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.
After a year spent surveying brand and consumer response to the recession through our AnxietyIndex.com, we have released our top 10 brand lessons from the Great Recession.
“The Recession Handbook: Brand Lessons from the Great Recession” emerged out of the quantitative and qualitative research that we conducted during the downturn. Over the past year, we have tracked nearly 400 brand responses to consumers’ recession-related anxiety in 27 markets. At the same time, we have quantitatively measured the levels and drivers of consumer anxiety in 13 markets.
Our hope is that this will serve as a primer for future downturns, beyond simply making the case for maintaining or increasing brand spend during a recession. We believe our recommendations will hold up in recessions to come, helping brands better address the challenges that come with economic upheaval.
Our 10 brand lessons from the Great Recession:
1. Find your value voice.
2. Remove the risk from price.
3. Don’t shy away from tackling anxiety head on.
4. Leverage public sentiment.
5. Give consumers more control.
6. Provide a real service for consumers.
7. Inspire rather than empathize with consumers.
8. Return to the core value of hope.
9. Re-imagine how your products are sold.
10. Use the recession to achieve a higher goal.
Promoting optimism through difficult times has been a recurring theme among marketers. Now New York City’s Metropolitan Transportation Authority is doing the same—very literally—through a public art project. Beginning last fall, the MTA’s Authority Arts for Transit, one of the world’s largest public arts institutions, began adding the word “optimism” to the reverse of 14 million MetroCards.
The idea comes from graphic and conceptual artist Reed Seifer, whose Project Optimism originated in 1995 as part of his senior art thesis. His goal is “to communicate a sense of positive, forward-looking energy into the hands of those using the MetroCard through the simple use of the word.” Rolling out the project in the midst of a recession was a simple and timely idea for a city that’s been badly bruised by the downturn. Its residents are hurting—as of December, Manhattan had the nation’s highest level of unemployment—and Wall Street has become a symbol for all that was wrong with the economy before the bust. “Optimism” is a heartening message for a city that can certainly use a smile.
In a full-page New York Times ad that ran earlier this week, the New York branch of steakhouse chain Smith & Wollensky declared that if it can’t get its hands on customers’ cash, it will take their stock options. Its tongue-in-cheek “Steak for Stock” special calls for steak lovers to swap NYSE and NASDAQ certificates for equally acronymic USDA dry-aged steaks.
While Wall Street bonuses have traditionally funded blow-out meals at such restaurants, this year many bankers are getting company shares rather than cash. The ad pokes fun at the fact that Smith & Wollensky’s core clientele is no longer knee-deep in bonus money, saying that “the effects on the local economy could be catastrophic, leaving large tracts of land in the Hamptons and Martha’s Vineyard undeveloped.” Actual “Steak for Stock” trades are unlikely, as the registered owner of the stock must present the original certificate. But the ad insists customers take the promotion to heart, adding that the restaurant will “even accept GM.”
It’s an over-the-top approach reminiscent of the “Expense-a-Steak” promotion from Midtown steakhouse Maloney & Porcelli, which provided a site that generated fake receipts so that corporate clients could return to the upscale dining venue. This tactic boldly connects not only with bankers coming to terms with a new financial equation but also with other anxious New Yorkers, who can use a good laugh when thinking about the crisis.
The downturn brought a wave of populist fury, stirred up by the good guys/bad guys notion of Wall Street vs. Main Street. But while that fury is now set at simmer, big business remains woefully unpopular—and so in a new commercial, Office Depot harnesses some populist zeal for itself and casts its lot with the little guy.
But Office Depot is a Wall Street-traded big box chain, right? Not so fast. A recent TV spot features Dan, a small-town barber, whose shop is threatened when a large chain moves in across the street offering $6 cuts. So Dan heads to Office Depot for a banner that reads “We fix $6 haircuts.” The banner really sticks it to “Nitro Cutz,” which papers its windows five months later, a satisfying reversal of fortune for Dan.
By casting itself as a Main Street ally, Office Depot slyly gets viewers to forget that it’s a large multinational chain whose low, low prices have put independent stores out of business. Now that’s a reversal.
In late 2008, we wrote in our “10 Trends for 2009” report that “The reality or the risk of money running short is a real incentive for consumers to find new ways of enjoying what they have and what they can afford. Rather than splurging on extravagant treats and ‘retail therapy,’ consumers will be cultivating simple pleasures as a more suitable and satisfying way to feel good.”
Allstate has been leveraging the theme of small pleasures for a year now (we wrote about a back-to-basics-themed spot last February). In a recent commercial, the insurer addresses this silver lining of the recession—a reassessing of priorities—in a poetic way. “In the last year we’ve learned a lot of lessons,” actor Dennis Haysbert intones. “We learned that meat loaf and Jenga can be more fun than reservations and box seats. And we learned that who’s around your TV is more important than how big it is. That cars aren’t for showing us how far we’ve come, but for taking us where we want to go.”
Getting to insurance, he goes on to say: “We learned that the best things in life don’t cost much. And at Allstate they don’t cost much to protect. So protect them, put them in good hands.”
Allstate continues to make its subtle “Good Hands” pitch (protecting these small things) seem genuine.
During this economic downturn, a number of brands have employed a strategy of producing content that uses simple language and graphics to help consumers understand a situation they may not previously have faced. For example, I’ve written about UBank’s series of smart Webisodes on topics such as “Credit Crunch Explained” and “Recession Explained.”
