Marketing With The New Consumer (ipsos Reid Study)

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Beyond the Recession – Marketing with the New Consumer An Ipsos Reid Point of View – Fall 2009

Copyright ©2009 Ipsos Reid Corporation. All rights reserved.

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ways to indulge on a dime instead of a dollar, to share and swap rather than buy, to reuse and exchange instead of dispose – and they are not shy about letting people know they are doing it. They choose to do business with suppliers who authentically share their new found values of social and environmental responsibility, and they understand that the Internet has empowered them with an unprecedented voice, reach, and participatory avenue in product or service development. They are making their opinions known and they expect their suppliers to listen.

In a recent white paper, ‘Living in Turbulent Times – Canadians and the Recession,’ Ipsos presented a picture of a consumer in a pessimistic frame of mind. This pessimism was brought on by worries over household debt and job loss, both of which affected spending patterns in fairly predictable ways – fewer big ticket and luxury item purchases, more modest vacations, eating out less often, and a greater emphasis on price (but not at the expense of value). In the same way that the Great Depression and the two World Wars defined their generations, the current recession, and its resulting widespread pessimism, is transforming the nature of business and the consumer model to create the New Consumer. In a follow-up white paper, ‘Trends Shaping the New Consumer,’ Ipsos described the forces shaping this New Consumer. The source was Ipsos’ global Trend Observer research, which uncovers today’s trends and predicts their future evolution. The paper described a number of trends that are influencing today’s consumer – some emerging, some strengthening, and some diminishing. These influences are vital considerations for marketers as they update strategies, redefine tactics, and design messages and communications to connect with the New Consumer.

What Does This Mean For Marketers? As with many things, the value of this information is revealed in its application. Marketers must engage their organizations to identify ways to capitalize on trends to reach the New Consumer. However, connecting with the New Consumer may require more than just a shift in messaging. Some marketers will need to redefine their entire approach to product and service development and aggressively innovate, to win both the mind and the heart of the New Consumer.

Some Guiding Principles This paper will suggest steps that you can take to engage your organization and to identify and prioritize responses to New Consumer trends, whether that means simply shifting your communications or creating wholesale regenerations of your market processes. These responses have to be specific and actionable, relating to your organization’s unique capabilities, strategies, and positioning. Therefore, it is impossible to create a set of implications relevant to a general audience. However, the trends do point to some guiding principles worthy of consideration, especially as you seek to align the trends to your own organization’s position and messaging.

Spurred on by a heightened social consciousness and empowered by social media, the New Consumer’s newly shaped attitudes about self, community, the environment, and business are changing the dynamics of the marketplace and the relationship between buyers and sellers. For many, the current economic turmoil has been cathartic. Coupled with the pessimism of the moment, the New Consumer has emerged. New Consumers have re-evaluated their individual and societal roles, deciding to ‘reboot’ or start over. No longer waiting for institutions to repair perceived shortcomings or failures in the system, New Consumers are personally taking charge of environmental and spiritual projects, while seeking value for their hard-earned dollars in new, imaginative ways. The New Consumer is capitalizing on the opportunity to eliminate artificial and manufactured needs – rediscovering truth, value, and satisfaction in their lives, while exploring new experiences.

Sell Optimism The New Consumer is pessimistic and worried, but does not want to remain in that state. Just as we avoid individuals who are negative and pessimistic, so too will the New Consumer avoid organizations that sell negatively. Success is being simple, fair, easy, nice, and good. Empathize with the New Consumer. Lend a hand and offer a way forward. Be reassuring. Be confident.

New Consumers are conspicuously green, and are consuming in different ways.They’re looking for tangible –2– Copyright ©2009 Ipsos Reid Corporation. All rights reserved.

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Innovate and Change

Co-Create

The New Consumer is open to change and is receptive to the idea of starting over. Create opportunities for you and your customer to connect, and if need be, bury the hatchet on past gaps. Start anew. Start fresh. But first take time to rethink and re-evaluate the customer experience so that you are able to deliver on the renewed (and revised) expectations. The New Consumer abhors deception. Do not be a phony.

Now is the time to innovate and change. But do not act on your own, in isolation. Devise ways to co-create with the New Consumer – what better solutions to bring forward than those they have helped to develop? The New Consumer wants to participate, expects to participate, and is willing to enthusiastically support a company that facilitates, encourages and listens to what they have to say. Use social media and the web to increase or solicit consumer engagement with your business. Create engaging and interactive marketing materials. Encourage your audience to touch, feel, think, smell, ask, and answer.

