credit crunch feb 09

54
Julian Rodway Expressions Planning Limited 416a King’s Road London SW10 OLJ Tel: +44 (0)20 7376 3356 Fax: +44 (0)20 7376 3447 Email: [email protected] March 2009 CREDIT CRUNCH: WHERE YOUR CONSUMERS ARE AT TODAY PHASE 2 [FULL REPORT] EXPRESSIONS BRAND PLANNING

Upload: julianrodway

Post on 02-Jul-2015

324 views

Category:

Economy & Finance


0 download

DESCRIPTION

Credit crunch and impact on: health, fresh produce, entertainment & shopping

TRANSCRIPT

Page 1: Credit Crunch Feb 09

Julian Rodway

Expressions Planning Limited

416a King’s Road

London SW10 OLJ

Tel: +44 (0)20 7376 3356

Fax: +44 (0)20 7376 3447

Email: [email protected]

March 2009

CREDIT CRUNCH:

WHERE YOUR CONSUMERS ARE AT TODAY

PHASE 2 [FULL REPORT]

E X P R E S S I O N SB R A N D P L A N N I N G

Page 2: Credit Crunch Feb 09

CREDIT CRUNCH CONTEXT

The last quarter of 2008 was a dress rehearsal for 2009

The UK economy experienced record rises in fuel, impacting on:

• Home heating

• Transport costs

• Production costs

Compounding these fundamental costs was the credit crunch

From a consumer perspective the world was changing:

• Mortgage companies were failing

Icons of consumerism were crumbling:

• High street shops were closing

Banks were bailed out:

• Motor manufacturers were looking for economic support

Consumers were experiencing the cold winds of change

Expressions Planning Credit Crunch - 1

Page 3: Credit Crunch Feb 09

A YEAR LONG REVIEW

Expressions conducted 4 groups in February 2009:

• 2 in Birmingham

• 2 in London

In each location one group was conducted amongst:

• Consumers confident about their economic future

• Consumers experiencing recent economic difficulties and concern over jobs

The aim was to understand the current environment:

• Select 8 households for an ethnographical study

The intent is to follow the fortunes of these 8 families monthly over the year

In this first in home study we explored 4 categories

• Health issues

• Fresh produce

• Entertainment

• Shopping

We invite you to submit other categories and specific questions to be explored during the

subsequent monthly interviews

This is a free service

Expressions Planning Credit Crunch - 2

Page 4: Credit Crunch Feb 09

RECESSIONARY MINDSETS: RECREATIONAL TO REALITY

Expressions Planning Credit Crunch - 3

Page 5: Credit Crunch Feb 09

RECESSIONARY CONSUMER TYPOLOGIES

Expressions Planning Credit Crunch - 4Prominence

Co

nfi

de

nt

Co

nc

ern

ed

Recreational

Reserved

Retrenchers

Not overly concerned about serious economic issues

Recognise situation as an opportunity to review

& reduce household expenditure

Elements of regaining control of expenses

Participation is about cutting back:

- not cutting out

Perceive household as vulnerable to unemployment

Need to be proactive, manage their household expenses

Matter of prioritising expenditure

Cutting back & out without being too puritanical

Experiencing economic difficulties; adjusting & adapting

Desperate measures need to be enforced by many

Optimistic belief means some adopt a

progressive cut back/out policy

Learning to adjust to a different set of priorities

Driven by a need to conform to situation

Conscious that conspicuous consumption is

not socially or politically correct

Selectively join in but will also exploit opportunities

Relatively confident they will not be impacted on

Reality

Page 6: Credit Crunch Feb 09

RECESSIONARY CONSUMER TYPOLOGIES: SUMMARY

Expressions Planning Credit Crunch - 5

Recreational Summary

Need to conform

Selectively join in

Exploit opportunities

Relatively confident

Reality Summary

Experiencing economic

difficulties

Desperate measures

Progressive cut out policy

Learning to adjust

Retrenchers Summary

Vulnerable to unemployment

Need to be proactive

Prioritising expenditure

Cutting out & back

Reserved Summary

Not overly concerned

Opportunity to review & reduce

expenditure

Regaining control

Cutting back, not cutting out

Page 7: Credit Crunch Feb 09

RECREATIONAL MINDSET

Expressions Planning Credit Crunch - 6

Context

Crisis

Voyeurs of crisis; a topic of discussion not an imminent threat

Opportunity for some to carefully and covertly exploit:

“…at least you can now negotiate over prices…”

“…you can now get a builder and at a reasonable price…”

Critical of the ‘doom & gloom’ of economic news; considered an

irritant:

“…the media don’t help, full of depressing stories…”

“…stopped listening to Radio 4…too depressing…”

