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2010 New Business Conference Mintel
 

2010 New Business Conference Mintel

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The economy is starting to rebound, but what does that really mean for consumers and companies? Where are people actually spending money? And what companies and industries are flourishing despite the ...

The economy is starting to rebound, but what does that really mean for consumers and companies? Where are people actually spending money? And what companies and industries are flourishing despite the downfall? Based on the latest research findings from Mintel, this session will arm you with critical new information. Take away key insights that will directly impact your targeting and approach to converting those target prospects.

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    2010 New Business Conference Mintel 2010 New Business Conference Mintel Presentation Transcript

    • Recovery: How Consumers and Companies Are Really Responding Presented by Krista Faron Lead Innovation Analyst, Mintel Research Consultancy April 14, 2010
    • About Mintel Mintel is a leading global supplier of consumer, product and marketing intelligence across categories Mintel International For 38 years we have been a trusted, reliable research partner providing unique insight into consumer trends, market trends and product innovation 2 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • The good news: Beyond the usual economic indicators Driving decline in reverse !   +.2% in October and December 2009 !   +.3% in September and November 2009 More temps hired !   48,000 temp jobs added in February 2010 !   Up 284,000 since September 2009 Teen spending rebounds !   December 2009 and January 2010: Teen retailers post 5% and 6.5% year-over-year increases after 18 months of decline FedEx thrives !   Q3 FY2010 profits more than doubled and revenue rose 7% 3 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • The OK news: Saving increases, especially for the affluent 80% of $ saved 40% 35% 30% 25% >$25K $25K-$50K 20% $50K-$75K 15% $75K-$100K $100K+ 10% 5% 0% I am currently saving more than 5% of my household income Source: Mintel, January 2010, N=1,045 adults 18+ with internet access 4 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • The OK news: Financial conservatism remains 35% 32% 30% 25% 21% 20% 15% 12% 10% 10% 5% 0% I completely discontinued the use of credit cards in 2009 I increased the amount I saved in my retirement account in 2009 I am saving more money now than a year ago I am using my debit card more in the last year Source: Mintel, January 2010, N=1,045 adults 18+ with internet access 5 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • But be aware: Unemployment rate Source: US Bureau of Labor Statistics 6 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • The #1 most important driver in 2010: Resilience What is it? !   The ability to thrive in spite of recession-based misfortune !   The flexibility to live, work, play and buy in resourceful and creative ways What does it mean in 2010? !   A spirit of optimism prevails !   Consumers will continue to do What’s driving it? old things in new ways •  Trading Up, Down and Over !   Companies need to recalibrate •  Time Bubble Bursts •  That’s (Home) Entertainment Source: Mintel Inspire Source: Mintel Inspire 7 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Resilience in action: From companies and consumers Dominos: Fearless marketing !   Q4 2009: US same-store sales +1.4% Total US retail sales of vitamins and !   Papa John’s: -.5% minerals, at current prices, 2006-14 !   Pizza Hut: -12% 16,000 5.8% 5.5% 14,000 6.1% 6.4% 6.8% 12,000 6.2% Vitamins: 8.9% 10,000 4.2% 4.1% 3.9% Prevention over reaction 8,000 !   National health expenditure 6,000 rate: +5.5% in 2009 4,000 !   Forecasted 2010 growth in 2,000 vitamins & minerals: +6.8% 0 04 05 06 07 08 09 10 11 12 13 14 fore fore fore fore fore $ million % change Source: Mintel Oxygen, Vitamins and Minerals (September 2009) 8 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • A new kind of resilience: Multi-generational homes Mintel Inspire calls it the “Boomerang Generation” !   57% of males aged 18-24 live with a parent(s) !   One-third of Boomers report that their children aged 18+ live with them, or will probably move back home at some point —and are happy about it! And it’s not just adult children who are moving home !   20% of Boomers have a parent living at home Sources: Mintel Inspire; Mintel Oxygen, The Social Dynamics of 18-24 Year-Old Males (September 2009) and Lifestyles of Baby Boomers (October 2009) 9 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Recovery truth #1 Micro-targeting doesn’t always work 10 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Successful companies are casting a wider net Portfolio and consumer diversity is key P&G moves to broaden appeal !   