Consumer Eye 8

November 2010

wave eight15th Sep – 6th Oct 2010

A summer to remember?

“Overall, consumer confidence has remained relatively stable since the start of the year, but this consistency masks the differences apparent between different groups…”

Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10

-60

-50

-40

-30

-20

-10

0

all consumers The Sun The Times

All Consumers

-29%

The Sun

-43%

The Times

-24%

Fieldwork period: 15th September – 6th October 2010

Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10

-90

-80

-70

-60

-50

-40

-30

-20

-10

0

All ConsumersThe EconomySavingsHouse ValueMortgage

Q. Please indicate how you feel about the following...*Consumer confidence is calculated by subscription the % who are pessimistic from those who are optimistic

“The formation of the coalition government seems to have steadied confidence, but June’s ‘emergency budget’ has seen optimism about the state of the economy suffer following a strong increase last quarter…”

Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10

-80

-70

-60

-50

-40

-30

-20

-10

0

All ConsumersFuel CostsUtility BillsGrocery CostsJob Security

Q. Please indicate how you feel about the following...*Consumer confidence is calculated by subscription the % who are pessimistic from those who are optimistic

“We would expect to see a greater decline in confidence around utility bills and job security in the next wave, but the pessimism around grocery costs is more dramatic than would have been predicted…”

Into 2011

HOUSE VALUEHouse prices fell for the fourth consecutive month in October.

Supply and demand both stalling resulting in deadlocked market.

Fewer mortgage approvals.

Property market ‘double-dip’.

GROCERY COSTSVAT increase won’t directly affect grocery costs, but the increase will have an impact on household budgets generally, so cut-backs are bound to be made where possible.

Supermarkets are set to benefit in non-food areas including clothes, homewares and electrical goods as consumers will limit trips to specialist retailers but still have to visit the supermarket.

JOB SECURITYWith around 500,000 public sector jobs reported as being at risk across a number of sectors, concern is set to rise.

As the government has placed an expectation on the private sector to accommodate some of those who lose their jobs, there will be a more cautious outlook for many.

The Premise

We have a clearly defined brand mission, vision, and values. Authenticity plays a vital role here...

It builds trust and credibility with the consumer and provides the basis for identification with your brand, and it must never be jeopardized.

Erich Stamminger, Adidas

“ “

The Premise

FUNCTIONAL

emotional

duty to ONEchoice of MANY / interchangeable

supermarkets

football clubs

bank

clothing & fashion

technology

mobile phone network

media (esp. newspapers)

family friends

Based on Practical Semiotics’ Loyalty researchPrac.

Semio.

What does loyalty mean to you?

CONSUMERISM CONFIDENCE

RECESSION

FUNCTIONALEMOTIONAL

STAR

T H

ERE

PREVIOUSLY

The Premise

The Premise

Wants Driven Needs Driven

Communication

Brand Price

The Consumer

RATIONALISATION

BMW has identified… that, next to our products, the brand is the second strongest pillar for our success.

It delivers the emotional added value that is very important for our customers.

Jan-Christiaan Koenders, BMW

“ “

The Consumer Spectrum


+ve

-ve

14%Base: 146

39%Base: 402

38%Base: 396

9%Base: 100

27%Base: 332

9%Base: 107

38%Base: 467

27%Base: 332


NEED WANT

cluster chart

cluster chart

State-ments

http://ukheartbeat.yougov.com/

http://premiumpanel.yougov.com/

“Emotionally – or ‘wants’ – driven consumers are more optimistic than their Functionally – or ‘needs’ – driven peers…”

Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10

-60

-50

-40

-30

-20

-10

0

all consumers

All Consumers

-29%

Fieldwork period: 15th September – 6th October 2010

Premium Panel

-14%

UK Heartbeat

-27%

Premium Panel

-41%

UK Heartbeat

-58%

WAN

TN

EED

UK Heartbeat respondents are spending less on mobile phones, beauty & cosmetics, clothing, savings and home entertainment.

Premium Panel respondents follow the same pattern at those on the Heartbeat Panel but clothing , socialising and beauty & cosmetics are the main areas likely to have experienced cut backs.