Economically comfortable; adopt a secure attitude to employment

Typically working in public sector or companies supporting essential

services

Boast about low mortgages or tracker mortgages

Perceive themselves as financially astute

Not prepared to alter their lifestyle but less overt about it:

“…we’re still going skiing but feeling a bit guilty about it…”

Page 8: Credit Crunch Feb 09

RECREATIONAL MINDSET (Cont’d)

Expressions Planning Credit Crunch - 7

Considerations

Brands

Feel an opportunity to review household expenditure

More about exploiting offers than consolidating:

- minimizing expenditure & getting greater value:

“…Sky are doing some good offers…”

Concern over value of sterling & foreign holidays

For the brave an opportunity for investments:

“…house prices are going to fall…they’ll be some bargains

about…”

Belief in buying brands unshaken; not going to compromise

Conversely, many aware of brands being discounted:

- from chocolate biscuits to BMWs

Resist changing established and efficient shopping habits

Recession more about being seduced to remain loyal to

existing suppliers:

- exploiting an opportunity

Page 9: Credit Crunch Feb 09

RECREATIONAL MINDSET (Cont’d)

Expressions Planning Credit Crunch - 8

Summary

Confident, to an extent complacent

Perceive situation as an opportunity to exploit

Voyeuristic and vulture mentality

Not prepared to compromise on lifestyle

Respect need to be less conspicuous consumers

More likely to buy a bigger car at reduced rate:

- than a smaller more economical car

Crisis is about selectively joining in when it suits them

Page 10: Credit Crunch Feb 09

RESERVED MINDSET

Expressions Planning Credit Crunch - 9

Context

Younger couples, some professionals (teachers, librarian, IT

workers)

Feel relatively secure in job; unemployment not an issue

Focus is on maintaining lifestyle by efficient finances

Concern is about the future and future planning

Crisis

Impact is by association; house prices have fallen

Constraining plans for family improvements:

“…we wanted to move to a bigger house this year…”

Talk about friends and relatives being affected; second hand

experience:

“…my brother-in-law’s badly hit, he’s a builder…”

Period of reconsidering financial situation, reviewing expenses

Sensitive to the plight of others; cutting back part of conformity:

“…you see people buying more economy lines…so you

think you might too…”

Page 11: Credit Crunch Feb 09

RESERVED MINDSET (Cont’d)

Expressions Planning Credit Crunch - 10

Considerations

Brands

Still remaining loyal to ‘icon’ brands (washing products,

butter, cereals, etc):

- switching where deemed less important:

“…I’m not down to buying the economy own labels but

cutting back where possible…it is a sign of the times…”

Challenge mentality towards expenditure:

“…I feel as if I have to justify what I buy to myself…”

Reference the need to budget and consider expenditure carefully

Future plans involving big ticket items or household improvements put

on ice

Holiday plans have become less extravagant & UK based due to the £:

- no longer able to enjoy cheap €

Looking to make savings where possible without sacrifice

Mood of being prepared for worse times:

- preparing a plan to cope

- a phased strategy from cutting back to cutting out

Page 12: Credit Crunch Feb 09

RESERVED MINDSET (Cont’d)

Expressions Planning Credit Crunch - 11

Summary

Feeling of being prepared

Gaining control of expenditure

Prioritising values

Refreshing attitude to extravagant consumerism

Adopting more family and free entertainment

Turning from consumerism to culture

Need to justify purchases; element of guilt over extravagance

Seeking to compensate when cut back:

- indulgent meal in rather than a night out

Initiating family values and appreciating of money management

Page 13: Credit Crunch Feb 09

RETRENCHERS MINDSET

Expressions Planning Credit Crunch - 12

Context

Crisis

Driven by the need to be prepared

Having a sort of plan, campaign management

Unspoken expectation of at least one partner’s income being

affected

Have often reviewed household finances and cut down and out:

“…we haven’t pared back to the bones …but should it happen

we know we can be more ruthless…”

Concerned about unemployment

Experience of friends, family and colleagues who have been

made redundant

Work in sectors vulnerable to downturn (building related,

catering, manufacturing, etc)

Anxiety about surviving through meeting essential commitments

Page 14: Credit Crunch Feb 09

RETRENCHERS MINDSET (Cont’d)

Expressions Planning Credit Crunch - 13

Considerations

Brands

Some brands non negotiable (coffee, cereal, shampoo, toothpaste, etc)

Perceived as false economy

All discretionary expenses cut back

Experiment with other stores and own label products:

“…I’ve always driven past Morrison’s to get to Sainsbury’s but now I’m

converted…excellent fresh fruit and veg…”

A period of redefining household tastes and expectations

Trading down whenever possible and practical

Staged reduction in unnecessary expenditure and lifestyle

Desire to implement drastic cuts after Christmas:

