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 recently posted about hypermarket chain Leclerc and its price-comparison site Quiestlemoinscher.com (“who is the less expensive”), a popular tool for French shoppers. With consumers in many markets anxious about the cost of everyday goods and exceedingly price-sensitive, shoppers are ever more apt to research the lowest-price options. In response, mySupermarket aims to “bring price transparency to the shopping experience and help you shop smart.” The online-shopping service launched in 2006 in the U.K., where it claims 2.9 million registered users, and is now expanding to the U.S.
In the U.S., the service lets shoppers choose among staples sold by eight major retailers (Amazon, Walmart, Target, Soap.com, Diapers.com, Drugstore.com, Walgreens and Costco), alerting users when they can save further by choosing a different size or alternative product. Shoppers check out via mySupermarket, which “optimize[s] your cart to get you free shipping,” according to a promotional video. According to TechCrunch, the company is also planning a mobile app that would notify shoppers about relevant promotions when they’re in stores.
While many brick-and-mortar retailers are fretting about showrooming, it’s a trend that generally hasn’t applied to supermarkets—but they’re still vulnerable in the face of new digital tools that give consumers more workarounds and comprehensive data. At the same time, however, marketers might find opportunities here: The company told TechCrunch that its app will enable brands to communicate with opted-in consumers—for instance, alerting them to price decreases on favorite items or sending a reminder to stock up on various staples.
Quiestlemoinscher.com (“who is the less expensive”) is a very well-known and successful price-comparison website that Leclerc, the French hypermarket chain, created a few years ago. It lets consumers compare local prices for national brands and private labels by clicking on a region of the map or by entering a postal code. It provides a real utility, especially in a crisis period when everybody needs to save money and pays attention to differences of even a few cents. (Last year French consumers’ purchasing power declined for the first time in three decades, according to Retail Detail.) The website shows that Leclerc is the least expensive brand/store 98 percent of the time, according to the retailer.
More recently, with Leclerc’s competitors making the same, “We are the least expensive” pitch, the retailer had to find another innovative way to prove its lowest-price claims. In addition to a smartphone app that lets customers scan products to compare prices, Leclerc has extended its service to in-store screens where customers can check on the prices of major competitors. By setting up this type of device, Leclerc brings a highlight of the Web directly into the physical store, whether or not the customer has a mobile device.
Quiestlemoinscher.com is a smart initiative that has brought assurance and, of course, savings to consumers, making the retailer a real ally in this time of crisis. For a majority of French people, Leclerc is now one of the most trusted of French brands.
Movistar, one of the biggest telecommunications companies in Argentina, is lowering the cost of unlimited service if its consumer community comes together and gives the brand a certain amount of Facebook “likes,” clicked votes or SMS messages. The idea behind the campaign is that when people come together, each one is able to get more. A commercial tells viewers that after “liking” many useless things, finally there’s a “like” that gives real benefit. “Life is more if you share,” says the ad. The brand is also promoting the concept by asking consumers to vote for which of several bands will perform a free concert.
With Argentineans deeply concerned about the rising cost of living, this is an interesting approach to price sensitivity in the context of inflation. Plus, a mobile provider promoting the idea of community is smart at a time when people are becoming more aware of how electronic devices isolate us from others and affect the way we interact.
As the cost of living in the U.K. rises and Brits become increasingly anxious about covering the cost of their weekly shop, supermarkets must work harder to keep customers loyal. According to recent research, the cost of living in the U.K. is 11 percent higher than the international average and an incredible 18 percent higher than it is in the United States. In addition, since the horsemeat scandal broke, U.K. advertisers can no longer rely solely on a “cheapest price” message. The public still wants their food to be as inexpensive as possible, but the scandal made it clear that there’s often a price to be paid when offerings appear too cheap to be true.
Low-cost supermarket Asda has previously focused on price against their competitors. In a marked departure from its usual method of communicating, the retailer is now engaging the consumer with the reality of juggling a busy household and bills in an amusing, charming and also honest way, before the lowest-price message comes along in all its glory. Asda’s new price lock initiative, which freezes the costs of essentials for a 12-week period, seems a clever tactic to prevent regular and potentially new consumers from shopping around week on week.
One of the most important and expensive purchases consumers make is a car, and the process is often fraught with confusion and fear. TrueCar aims to eliminate that by gathering market data and showing buyers what they can expect to spend on average for vehicles in their area, based on what others have paid; it also has a network of certified dealers who “offer a hassle-free car-buying experience.” The model is somewhat different from other price-comparison sites for car buyers, as The Economist outlined earlier this year.
A new TV ad opens by saying “Let’s talk truth,” noting that “Buying a car can be overwhelming” and is “a process filled with anxiety.” TrueCar emphasizes that it’s committed to openness, fairness and a better car-buying spirit, delivering the message that all deals and transactions are transparent. It induces confidence in the consumer, especially the promise to eliminate the fear of haggling. As Scott Painter, TrueCar’s CEO, said in a release, “Nobody wants to be a sucker and overpay.”
“Noooooo!” This month JCPenney introduced its new “Fair and square” pricing policy by playing off the idea that keeping up with sales and special offers is stress-inducing in the extreme. Various shoppers scream when they’ve just missed a sale, an item they’ve bought subsequently gets discounted, they’re stuck in a huge sales-event line or they’re overwhelmed with coupons. “Enough. Is. Enough,” viewers are told cryptically, then referred to the retailer’s Facebook page, which explains the new “Fair and square” pricing policy.
