The New Consumer Economy: What to watch and What to do
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Transcript of The New Consumer Economy: What to watch and What to do
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Title of PresentationCopyright © 2012 The Nielsen Company. Confidential and proprietary.
The New Consumer Economy:What to watch and What to do
James Russo, Nielsen
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KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
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INCREASINGLY ECONOMICALLY DIVIDED CONSUMERS
Source: msnbc.com; CNN Money*Supplemental Nutrition Assistance Program (SNAP)
1 in 7 Americans rely on food stamps
1 in 2 Americans own stock, mutual fund, 401K or IRA
20% of Americans earn less than $20,000 a year
20% of Americans earn less than $20,000 a year
87% of Americans earning over $75,000 own stocks
87% of Americans earning over $75,000 own stocks
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RETAIL SPENDING DRIVEN BY AFFLUENT HOUSEHOLDS
Retail Spending: 2 year trend
Approximately20% of HHs earn
over $100k
Approximately20% of HHs earn
over $100k
Source: Nielsen Homescan, 52 w/e 10/1/2011 versus 10/3/2009 excludes gas-only or Rx-only trips
-9%
-1%
-3%
-8%
-1%-1%
4%
< $20K $20K - $29K $30K - $39K $40K - $49K $50K - $69K $70K - $99K $100K +
Household Income
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
US MEDIAN HOUSEHOLD INCOME ON DOWNSLIDE
Source: U.S. Census Bureau; The New York Times & USA TODAY/Sentier Research
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
YOU CAN NO LONGER AFFORD TO BE “MIDDLE OF THE ROAD”
Conventional Retailers can no longer be …conventional
They need to differentiate themselves more than ever – to get beyond price
Conventional Retailers can no longer be …conventional
They need to differentiate themselves more than ever – to get beyond price
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KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
WHAT WE DID
• Selected a list of major CPG & Retail advertiser brands to include in the analysis
• Categorized ads (4000+) by creative approach: humor, narrative, sentimental, product, promotional & value
• Evaluated the “effectiveness” of each creative approach throughout the recession (from 2006 through 2011) among Adults 18+
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WHEN DESIGING ADS, THE SMART MONEY IS ON: HUMOR, NARRATIVE, SENTIMENTALITY
2006 - 2007 2008 - 2009 2010 - 2011
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FOCUS ON THE CONNECTION
• Marketers focused on product features and promotion/price do not resonate with viewers . . . even during tough economic times
• Consumers respond to marketing that makes a connection. Focus on creating messages that engage audiences with humor, sentimental/family themes, and relatable/engaging storylines over those that tout price/promotion/product features
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KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
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VALUE IS NOT JUST ABOUT PRICE, IT’S ABOUT THE BALANCE OF PRICE AND BENEFITS
Value Consumer = Price Value Consumer = Benefits/Price
All other Yogurt Greek YogurtAvg Price +107% higherUnit Sales 134%
Unit Sales -8%
Unit Sales 6% Premium Chocolate Avg Price 83% higher Unit Sales 10%
Mainstream Chocolate
Pound Sales 1% Healthy PastaAvg Price 57% higher Pound Sales 5%
Pasta Excluding Health
Unit Sales -4%
Premium CoffeeAvg Price 18% higher Unit Sales 5%
Mainstream Coffee
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
Shop
Source: Nielsen Homescan Survey – February 2012
NEARLY HALF OF CONSUMERS HAVE SHOPPED AT ALTERNATIVE VALUE FORMATS
Defined as: Thrift, 2nd hand/used goods, consignment, & pawn stores; Craigslist website; check cashing establishment
<= $49K $50K to $99K $100K+
56%
75% 72%66%
52% 46%56%Shopped In the past 3 months
Plan to shop in the next 12 months
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KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
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KEY TRENDS THAT WILL IMPACT BEHAVIOR
Increasingly Multicultural Older but Wiser
Declining FamiliesIncreasingly Urban Smaller Households
Stagnant Population
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ETHNIC HOUSEHOLDS WILL BE THE MAJORITY BY 2050
35%
54%
Source: US Census
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BUT THE OPPORTUNITY IS TODAY
HISPANICAMERICANS
12th LARGESTECONOMY
AFRICAN-AMERICAN
17th LARGESTECONOMY 27th
LARGESTECONOMY
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CONNECTED BUT CONNECTED = ENGAGED
HISPANICS AFRICAN AMERICAN ASIAN AMERICANtext talk view
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THE GAP
New Product
Hispanic
Ad Spending
African American
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
REACH RESONATE
HOW WE GET THERE
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
KEY TAKEAWAYS
• A successful ad is a successful ad
• Everybody responds to humorous storylines
• Prioritize universal drivers over cultural nuances
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
MULTICULTURAL DRIVERS
* Likability Index versus average Asian Ad likability* Likability Index versus average Asian Ad likability
Asian Americans like product features
46% 85%OF TOP ADS DISCUSS PRODUCT FEATURES
OF BOTTOM ADS DON'T DISCUSS FEATURES
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
MULTICULTURAL DRIVERSAfrican-Americans respond to humor
42% 96%OF TOP ADS AREHUMOROUS AND RELATABLE
OF BOTTOM ADS ARE NOT HUMOROUS OR RELATABLE
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
MULTICULTURAL DRIVERSHispanics prefer family references
41% 95%OF TOP ADSFOCUS ON THE FAMILY
OF BOTTOM ADS DON'T FOCUS ON THE FAMILY
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
41%INCREASE IN HISPANIC
MARKET SALES
TOP PERFORMING GENERAL AD RESULTING IN
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
KEY TRENDS THAT WILL IMPACT BEHAVIOR
Increasingly Multicultural Older but Wiser
Declining FamiliesIncreasingly Urban Smaller Households
Stagnant Population
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You need to adjust to accommodate different shopping and product preferences
It’s an age AND it’s an attitude
This Not this
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Know the difference between age groups and generations
Seniors Today Seniors Tomorrow
• More traditional• Less technological savvy• Conservative values• Conservative tastes
• Requirements, conditions & ailments related to age
• Less traditional• More technological savvy• Less conservative values• Willing to experiment
• Requirements, conditions & ailments related to age
Sameneeds
DifferentPeople
PatientPatient ConsumerConsumer
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KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
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HOW WE CONNECT WITH CONSUMERS IS EVOLVING
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USING NEW AND TRADITIONAL WAYS
3.5 Hours
3.5 Hours
74%Internet
penetration
74%Internet
penetration
DEVELOPED
DEVELOPED
21% of North
Americanshave TV’s
with internet connection
21% of North
Americanshave TV’s
with internet connection
++
Source: Nielsen Global Survey Q3 2011
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CROSS PLATFORM VIEWING GAINING• Average TV viewer is
watching 6 fewer minutes per day of traditional television
• Viewing is shifting to other devices, including to tablets. (Current penetration is 15% of US homes)
• Nearly 36 million mobile phone owners in the U.S. watch video on their phones.