“…we knew we had to do it but wanted to have a good

Christmas first for everybody…”

All household bills and outgoings reviewed:

- some subscriptions cut out (mobile phones, Sky, etc)

- some services switched to exploit offers (dual fuel discounts, cheaper

suppliers, etc)

- some cut back (basic Sky package, selling 1 car, etc)

Desire to revisit mortgage but concern about ‘opening a can of worms’

Want to be living as expediently as possible; weaning themselves off credit

Page 15: Credit Crunch Feb 09

RETRENCHERS MINDSET (Cont’d)

Expressions Planning Credit Crunch - 14

Summary

Planning for the worst

Learning to live on a reduced budget

Challenging past consumer aspirations

Acclimatising the family; changing tastes and expectation

Learning different shopping regimes

Seek non extravagant rewards and treats

Family based activities evident

Parental concern on children not being the innocent victims

Prepared to compensate children and family with small shared

indulgences

Page 16: Credit Crunch Feb 09

REALITY MINDSET

Expressions Planning Credit Crunch - 15

Context

One or both partners made redundant or hours shortened

Immediately impacting on household finances and emotions

Take desperate and immediate expenditure decisions:

- driven by necessity

Pride prevents consideration of outside financial planning and help

Reluctance to talk to mortgage provider or landlord

Crisis

Living through economic turmoil

Perceived themselves as victims, want to apportion blame

Government and banks cited as being responsible for ‘the mess’:

“…it’s about people in power playing with our lives…”

Adopt a pessimistic view of the future:

“…I’m 48, I’m not likely to get another job in engineering

again…or at all!”

Page 17: Credit Crunch Feb 09

REALITY MINDSET (Cont’d)

Expressions Planning Credit Crunch - 16

Considerations

Brands

Radical change of life

Minimising expenditure and impact on family:

“…you know there are plenty of us out there and there will be plenty

more but you don’t want your kids to be affected…”

Evident psychological impact

Brands are luxuries that need to be justified:

“…it’s only a few pence more for Heinz and they can tell

the difference even if I hide the tin…”

Challenge is to survive on a reduced budget

Economies are essential, not optional:

“…heating or eating…”

Significant change in shopping and eating habits:

“…now buying more vegetables and cooking from

scratch…found some really good recipes…”

Discount stores now offer a shopping relevance:

“…now go to Aldi first…what I can’t get there I get at Tesco’s…”

Page 18: Credit Crunch Feb 09

REALITY MINDSET (Cont’d)

Expressions Planning Credit Crunch - 17

Summary

Challenges and changes family life

Learning to cope with circumstances

For some adoption of different value systems

Different coping strategies; resignation to optimism

In a changing world brand loyalty perceived as a luxury

Consumers looking for survival strategies

However cheap does not always represent value

Need to treat themselves and family

Distractions deemed important; family outings, gaming consoles

Discovery of a different set of values and consuming

experiences:

- eg swapping culture or exchanging items on EBay

Page 19: Credit Crunch Feb 09

HEALTH ISSUES & PRODUCTS

Expressions Planning Credit Crunch - 18

Page 20: Credit Crunch Feb 09

HEALTH ISSUES AND PRODUCTS

Expressions Planning Credit Crunch - 19

Recreational

Reserved

Less indulgent expenditure, including clothes

Belief in health & need to invest in it

More about maintaining the status quo

May pull back from extravagant products:

- especially for the household

Becoming less concerned about fashion:

- respecting ‘need’ not ‘want’ philosophy

Prepared to invest in appearance & health

Keen to adopt a healthy lifestyle & prepared to

fund it

Enjoying family life, indulging children:

- karate & swimming lessons

Take advantage of promotions & offers

Enjoy indulging children with out door equipment

(eg bicycles)

Page 21: Credit Crunch Feb 09

HEALTH ISSUES AND PRODUCTS (Cont’d)

Expressions Planning Credit Crunch - 20

Retrenchers

Reality

Health more of a basic necessity

Shopping for economy products

Adopt a more grounded approach to hyperbolic

claims

Exercise thought to counter anxiety

Life thought to have changed in this context

Walking or cycling more; greater use of public

transport

Health concerns more focused on a balanced

diet

Gym membership early victim of recession

Conversely aware of need to present a fit image

Exercise deemed a good release of recessionary

anxiety

Belief need to be fighting fit

Some replacement of gym routines with home

exercise (walking the dog)

Concerned about appearance but reluctant to

start diets (need to buy new clothes)

Page 22: Credit Crunch Feb 09

HEALTH ISSUES AND PRODUCTS (Cont’d)

