Innovation Inspiration : The Post-Crisis Consumer
30 Aug 2010|Added Value
Welcome to our August edition of Innovation Inspiration, Added Value’s monthly e-mail service designed to provide a short burst of facts and stimulation on marketing and innovation topics.
As economic indicators suggest that we are slowly emerging from the gloom of the crisis, we take a look at some of the longer-term effects on consumers and innovation.
The sheer financial and psychological impact of the worst recession since the 1930s was bound to make most consumers batten down the hatches: Datamonitor has identified cocooning responses such as Streamlining and Risk-Aversion. Perhaps most important for marketers is the re-definition of Value in consumers’ minds: as this year’s BrandZ shows, even in recession price is just one element in the value equation. At Added Value, we believe there are 3 ways to address this: building a value ethos, value propositions and value communication.
Read more: Top 100 Most Valuable Global Brands 2010
The polar opposite of Hangover, Backlash characterises a consumer response that has acted as a driver of consumer spending. Despite initial fears, there are many consumers who feel they’ve come through relatively unscathed – while many people just need a break from the 3-year freeze. Luxury is seen by some as their right, even if they’ve had to cut back; and experiential retail has ridden on a huge wave of consumer desire for authentic, real-world diversion.
Read more: Luxury or Necessity?
Read more: The Elements of a Great Shopping Experience
3. Consumer Power
We talked a while ago about Yochai Benkler’s theory that for the first time since the Industrial Revolution the most important means of value creation – digital technology – are in the hands of the people. (Watch his TED talk on Open Source Economics) Examples of this now abound: from the exponential growth in e-tailing and retail tools & apps through ‘hacked’ brands such as IKEA to the increasing evidence of the correlation between social media engagement and corporate financial performance.
Read more: Romancing the Flat Pack : Ikea, repurposed
Read more: Ranking the Top 100 Global Brands
Read more: How can Social Media Sell Coffee
4. New Conscience
Sustainability and responsibility have been on everyone’s radar for some time now, but the crisis has given them fresh impetus. The ‘Green economy’ has been outperforming the economy as a whole, and what used to be just Geek is now also Chic. Research from Added Value’s Sustainable Innovation practice suggests that this is leading to the addition of a new dimension in consumers’ perceptions of what constitutes Value.
Read more: Electric Vehicle Consumer Survey
5. Boomer Opportunities
Finally, where can you look for consumers who still have money? There are worse places than the Baby Boomer generation: in the US, they account for nearly 30% of the population, 55% of CPG sales ($230 billion) and an overall annual spending power estimated at $2 trillion.
Read more: Baby Boomers Buying Power, a Force to Reckon With
If you’d like to discuss how Added Value can help you respond to consumer change in a post-crisis world, we’d be delighted to hear from you.
CEO, Added Value France
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