Your attention please: the recession is over! At least that’s what many economists, analysts and pundits are saying. As the longest recession since WWII was leaving its impact on consumer attitudes at large, and the world of branding and packaging in particular, our network of offices across Europe, Asia and the United States decided to find out which changes would be temporary and, perhaps more importantly, which ones would have lasting impact. We interviewed thought leaders in brand marketing and design and drew from recent engagements and local trend watchers for our analysis. We hope they’ll trigger new thinking and provide useful insights for your brand-building endeavors.
What’s clear is that, due to the dramatic visibility and the sheer length of the recession, most Western consumers are just coming out of what we describe as a long “mourning” period. In fact, we noticed a very strong correlation between the sequence of emotions that consumers went through over the last 18 months and the psychological stages people go through when dealing with tragedy.
The early days of the recession saw consumers in a phase that correlates with the first stage of the Kübler-Ross psychological model of grief; they were in denial, ignoring the economic problem by taking part in smart indulgences. Their subsequent behaviors reflected the classic progression of grief, as consumers sought alternatives by going back to the familiar and seeking out simplicity and, ultimately, by accepting their new reality.
Early in the recession, anxious consumers turned to brands like Kleenex, which showed a playful side.
Anger, Denial
In the early days of the recession, when they were feeling paralyzed and cash strapped, consumers yearned for a bit of luxury to help soothe their anxieties. That need resulted in a rise in guilt-free indulgences, purchases that consumers could “justify” as responsible and accessible (i.e., ones that wouldn’t impact their immediate future).Certain categories benefited from this trend. Confectionery was one, with gum growing at a fast pace and brands of dark chocolate like Green & Black’s recording a big increase in sales. That might also explain why, when at the same time that Lehman Brothers was going bust, drugstore sales for Durex condoms were up!
Private label brands, of course, also benefited from this shift, with Walmart introducing its redesigned Great Value brand and German retailer Rewe recording major sales increases through its Feine Welt range of indulgent, but bargain-priced, food items.
The most successful national brands responded to this trend by introducing offerings that qualified the value of their brand beyond a price consideration and spotlighted a sense of playfulness (e.g., Kimberly-Clark’s Slice of Summer cartons, which K-C’s creative director Dayton Henderson says, “tapped a consumer need, bringing a little fun to those wanting an affordable seasonal expression”).
As their world came crashing down (the capitalist model in particular), and they grew anxious about the uncertainty of the future, consumers began to challenge traditional sources of authority (Wall Street, politicians, CEOs, economists, etc.). To ground themselves, they turned to the familiar activities of the past, beginning to spend more time on activities like cooking and “vacationing” at home. This desire to go back to what’s “known” shifted at times between a resurgence of nostalgic values (e.g. the return of the milkman announced with a resurgence of glass bottles in milk and dairy) and a forward-looking interpretation of old societal icons (e.g. the re-invention of FDR’s New Deal to introduce the tax stimulus package).
So how can brands tap into this shift? Bill Lunderman, Colgate-Palmolive’s vice president of global strategic brand design says, “Brands need to go back to their traditional values.”
Indeed, a few national brands have leveraged this opportunity, and they’ve done so with a sense of storytelling. Celebrating their national identity, the vintage German beverage brands Bluna and AfriCola relaunched and heralded the German “economic miracle” era of the 50s, while numerous Polish brands promoted the “Teraz Polska” (Poland Now) logo, the denomination of origin for Polish goods.
Others played up their heritage. The English bakery brand Hovis ran a long commercial celebrating moments in British history that occurred throughout the brand’s 124-year history.
Another strategy was to revamp old classics. The French brand Briochin, for instance, created a limited-edition back to basics line of soaps packaged in a simple vintage blue tin.
"Cheap chic" brands like 5,0, appeal to consumers who have accepted the new reality, where saving is now a stylish way of life.