Expressions Planning Credit Crunch - 21

Context

Gyms

Fitness was perceived as an ingrained attitude

Prompts polarising attitudes: addiction or avoidance

Evident concern over being ‘fighting fit’ to cope with the recession

Need to present an energetic & youthful image:

- especially with the threat of unemployment

Element of improving or regaining self confidence through physical

appearance

Gym membership regarded as discretionary expenditure

Perceived as a personal indulgence that could not be justified when

cutting back:

“…I used to go swimming nearly everyday…I miss not going to the

gym, it was escapism…no I won’t go to the public pool, it wouldn’t

be the same…”

However, amongst the more secure, gym membership can be

rationalised:

“…we have family membership & both of us use it..I pay extra for the

crèche…”

Page 23: Credit Crunch Feb 09

HEALTH ISSUES AND PRODUCTS (Cont’d)

Expressions Planning Credit Crunch - 22

Alternative to

gym

Dieting

Running & jogging considered free alternatives to gym membership:

“…still get the exercise buzz, but without the monthly charge…”

Some undertaking exercise regimes at home

Dog walking also cited as exercise routine

Evident signs of missing gym membership; aspect of self pampering &

rewarding

Danger of breaking future routines, danger of distancing lapsed members

Whilst the credit crunch was an opportunity to diet & adopt healthy

routines, there was a lack of incentive:

“…it’s not as if you can go out & buy a new outfit when you’ve lost the

weight…”

Amongst Reality & Retrenchers the move was to more comfort food:

“…you want something hot & filling…not salads…”

Dieting was resisted due to ‘self obsession’ & wrong season

Page 24: Credit Crunch Feb 09

HEALTH ISSUES AND PRODUCTS (Cont’d)

Expressions Planning Credit Crunch - 23

Toiletries

Favourite toiletries were thought non negotiable

Considered essential to appearance & self confidence

Many women were prepared to compromise on general toiletries:

- family soaps & shampoo brands were readily exchanged for own

label

- however personal cosmetics, skin care and hair care brands could

be justified:

“…I’m not prepared to experiment with cheap shampoos. I know what

suits my hair…buying cheap ones would be false economy…”

Family was also being encouraged to use more economically

Men’s toiletries, especially shaving, appear to be more vulnerable than

women’s

Page 25: Credit Crunch Feb 09

HEALTH ISSUES AND PRODUCTS: LEARNING

A positive approach to health appears to directly influence self esteem

Retrenchers and Reality consumers have noticeably less energy and confidence

Gym visits and a proactive health attitude are early casualties

Gym subscription is perceived as a luxury

Conversely these two groups are arguably in most need of stress reducing exercise

Belief by some that they need to present a fit and energetic persona:

• To prevent redundancy or be competitive in the job market

Expensive household toiletries likely to be replaced with economy versions

Reluctance to sacrifice trusted personal toiletries and cosmetics

• Perceived as essential and cost effective

Incentive to diet often missing (such as holidays, new appearance):

• Conversely concern over cost of new wardrobe

Opportunities to reach out to struggling consumers:

• Deals or off peak membership

Toiletry brands need to justify price premium by amplifying benefits

Expressions Planning Credit Crunch - 24

Page 26: Credit Crunch Feb 09

FRESH PRODUCE (FRUIT, VEG & FLOWERS)

Expressions Planning Credit Crunch - 25

Page 27: Credit Crunch Feb 09

FRESH PRODUCE

Expressions Planning Credit Crunch - 26

Recreational

Reserved

Adopt a pragmatic view to prepared fruit & veg

There if they need the convenience

Concern is more on freshness & taste than cost

Purchase of fruit & vegetables has not been affected

Belief there are more loose products on offer

Still subscribe to belief in organic as healthier option

Some shopping farmers’ market for taste, health

benefit & recreational appeal

Buying into prepared market for convenience

Real vegetables for real cooking (Sunday lunch)

Often mums with small children

Shopping tends to be more health &

convenience oriented

Looking for shelf seduction & inspiration

Want reassurance over nutrition

Unlikely to shop whole fixture, selective products

Less likely to be price sensitive or aware

Page 28: Credit Crunch Feb 09

FRESH PRODUCT (Cont’d)

Expressions Planning Credit Crunch - 27

Retrenchers

Reality

Practised economy cooks

Cooking from scratch due to necessity

Perceived as healthy & economical food

Focus is on main vegetables & fruit

Only buy different offers if on promotion

Flowers deemed an unaffordable luxury

Prepared to buy from markets or supermarkets

Willing to prepare vegetables

Want to ensure this is no wastage

Salads regarded as an expensive meal option

Looking for bargains

Shopping for fresh produce was ‘hands on’:

- they select their produce

Loose preferred to bagged

Prepared to see beyond the leaves & dirt, more

tolerant of different sizes & shapes

Looking to avoid waste, only buying what will be eaten

Fruit bowl & cut flowers victim of recession:

