We live in a fast moving, interconnected world, which, even in normal times, provides a daunting challenge for marketers. Recently, however, we have not experienced anything close to “normal times”. The crisis in the financial markets and spill-over into the wider economy mean we have entered an intense period of uncertainty. In this context, marketers may understandably question the prevailing wisdom about their consumers. Are our insights still valid? Will they be so tomorrow? To what extent do we need to reassess the fundamentals? These questions pose a particularly interesting challenge for The Futures Company, whose stockin- trade is consumer trends. Are the trends we understood yesterday relevant today? Can we continue to rely on them to understand evolving consumer priorities? The answer is both yes, and no.
Here today, here tomorrow
If consumer trends are indeed “trends”, rather than “fads”, then they are grounded in the fundamental forces shaping consumers’ lives, capturing important shifts in consumer priorities. The Futures Company’s Ten Global Energies attempt to do just this. They provide a comprehensive framework to explore the many ways in which consumer and brand behaviour is changing around the world (see picture, right). Whereas fads come and go within weeks or months, our Global Energies should have a shelf life of years.
Not out of thin air
A recent precedent for understanding the impact of seismic global events is September 11, 2001. The economic and social shockwave following the tragic events of that day was widely expected to cause a fundamental shift in consumer priorities, particularly in the US, where consumers were most obviously impacted. Many commentators declared that nothing in life or business was ever going to be the same again, that a new and different era had begun. We are witness to similar rhetoric today as the media expound upon the implications of the failing global financial system.
Stepping back from the hyperbole, we would do well to remind ourselves that 9/11 did not bring about the total and utter change in consumer priorities that was expected at the time. In a paper delivered on September 26, a fortnight after 9/11, J Walker Smith, President of US trends company Yankelovich, which is now one half of The Futures Company, having merged with Henley Centre HeadlightVision in January 2008, pointed out that the events of September 11 had not destroyed the basic purposes of marketing. Then, just as before, and today, just as before, what marketers do is understand consumer priorities and solve their problems.
Tracking consumer priorities before and after 9/11, Yankelovich found they were broadly the same. In fact, they had already detected a considerable reassessment of priorities prior to 9/11, emerging as a growing force among US consumers for the previous nine to ten months. The events of 9/11 suddenly made it OK for consumers to give voice to these new priorities. So, the craving for simple, authentic experiences that mushroomed after 9/11 predated the events of that day. The desire to slow down the pace of life and reassess work/life priorities, were similarly not new. 9/11 did not create new consumer needs out of nowhere. Instead, it intensified and accelerated trends that were already becoming evident, even if they were overlooked by most marketers until the aftermath of 9/11.
Today clients are asking whether the credit crunch will bring a fundamental reassessment of consumer priorities. We would argue that the key changes that are going to occur are already evident today. Prior to the recent intensification of the credit crunch, we had already detected a growing sense of responsibility among consumers – a burgeoning awareness about the need to navigate through and manage the wide array of risks and responsibilities in life. Far from being reversed by recent events, we expect this pre-existing trend to intensify and accelerate. Businesses and brands who understand and respond to this challenge should fare well.
Unexpected and parallel paths
Of course, some adjustment is bound to occur. It is naïve not to recognise this. Economic anxiety forces consumers to make trade offs and deprioritise some expenditures. Which will be the casualties? The answers may not be what you’d expect.
A common perception is that in the face of mounting economic anxiety, consumers will discard their ethical and environmental conscience in favour of lower prices. By this logic, we should expect our “Making a Difference” Global Energy to lose momentum or go into reverse. The Futures Company research suggests marketers who assume this are likely to be wrong.
Our current Going Green study in the US shows consumers with high to severe levels of economic anxiety manifest the highest levels of concern regarding the environment. The survey results also reveal a significant, positive correlation between economic anxiety and green behaviour. Our recent UK “Feeling the Pinch” study shows that for UK consumers, levels of economic anxiety are independent from green and ethical attitudes and behaviours.
These findings suggest ethical and environmental consumption will hold up fairly well through a downturn. This conclusion is further supported by trade-off analysis conducted within the “Feeling the Pinch” study. This shows that consumers are relatively unwilling to make tradeoffs when it comes to ethical and environmentally motivated purchases: fewer consumers are likely to cut back on their consumption of these products than are likely to eat and drink out less often or buy fewer new clothes.
Interestingly, our “Feeling The Pinch” data suggests consumption of organic products will be more vulnerable, a finding also supported by recent sales figures reporting a significant drop off in organics. The weakness of organics and the relative robustness of other ethical and environmental purchases shows how critical it is to track the nuance of consumer change. It is not enough to examine how the trend performs overall. The sub-trends within and the ways in which these are manifested in the wider world must be closely monitored.
The trends that bend
It is at the micro level that change is most likely to first become apparent. Marketers must have eyes and ears on the ground to be alert to any significant change or opportunity. Traditional research is unlikely to spot these kinds of changes.
The Futures Company’s network of Global Streetscapers, culturally connected individuals located all around the world, are likely to be a better sensing mechanism. As an example, we are detecting changes in the way our “Seeking Experiences” Global Energy is manifesting. The underlying desire for rewarding experiences will not go away. Instead, consumers will look to satisfy it in more modest, lower risk ways, and in more “rationed” moments – special occasions and “treats”. Marks & Spencer are explicitly targeting this opportunity with their “Gastropub” range, offering a pub dining experience at home, at a lower price. In the US, our Streetscapers note the rise of “Staycations” – vacationing at home yet turning this into a richer experience than everyday living.
As Ged Davis, formerly head of Scenario Planning at Royal Dutch/Shell said, “a trend is a trend is a trend, until it bends”. It is the bends in the trends that will be interesting in the coming months. Companies that focus their resources on detecting and acting on these changes will be better placed than those who hastily tear up and rewrite their strategies. Abandoning what we understood from the past will not help. Being open, sensitive and responsive to change will determine success.
CV Siân Davies
Chief executive The Futures Company
2008 Chief executive, The Futures Company
2005 Chief executive, Henley Centre HeadlightVision
2001 Chief executive, Henley Centre
2000 Managing director, Henley Centre
1996 Co-editor Media Futures, Henley Centre
1988 Mercer Management Consulting, London & Boston