How will the economic climate affect consumers in 2010, and how can brands best use the market opportunities that have been created by the downturn?
New research, unveiled by the Futures Company at a briefing in London this morning, went some way towards answering these two key questions. The data suggests that, although few consumers are currently "panicking" about their finances, the recession has made people shop "smarter" than before, reflecting a general uncertainty about the way the economy is going.
Ahead of my full report, up on Warc.com soon, here are a pair of Futures Company insights from the briefing that stood out for me.
- Consumer motivation for purchasing products has moved from "I deserve it" to "I can justify it," with people more willing to shop around for the best deal.
Henry Tucker, director at the Futures Company, highlighted a telling example of a brand successfully leveraging this change in sentiment: the "disloyalty card" scheme from Prufrock, a coffee outlet based in East London (and run by Gwilym Davies, world barista champion 2009). Participants are obliged to visit eight other quality-focused cafes, getting their card stamped at each; they then receive a free Prufrock coffee after collecting a full set of stamps.
"They have such belief in the quality of their product," Tucker commented. "It's a great thought because consumers are shopping around and they are trialling things."
- On the macro side, Fran Walton, another Futures Company director, pointed to the possible effects of oil prices on consumers' wallets in 2010. Crude fell from an all-time high of $147 per barrel during the summer of 2008 to go as low as $40 in 2009. However, prices have since rebounded to $80 and could go still higher this year.
This trend has already had an effect at the petrol pump; the Futures Company research shows that the proportion of consumers worried about the cost of fuel rose from 43% in January 2009 to 53% in November.
Walton pointed out that higher oil prices also impact on shipping costs, making foods more costly to transport. Therefore, the weekly supermarket shop, a crucial part of many household budgets, could become that bit more expensive this year. People recognise the price of oil both "in their daily behaviours" and "the way they feel", Walton summarised.
The Futures Company also released some pointers about what its researchers would be looking at during 2010. Over Q2, the focus will be on sustainability, including how consumer behaviour is affected by green concerns, sentiment in the wake of the football World Cup and the UK general election will be looked at during Q3, and consumer health management strategies will be targeted in Q4.
Watch this space to stay updated on insights from this research, as they're released.