By contrast, Westpac, Australia’s second largest bank, recently stumbled with an animated video that tries to explain why it has pushed up interest rates. The bank’s retail chief, Peter Hanlo, e-mailed the roughly three-minute video to hundreds of thousands of customers. The response was outrage over the video’s condescending tone and its misplaced analogy centered around banana smoothies (which have become more expensive since severe storms destroyed banana plantations in Australia). Prime Minister Kevin Rudd suggested Westpac take “a long, hard look at itself.”
One of our 10 Trends for 2010 is Visual Fluency—the acceleration of the shift from words to images, and increasingly innovative ways to explain and illuminate complex topics. There are many ways for brands to leverage this trend—and likewise many ways to get it wrong. In this case, the medium was right, while the message was all wrong.
Assurances and guarantees were a dominant theme in marketing during this difficult year, helping to assuage consumer anxiety about spending. It kicked off with Hyundai’s widely copied Assurance Program. By late summer, GM was offering a “60-day satisfaction guarantee” (“If you don’t absolutely love your new vehicle, we’ll take it back”). In the online-travel category, Orbitz now offers both a “Price Assurance” program (if another customer books the same flight/hotel for less, Orbitz refunds you the difference) and a Low Price Guarantee (find a lower online fare for the same booking and Orbitz refunds the difference and gives you a $50 coupon). Competitor sites are doing likewise.
Now Gap is experimenting with putting this idea in the mall. Its Sprize program, so far only operating in the Vancouver area, has shoppers register for a Sprize card, which they show whenever they buy a Gap item; if the item’s price drops within 45 days, the difference is credited to the card. That credit is redeemable for up to a year.
This seems like a smart response to what’s become a sticky problem for retailers, which have been forced to slash prices this year, in effect training today’s value-conscious shoppers to wait for sales and offers (coupons, etc.). Since Gap’s refund is in the form of a credit, a good percentage of shoppers will likely spend extra once they’re back in the store or forget to redeem it at all. It will be interesting to see whether Sprize provides enough incentive to get bargain hunters to buy now and hope for discounts later.
Looking back on the recession and marketing in Saudi Arabia this year, we’ve seen brands shift from mass generic communication to more targeted advertising. Some brands have been trying to create more value. And for the first time in a while, we’ve seen brands going the extra mile to communicate discounts or value products, which used to be shunned by the cash-laden Saudi.
Two recent examples of this are Wafrah, a brand that has been focusing solely on marketing affordable products (its name translates as “save”), and Petromine, a motor oil brand offering 50 liters of gasoline free with an oil change.
But not enough brands here have directly addressed consumer anxieties, and most remain unconvinced that they need to focus on championing value. In the end, they just keep talking about how premium their product is while ignoring what people are feeling and an opportunity to really connect with their consumers.
In a downturn, sampling can transform from a call to buy into a generous gift from brands. A few weeks ago, so-called DanceBag parties were organized in several clubs around Spain; they were publicized through Facebook. More than 50,000 revelers left discos with free samples from brands including Axe, Trident, Bic and Smint.
HighCo Marketing House, the company responsible for the initiative, is also proposing a SkiBag (for handing out on the slopes), a GoldenBag (for luxury hotel rooms) and a SummerBag (for beachgoers). Let’s take two positive conclusions: Brands can collaborate to improve their efforts, and sampling is the best experience marketing you can propose to a society beset by the downturn.
In Spain, the downturn has not yet slowed, and the economy is still under a dark cloud. Brands are feeling this lack of oxygen, and new campaigns are few and generally conservative. One area where we’re seeing some activity is brand stores. This trend is being accelerated by the real estate crisis, which has created lots of cheap opportunities. Finally brands are playing with shops as experience spaces for consumers.
First, Danone opened up a store in Barcelona, a huge yogurt bar and restaurant project. Now Casa Knorr has launched in Barcelona and Madrid, with free cooking and nutrition workshops for kids and adults, as well as product tastings. Workshop attendees will learn to put together a weekly menu and prepare healthy snacks, and even be accompanied on instructive supermarket shopping trips by a chef and dietitian.
These consumer experience labs are a smart investment. It will be interesting to see whether they become a permanent part of the marketing mix once the downturn ends.
“The Recession Handbook: Brand Lessons from the Great Recession” emerged out of the quantitative and qualitative research that we conducted during the downturn. Over the past year, we have tracked nearly 400 brand responses to consumers’ recession-related anxiety in 27 markets. At the same time, we have quantitatively measured the levels and drivers of consumer anxiety in 13 markets.
Assurances and guarantees were a dominant theme in marketing during this difficult year, helping to assuage consumer anxiety about spending. It kicked off with Hyundai’s widely copied Assurance Program. By late summer, GM was offering a “60-day satisfaction guarantee” (“If you don’t absolutely love your new vehicle, we’ll take it back”). In the online-travel category, Orbitz now offers both a “
Two recent examples of this are 
In a downturn, sampling can transform from a call to buy into a generous gift from brands. A few weeks ago, so-called DanceBag parties were organized in several clubs around Spain; they were publicized through Facebook. More than 50,000 revelers left discos with free samples from brands including Axe, Trident, Bic and Smint.
In Spain, the downturn has not yet slowed, and the economy is still under a dark cloud. Brands are feeling this lack of oxygen, and new campaigns are few and generally conservative. One area where we’re seeing some activity is brand stores. This trend is being accelerated by the real estate crisis, which has created lots of cheap opportunities. Finally brands are playing with shops as experience spaces for consumers.
