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NYC quantifies savings from going green

enviroJust as temperatures started to rise after a rain-soaked June, New York City launched a campaign to encourage people to “Be Cool & Smart” by reducing air conditioning-related electricity consumption. This is a part of an aggressive plan to reduce the city’s carbon emissions by 30 percent by 2030.

One ad reads “Clean your air conditioner filters to save money. Dirty air filters make your A/C work harder & use more electricity.” Another tells subway riders to “Turn up your thermostat to save money. Each degree higher can cut your energy bill by 3% or more.”

Rather than emphasize the bigger, long-term “greener, greater New York” vision—which may be a bit abstract for some, especially during the sweltering summer months—the ads focus on the immediate monetary benefit. This is a much easier argument to make, especially at a time when people are trying to save money wherever they can.

As we found in “The Recession and Its Impact on the Environment,” consumers have adopted a number of behaviors over the past year that could be considered environmentally friendly—turning off lights/appliances when not in use, waiting to replace things until absolutely necessary, reusing things, etc. But as might be expected, the recession is a more dominant motivator for these behaviors than the environment.

For green brands benefitting from the recession, get in with the pockets and keep them with the planet. Leverage people’s concern over money to stimulate environmentally friendly behaviors and then work on changing attitudes (e.g., the impression that going green is more expensive) to help ensure people maintain these habits well past the recession. As the recession abates, brands will need to reinforce that these behaviors benefit the environment, not just the pocketbook.

(Click here to download the U.S. report on “The Recession and Its Impact on the Environment.” Please sign up for our subscriber alerts to be notified when the Australia, Canada, Japan and U.K. versions of the presentation are available.)

New AnxietyIndex research: Focus on India

Walk the streets of Mumbai, Delhi or Bangalore and you’re likely to find the usual—markets bustling with activity, kids wandering noisily, youngsters hanging out and families carrying out their daily chores. But probe any adult on how he feels about events in his world, and he’s likely to get tense. The first wave of AnxietyIndex India is out (download the presentation here), and it shows that Indians are worried. Not about military tensions around the world, the war in Afghanistan or even the state of the economy. But about crime, escalating food prices and unemployment. Worry clearly stems from issues that are here-and-now, that impact people’s day-to-day lives, that affect them directly but over which they have no control.

However, when it comes to talking about the future, Indians are upbeat. Aside from crime and terrorism, they believe most things will improve in the next six months. This makes sense given that India is sitting on some strong fundamentals: healthy economic growth in the recent past; lower impact of the global slowdown, resulting in reasonable-to-good growth forecasts; key sectors performing well, from FMCG to coal and cement; growing rural demand; and political stability.

There’s an interesting learning here for marketers–brands need to ride this wave of optimism, sparking confidence, showing the road to prosperity or promising a better lifestyle. One brand that has done this is Nokia: Its campaigns have successfully positioned the brand as a means to economic and social progress. Consider the TV spot below which highlights the economic aspirations of the brand’s target audience.

In China, the downturn has a different face

thumbnails_aichiIn JWT’s latest AnxietyIndex study, Chinese consumers had by far the lowest level of anxiety level among the global markets studied: 35 percent reported feeling anxious or nervous compared with a global average of 70 percent. It’s mainly the lower-income groups that show signs of more cautious spending patterns. That’s because the crisis has primarily affected the export sector (garments, toys, electronics assembly, etc.), which is very labor-intensive and employs low-skill migrant workers from rural areas. The government estimates that 20 million migrant workers have lost their jobs. Coupled with a weak social security system and rising food prices, this makes the lower-end consumer feel more vulnerable.

But China’s financial markets have been largely insulated from the global financial tsunami, as the market is relative closed to foreign flows and is highly regulated. The more affluent consumers, who are mainly employed by government agencies, state-owned enterprises or JV companies, have felt very little impact. Their savings in the bank are safe, the prices of their homes stable and high, their jobs secure. As most brands target these more affluent consumers, this explains why few marketers have reacted to any mood change.

Work hard, play harder

singapore-chartWith fewer people in the workplace and workers fearing redundancy, people are putting in ever longer hours. According to a global online survey recently conducted by recruitment agency Robert Walters, people in Hong Kong and Singapore are working harder than ever: Of those surveyed, 62 percent in Hong Kong and 59 percent in Singapore said they’ve been putting in more overtime. The global average was 55 percent.

For brands, this could be a great moment to provide some much needed relief through entertainment, humor and plain old fun. How can our brands bring a greater source of joy to people in these gray times?

Stealth consumption, brought to you by Manduka

2imagephpTime recently reported that high-end yoga mats are bucking today’s frugality trend. These mats—the priciest of which cost about $100—are made by a company called Manduka, whose sales rose 55 percent in the first four months of 2009. Manduka now has a distribution deal with nationwide retailer Dick’s Sporting Goods.

The article points to several reasons why sales are soaring: the continuing popularity of yoga, the “superior traction” and “extra cushioning” of the mat, etc. But I believe the driving reason behind Manduka’s success is outlined in our recent paper “The Recession and Its Impact on Luxury,” in which we discuss the future of luxury and what it means for health and wellness: People are re-evaluating luxury altogether. In some cases, this means redefining it in non-materialistic ways—time with family, doing good, being healthy. It can also mean spending more for products that conform to the highest green standards … or for things that enhance health and well-being.

Manduka’s pricey mats fit perfectly into the new mold of luxury: They allow people to invest in their health and wellness while simultaneously flaunting their wealth to those in the know. Call it stealth consumption rather than conspicuous consumption. Bad news for the Guccis of the world, good news for Manduka.

