyone else sees challenges. Macy’s has done just that: Instead of focusing solely on discounted pricing and “more for less” messaging this holiday season, the “Believe” campaign seeks to inspire consumers by returning to the core value of hope.
In Saudi Arabia, people freak out about their phone bills. Some consumers must choose between going out and paying their phone bill, which is possibly the most complained about financial obligation in the country.
So Saudi Telecom came up with a promotion to help alleviate some of this anxiety: It is offering a month of free calls for post-paid subscribers and anyone who switches to Saudi Telecom. Timed around the religious holiday of Eid, the offer was a holiday gift of sorts for the brand’s customers.
New York City’s new “NYC Extreme Local” campaign—designed to get locals spending more at neighborhood businesses during the holiday season—reflects several trends JWT has written about in the past few years.
Co-sponsored by American Express and AT&T, the print, outdoor and online campaign touts “24 days of shopping, dining, deals, events and more” in 15 Manhattan and Brooklyn neighborhoods (the emphasis on neighborhoods presumably explains the “extreme” aspect of local). A microsite also outlines a promotion: Make a total of $300 in purchases at three or more participating businesses with an American Express card and get a $50 card credit.
NYC & Company, which is behind this campaign, is one of several tourism organizations that have responded to the ongoing “staycation” trend by focusing on locals. Such efforts tie in well with the current affinity for all things local, especially at a time when many neighborhood businesses are hanging on by a thread; efforts like the 3/50 Project have sprung up to encourage people to patronize such businesses. (Most participants in the “Extreme Local” effort are independents, but IKEA in Brooklyn and a few other chain stores are also involved.)
One of JWT’s 10 trends for 2010 is Location-Based Everything, which covers the growth of location-based or -aware tools that use data from a user’s mobile phone—an area of huge potential for brands that can help consumers based on their location. We’ll see more brands building up their credentials as guides and advisers. American Express operates a travel-themed site that breaks down deals for cardholders by city. And as noted in a New York Times story on the “Extreme Local” campaign, AT&T wants to promote offerings including its Yellow Pages mobile applications.
AT&T told the NYT that it’s hoping to find similar sponsorship opportunities in other major markets. Watch for more promotions that tie these themes together.
“2-4-6-8 ’Tis the time to liberate!” a cheery ad for the Gap reads. “We can do it modest. We can go all out. This holiday, it’s up to us to whisper, scream or shout!” The copy, surrounded by photos of plaid-attired models in this month’s Vanity Fair, is a subtle nod to the awkward place we find ourselves in this holiday season—one foot in and one foot out of the recession.
To hit the point home, copy on another page reads: “What if I go lo-tech and wrap up plaid for you? We could skip those hi-tech gifts. Plaid’s got buttons, too.” This appears to be an acknowledgement of the fact that people are not only trading down, they’re trading off: choosing one category—often a cheaper one (e.g., clothes)—over another (the latest and greatest gadget, for instance).
While Gap ads are generally fun and festive, especially at this time of the year, you wish the messaging wasn’t so wishy-washy. Should I go modest? Or should I go all out?
As we enter what looks to be a jobless recovery, watch for more brands to attempt this tricky balancing act, trying to appeal to consumers who are still very much in a recessionary mind-set as well as those with a pent-up urge to splurge.
In our AnxietyIndex Quarterly report on hope-fueled vs. fear-fueled brands “What Hope-Fueled Markets Can Teach Brands,” we urged brands to return to the core value of hope. More brands are doing this in the emerging markets of Brazil, India and China than in developed markets, which tend to be more fear-fueled than hope-fueled. Marketers from Coca-Cola in Spain to Havaianas in Brazil have sold hope as a way to overcome adversity and fend off anxiety.
Before Christmas last year, as consumers tightened their wallets, the Red Cross in Portugal decided to sell hope in a literal way. In a popular mall in Lisbon, it opened a store where little cards promoting “hope” were clipped onto hangers and stocked on shelves, just as normal goods would be; the cards sold for 10 euros apiece. “Hope” was positioned as a gift alternative for the holidays, a product that people can’t hold in their hands but can feel emotionally. Shoppers could get the satisfaction that comes with both a mall transaction and the act of giving.
It was a success—hundreds of people attended the opening night, and in its first day the store achieved a place in the mall’s top 10 for sales. The Red Cross extended the stores’ hours as well as its closing date. And the store not only helped raise immediate funds but boosted awareness for the Red Cross.
Where its messaging could have played on the guilt of previously generous patrons, the Red Cross spoke in a voice of optimism. A hope-fueled approach can only benefit nonprofits and regular marketers alike as another challenging holiday season approaches.
Toys “R” Us is following the lead of Kmart and Sears in offering shoppers a layaway option for the holiday season. “The Big Gift” program helps people pay for bigger-ticket items such as bikes, swing sets and baby furniture: Shoppers put down 20 percent of the total purchase and pay a $10 service fee, then pay off the rest in small, interest-free increments. Participants must make the final payment by Dec. 6 for items to be delivered in time for Christmas. Toys “R” Us has said it may extend the program beyond this holiday season if it proves popular.
In what is likely to be a tough holiday season, layaway is a smart way to attract consumers who don’t have credit or want to avoid piling on more debt. And after nearly two years of recessionary living, people are becoming accustomed to delayed gratification. eLayaway.com, which administers online layaway programs for retailers including Best Buy, Apple and Dell, has seen business double over the past year, according to the Chicago Tribune. Surprisingly few retailers are adopting such programs: “I’m surprised we haven’t seen more companies announce layaways at this point,” Ellen Davis, vice president of the National Retail Foundation, recently told the Tribune.
The festive season has beaten consumers’ blues and acted as a tonic for their anxiety. It started with Onam in the South, increased its tempo with Durga Puja in the East, then came Navaratras, and the season finally peaked last week with Diwali in West and North India. This is a period when a lot of gifts are purchased, and it’s also considered an auspicious time to buy all things expensive for oneself and one’s home—jewelry, durables, automobiles.
It seems that consumers were just waiting for the season to kick in as a reason to splurge. This festival season has been phenomenal for marketers across almost every category, from retail and durables to automobiles, apparel, furniture and liquor. Car sales rose 21 percent in September. Future Group, India’s biggest retailer, clocked more than $107 million in 10 days, while Samsung and LG saw revenues grow nearly 40 percent during the festival period.
It seems that the only signs of anxiety among Indians emanated from the torturous traffic encountered while visiting friends, relatives or colleagues.
This Christmas won’t be a merry one for retailers, which are faced with frugal consumers still anxious about the economic upheaval of the past year. In the U.S., the National Retail Foundation is forecasting a 1 percent drop in total sales for November and December combined. That’s a decline over last year—which is considered the weakest holiday season on record (that is, since the Commerce Department started tracking retail sales in 1967).
Not surprisingly, the NRF says it expects to see aggressive price promotions, with some prices, notably in electronics, dipping below last year’s. Wal-Mart is setting the tone: Last year it priced 10 popular toys at $10 for the holidays, and this year—after working with toy makers to create new items and institute cuts on existing ones—it’s expanding the offer to more than 100 toys. To achieve the $10 threshold, the retailer cut prices by up to 50 percent. Target countered by saying it will match Wal-Mart’s prices where it sells the same items.
Along with price wars, expect to see retailers “turning back the clock, conjuring images of hearth and home,” as the Associated Press recently reported. Comforting consumers by tapping into nostalgia has been a popular tactic during the recession, as several of our contributors have noted, and it will dominate this holiday season. Where whimsical and splashy characterized marketing in recent years, now it’s all about old-fashioned and traditional. Seen any good examples? Send them our way.