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Consumer Insight Post Recession Consumer

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We (you and I), people who are in the eye of the recession and were in the eye of the unrealistic boom are one of the most interesting consumer segment I have come across during my marketing career. …

We (you and I), people who are in the eye of the recession and were in the eye of the unrealistic boom are one of the most interesting consumer segment I have come across during my marketing career.

Economic crisis, Natural disaster, Wars have shaped us. Now in the following presentation I am investigating the post-recession consumer. I believe the world is going through an optimism divide i.e. hopeful BIC (Brazil, India & China) vs. the rest of the world. The insecurities and the charged passion is changing marketing landscape.

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  • 1. Consumer Insights with Ayesha Saeed Consumer Insights with Ayesha Saeed Consumer Insight: Recession changes everything? www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 2. Consumer Insights with Ayesha Saeed www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 3. The Great Depression vs. The Great Recession Consumer Insights with Ayesha Saeed Great Depression Great Recession 9,096 – 50% of banks 57 – 0.6% of banks Bank failures (Jan. 1930 – March 1933) (Dec. 2007 – May 2009) Unemployment rate 25% 8.5% -26.5% -3.3% Economic decline1 (1929 - 1933) (Second quarter 2008 - first quarter 2009) Biggest decline in -89.2% -53.8% Dow Jones (Sept. 3, 1929 – July 8, 1932) (Oct. 9, 2007- March 9, 2009) industrial average Strong -25% +0.5% Change in prices (1929 – 1933) (Dec. 2007-March 2009) Recession – Emergency 1.5% of GDP for 1 year 2.5% of GDP for 2 years (2009 American Reinvestment and Post recession spending programs (Increase in 1934 budget deficit) Recovery Act) consumer States’ response Raise taxes, cut spending Federal stimulus plan gives fiscal relief to should be risk states to lessen impact of tax increases averse Increase in money 17% 125% supply by Federal (1933) (September 2008 – May 2009) Reserve Source: CNN Money www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 4. But it introduced A new global divide: OPTIMISM Fear fueled economies Hope fueled economies Flat is the new up Up is the new up Pessimism Optimism Eyes on the past Eyes on the future Attenuating the risk Taking risks Playing not to lose Playing to win Source: JWT Anxiety index
  • 5. C o n s u m e r ’s P e r s p e c t i v e Consumer Insights with Ayesha Saeed Recession wiped out $11 trillion of consumer assets. Source: Clear debts now “The current downturn in consumer spending is actually the beginning of a 15-to-20-year period of lower consumer spending in general across the U.S.” - Mark Zandi, chief economist for Moody's Economy.com www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 6. Consumer’s Perspective Consumer Insights with Ayesha Saeed UK: Jobs (online & print) Dropped by 50% Job loss in USA: 2.5 million jobs www.asaeed.wordpress.com Source: Impact of recession in UK by ACNielsen ms.ayeshasaeed@gmail.com Source: CNN money
  • 7. Types of customers emerged after recession Consumer Insights with Ayesha Saeed •Do not alter their purchasing •Take drastic action to greatly •Slightly affected by the •Tend to be younger, larger habits reduce living expenses and downturn and will cut back households known as cut back in all departments on spending for luxuries such “young, bustling families” to do whatever it takes to as entertainment and dining and often represent plain, save money out rural living. They buy generic brands or store labels. Recession Recession Switch to Panic Stricken Indifferent Insensitive Private Label •Typically represent older and •Generally older couples who •Consumers who typically live •Will switch from name smaller households who take live in a comfortable affluent in cosmopolitan centers and brands to generics or brands advantage of light coupons situation and are know as will switch stores looking for on sale looking for the best and sales “empty nesters”. This group the best deal. deal. remains loyal to name brands, but depends on coupons and sales to stock up while they can Light Coupons Stock-up & Switch Stores Brand Disloyal & Sales Save for Best Deal www.asaeed.wordpress.com Source: ms.ayeshasaeed@gmail.com Recession proof consumers by ACNielsen
  • 8. Implication: Cut Costs No fancy packaging, no unnecessary razzmatazz Consumer Insights with Ayesha Saeed 7 out of 8 consumer segments are seeking costing cutting – REASONABLE is the new Black www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 9. Implication: Simple, Small & cheap Consumer Insights with Ayesha Saeed www.asaeed.wordpress.com Source: Trend Watching February trend ms.ayeshasaeed@gmail.com
  • 10. Implication: Avoid Suspicions Consumer Insights with Ayesha Saeed Debt stricken consumer will Be Transparent read the fine print Privacy Online Presence legislation (Guide ‘em) www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 11. implication: Inexpensive Consumer Insights with Ayesha Saeed Icing mood lifters required When the economy is shaky, sales of lipsticks increase as the women boost their moods with inexpensive lipsticks. Leonard Lauder The chairman of Estee lauder companies www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 12. Good Enough is good enough: Realism Not Perfectionism Consumer Insights with Ayesha Saeed Psychologically Natural Disaster Recession rewarding and War purchases Recession will bring more mindfulness to the buying equation - which means that consumers will be calculating purchases in a more complex way. www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 13. The Optimism divide Consumer Insights with Ayesha Saeed THEME: EMBRACE CHANGE POSITIVELY THEME: READY TO BEAT THE ODDS •Inject Hope & Confidence •Add fuel to aspirations •Be Reasonable from communication to • Sell the dreams boldly product design www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 14. What it means for Government Consumer Insights with Ayesha Saeed -Inject Hope in the economy -Inject confidence in investor -Inject Policies to curb suspicions from online privacy to hidden costs of products/investments www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 15. What it means for Brands - Be transparent Consumer Insights with Ayesha Saeed - Create something new for the emerging consumer category – “realistically full of life” -Cut the fat – cut down all redundant costs -Investigate your brand’s DNA – Be reasonable www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com
  • 16. Consumer Insights with Ayesha Saeed Consumer Insights with Ayesha Saeed For more consumer insights log on to www.asaeed.wordpress.com www.asaeed.wordpress.com ms.ayeshasaeed@gmail.com