UK Heartbeat respondents are cutting back on savings and utility bills, but only in very small proportions in comparison to where they are likely to be spending more.

Premium Panel respondents are less likely to be spending more on household goods, grocery shopping, utility bills and services.

UK Heartbeat respondents are more likely to spend more in ‘essential areas’ such as mortgage / rent, utility bills, petrol and household goods.

Premium Panel respondents over-index for spending on ‘other non-food shopping’, grocery shopping and the same necessities as their Heartbeat counterparts.

UK Heartbeat respondents over-index for spending more in categories including services, clothing, beauty & cosmetics, mobile phones and home entertainment.

Premium Panel respondents’ likely spending areas include beauty & cosmetics, mobile phones and home entertainment, but also putting money into savings.

WAN

TNEE

DSPENDING MORE

SPENDING LESS

e.g.

The price is right, but is it enough?

If you had a long stretch out there in the marketplace of 'more is more and more is good’, now you have a significantly different value shift out there in the marketplace.

I think there is a return to quality; I think there is a return to things that have substance

Scott Keogh, Audi of America

““

PRIC

E

BRAN

D


e.g.

FUNCTIONAL emotional


The Premise: a summary

Wants Driven Needs Driven

Communication

Brand PriceBrand Price

Brand Driven Price DrivenRATIONALISATIONRATIONALISATION

The Consumer

The Premise◦ price = promiscuity; brands = loyalty

The Loyal Consumer: a paradox?◦ pricing campaigns neglect the more

lucrative ‘brand consumer’

The Consumer Spectrum◦ confidence, trust and value◦ caution and price

The Price is Right (but is it enough?)◦ price is important to all groups, but

‘value’ is key

Summary: an opportunity for brands

appendix

1. I believe the brands I buy say something about who I am

2. The brands I buy demonstrate a lot of the same values and attitudes as me

3. I am willing to spend more money on brands I love

4. I tend to buy things more because I want them than because I need them

5. I like to be seen wearing / using good quality brands and products

6. I like to use / buy the same brands as my friends

7. There are some brands that I will not compromise on

8. I like to be the first to discover new brands and products

9. I trust well known brands more than those I don’t really know

10. I tend to buy things because I need them than just because I want them

11. As long as the product does the job, I don’t care what brand it is

12. I pay little attention to which brands I buy

13. Brand is not important to me

14. I often just buy the product that is the cheapest

15. I weigh up all the factors before making a purchase

Consumer Segmentation

back

I believe the brands I buy say something about who I am

The brands I buy demonstrate a lot of the same values and attitudes as me

I am willing to spend more money on brands I love

I tend to buy things more because I want them rather than because I need them

I like to be seen wearing / using good qual-ity brands and products

There are some brands that I will not compromise on

I like to be the first to discover new brands and products

I trust well known brands more than those I don’t really know

I like to use / buy the same brands as my friends

I tend to buy things because I need them rather than just because I want them

As long as the product does the job, I don’t care what brand it is'

I pay little attention to which brands I buy

Brand is not important to me

I often just buy the product that is the cheapest

I weigh up all the factors before making a purchase

Explained variance (3-axis inertia) = 99%

WANT (STRONG)

WANT

NEED (STRONG)

NEED

Cluster GroupsUK Heartbeat Panel

back


I believe the brands I buy say something about who I am

The brands I buy demonstrate a lot of the same values and attitudes as me

I am willing to spend more money on brands I love

I tend to buy things more because I want them rather than because I need them

I like to be seen wearing / using good qual-ity brands and products

There are some brands that I will not compromise on

I like to be the first to discover new brands and products

I trust well known brands more than those I don’t really know

I like to use / buy the same brands as my friends

I tend to buy things because I need them rather than just because I want them

As long as the product does the job, I don’t care what brand it is'

I pay little attention to which brands I buy

Brand is not important to me

I often just buy the product that is the cheapest

I weigh up all the factors before making a purchase

Explained variance (3-axis inertia) = 99%

WANT (STRONG)

WANT

NEEDNEED (STRONG)