Still eating caviar, but buying it at a discount

It used be that most people who took advantage of vouchers, deals and discounts were living on a shoestring. Today, it’s simply a sign of a savvy shopper, whatever their income. This recession has seen the rise of the deal-seeking affluent, and brands that have not traditionally catered to an affluent audience should be doing all they can to appeal to this new breed of discount shopper. By luring in these consumers now and offering them a good experience, brands may well retain their custom beyond the recession.

One example from the U.K., which I highlight in our Balancing Health, Wellness and Budgets presentation (download in the Trends and Research page), is discount supermarket chain Aldi, which swiftly added luxury items such as whole Canadian lobster (£5.99) and premium caviar (£1.69) in response to an influx of high-income customers. One trend forecaster has labeled these shoppers “the Aldirati,” while some call them NFAs (no-frills affluents), as an article in the Times of London points out. A recent Aldi campaign hit the nail on the head with the tagline: “Don’t change your lifestyle, change your supermarket.”

The Rise in DIY

thumbnails_diyDIY isn’t just what you do after a shopping spree at IKEA. Today, do-it-yourself is influencing a range of categories, including entertainment, food, beauty and fashion. From locals organizing and promoting their own parties and events to teens formulating at-home beauty treatments, the ethos of DIY is becoming increasingly pervasive.

A confluence of factors is shifting this movement from the fringe to the mainstream, chief among them the anxiety brought on by the Great Recession—DIY is simply cheaper than the alternatives. DIY also seems like the savvy, even chic thing to do at a time when frugality and anti-consumerist sentiment are proliferating. The Internet is also a key factor, helping DIY-ers learn from and inspire each other. And in a world where mass-produced goods dominate, DIY allows for a sense of discovery and a way to stand out from the crowd.

Our latest trend report explores how DIY ideas and attitudes are affecting consumer behavior and purchasing habits in a range of categories, and looks at what it means for brands and marketers. You can download the report from our Trends and Research page.

USA Today: The recession generation?

Earlier this year, we conducted a survey on the recession and its impact on the Millennial Generation. As you may remember, we found that while there is a pervasive sense of resentfulness among Millennials, who feel they’ve been dealt an unfair blow because of the recession, they are finding advantage in adversity. A good portion of twentysomethings, for instance, see this as a market for first-time home buyers and entrepreneurs.

A story in yesterday’s USA Today, which highlights some of the results from our AnxietyIndex survey, illustrates how teens and twentysomethings across the U.S. are responding to the recession, whether leading a simpler life, looking for end-of-season sales instead of shopping constantly, or starting their own businesses.

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Source: JWT survey in February of 243 people age 18-29 (among 1,065 Americans surveyed)

The recession is clearly shifting the conversation from Millennials’ narcissism and sense of entitlement to their ingenuity; from their conspicuous consumption to their conscious and creative consumerism, where cheap is chic, bargain-hunting begets bragging rights and doing more with less carries greater badge value than the latest It bag or logo-laden attire.

Brands can get behind Millennials by subtly acknowledging their tough situation and helping them navigate the recession with easy-to-understand guidance. They can also tap into the aspirations and optimism of these young adults, whose eyes are open to all opportunities that may present themselves during this rough patch. A good way to build confidence is through hope—giving young consumers a chance to be proactive and plan practically for their future.

To download our study on the recession and its impact on the Millennial Generation, click here.

The power of the ‘R’ word over consumer confidence

corey-lThe recently released March quarter national accounts show the Australian economy grew slightly (0.4 percent) and thus avoided technically landing in a recession (defined as two consecutive quarters of negative growth). Following this announcement—and the subsequent media stories that Australia has “escaped recession”—consumer optimism rose by 12.7 percent from May to June, the largest increase in 22 years, according to the Westpac-Melbourne Institute Survey of Consumer Sentiment.

As the Institute notes, this demonstrates the significance of the word “recession” to consumer confidence. This was also demonstrated in March 2001, when the confidence crashed by 13 percent after the December quarter national accounts pointed toward a recession.

According to AnxietyIndex research, Australian consumers have been experiencing somewhat muted levels of anxiety relative to the U.S. and U.K. Alongside this, Australian brands have been projecting pragmatic optimism, referencing the economic climate only implicitly—in contrast to the more explicit (reactive or tactical) recessionary messages in the U.S. and U.K.

The Australian economy is not out of the woods yet, however, and given the volatility in consumer confidence, it would be unwise for brands to diverge from their strategy of pragmatic optimism while the climate remains uncertain. It will be interesting to consider the power of context and gauge how the word “recession” affects anxiety levels in the lead-up to the next quarter’s national accounts.

Photo credit: Corey Leopold

The irony of recession chic

1258244895_1f9a814168The word “homespun” crops up in two recent articles about recession-era trends among big spenders. In one, “The Rich Welcome the Humble-Looking Abode,” the Los Angeles Times notes that sumptuous furnishings are being replaced by their aesthetic opposite. And The New York Times describes how the wealthy are toning down weddings by embracing a “down-home” approach—the food is casual (grilled meats, fries, comfort desserts like peach cobbler), as are the settings (frequently backyards) and set-ups (outdoor tables covered in burlap, for example).

The irony: This restraint costs no less than the glitz it’s replacing. Examples of recession-chic décor—dubbed “dumpster diver deluxe” by one design guru—include $600 pillow shams made from grain bags and burlap-covered canopy chairs that go for $3,600 a pair. A bride who’s described as aiming for an “unfussy and authentic” wedding admits its cost will be “sizable.” As a high-end wedding planner explains, for her clients, it’s “more about not looking like they have a lot of money.”

As we discussed in our recent trend report “The Recession and Its Impact on Luxury,” attitudes toward conspicuous consumption have shifted dramatically, at least in the developed world—today even the costliest goods and services must be cloaked in a veil of modesty.

Photo credit: purdman1