- but with exceptions (Valentines, Mother’s Day)

Some experimentation with markets for fresh produce

& value shopping

Page 29: Credit Crunch Feb 09

FRESH PRODUCE (Cont’d)

Expressions Planning Credit Crunch - 28

Context

Greater appreciation & focus on fresh produce driven by:

- reversion to ‘proper’ cooking & more traditional meals

- appreciation of wholesomeness of fresh fruit & vegetables

Fresh produce now a more complex decision requiring consideration of:

- air miles & seasonality

- organic issues

- packaging & processing

Most were looking for a quality and convenience balance:

“…I don’t mind washing them but if I can get them ready for the pan at

a few pence more then it’s worth it for me…”

Reluctance to appear irresponsible by buying pre-prepared or exotic

offers

Adopt a more considered and controlled approach:

- not prepared to waste fruit and vegetables

Less likely to buy on impulse

Page 30: Credit Crunch Feb 09

FRESH PRODUCE (Cont’d)

Expressions Planning Credit Crunch - 29

Organic

Seasonality

For most organic was not a consideration

Perceived as expensive with only a marginal health benefit

Conversely organic believers were still subscribing to the superior health

& taste promise

Less of an issue with Reserved & Recreational consumers

Used to having a wide selection on offer throughout the year

More of a concern amongst Retrenchers & Reality consumers

Out of season & exotic fruit perceived as very expensive

Rationalise fuel for either transport or heating:

- dramatically increases cost

Concern over being seen as extravagant

Page 31: Credit Crunch Feb 09

FRESH PRODUCE (Cont’d)

Expressions Planning Credit Crunch - 30

Packaging

Evident resistance to over packaging

For the economy minded packaging added to the cost:

- & prevented them from inspecting the fruit & vegetables

For Reserved & Recreational consumers packaging was seen as

occasionally unnecessary:

- lacking eco ethics

Steam cooking makes sense of packaging & preparation for these

shoppers

Pre-prepared & packed could be justified by no wastage and convenience

Page 32: Credit Crunch Feb 09

PRODUCE: LEARNING

As budgets become tighter consumers retrench to wholesome fresh foods

Willing to spend time preparing vegetables (time rich, money poor)

Reluctance to paying for excessive stalks, leaves or dirt

Evidence of trimming at fixture

Want to ‘feel’ the products to make their own selection:

• Packaging acts as a barrier

Still a role for pre-prepared food but needs to be justified:

• Convenience, no wastage and variety

Concern over pre-prepared is still on nutrition, taste and for some hygiene

Organic devotees remain convinced of health & taste superiority:

• Additionally believe price difference is now marginal

Fruit bowls and more exotic vegetables appear to be victims of the times for some

However, there is still a market for prepared fruit and vegetables providing it is

competitive in terms of variety, convenience or wastage

Flowers as a self purchase are a luxury:

• Perhaps need re-positioning as a token present (husbands)

• Or joint promotions with suitable gift options

Expressions Planning Credit Crunch - 31

Page 33: Credit Crunch Feb 09

ENTERTAINMENT IN & OUT OF HOME

Expressions Planning Credit Crunch - 32

Page 34: Credit Crunch Feb 09

ENTERTAINMENT IN & OUT OF HOME

Expressions Planning Credit Crunch - 33

Recreational

Reserved

Few changes to entertaining patterns & expectations

Still going out as often & to known places

Limitations are less financial & more about family

circumstances – babysitters & other commitments

Social life more likely to be impacted by others:

“…meet up with my girlfriend once a month for a meal…she

phoned to say she can’t afford it, her husband’s a builder…”

Again experience of the Credit Crunch is via a third party

They have aspirations & entertainment expectations

Want to invest in home entertainment: Sky & HD TV:

“…can afford them now as we have more money each month

[tracker mortgage]…”

Cautious about indulging but still feel they deserve strokes &

rewards

Claim to be cutting down on the frequency of going out but not

down trading:

“…when we got out for a meal we go for a good one…I don’t

want to spend money & be disappointed…”

Selected interest in meal deals; more effective if from a chain

already used

Currently reviewing home entertainment with a view to

economising not eliminating

Drinking at home perceived as saving, tendency to buy more

Evidence of trading up on wines as a justifiable extravagance

Page 35: Credit Crunch Feb 09

ENTERTAINMENT IN & OUT OF HOME (Cont’d)

Expressions Planning Credit Crunch - 34

Retrenchers

Reality

Cut back on entertainment, extent dependent on Credit Crunch

mentality

Less frequent nights out or more control over budget:

“…we’ll still go out for a drink but won’t stay as long…stopped

buying rounds…I think people understand these days…”