Cluster GroupsPremium Panel

back


Want (Strong) Want Need Need (Strong)0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Spending less Spending about the sameSpending more

During the recent tough economic climate, consumers have been changing the way they shop for products and services. Looking at the list below, please indicate how your level of spending has changed over the past 12 months


10%

20%

30%

40%

50%

60%


Grocery shopping

back




10%

20%

30%

40%

50%

60%



10%

20%

30%

40%

50%

60%

70%


Utility bills

During the recent tough economic climate, consumers have been changing the way they shop for products and services. Looking at the list below, please indicate how your level of spending has changed over the past 12 months back




10%

20%

30%

40%

50%

60%

70%



10%

20%

30%

40%

50%

60%

70%


Socialising





10%

20%

30%

40%

50%

60%



10%

20%

30%

40%

50%

60%

70%


Household goods





10%

20%

30%

40%

50%

60%



5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Petrol





10%

20%

30%

40%

50%

60%

70%



10%

20%

30%

40%

50%

60%


Mortgage / rent payments





10%

20%

30%

40%

50%

60%



5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Paying off debt





10%

20%

30%

40%

50%

60%

70%



10%

20%

30%

40%

50%

60%

70%


Clothing





10%

20%

30%

40%

50%

60%



10%

20%

30%

40%

50%

60%


Putting money into savings





10%

20%

30%

40%

50%

60%

70%



10%

20%

30%

40%

50%

60%

70%

80%


Mobile phone





10%

20%

30%

40%

50%

60%

70%



10%

20%

30%

40%

50%

60%

70%


Home entertainment





10%

20%

30%

40%

50%

60%



10%

20%

30%

40%

50%

60%


Beauty & cosmetics





5%

10%

15%

20%

25%

30%

35%

40%

45%

50%



10%

20%

30%

40%

50%

60%

70%


Services (e.g. gym / hairdressers etc.)




utilit

y bi

lls

savi

ng

socia

lisin

g

groc

ery

shop

ping

payi

ng o

ff de

bt

hous

ehol

d go

ods

petr

ol

othe

r non

-food

shop

ping

mor

tgag

e / r

ent

hom

e en

tert

ainm

ent

mob

ile p

hone

beau

ty &

cosm

etics

cloth

ing

serv

ices (

e.g.

gym

or h

aird

ress

ers)

0

20

40

60

80

100

120

140

160

180

Want (Strong) Need (Strong)

Wants-driven consumers are more likely to be ‘spending more’ in 12 out of the 14 categories listed vs. just 6 for needs-drivenIndex scores based on likelihood to ‘spend more’ vs. average

If you had to reduce your monthly outgoings, which of the following would you cancel / do first? Base: Strong Want & Strong Need only back


utilit

y bi

lls

hous

ehol

d go

ods

serv

ices (

e.g.

gym

or h

aird

ress

ers)

groc

ery

shop

ping

petr

ol

othe

r non

-food

shop

ping

socia

lisin

g

cloth

ing

payi

ng o

ff de

bt

mor

tgag

e / r

ent

hom

e en

tert

ainm

ent

savi

ng

mob

ile p

hone

beau

ty &

cosm

etics

0

20

40

60

80

100

120

140

160

180


Wants-driven consumers are more likely to be ‘spending more’ in 8 out of the 14 categories listed vs. 7 for needs-drivenIndex scores based on likelihood to ‘spend more’ vs. average



mob

ile p

hone

beau

ty &

cosm

etics

cloth

ing

savi

ng

hom

e en

tert

ainm

ent

payi

ng o

ff de

bt

socia

lisin

g

groc

ery

shop

ping

othe

r non

-food

shop

ping

hous

ehol

d go

ods

petr

ol

serv

ices (

e.g.

gym

or h

aird

ress

ers)

utilit

y bi

lls

mor

tgag

e / r

ent

0

20

40

60

80

100

120

140

160

180

HB PP

Needs-driven consumers are less likely to be spending more across a range of categories, with essential areas the only ones likely to see an increaseIndex scores based on likelihood to ‘spend more’ vs. average

