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.
Walmart, Target, CVS and Walgreens are among the major retail chains paring brand-name products from their shelves in favor of private-label brands. This means fewer choices for consumers. Although conventional wisdom has it that people prefer more options, and a recent analysis in the Journal of Consumer Research seems to back this up, a piece in The New York Times challenges this theory. Reporter Alina Tugend questions whether choice overload can create anxiety and “paralyze people or push them into decisions that are against their own interest.”
Tugend describes a study by Columbia University business professor Sheena Iyengar. When a booth in a gourmet supermarket offering samples of jam included six varieties, 30 percent of shoppers who stopped by bought a jam; when the booth offered a much wider 24-flavor selection, only 3 percent actually purchased something. (But while 60 percent of customers stopped by when more flavors were on offer, the six-flavor selection attracted only 40 percent.)
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.
The recession saw many consumers postpone big-ticket purchases, a challenge that electronics chain Best Buy is addressing with its novel Pitch In card. Think bridal registry meets microfinancing meets layaway. Best Buy terms it “easy group gifting.”
Customers looking for help financing a purchase create a Pitch In card along with a Best Buy wish list, which they share with friends and family. Gift-givers can contribute payments ranging from $5 to $9,999.99. “It’s the perfect way to get that big Wish List item you’ve been dreaming of,” says Best Buy on its Web site.
Recently we’ve seen a rise in collective action, with people increasingly understanding that every bit counts in addressing today’s big issues, from the economy to the environment—adopting a “we” rather than a “me” mentality. While we’ve seen similar efforts in the independent music scene, Best Buy is charting new territory by bringing this idea to the commercial realm, enabling consumers to tap into the collective conscious of their friends.
It’s a great example of how brands can help spur spending without relying on steep discounts while their customers are laying off the plastic.
Louis Vuitton ads have long been synonymous with flash, featuring bold colors, images and celebrities like Madonna and Keith Richards. In what appears to be a step away from this tack, the luxury brand launched a campaign that is bold in its understated approach. At first glance, the print ad looks like a delicate Vermeer painting. It features a demure, angelic young woman in a darkened room, her hands and face lit in halos of light, hand-sewing a red leather wallet. Opposite the elegant image is copy that draws on the impeccable finesse that is executed by Louis Vuitton’s “craftsmen.” It goes on to say that details, like “five tiny folds,” make its products timeless and long-lasting.
In our trendletter last May on “The Recession and Its Impact on Luxury,” we wrote that, as consumers shy away from conspicuous consumption and ostentation, luxury marketers would play up “craftsmanship, heirloom appeal and the best materials.” This ad is an attempt to do just that, with its message of classic quality, attention to detail and long-lasting value.
However, luxury brands also need to take care in what they claim. As we talked about in Reading the Fine Print, one of our 10 Trends for 2010, consumers are now more than ever doing their homework before purchasing products, calling for transparency. In fact, according to BusinessWeek.com, Louis Vuitton does not make most products by hand, dismissing the aforementioned craftsmen. It may not suffice for consumers to read the concluding copy: “Let’s allow these mysteries to hang in the air. Time will provide the answers.”
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.
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.
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.
Walking around Dublin, you can’t miss the campaign from Unilever. “Who wants lower prices on the Flora range?” one ad on the side of a building reads. “Who wants lower prices on Cif sprays?” another plastered on a bus asks. “Who wants lower prices on Vaseline lotions?” yet another begs. Each time the answer—punctuated by a check mark in a box—is unanimous: “Ireland says Yes!”
Smartly, the campaign is riding the wave that followed Ireland’s overwhelmingly positive vote for the Lisbon Treaty, which includes a pulling together of all EU members in matters of legislation, trade, etc. Following the Oct. 2 vote, there was an air of good feeling (which is thin on the ground), a slight togetherness and almost a sense of maturity in the country. (When the treaty first came up for a vote in June 2008, Ireland was the only country to have a referendum out of the 27 EU states, citing reasons such as loss of sovereignty and a lack of clarity around the specifics.)
What’s even more smart is the fine print in the ads: Unilever says it’s reducing its prices for retailers “to help them reduce prices for you.” A press release about the campaign crams in the facts: “With 1.3 million Unilever products sold in retail outlets nationwide every day in Ireland and an average price reduction of 11 percent across 70 percent of its 900-strong brand portfolio, Unilever Ireland’s price reductions will play a significant part in delivering real value to consumers on premium brands.”
With Ireland’s unemployment rate hitting 13 percent, its citizens need all the help they can get. Unilever trimming prices positions the company as an ally in trying times and will help to instill good will in the consumer not only now but in the years to come.
I understand that retailers still have to keep turning over stock during hard times. But some are going about this in a way that does serious damage to their brands. JoS. A. Bank, the North American menswear chain, had a reputation of offering pretty good stuff at a fair value. That image is gone, as their recent promotions have me believing their prices are pure fiction. The base offer is now “buy one, get one free,” and they also do a “buy one suit, get another suit AND a sport coat free” on Mondays and Tuesdays, with similar deals available on Wednesdays and Thursdays.
In our first AnxietyIndex Quarterly earlier this year, we advised that if tactics aren’t approached in a branded way, brands risk becoming genericized. Like I said, times are hard, but JoS. A. Bank’s strategy has me convinced that (a) The original prices were way too high, or (b) The only time to shop there is when the promos are crazy good. Neither option is good for the brand. There has to be a better way to move clothing.
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.
Walmart, Target, CVS and Walgreens are among the major retail chains paring brand-name products from their shelves in favor of private-label brands. This means fewer choices for consumers. Although conventional wisdom has it that people prefer more options, and a recent analysis in the Journal of Consumer Research seems to back this up, a piece in The New York Times challenges this theory. Reporter Alina Tugend questions whether choice overload can create anxiety and “paralyze people or push them into decisions that are against their own interest.”
Louis Vuitton
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 “
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.
Walking around Dublin, you can’t miss the campaign from Unilever. “Who wants lower prices on the Flora range?” one ad on the side of a building reads. “Who wants lower prices on Cif sprays?” another plastered on a bus asks. “Who wants lower prices on Vaseline lotions?” yet another begs. Each time the answer—punctuated by a check mark in a box—is unanimous: “Ireland says Yes!”
I understand that retailers still have to keep turning over stock during hard times. But some are going about this in a way that does serious damage to their brands. JoS. A. Bank, the North American menswear chain, had a reputation of offering pretty good stuff at a fair value. That image is gone, as their recent promotions have me believing their prices are pure fiction. The base offer is now “buy one, get one free,” and they also do a “buy one suit, get another suit AND a sport coat free” on Mondays and Tuesdays, with similar deals available on Wednesdays and Thursdays.
