Published on February 28, 2009
Introduction overview predictions for key themes influencing branding for 2009 snapshot of consumer mindset today − hopes, frustrations, feelings, values how societal shifts may influence relationships with brands raw hypotheses vs proven phenomena our inspiration qualitative assessment by sterling strategy team made up of our “road warriors” - brand strategists, researchers and planners − 1,000’s of consumer, client, employee interviews − multiple categories and businesses year end download of common themes and patterns they’ve seen in the marketplace which serve as our foundation for our predictions the following year 2
Who we are we’re a leading marketing and branding agency, formed in 1992, and a member of the Omnicom Group of agencies we deliver inspiring solutions that drive brand growth for our clients we are catalysts that stimulate your brand in order to create real impact in the marketplace we work with corporate and consumer brands and operate nationally and globally we have a staff of 90 professionals in the US new york san francisco london singapore 3
The path of our practice strategic consulting positioning and innovation market research ethnography, qualitative, focus groups, quali-quant, quantitative, online, offline brand design design intelligence, corporate and brand identity, collateral, packaging graphics and structure, naming, web site design 4
In a wide array of industries household cpg retail media entertainment 5
We know brands and consumers really, really well! 2008 600 80+ in-facility consumer industry, category 6,800 1,035 discussions and competitive analyses consumers on-location interviewed consumer face to face discussions 6
From conspicuous consumption to serious re- evaluation…be prepared for fundamental and radical new thinking about brands. 2009 marks the first year after 30 years of conspicuous consumption and consumers are seriously re-evaluating EVERYTHING cataclysmic series of events brings us to our senses - energy crisis, environmental instability, economic meltdown and ethics in shambles as a country, we have been left financially overstretched and this causes the ultimate anxiety and stress a coming back down to earth…this is “not a lifestyle for me anymore” President Obama has called for “a new look at ourselves” many forced into re-evaluation given the loss of a job/home everyone is going through “mid-life crisis”, no matter what age you are this is a paradigm shift from spending to simplicity 9
Calvin Klein’s new “one” campaign is perfect for these times”: implication for brands expect and respond to real and permanent behavioral change those who are waiting for things to return to ‘normal’ are in for a serious disappointment we’re in this all together remember that RELAXING is now what is EXCITING keep your consumer closer than every 10
“Brandicide” = brands that bring about their own demise. inevitable by-product of recessions those that lack the strength, skills and smarts to survive…Darwinism in action for brands much “brandicide” is self imposed – because the brands are undifferentiated, mismanaged and using the same management style in bad times that they did in good ones: − Lehman Brothers, Merrill − Chrysler/GM − United − Budget − Circuit City − Fortunoff discriminating consumers are outing brand fakes and, as in human nature, moving away from sinking ships 12
Page from Lehman Brothers website announcing bankruptcy: implication for brands have passion in your craft have genuinely different things to say focus and differentiation is paramount to brand survival…just look at Apple 13
Brands must align themselves with the mood of the nation. the consumer is more sophisticated than ever and knows instinctually what a brand can and can’t be align though positioning and overall ALL marketing activity the good: Wal-Mart’s “save money, live better” message… “ live better” along wouldn’t work Target’s ironic take on surviving the economic crisis Hyundai’s Assurance campaign the bad: Citi’s “live richly” campaign…out of tune, very quickly AIG $500K retreat at a posh Californian beach resort LG tagline “life’s good” has already been back-burned “Life is Good” clothing brand might want to consider renaming themselves “Life is Not Good”! 15
Wal-Mart has its day in the sun and their new logo supports a justified optimism: implications for brands constantly check in with the marketplace mood because it is changing daily consumers will weed out brands that aren’t in sync with the country…so get in sync! 16
Consumers are starting from a place of mistrust and scrutinize claims, promises and benefits…thanks to the internet. this is an entire generation that has been bombarded with ads and brand messages their entire life…they simply don’t believe or trust what brands say about themselves fuelled by rampant fraud (Bernard Madoff) fuelled by quality scares (China) fuelled by greater access to opinions and critiques (Yelp.com, Twitter) skepticism about bold claims without specific support data (greenwashing) consumer doing even more research less reliance on company created marketing − third party endorsements easy to access and more credible such as Consumer Reports, AMA and Good Housekeeping − peer group endorsement becoming more important 18
Benjamin Moore’s green standard badge exudes quality assurance and transparency: implication for brands this is a PERMANENT consumer change, so house-clean to strip out the “claim-fluff” delight your brand champions…your best advertisement (but you have to find them!) be transparent, focus on making your product excellent and be passionate about your brand because this is infection 19
Economic crisis encourages more patriotism in our purchasing behavior. this is a common reaction in times like this: recession, jobloss my the millions, new party, new president what is different this time around is access to information on the internet…and this has changed EVERYTHING growing apprehension about our dependence on China deep desire to make cars…in America for America…BUT only if the product is as good as it is overseas steel is the latest industry to seek help (expect a rise in “protectionism”) − asked for “buy American” clause to be added to every provision promise of massive domestic infrastructure investment President Obama: “the best thing in America is when we come together as a society in times of crisis” economic and environmental incentive − supporting local industry − reducing carbon footprint 21
Love it or leave it, Pepsi’s new logo and tag line celebrates America and change: implications for brands leverage domestic credentials where we can do not exploit patriotism…a form of emotional blackmail the finished product must be as good as the best from abroad 22