The spot’s screaming has been deemed “annoying and disturbing” by some, but the real question is whether “Fair and square” will draw shoppers who prefer straightforward pricing to the highs (and lows) of scoring deals. The new policy, based on a red, white and blue scheme, incorporates some discounting: Red prices indicate “great prices, everyday,” blue refers to “best prices” (clearance markdowns that take place two Fridays a month), and white indicates a month-long promotion (e.g., back-to-school specials). The aim is to end what new chief executive Ron Johnson termed “fake prices,” telling The New York Times last month that “Now most things are on 60 percent markdown, and every time we do that, we’re discounting Penney’s brand.”
Reactions have been mixed. A pricing strategy consultant writes on the Harvard Business Reviewblog that the retailer isn’t differentiated enough to succeed with value pricing, while an enthusiastic commenter who describes herself as a busy mom says she’s gotten “darn tired” of the pricing game. The downturn has not only trained many shoppers to find or wait for the best deals but also to understand fake prices for what they are. The time seems right for a more straightforward approach that acknowledges consumers are smart enough to see through the hype.
Committing to a 12-month mobile contract can be a bit anxiety-provoking in this economy, so service provider T-Mobile is aiming to make U.K. consumers more comfortable with annual plans via its new You Fix program. Unlike most other such plans, which can lock consumers in for 24 months with few opportunities to make changes, T-Mobile’s program is a 12-month offering, with built-in flexibility. Customers select from a range of low-cost plans, but if they find their choice too restrictive, they have a “pay as you go” option to buy modular packages for extra minutes or texts. The handset is free.
For consumers worried about incurring additional fees, You Fix provides the chance to exercise what T-Mobile refers to as “spend control” and avoid “nasty surprises” at the end of the month. (A stunt to promote You Fix involved fake traffic officers giving parking fines—the nasty surprise—to legally parked drivers, who ultimately realized there was actually cash in the faux tickets.) This easy solution provides basic mobile plans to financially strapped consumers, as well as the latest handset, another plus for tech-hungry, cash-poor shoppers. Expect more of these hybrid offerings, which require some commitment from the consumer but provide greater flexibility and peace of mind.
After recently ending its famed two-year-old Assurance program that protected customers who lost a job following a vehicle purchase, Hyundai Motor America is introducing an Assurance guarantee designed to alleviate buyer anxiety about depreciation. The Trade-in Value Guarantee locks in a price (based on the Automotive Lease Guide forecast) for a vehicle in months 24 through 48 of ownership, which the car owner can then put toward a new vehicle, financed by Hyundai Credit. If a vehicle’s market value ends up being higher, the owner gets the extra credit. Customers must show proof of regular maintenance at authorized Hyundai dealerships.
Brand Channel points out that while the program could be a good tool for boosting use of the Hyundai dealerships, it’s not likely too many people would end up utilizing the offer, since late-model used cars have been rising in value.Consumer Reports notes the program’s potential benefit is mostly limited to buyers of bigger, more gas-hungry models, which are prone to price swings as fuel prices rise or fall. Still, the guarantee can only serve as one more incentive for car shoppers, since no extra cost is entailed (though reliance on Hyundai dealerships could add expense)—unlike Best Buy’s less appealing new Buy Back program for electronics purchases, which requires customers to pay in at purchase in order to participate.
With prices rising for many consumer goods, we’ve been waiting to see how messaging from brands will assure anxious shoppers. In most cases, brands aren’t acknowledging increases, frequently hiding them with “package shrink,” as The New York Timesreports. In the U.K., California Raisins is directly addressing cost increases, which in this case are as high as 30 percent in some instances, due to the removal of a type of subsidy last October.
Print and online ads convey the message that “despite recent retail price increases, California Raisins still represent incredible value when compared with some other dried and fresh fruit,” as the website puts it. Some ads try to sell raisins as individual items with headlines like “75 pieces of fruit for 40p?” while others emphasize their health credentials (“0% fat / 100% value”). While people who buy raisins are likely already sold on the nutritional advantages, perhaps what’s most important is simply confronting the increase head-on with consumers so they’re prepared when they get to the shelf.
Colombia has one of the highest Internet penetration rates in Latin America and the fastest adoption rate, according to comScore. Yet the majority of Colombians don’t have a high-speed connection at home, instead frequenting Internet cafes to get online. While Colombians can afford computers, most are hesitant to invest in broadband due to the monthly fees, so broadband has yet to become a commodity. In a recent campaign for Telmex, a local Internet provider, JWT Bogotá used this insight to directly address price anxiety surrounding the cost of at-home Internet connections.
One day last October at Colombia’s busiest bus terminal, 35 people boarded a bus for the long journey from Bogotá to Calí. As the trip began, a mystery man boarded and told the passengers that thanks to Telmex broadband service, they would be traveling by plane, an experience most had never had before. An eight-hour bus journey became a 35-minutes plane ride—a tangible demonstration of Telmex’s promise of “high speeds for the price of low speeds.”
By placing real people in a storytelling-based activation, Telmex effectively humanized its service, countering the misconception that high-speed broadband (just like flying on a plane) is an out-of-reach experience for everyday Colombians.