Bargaining, Depression
As the recession progressed, people looked for ways to adapt, with two-thirds of U.S. consumers reporting in a Harris Interactive poll that they simplified their lives (and will continue doing so once the recession is over). When they are still eating out, they are seeking value meals (not just in quick-service environments but also in regular restaurants). When they’re eating in, they are looking for family combos. This search for simplification generated a need for healthier products with lighter formulations and fewer ingredients, and for products that are easier to understand and use.Consumers turned to brands that engaged them with honesty and transparency-often with packaging that showcased “essential” information using language that was easily understood. Hence the success of Häagen-Dazs’ Five ice cream brand, which clearly spells out its five simple (yet altogether delicious) ingredients, or the UK’s Essential Waitrose line, which delivers the basics of a daily routine in packaging that speaks to the very idea of simplicity. At a somewhat higher price point, Nespresso owes part of its success to the simplicity of its coffee preparation and, in consumer electronics, Philips continues to shine with its claim for “sense and simplicity.”
The Campbell Soup Company’s Darralyn Rieth crystallized the current objective for brands when she said, “We need to understand what consumers really need to know in an attempt to make things simpler.”
Another effect of the recession was that consumers grew exasperated with what they began to view as the all-out greedy consumer culture, which they feel has been fueled by “unscrupulous” financiers, and unscrupulous marketers who “entice” them to buy more instead of buying better. Consumers believe they have fallen victim to a society that induced them to make purchases they do not really need and under terms that they do not entirely control. As a result, there has been a clear backlash against over-marketed, impulse purchases and a noticeable desire for consumers to own the entire purchasing process, from the type of products they buy to how frequently they buy them and how they shop for them. This explains the sluggish performance of brick and mortar sales and the rise of online buying, with Cyber Monday (online) replacing Black Friday (brick and mortar) as the shopping high point this past holiday season.
The emergence of this trend that we call “controlled temptation” explains the phenomenal success of online product review and comparative platforms (whether it’s Qype, Yelp, Ciao or the UK’s www.comparethemarket.com) and online vendors like Amazon, the UK’s Very or even Woolworth’s, which was reintroduced in the UK as an online retailer after it liquidated its physical assets in 2009.
Brick and mortar retailers are aware of this push and are fundamentally re-thinking how this influences their own offerings. The answer generally lies in streamlining standard product offerings to make room for retailer-specific deals from national brands. As Glen Spurrier from Alberto Culver shared with us, “Retailers have pushed national brands to rationalize their SKUs so companies end up having to find the right balance between the new and the essential.”
As the recession progressed, people turned to simplification and everyday basics like the Essential Waitrose line.
Acceptance
Having gone through the havoc of all these conflicting emotions, consumers are now approaching the future with a completely new mindset. At the end of the day, the major effect of the recession on consumer attitudes is a shift of the paradigm from a mindset of “what I want is what I need” to one of “what I need is what I want.” Overt luxury and decadence are now seen as ostentatious, which explains why the sale of high-end clothing, jewelry, accessories and cosmetics decreased by 15 to 20 percent in 2009, according to Unity Marketing’s Luxury Report.Meanwhile, the very idea of saving has now become part of a stylish way of life. Certain brands have actually embraced the idea that cheap is chic by making it a part of their communication. Take the German beer brand 5,0, whose packaging copy claims “we’ve cut back on everything, but the quality of our beer.” Or Germany’s electronic retailer Saturn claiming “we love technique, we hate expensive”), or Mark & Spencer’s very direct messaging to shoppers, “Dine in for 10 pounds.” Meanwhile, cheap retailing is booming, with Priceline.com and Trader Joe’s recording some of the highest growth rates in their respective sectors, and conspicuous claims around organic and natural benefits are brushed aside as consumers have a hard time understanding what this “marketing fluff’’ really means in their lives.
So a few words of wisdom-or, the new rules of consumer engagement, if you will-as you apply these learning into your future brand building initiatives:
+ Don’t try to sell consumers what they don’t really need;
+ But, at the same time, don’t forget that behind every basic need lies an aspiration.
+ Use playfulness and familiarity to earn the right to engage with consumers.
+ Respect consumers by making clear, believable claims and making your portfolio easy to understand and navigate.
+ Give consumers a sense of control in the way they choose to interact with you.
+ Use packaging to give a fair picture of what is inside the pack, but don’t lose an opportunity to tell a compelling story. BP
Eric Zeitoun is president of Dragon Rouge USA, the leading independent brand and design consultancy. Contact him at eric@dragonrouge-usa.com or 212.367.8800.