If you had to reduce your monthly outgoings, which of the following would you cancel / do first? Base: Strong Want & Strong Need only

NEED

back

utilit

y bi

lls

savi

ng

socia

lisin

g

groc

ery

shop

ping

payi

ng o

ff de

bt

hous

ehol

d go

ods

petr

ol

othe

r non

-food

shop

ping

mor

tgag

e / r

ent

hom

e en

tert

ainm

ent

mob

ile p

hone

beau

ty &

cosm

etics

cloth

ing

serv

ices (

e.g.

gym

or h

aird

ress

ers)

0

20

40

60

80

100

120

140

160

180

HB PP

Wants-driven consumers – especially those on the Heartbeat Panel – are ‘more likely to be spending more’ across a wider range of categoriesIndex scores based on likelihood to ‘spend more’ vs. average

If you had to reduce your monthly outgoings, which of the following would you cancel / do first? Base: Strong Want & Strong Need only

WANT

back

Stop eating out

Not plan any holidays / take less holidays

Cancel a gym membership

Cancel / reduce direct debits to charities

Stop / reduce regular saving

Stop subscription / pay for TV service

Cancel non-essential insurance policies

Increase / switch to own label (non branded) goods

Use cheaper forms of transport

Stop / reduce pension contributions

None of the above

Cancel mobile phone subscription

Cancel broadband service

Other

0% 10% 20% 30% 40% 50% 60%

NEED-DRIVEN

WANT-DRIVEN

UK Heartbeat wants-driven respondents’ top 3 cut backs would be on ‘nice-to-haves’, whilst the needs-driven would cut down on branded goods



Stop eating out









None of the above

Other




0% 10% 20% 30% 40% 50% 60%

NEED-DRIVEN

WANT-DRIVEN

There are fewer, and less notable differences between needs- and wants-driven consumers on the Premium Panel, but the priorities for both mirror those on the Heartbeat Panel







Stop eating out






None of the above



Other

0 50 100 150 200 250 300

NEED-DRIVEN

WANT-DRIVEN







Stop eating out




None of the above


Other




0 20 40 60 80 100 120 140 160 180

NEED-DRIVEN

WANT-DRIVEN




10%

20%

30%

40%

50%

60%

70%

80%

More important Stayed the same Less important

During the recent tough economic climate, consumers have been changing the way they shop for products and services. Looking at the list below, please indicate how the level of importance has changed for you over

the past 12 months


10%

20%

30%

40%

50%

60%

70%

80%


Price checking

back




10%

20%

30%

40%

50%

60%

70%

80%

90%



10%

20%

30%

40%

50%

60%

70%

80%


Convenience


the past 12 monthsback



Service


10%

20%

30%

40%

50%

60%

70%

80%



10%

20%

30%

40%

50%

60%

70%

80%







10%

20%

30%

40%

50%

60%

70%

80%



10%

20%

30%

40%

50%

60%

70%

80%


Quality





Company ethics


10%

20%

30%

40%

50%

60%

70%

80%



10%

20%

30%

40%

50%

60%

70%

80%







10%

20%

30%

40%

50%

60%

70%

80%



10%

20%

30%

40%

50%

60%

70%

80%

90%


Choice (of product / store)





Buying the same brands as before


10%

20%

30%

40%

50%

60%

70%

80%

90%



10%

20%

30%

40%

50%

60%

70%

80%

90%







10%

20%

30%

40%

50%

60%

70%

80%


Finding out about new brands


10%

20%

30%

40%

50%

60%

70%

80%






Finding out about offers


10%

20%

30%

40%

50%

60%

70%

80%



10%

20%

30%

40%

50%

60%

70%







10%

20%

30%

40%

50%

60%

70%



10%

20%

30%

40%

50%

60%


Saving money on a purchase





Most competitive price

Reputation for customer service

Reputation for offering competitive products

Reputation for financial stability

Recommendation from friend/relative

Past experience of dealing with the provider

Financial pages of a newspaper

Advertising

0%10%20%30%40%50%60%70%80%


Financial products








Advertising

0%10%20%30%40%50%60%70%80%


Looking at the list below, please indicate which of the following factors would be important when considering switching financial service provider back