“…can’t afford to spend £30-40 on a Friday night anymore…”

Still celebrate family occasions but looking for cheaper options

Deal sensitive; actively aware of promotions

Usually already reviewed home entertainment options; cut

back or cut out Sky

Cable/satellite TV regarded as a luxury & therefore vulnerable:

- conversely internet seen as educational & helpful

Celebrate family occasions at home with relatives & friends

Going out was rarely an option: a selfish indulgence

Discovered other family activities & amenities:

- local parks, children’s clubs:

“…the internet when some time ago…if the kids want to use it

they go to the library…”

Home entertainment limited to terrestrial & Freeview

Occasional history of debt issues with Sky:

“…we ran a large bill…I’ve now paid it off but we miss it as

we’re a sporting household…”

Some drinking at home but thought of as an extravagance:

“…if the kids see us drinking it’s not fair on them…he wants a

new pair of football boots…”

Page 36: Credit Crunch Feb 09

ENTERTAINMENT IN & OUT OF HOME (Cont’d)

Expressions Planning Credit Crunch - 35

Context

Still want entertainment & occupation

Argue it is a distraction from reality

Going out for meals, drinks, entertainment considered discretionary:

- consequently easy to enforce savings

Most have become accustomed to multiple channel TV:

- through non terrestrial broadcast

Attuned to programmes on demand

Going out of the home for entertainment also adult centric:

- can be perceived as selfish if imposing family economies

Some preparation to invest in household as entertainment hub

Cut back

Sky/Virgin services tend to be first line economies

Respondents either paring back to basic packages or cutting out

Page 37: Credit Crunch Feb 09

ENTERTAINMENT IN & OUT OF HOME (Cont’d)

Expressions Planning Credit Crunch - 36

Meals out

Meal in

Meal deals tend to work amongst select groups

- seduce Retrenchers to go out and spend

- appease guilt or concerns of the Reserved

Coupons only seem to be effective if the restaurant is already known:

- promotes pleasant memories & known expectations

All aware of supermarket meal deals

Actively taken up by Retrenchers and Reserved

However perceived from different perspectives:

- Retrenchers: celebration of an occasion

- Reserved: compensation for a meal out

Page 38: Credit Crunch Feb 09

ENTERTAINMENT IN & OUT OF HOME (Cont’d)

Expressions Planning Credit Crunch - 37

Drink out

Drink in

Cut back on by most

Perceived as self indulgence:

- denying partner pleasure

- spending family money

Compensating for less drinking on licence was more at home

Reserved can indulge in small home entertainment extravagances:

- buying better wine

- accompanying treats, crisps, dips, etc

Retrenchers can justify pleasures as compensation for not going out

Page 39: Credit Crunch Feb 09

ENTERTAINMENT IN & OUT OF HOME: LEARNING

Need for entertainment as a reward and/or a distraction

Economically impacted families discovering different entertainments

Exploiting community facilities and recreational clubs:

• Especially children

Adults giving children more freedom and independence to participate

Greater appreciation of going out and more consideration given to staying in

Non terrestrial TV first line economy to be cut out or cut back

Concern is consumers justify decision by deriding service:

“…a thousand channels and nothing to watch on any of them…”

If they believe this they will be difficult to re-recruit when they can afford the service

Meal deals both in and out of home need to be indulgent and exciting:

• Not be perceived as compensation

Opportunity for more proactive marketing offers for in home entertaining

Expressions Planning Credit Crunch - 38

Page 40: Credit Crunch Feb 09

SHOPPING – FOOD & CLOTHES

Expressions Planning Credit Crunch - 39

Page 41: Credit Crunch Feb 09

SHOPPING – FOOD & CLOTHES

Expressions Planning Credit Crunch - 40

Recreational

Reserved

Shopping still a recreational activity

Family shopping trips at weekends virtual day out

Taken advantage of ‘continuous & closing down’ sales

Whilst exploiting offers criticism over extended sales

Claim certain shops are like jumble sales (Miss Selfridge)

Detract from pleasure of shopping

Supermarket behaviour relatively unaffected

Still buying same brands & items: usually unaware of key

prices

Purchasing what they want

Also critical of drab economy packaging & excessive sale

merchandising

Conscious of Credit Crunch environment

Described as a continuous sale since before Christmas

High St & malls considered to be less attractive:

- fewer people, less ‘spirited’

Aspiration, excitement & extravagance appears to have gone:

“..miserable looking people looking at things they can’t afford

& buying stuff they don’t need but is cheap…”

Little change in shopping habits or patterns

Page 42: Credit Crunch Feb 09

SHOPPING – FOOD & CLOTHES (Cont’d)

