Peter Harris

National President

Australian Market & Social Research Society (AMSRS)

A HIDDEN TRUTH ABOUT AUSTRALIAN CONSUMERS PETER HARRIS | MANAGING DIRECTOR

June 2011

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2

4

6

8

10

12

Trusted Admired Exciting

Public Rating of Professions

Nu

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Law

yers

Aid

Wo

rker

s Pa

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g In

spec

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Stu

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Pers

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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1950 1960 1970 1980 1990 2000 2010

telephone online

Decline in Response Rates

Hello…

…is there anybody out there?

Social Media Monitoring

Design

Community Panels

Conversation Brand

Ronnestam

Customer 2

Customer Conversations

Customer

Customer

Brand Relationship

Continuous listening

Peter Harris

National President

Australian Market & Social Research Society (AMSRS)

A HIDDEN TRUTH ABOUT AUSTRALIAN CONSUMERS

ON THE SURFACE

18

Australia is the “lucky country”, right?

Spirit of innovation | Having a go | Mateship | Good humour |Taking a stand

Unemployment in Australia is low

Last data point: 15.07.2010 Source: Datastream, Credit Suisse / IDC

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Jan 90 Jan 92 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10

Unemployment rate

(in %)

Australian dollar

Is strong

Real AUD/USD

4.0

4.2

4.4

4.6

4.8

5.0

1984 1988 1992 1996 2000 2004 2008 2012

Log (Real AUD/USD) Average +/-1 S.D.

Sources: Datastream, Credit Suisse

Real AUD/JPY

4.0

4.2

4.4

4.6

4.8

5.0

1984 1988 1992 1996 2000 2004 2008 2012

Log (Real AUD/JPY) Average +/-1 S.D.

Sources: Datastream, Credit Suisse

Australia Growth shifting from

consumption to capex

Monetary conditions point to a slowdown

-6%

-3%

0%

3%

6%

9%

1978 1982 1986 1990 1994 1998 2002 2006 2010 2014

-2

-1

0

1

2

3

YoY% Change in Real GDP (LHS) MCI (RHS, Inverted, Led 4Q)

Sources: Bloomberg, Datastream, Credit Suisse

Consumers are choosing to deleverage

-8%

-4%

0%

4%

8%

12%

16%

1977 1983 1989 1995 2001 2007 2013

HEW (% Inc) Change in Housing Credit (% Inc)

Change in Housing Stock (% Inc)

Sources: Bloomberg, Datastream, Credit Suisse

FAIL

GFC…? in Australia it was more a crisis in confidence more than a financial disaster

$10B Stimulus package paid from

8th December 2008

48% Received benefits

15% Made a significant

difference

Personal messages from CEO’s

5% cut for Senior Mgt so that those earning under $100k can keep their jobs and receive a small increase

So where are Australians now?

69% of Australians believe the economic

conditions in Australia are good

More males believe

conditions are good while

females are more unsure

69% of Australian’s

50% OF CANADIANS

14% OF BRITS

12% OF AMERICAN’S

Gen Y are more optimistic about our economic

future than Gen X; believing economic

conditions will improve in the next 6 months

49% of Australians

worry about paying

their mortgage/ rent

Females worry more frequently than males

Is it any wonder retail spend is down? Over 3 successive quarters women are less optimistic than men Impacting consumer spending patterns More worried about retirement resources Rely more on partners partially for financial support 1 in 4 families with children in childcare works for no financial gain despite receiving some level of govt support Post GFC employment levels of men recovered more quickly than women Source : CBA Economic Vitality Report March 2011

safe

ty is

pri

mar

y

1%

4%

7%

9%

12%

13%

25%

29%

Invest in mutual funds

Invest in individual stocks

Spend on personal items …

Put towards a big purchase …

Spend on a Holiday

Cover daily expenses …

Save (in a bank account)

Pay down debt

Avoiding risk

If given $1000, the average Australian

would put the money towards…

Gen X are most likely to use the money to pay off debt whilst boomers are most

likely to spend on a holiday

17% would use 100% of that money to pay off debt while only 1% would

put 100% of the money towards purchasing personal items

We are reacting to brands and political leaders in a different way

Empathy is now table stakes

Sir Ralph admitted his bank had suffered significant damage to its brand due to the unprecedented public fury at last week's rise – November 2010

No real difference between major

political parties

or leaders

“Blandification” of Political leaders and policy

Bernard Salt, Australia Demographer

Rejecting Spin Doctoring during the 2010 Federal Election

47% distrust the Liberal party

48% distrust the Labor party

60% distrust the Greens

Base: All respondents (n=1021) Conducted via Your Source National Omnibus Jan 2011 Weighted to Australian Population

49% of Australians trust Julia Gillard

39% trust Tony Abbott

More males trust our first female PM than females

Base: All respondents (n=1021) Conducted via Your Source National Omnibus Jan 2011 Weighted to Australian Population

the formation of opinion. Citizen journalism combined with the 24 hour news

Bernard Salt Demographer and Columnist The Australian, August 2010

just apply in Australia. It applies in almost every

compelling evidence to suggest that this popularity can

Lachlan Harris

Sunday Telegraph Sunday 25th 2011

Picture of gerry harvey

Changing media landscapes

Mo

bile

http://hispanic-marketing.com/blog/advertising/mobile-location-based-services-market-to-exceed-12bn-by-2014-says-juniper-research/

Power of Location

Mobile and Location

A general lack of trust

Increased levels of public scrutiny ; and

The changing media landscape

are making it more difficult for brands and politicians to stand out and communicate

effectively

SO WHAT IS THE HIDDEN TRUTH IN THE ‘LUCKY COUNTRY’?

For consumer’s it’s RE-VALUATION TIME

Brand’s out of Sync Will be out of favour

Connection’s That Matter

Socially

Responsible

Group Shopping

“We are witnessing a transformation

in consumer behavior, as people

change the way they shop”

Matt Glasner

Experian Marketing Services

“Visits by Australian shoppers to

daily deal websites such as

CatchOfTheDay and Cudo have

soared by more than 1000 per cent

in the in the past year.

SMH 25 May 2011

A discount rate of 20– 40% would encourage men to enter a store

whilst discounts between 40-60% are needed to encourage women

Base: All respondents (n=1021) Conducted via Your Source National Omnibus Jan 2011 Weighted to Australian Population

Being Inspirational

Breaking through the blandification

Breaking through the blandification

A new take on the Rapunzel fable

More than 3D

The Next Consumer Revolution

THE NEXT CONSUMER

REVOLUTION

• This is a fundamental shift not cyclical

• Community driven, not so individually driven

• Calmness and simplicity rather than stress

and complexity

• Out: competition, power, control, conflict,

command

• In: generosity, close circles, people, leaders

and brands that listen

Concept by Mark Pollard

RELATIONSHIPS THAT YIELD START WITH LISTENING

IMAGE BY PDavidee FLICKR

“WE NEED TO GROW BIGGER EARS” CHRIS BROGAN

At IBM/Unica’s Marketing Innovation Summit in Boston last week (May 2011) Survey Reveals….

What happens to our social arrangements (substitute research) when every photo can be

recognised, geo-located and individuals tracked? What happens to shops when every price

can be compared? What happens to conversations when it’s all recorded, or any fact is a 5

sec voice search away from being checked? - TOM HUME, MANAGING DIRECTOR OF FUTURE PLATFORMS

THE FUTURE

Well said.

“It’s research Jim but not as we know it.”

Mrs Spock http://mrsspock.deviantart.com/art/Quickly-drawn-Spock-27657580

“Stop, Collaborate and Listen” – Vanilla Ice