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LEVERAGE SIMULTANEOUS USAGE
Source: Nielsen Q2 2012 Connected Devices report
44% of simultaneous
tablet+TV viewers visited
a social networking site
during the program
86% tablet owners
and 84 % of smartphone owners use their device
while watching TV
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BREAKING THROUGH THE SOCIAL MEDIA AUDIENCE
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SOCIAL ADS GENERATE A 55% GREATER LIFT IN RECALL
52% Opportunity to save
37% Free service or app.
36% Exclusive information
33% News of interest
26% Charitable purpose
Consumers will provide their personal information for:
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59%
56%
52%
49%
49%
48%
46%
New Product Input
Product Reviews
Join Manufacturer Group
Receive/Share Recipes
Join Retailer Group
Receive Coupons
Join Loyalty group
FOR OUR INDUSTRY…WHAT ARE CONSUMERS WILLING TO DO ON SOCIAL MEDIA?
Source: 2011 Nielsen PanelViews Media Survey - Individual responses - Canada
Consumers are willing to
get more involved
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TRUST IN A SOCIAL MEDIA WORLD
Completely Completely/somewhatBrand Sponsorships 7% 47%TV Ads 6% 48%Radio Ads 5% 43%Newspaper Ads 6% 46%Magazine Ads 6% 47%Ads before movies 4% 41%TV product placements 5% 41%Outdoor billboards 4% 46%
Completely Completely/somewhatBrand Sponsorships 7% 47%TV Ads 6% 48%Radio Ads 5% 43%Newspaper Ads 6% 46%Magazine Ads 6% 47%Ads before movies 4% 41%TV product placements 5% 41%Outdoor billboards 4% 46%
TraditionalMedia
Completely Completely/somewhatBranded websites 9% 57%Emails I signed up for 6% 50%Ads in search engine results 5% 40%Online video ads 4% 36%Online banner ads 4% 33%Ads on social networks 4% 36%Txt ads on mobile phones 3% 29% Display Ads on mobile devices 4% 33%
Completely Completely/somewhatBranded websites 9% 57%Emails I signed up for 6% 50%Ads in search engine results 5% 40%Online video ads 4% 36%Online banner ads 4% 33%Ads on social networks 4% 36%Txt ads on mobile phones 3% 29% Display Ads on mobile devices 4% 33%
NewMedia
Completely Completely/somewhatRecommendations from people you know 28% 91%Consumer Opinions posted online 9% 70%Editorial Content (Newspapers) 7% 59%
Completely Completely/somewhatRecommendations from people you know 28% 91%Consumer Opinions posted online 9% 70%Editorial Content (Newspapers) 7% 59%
Friends&
Family
Source: Nielsen Global Online Consumer Confidence Survey 3Q2011
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Economic Outlook
WHAT’SNEXT?
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24% 22%
0%
10%
20%
30%
40%
50%
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
Source: NGCCI
MostOptimistic
MostOptimistic
U.S CONSUMER IS CAUTIOUSLY OPTIMISTIC ABOUT THE FUTURE
DO YOU THINK YOUR COUNTRY WILL BE OUT OF A RECESSION IN THE NEXT 12 MONTHS?
% SAYING YES
Source: Nielsen Global Omnibus Consumer Confidence Survey 1Q2012
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LOOKING FORWARD, COPING MECHANISMS REMAIN CONSISTENTWHEN ECONOMIC CONDITIONS DO IMPROVE, WHAT
DO YOU EXPECT YOU WILL CONTINUE TO DO……
Save on gas 51%
Reduce take-out 35%
Less on apparel 31%
OOH Entertainment 29%
Save on groceries 28%Source: Nielsen Global Omnibus Consumer Confidence Survey 2Q2012
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THE CONSUMER IS IN CONTROL
ConsumerConsumerBrandsBrands RetailersRetailers
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SUCCESS RELIES ON EVEN GREATER COLLARBORATION
Collaboration
Trust
Loyalty
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Title of PresentationCopyright © 2012 The Nielsen Company. Confidential and proprietary.
The New Consumer Economy:What to watch and What to do
James Russo, Nielsen