Expressions Planning Credit Crunch - 41

Retrenchers

Reality

Window shopping normally involves some token buying +

additional expense on coffee or lunch

Consequently staying away from shops

Concern over being tempted to spend & reminded of situation

Significant changes in supermarket shopping strategy:

- introducing different outlets & more frequent & smaller shops

Adopting a more controlled regime; restocking rather than

needless shopping

Trading down to own label offers or economy where they can

Use of smaller local outlets for daily shops

Believe in smaller shops; they are less likely to be seduced by

unnecessary produce, more in control, conscious of budget

Shopping to a budget

Exploit offers, collect vouchers, network of price watch friends:

“…we swap details of the various promotions…”

Coupons promote brand switching, not unnecessary purchase

Cost of shopping includes transport so use local shops for daily

essentials, topped up with larger provision shopping

Trolley strategy: use smaller trolley or basket to limit shop

Aware of mark down time & shop discounted section

Shop ruthlessly to achieve budget, can’t afford to be tempted

Tend to have a set & disciplined shopping regime

Matches an organised weekly meal plan to avoid waste

Page 43: Credit Crunch Feb 09

SHOPPING – FOOD & CLOTHES (Cont’d)

Expressions Planning Credit Crunch - 42

Supermarkets

Many consumers cannot afford to be loyal to a particular supermarket

Evidence of reviewing different outlets

Adoption of selective shopping regimes:

“…Morrison’s is very good for vegetables…looks very fresh &

attractive so I shop there now for fresh stuff…”

General concern over frivolous shopping:

- avoidance of waste

Some switching to smaller stores for a more controlled shop:

“…I’m now shopping in Somerfield…I find it cheaper as there is less

to tempt me…”

Those economising are making more frequent small shopping forays:

- supplemented by a weekly provision shop

Noticeable restrictions and controlled shopping strategies:

- using a basket rather than a trolley

- selecting a small trolley

- switching to scanning to keep track of prices & total cost

Page 44: Credit Crunch Feb 09

SHOPPING – FOOD & CLOTHES (Cont’d)

Expressions Planning Credit Crunch - 43

Non

supermarket

Clothes shopping severely restricted amongst Retrenchers & Reality

Recreational & Reserved have been taking advantage of extended

sales

However these current shoppers are becoming critical of retail

environment:

- too many sales

- empty malls

- miserable window shoppers

Perceived as detracting from shopping enjoyment & experience

Some showing interest in online shopping as experience becoming more

functional than fun

Page 45: Credit Crunch Feb 09

SHOPPING – FOOD & CLOTHES: LEARNING

2 groups appear to be relatively unaffected economically:

• Recreational and Reserved

Shopping habits more impacted by the environment, especially non food shopping

Critical of extended sales, lack of new stock and depressing shopping environments

Some using the internet more as shopping has become more functional and less fun

Other 2 categories, Retrenchers & Reality, are actively avoiding non essential shopping

Even window shopping was thought of as dangerous and depressing:

• Due to bringing home the reality of the situation

Consumers more likely to shop and support their preferred shops for clothes shopping

Conversely evident vogue to sample different supermarkets

Comparisons are made on the total experience:

• With a view to adopting a more selective shopping regime

This behaviour could challenge the ‘one-stop, one-shop’ habit:

• Introducing fragmented shopping loyalties

Expressions Planning Credit Crunch - 44

Page 46: Credit Crunch Feb 09

OBSERVATIONS AND ANOMOLIES

For many recessionary reaction did not impact on the household until January

Evident desire to enjoy Christmas before embarking on a belt tightening regime

Possibly due to New Year resolutions and/or job anxiety, there was a noticeable health

undercurrent

Some respondents thought survival of the recession was about being fit:

• Presenting a younger and more active person

• This possibly accounts for the rise in male toiletries and tans

Whilst belt tightening began in January, the sales proved too tempting an opportunity for

many:

• An opportunity to shop and save

• Hence the rise in January of retail sales

Despite banks being perceived as the perpetrators of the situation:

• None had switched banks

View that the economic world may change after Barack Obama’s inauguration

Expressions Planning Credit Crunch - 45

Page 47: Credit Crunch Feb 09

OBSERVATIONS AND ANOMOLIES (Cont’d)

Interestingly green issues appear to have been subjugated by economic concerns:

• Perceived as short term vs long term interests

Seeds of a changing form of consumerism from ‘want’ to ‘need’:

• With some even challenging ‘need’

Signs of entrenchment to home for entertainment

Also exploiting community facilities:

• Museums, libraries, parks, pools, gyms, etc

Expressions Planning Credit Crunch - 46

Page 48: Credit Crunch Feb 09

PRINCIPAL LESSONS

Economic recession is about a collective consciousness

Individuals will be affected but react differently

Marketing opportunities are about understanding different consumers’ needs and desires