Be Experiential The New Consumer is experimenting with new lifestyles and improved levels of self sufficiency. Understand your customers’ experiences and use that knowledge to offer new and exciting ways and opportunities for them to interact with you or other consumers. Enhance the shopping experience by building processes and experiences to help the New Consumer choose your products or services.

Engaging Your Organization The following is a suggested process for engaging your organization and identifying priorities and actions, responding to the 17 trends uncovered by Trend Observer. Step 1. It is critically important to clearly understand and articulate your organizational values, brand values, and your core value propositions. Examine them through the lens of the New Consumer, and if necessary, re-word them in New Consumer terminology to see what alternate strategies might be suggested. The New Consumer wants to believe that the organizations they support share their values. This is a good place to start.

Nurture and Market to the ‘Tribe of the Responsible’ The recently dominant ‘Tribe of the Wealthy,’ whose emotional drivers for purchase focused on the grand, the big, the new and the visible, has been supplanted by the New Consumers’ ‘Tribe of the Responsible.’ Motivated by the need for change, the New Consumer is consuming in different ways, and wants to be seen to be doing it. Create symbols to allow the New Consumer to recognize others in their tribe and display their tribal colours proudly. Be the enabler for interaction, sharing, and communication within the tribal community.

Step 2. For each of the 17 trends in Trend Observer, identify if your organizational value proposition (i) is clearly aligned with the trend, (ii) requires some adaptation to align with the trend or (iii) is so out of sync with the trend that efforts to create alignment might result in a credibility gap too wide to be useful. There are no right or wrong answers to this exercise. The objective is to foster discussion and engagement by forcing the organization to make explicit choices about which of the trends to capitalize on and which to ignore, taking into consideration both the organizational value proposition and what the organization can authentically and realistically deliver.

Champion a Noble Cause The bottom line and shareholder interests are important to your business, but are hardly motivating for the New Consumer. Great brands have always stood for a more noble cause than the bottom line, and this is more important to the New Consumer than before. Take charge of an issue no matter how big or small and make it your responsibility to be the catalyst for change. The specific cause should align with your core business values, but primarily, what counts is the authenticity and honesty of the effort. If it is truly genuine the New Consumer will love you for it.

Step 3. For the subset of trends that are clearly aligned with your organizational value proposition (the high priority bucket), ask yourself if that alignment is reflected in company communications, expressions of your brand, and in your marketing programs. If they –3–

Copyright ©2009 Ipsos Reid Corporation. All rights reserved.

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Status Quo Is Not an Option.

are not, what are the simple tweaks that can be made to bring them into alignment? In many cases, simple wording or tone changes can be the solution.

Trends can be easy to miss and hard to take advantage of. But for those who can successfully pinpoint and capitalize on trends with dedicated engagement, focus, and commitment, the rewards can be extremely high.

At this point, consider again the New Consumer persona and your chosen priority subset of trends. Do new approaches to the marketplace reveal themselves? Are there new product opportunities? How about new marketing strategies or tactics? New business models? Entirely new businesses? Having an idea generation session at this point to brainstorm and innovate will be fun, energizing, and productive for your organization.

The recent economic turmoil and the incredibly rapid rise of social networking tools have shaped a generation of consumers unlike any that has come before. The global and local trends that are shaping – and are being shaped by – the New Consumer are causing fundamental shifts in the nature of the traditional consumer model and consumer markets as we know them. This presents untold opportunity for new business models, new distribution methods, new products and an opening to make something old new again.

Step 4. Repeat Step 3 for the subset of trends that you have identified as requiring some adaptation of your organizational value proposition. Does thinking about how to adapt suggest new business opportunities? New processes? New marketing strategies or tactics? Or maybe they suggest a different spin to your marketing communications?

Status quo is not an option. Go for it!

About Ipsos Reid

You will need to evaluate the costs of adaptations vs. benefits, then decide whether each of the trends then move into the ‘high priority’ bucket (Step 3) or fall into the ‘no priority’ bucket (Step 5 below). Keeping trends in a middle ground or a holding pattern should not be an option.

Ipsos Reid is Canada’s largest marketing and public affairs research company and the country’s most trusted research brand. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies.

Step 5. For the subset of trends that you have determined to be not easily leveraged by your organization (the no priority bucket), you need to ask if they can be simply ignored, or if they warrant monitoring or managing. In some cases you can just ignore them and focus on the ‘high priority’ bucket, but in others, you will need to watch the direction these trends take as they evolve. Simultaneously, you should closely monitor New Consumers’ reactions to your company’s activities to help manage (and preserve) your corporate reputation and brand equity.

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