Advertising

0%

10%

20%

30%

40%

50%


Current account








Advertising

0%

10%

20%

30%

40%

50%












Advertising

0%

10%

20%

30%

40%

50%


Savings account








Advertising

0%

10%

20%

30%

40%

50%












Advertising

0%

10%

20%

30%

40%

50%


Credit card








Advertising

0%

10%

20%

30%

40%

50%












Advertising

0%10%20%30%40%50%60%70%80%


Car insurance








Advertising

0%10%20%30%40%50%60%70%












Advertising

0%10%20%30%40%50%60%70%


Home/contents insurance








Advertising

0%10%20%30%40%50%60%70%





Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


During the recent tough economic climate, consumers have been changing the way they shop for products and services.

Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


“I would consider changing provider if I saw deterioration in the product or service”



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


“I would consider changing provider if I saw a better alternative advertised”



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


“I would consider changing provider if I saw a cheaper alternative advertised”



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


“I would consider changing provider if it was easier / cheaper to do so”



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%



Current a

ccount

Savin

gs acc

ount

Credit c

ard

Car insu

rance

Home / Conten

ts insu

rance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


“I regularly change the financial services providers I use”



Newspapers rely on loyalty

The emotional connection nurtured by brand resonates strongly with consumersPricing messages encourages promiscuity and trial

Re: Gap logo … readers’ misgivings about Times sections and demanding T2

The power of brandsBringing back brand communicationConsumers have tired of austerity messagesThe emotional connection nurtured by brand resonates strongly with consumersPricing messages encourages promiscuity and trial

Furore over new Gap logo?! People love brands.

July – September 2010◦ A cat in a bin, the standard world cup disappointments and the odd man-hunt…

who says it’s the silly season.◦ How has consumer confidence fared?

The power of brands◦ The Premise: price = promiscuity; brands = loyalty◦ The Loyal Consumer: a paradox?◦ The Consumer Spectrum◦ The Price is Right (but is it enough?)

Summary◦ Choice versus Loyalty◦ October – December 2010

Agenda

CONSUMERISMis the creation and development of a desire to purchase goods or services in ever greater quantities

CONFIDENCEhas declined since the credit crunch

struck. Desire remains, but purchase

decisions are increasingly rationalised

RECESSION

FUNCTIONALcaution has become the default setting for the majority of consumers as every purchase comes under greater scrutiny

EMOTIONALby creating an emotional tie between brand and consumer, the desire to purchase can be reinvigorated now that the the consumer relies less on rationalisation, and more on [ the brand ] as a contributing factor to justifying ‘value’

STAR

T H

ERE

RATIONALISATIONthe cautious consumer is cutting back on both essential and luxury items, checking prices and justifying purchases. If value – according to their own interpretation – can be identified, then the purchase becomes more likely to go ahead

PREVIOUSLY

The price is right, but is it enough?VALUE INDICATORSService and Quality are two elements that can turn Price into Value.

This is more apparent among our wants-driven group where ‘nice-to-haves’ come into play because price is not the be-all and end-all to them.

Other added value elements such as Company Ethics and Choice are less important to consumers generally, but especially amongst the needs-driven group.

RATIONALPrice-checking has remained important to all groups, indeed it is the needs-driven quality readers who are doing this more now than a year ago, and more than their popular-reading peers.

EMOTIONALBuying The Same Brands as before is considerably less important amongst needs-driven consumers.

Finding Out About New Brands has lessened in importance – especially amongst quality readers.

FUNCTIONALFinding Offers is important for both wants-driven and needs-driven audiences, but for different reasons.

Saving Money is key for needs-driven consumers across both panels, but less so for wants-driven.

e.g.

Unoccupied Territory Up for GrabsFunctional

Choice of many

Emotional

Duty to one

Current supermarket position:Reward cards and a fixation on price

Football clubs, regional pride and patriotism

Brand loyalty, employer-employee relationship

The way forward:Can supermarkets credibly talk about loyalty with emotion and reason?Can newspapers?

back

Documents

Consumer Eye 8