An economic recession need not result in consumer psychological depression and brand

pessimism

Indulgences and rewards are sought as displacements and distractions

Consumers are more open to experiment with different regimes and behavioural patterns

Status quo is challenged by many wanting to make economies and efficiencies

Consumers need to be able to justify paying premiums:

• need greater belief in product delivery, physically or psychologically

Brands with a strong personal attraction are less at risk

Cheap substitutions more likely on more functional items

Expressions Planning Credit Crunch - 47

Page 49: Credit Crunch Feb 09

PRINCIPAL LESSONS (Cont’d)

Entertainment is perceived as a first line economy:

• Reducing out of home expenditure: mandatory

• Reducing in home regular commitments: optional

• Compensating by indulgent in home evenings

Even amongst the most vulnerable consumers reluctance to be too puritanical

Reluctance to markedly concede family living standards despite their situation

Living through the recession, even for vulnerables, is initially about

adjusting, not abstaining… (yet)

Expressions Planning Credit Crunch - 48

Page 50: Credit Crunch Feb 09

ECONOMICS AND RECESSION: ACCORDING TO THE CUL-DE-SAC CONSUMER

Expressions Planning Credit Crunch - 49

Page 51: Credit Crunch Feb 09

APPORTIONING BLAME

Banks and bankers

America & George W Bush

UK & Gordon Brown

Empire building entities

Expressions Planning Credit Crunch - 50

Inherent greed of banks

Short term profit at whatever cost

Individuals driven by the incentives of banking

bonus

OPEC

& energy

companies

Lack of regulation & control of banking market

Exploitation of naïve market & investors:

- Bernard Madoff

Bush’s support for oil industry

Courting & lack of control of financial market

UK economy dependent on service & finance

Brown’s denial of the boom & bust economic

cycle & lack of preparation

Specifically oil related companies

Inability to regulate demand & supply &

consequently:

- control retail price of energy

Exploitation of developing economies; Brazil,

Russia, India & China (BRIC)

Moving production & HQs from UK to source &

benefit from cheap production & tax opportunities

Page 52: Credit Crunch Feb 09

PROBLEM RESOLUTION AND CONSUMER REACTIONS

Expressions Planning Credit Crunch - 51

US & UK Governments bail out banks

Tax payers’ money used to ‘bank aid’ the system

Radical reduction of bank rate to ‘defibrillate’

chronic economic solutions

A sop to the UK consumer with a reduction of VAT

Resentment that perceived catalyst should be reactively

supported

Frustration that first trench of funds not distributed:

- banking paralysis, risk aversion or greed

Perceived as nationalisation of high street finances

Savings & mortgages now state dependent

International, some foreign owned, monolithic businesses

looking for hand outs

Retrenchment of foreign companies perceived as exploiting

UK; workers & government economic hospitality

Perception of companies having lost interest in UK:

- emerging BRIC economies

View these companies were profiteering by escalating retail

fuel costs

Recently confirmed by record profits for Shell & BP

Call for windfall tax on energy companies displaced by

complexity of the economic situation

Banks & bankers

Empire building entities

Energy

companies

Page 53: Credit Crunch Feb 09

BANK AID: TOP DOWN ECONOMICS

Expressions Planning Credit Crunch - 52

Government intervention focussed on:

“…helping the perpetrators…”

“…rewarding the guilty…”

Undermines consumers’ faith in credible solutions

Compounding this mistrust is ineffectiveness of

Government intervention:

“…lent the banks billions but not doing anything

with it…”

“…lowest bank rate for 100 years but I’m still being

charged 6% on my mortgage…”

From a consumer perspective recent measures

have been:

- reactionary and restricted

- ill conceived and executed

Emphasis has been on securing the status quo:

- saving the decrepit system that caused the

problem

Shoring-up the

System

Page 54: Credit Crunch Feb 09

CONSUMER CENTRIC: BOTTOM UP ECONOMICS

Expressions Planning Credit Crunch - 53

Lack of trust in banking systems & bankers

Concern over security of savings & honouring loans

Disillusioned with structures & regulations

Disappointment of banks parental positioning & control

and exposed management

Resentment over public monies bailing out banking

system

Impact on consumer is to inflate uncertainty & insecurity

Most consumers perceive themselves as victims of the

crisis & still vulnerable to unforeseen events

Causes many consumers to consolidate & reduce

spending:

“…it’s like a rabbit caught in the headlights… freezes…”

Rather than kick-starting the economy the measures

cause consumer economic paralysis

Belief consumers being excluded from economic

considerations – fundamental flaw:

“…we are the economy…”

“…they shouldn’t have given billions to

the banks but thousands to each

family…that’s the way to start the

recovery…”

Re-engineering & gearing