Era and Cheer repositioned as bargain brands !   Tide goes “Basic” !   Duracell and Pampers: More for the same price Burger King admits sole focus on young men isn’t working !   US and Canada: Sales down 8.2% in January-February 2010 !   Meanwhile, McDonald’s US same-store sales rose .7% in February 11 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Recovery truth #2 Luxury. Is. Not. Dead. 12 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • The luxury market shows signs of recovery Consumers will spend for exclusivity, uniqueness !   Tiffany & Co: +17% worldwide sales in Q4 2009 !   Williams-Sonoma: +8% sales in Q4 2009 !   Hermès: +8.5% revenue in 2009 !   Oasis of the Seas: !   Gold Class Cinemas: Lowest priced inside $35 luxe movies cabin at $2,303 vs. !   Cinebarre: 17-40% $1,293 for other annual growth rates, Royal Caribbean ships new theater opening !   Loft suites ($3,200) every six weeks by booked for next two 2011 years 13 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Recovery truth #3 When a suitable alternative exists, we’re willing to trade down 14 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • We still like to drink … just cheaper alcohol Same benefits, different strategy Cheap beer at home Happy hour out of home !   The winners? Busch, Miller High !   The Cheesecake Factory Life and Pabst Blue Ribbon !   P.F. Chang’s !   US domestic sub-premium !   Ruby Tuesday brands: +2.6% !   Premium beer: -1.4% 15 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Recovery truth #4 But for some things, we just won’t compromise 16 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Beauty matters No trade-offs for looking young Sales of facial anti-aging skincare products at current prices, 2004 -2014 !   32% of women say “I have cut back spending in other areas, but I will not cut back on my skincare favorites” !   Facial anti-aging products: 9.6% forecasted sales growth in 2010 Source: Mintel Oxygen, Anti-Aging Skincare (February 2010) 17 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Recovery truth #5 The retail paradigm has changed 18 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • How we shop now Looking for deals at the high and low end Rise of the dollar store !   51% of consumers shop at dollar stores more than once/month !   4.1% forecasted growth in 2010 !   Analysts tag Dollar General as strongest growth prospect of any Member-only online sales food and drink company in 2010 !   Offering high-end deals in fashion, travel, beauty and home décor !   Gilt Groupe: Ranked #19 by WSJ as company with the most potential to become “The Next Big Thing” Source: Mintel Oxygen, The Dollar Channel (July 2009) 19 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • But let’s not over-generalize A case study: Publix Greenwise Many Mes !   Gourmet supermarket in Tampa neighborhood with median HH income of $140K !   Upscale sells !   Biggest deli seller? Tuna Tataki at $29.99/pound !   Downscale sells !   Fried chicken, self-serve soda foundation and Tide added based on customer feedback Source: Mintel Inspire 20 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Recovery truth #6 We’re still green … but it helps if being green has a financial benefit 21 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Rates of “greenness” hold steady in the recession Consumers are happy to take more green for being green !   Seattle: Eco-friendly homes sell for 8.5% “I will consider ‘green’ factors on my next purchase,” more and are on the by category, 2008 vs. 2009 market 22% less time 56 than other homes 54 !   RecycleBank: Recycle, 52 receive points, redeem 50 at stores 48 46 !   CVS: $1 in store credit 44 for every four plastic 42 bags skipped Major appliances Cars or trucks Small kitchen appliances Electronics Other hardware or home supplies 2008 2009 Source: Mintel Oxygen, Green Living (February 2009) 22 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Recovery at a glance • Dollar and club stores • Out-of-home Looks entertainment good • Private label right now • Pet food • The teen market • Bifurcated luxury • Fashion retail Looks • Full-service dining promising for the • Green building and future appliances • The multi-generational market 23 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • So what does it all mean? !   Spending is up, but stay cognizant of unemployment and savings rates !   Filter everything through the lens of resilience !   Price still matters, but consumers are showing they’ll pay for innovation and uniqueness !   Smart companies can always defy category downfalls !   Consumers continue to be complicated and contradictory … and that’s a good thing 24 © 2010 Mintel International Group. All rights reserved. Confidential to Mintel.
    • Krista Faron Lead Innovation Analyst tel: 323-848-4071 email: kfaron@mintel.com