Faith Popcorn’s concept of “cocooning” in the 90s has resurfaced 20 years later as “incubating”…the new “wired safe house” allows us to hunker down, retreat, conserve and be productive. learn new skills online shopping self-education building stronger social networks and family connections (facebook) The passive pursuit of cocooning is being replaced by more active incubating. growth of educational brand Rosetta Stone is a prime example popularity of games like Wii that develop skills as well as friendships growth of “from scratch” and gourmet cooking…self-trained connoisseurship success in instructional websites, university course, videos and magazines and DIY growth of the slow food movement and the return of the pot luck dinner party careers are born - learn a skill, order the supplies, sell on etsy.com or ebay 24
Explosion of activities and education for the home: implications for brands consumer’s new activity of “incubating” presents extraordinary opportunities for brand growth so explore and promote your role in “home-living & learning” 25
When consumers fully understood the gravity of the economic crisis in the fall of ‘08, longtime established spending habits and patterns literally changed overnight, taking experts completely by surprise. Now we’re embracing a culture of thrift, out of necessity and fear, and we’re seeing this evolve into fun. opting even more for store brand products sticking with the previous model of short cycle tech products for longer seeking out pre-owned products more than ever taking business models such as ebay and craigslist to a new level endorsing new no-frills dining from famous chefs being fulfilled by spending less and enjoying the thrill of being smart about money…we are buying cheap and used “Smart Cookies” book franchise is taking off 27
Ina Garten gets “back to basics” with her her new cookbook: implications for brands consumers shifting shopping habits focus from wants to Magazines take pride in helping readers needs find deals in mass market: brands should address strategic positioning and executional messaging intellectual power will be channeled by marketers into a better understanding of “the science of NEEDS” 28
All roads are pointing to local, and this is the purchasing decision that allows consumers to really make a difference. culturally: consumers are more committed to supporting their local communities in every which way…just look at the explosion of farmer’s markets consumers are opting to support their local shops over chains (wine shop, book store, etc.) economically: this will become even more prevalent when we experience the next upward spiral in gas prices making the cost difference from Amazon to a local book store smaller environmentally: carbon footprint more universally understood concept with disasters like Katrina make consumers realize global warming is here now 30
Climate Counts helps consumers vote with their dollar: Retail stores plug into the community with classes: implications for brands defining and celebrating your connection to the community − local production − local grown − local social causes huge opportunity for retail to connect and nurture their community: − Classes at Apple − Baby Gap recently had Olivia and Cat and the Hat appear live for book readings 31
Discounting looks like a good thing – consumers get their bargains and retailers shift their stock, but this short term will essentially reposition a brand. “60% off” is the norm “buy one, get two free” is the latest favorite promotion discounting battle could permanently scar brands − some could be “de-positioned” by downward pricing activity − for example, Gap, Saks, Circuit City and Denny’s effect should be minimal for those already committed to the strategy (e.g. Wal-Mart) we admire courage of premium brands who offer no discounts (Coach and Patagonia) 33
Quiznos’ new ads (what happened to the toasted buns?) - positioning themselves as a value meal vs a quality meal: implications for brands for apparel, food, electronics and auto businesses, desperate discounting poses a real (and potentially permanent) threat to many brands focus on long-term positioning versus short-term solutions we believe it is critical for brand owners to support your brand’s true positioning in the marketplace 34
This is, fundamentally, a new consumer era will take root in 2009 driven by consumer response and attitudes towards economics, ethics, energy and the environment (ironically these are the same four pillars that failed us in 2008). quality of life rather than possessions in life…choosing a family vacation over shopping being community-driven and not so individually-driven…“we” vs “me” new innovative thinking will replace (failed) historical approaches (the ‘08 election reflects our collective attitudes) a calmness and simplicity rather than stress and complexity…choosing time with our families over a time zapping promotion human health as opposed to corporate wealth…putting our personal well being and health above corporate success (“health is wealth” is back) 36
Axiom Legal allows lawyers to work from home and consult with their clients: implications for brands the birth of “accountable branding, accountable marketing” this is paramount to keep in mind for brand success, not to mention brand survival The upper middle accountability for products (doing class reclaims the what they say), accountability for pre-fab home: messaging (saying what they do), accountability for the environment, for communities, for employees… the list goes on and on 37 37
A few final thoughts Over the many years that we have done this report, 2009, in every way, is by far the most complex and challenging years we’ve seen. hard to find anything positive in the constant flood of terrible news coming from the marketplace but we believe markets and consumers will find new high ground and new solutions from the current marketplace mess 2008 will be seen as a watershed year when fundamental consumer behavior changed. this fact alone should inspire us all new eras are always exciting and exhilarating let's hope that this is no exception 38
A summary of our predictions for ‘09 1 for consumers, it’s re-evaluation time 2 brandicide – a trend on the rise 3 brands out of sync are brands out of favor 4 consumer skepticism – now on steroids 5 make it in america…but make it great 6 at-home incubating – it’s all the rage 7 from frivolity to frugality 8 local – the connection that matters 9 addiction to discounting can hurt a brand 10 the next consumer revolution has begun 39
Clara Hendon email@example.com 415-891-8879 40
sterling brands sterling brands.com 350 fifth avenue 41 grant avenue new york ny 10118 san francisco ca 94108 v 212 329 4600 v 415 248 7900 f 212 329 4700 f 415 248 7979
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