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Eyes Wide Open 2.0


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New research from Ogilvy & Mather and Communispace reveals extreme new consumer shopping behavior and spending priorities.
This report looks at how consumers will go to market in 2011.

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Eyes Wide Open 2.0

  1. 1. Eyes Wide Open 2.0InsIghts Into the “In-Charge” Consumer
  2. 2. Consumers see no signs of economic recovery: what’s ahead for 2011 New research from Ogilvy & Mather and Communispace reveals extreme new consumer shopping behavior and spending priorities. This report looks at what this means for the 2010 holiday season and at how consumers will go to market in 2011. 15%Do you think i havethe recession no iDeais over? 7% yes 78% no
  3. 3. Consumers spend on crazy deals, shiny objects, tech productsWhat 2010 tells us about Over a third of consumers polled say new “Consumers’ lust for new shiny techthe 2011 “In-Charge” Consumer technology products are on the top of their gadgets is high, as these products offer aThe 2010 consumer wallet is not opening must-have lists; but when making purchases relatively affordable escape from the realityup for big purchases this holiday they have a price limit, bargain-hunting of a difficult economic climate,” explainedseason, according to a new study by mentality, and they are using more coupons. Graceann Bennett, Director of Strategico1 in partnership with the One consumer said they would buy a Planning at Ogilvy. “But paying fullconsumer insight firm Communispace. The Kindle if the price drops to $119. Another price is not realistic. They want deals thatstudy documents the holiday shopping said they would buy a combo Blu-ray/ satisfy desires on the things they want.”game plan of today’s much smarter, budget- Netflix player only if the price was “under $125.” As one of the Communispace communityminded shoppers – 78% of whom say that members in the study said:the recession is not over and 51% of whomsay that economic recovery will take “I really analyze my purchases…another two to three years. no more full-priced new video games for me. E I have started doing more research to make V smarter purchases.” A $ S $ $$
  4. 4. marketing strategies that work—it’s all about the dealThe findings reveal how aggressive new “Breaking through the holiday clutter with “I am using more coupons for groceriesmarketing tactics must be used to eye-popping deals that practically scream and shopping for deals online and in weeklydrive both consumer wants and needs. We’re giving it away! is getting consumers into ads. I will continue to do all these thingsTo activate consumer desire, deals with stores,” explained Manila Austin, Ph.D., into 2011…”time limits are driving consumer purchases, Director of Research at Communispace.say Ogilvy and Communispace. They cite “The reality, however, is that consumers arerecent creative sales promotions by specialty exercising a newfound power and control.retailers as evidence of the ticking clock While there may be higher traffic numbers,buy now game retailers are using to get we found that consumers are actually sayingshoppers in stores. they will be spending less this year than last year–when spending was greatly reduced from previous highs.” the Deal Best Buy spend $400, get a $200 gift card Gap 50% off until 10 a.m. on Black Friday Abercrombie spend $100 before noon, and get a $50 gift card Borders 40% off in store only, buy before 11/30
  5. 5. the 2011 consumer —from powerless to powerfulAlso on consumers’ shopping lists are have budgets and a plan. They’ve gone “Big consumer spending trends wefood, clothes, and personal care and from powerless to powerful. This is a see continuing into 2011 are a much higherbeauty products–items they are planning huge transition.” focus and practice on budgeting, moreto buy BUT only by spending less. Bigger do-it-yourself activities and a rejection ofticket items–cars, computers and home The holiday holdouts research reveals a well- the having-it-all lifestyle of the past,”furnishings–are being put off for later, thought-out game plan for gift giving this explained Dr. Austin.and at lower cost. Off the list: vacations year and buying in 2011.with 21% of respondents saying they are This idea is echoed by another consumer “I am buying fewer gifts for the kids,eliminating vacations this year. who said, “My goal is to get people things focusing on the things they might really like that are practical and that they will use.“Consumers today know they have the and that will last a longer time than the usual I’m tired of ‘stuff’ and am transferring that power,” explained Ms. Bennett. “At the junk they get. I am not asking for much to other people.” early stages of the recession, they felt for myself, and plan to do crafts or baking powerless and confused. Now the majority for the extended family this year.” new approach to GiFt GivinG 52% will buy less-expensive gifts 45% are setting a budget are scaling back on the number of gifts they are giving, 44% a further 10% decline from last year’s frugal giving 24% are making gifts, an increase from last year
  6. 6. What’s ahead for 2011The holiday holdouts of 2010 will continue The new study follows the “Eyes Wide Open,their thrifty ways for the foreseeable future, Wallets Half Shut” study that Ogilvy andaccording to the research. Over a third Communispace partnered on one year ago.of respondents said that economic recovery That initial research revealed significantwill take longer than expected–at least changes in consumer lifestyle choices, in10 years for full recovery. their pursuit of the American Dream and in their buying and shopping behaviors. “We have stopped eating out as much and renting movies instead of going to the Among the coping strategies consumers have adopted that will continue over theater. We don’t use a credit card, the next year are: unless it is an emergency and found we can do more with less.” Money savinG solutions 52% cook dinner at home more often 33% keep a car longer than normal 30% pay down debt 27% won’t take a vacation 26% create and stick to a budget
  7. 7. marketing strategies for 2011With consumers spending more time Among the new tactics Ogilvy says they are buying it because they wantshopping and comparing online, marketers marketers need to employ: the salon experience. What makes thismust align their online and offline approach work is that it taps into thatcommunications. A brand can’t promise Dazzle me WIth Deals emotional side and the rational side, givingone thing online and deliver something Marketers have to go beyond coupons and the consumer permission to buy the itemsdifferent in the store. percentage-off deals. Creative, attention- that fulfill their wants and needs at a getting offers where the deal itself is great price. Brands have to understand“Marketers have to follow the path the the complicated calculus that consumers the news is what drives consumer holdout consumer takes, even making sure that if consider before permitting themselves today. Stores opening at midnight, 3 a.m. they say something about their brand to buy and that they can’t just work on and other off-hours with limited special price on Twitter, there is a response,” said Ms. the rational price side of the equation– offers are getting shoppers in the door. Bennett. “A website isn’t enough today. desirability is more important than ever. To get these buyers to look at your brand, Consumers follow their own circuit from marketers must close the sale even before Facebook to Groupon to review sites. tempt me WIth teChnologY the customer is in the store. The presale A brand has to work much harder to gain is more important than ever before. New innovations at the right price will get trust, loyalty and fans. But those that do, consumers spending on “not so big, but will be well rewarded.” make me Want You big enough” purchases that satisfy the Selling isn’t just about value and price. need to indulge in a controlled and limited Marketers have to take both a right- and way. There is a pent-up desire for shiny new40 % of men and young left-brain approach. Suave recently moved objects. Consumers are more deliberate adults plan to purchase into the aspirational space with its newly in their spending but are budgeting for the tech products that deliver bothnew technology products in 2011. reformulated Salon Professionals line, positioning the brand as one with the function and fun. quality and desirability of a salon product. This appeals to what the consumer desires. They already know when they get to the store that Suave is a great value, but now
  8. 8. how the research was conductedA variety of quantitative and qualitative research was conducted for this study;a nationally representative sample of 1,000 consumers was polled byo1 Chicago, and several facilitated discussions were conducted inCommunispace’s proprietary online communities. The study builds upon theOgilvy and Communispace research conducted together last year on a nationallyrepresentative sample of 1,200 American adults through a robust online survey.ContactsGraceann Bennett, Manila Austin, Ph.D.Ogilvy COmmunispaCe maustin@communispace.comT:312.856.8218 T:617.607.1472