Global Consumer Confidence Rebounding

Global consumer confidence in the first quarter of 2010 rebounded to reach its highest level since the third quarter of 2007, providing the most definitive sign that the world is beginning to recover from the recession, according to the latest edition of the Nielsen Global Consumer Confidence Index. As the world’s consumers started to spend again, they drove the global index up to 92 points (100 = average) in the first quarter. This represents a six point increase from six months ago and only two points short of the 94 point index mark in Q3 2007, just prior to the decline into world recession. Consumer confidence hit an all time low of 77 index points in early 2009, following the collapse of the international financial system, before steadily increasing again last year.

Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among more than 27,000 Internet users in 55 countries. In the latest round of the survey conducted between March 8 and March 26, 2010, consumer confidence in many markets rebounded to pre-recession levels of late 2007 and early 2008. Additionally, over the past year, the number of global consumers who believe they are currently in recession dropped 19 points to 58 percent, compared to 77 percent a year ago.

That's the good news.  The report, however, also highlights the disparity between East and West - the pace and extent of economic recovery is greatest in Asia Pacific and Latin American countries and, although better, still sluggish in the U.S. and western Europe, largely due to higher unemployment rates.

“Americans are still extremely cautious about spending given the uncertain nature of the recovery in the U.S. and the continued level of high unemployment. They remain committed to managing controllable costs such as gas and utility bills, and they continue to focus on repairing their balance sheets,” said James Russo, Vice President, Global Consumer Insights at The Nielsen Company. “That said, they are expressing a desire to spend more on discretionary items such as out-of-home entertainment, apparel and vacations—a noticeable shift in this survey. A huge opportunity exists for manufacturers, marketers and retailers who know how to reach the right consumers in the most effective way.”

Get the full report - click here.

The New Consumer Frugality

What does this mean for health providers?

Retailers must adapt to the enduring shift in U.S. consumer spending and behavior, according to a new Booz & Company survey of buying habits.

A new survey of 2,000 U.S. consumers, the second issued by Booz & Company since the early days of the recession in October 2008, confirms that a “new frugality,” born of the Great Recession and evidenced by two consecutive years of declining per capita consumption, is now becoming entrenched among U.S. consumers and is reshaping their consumption patterns in ways that will persist even as the economy starts to recover.

A new frugality, characterized by a strong value consciousness that dictates trade-offs in price, brand, and convenience, has become the dominant mind-set among consumers in the United States — and probably in other wealthy countries as well. Two-thirds of American shoppers are cutting coupons more frequently, buying low price over convenience, and emphasizing saving over spending. Per capita consumption expenditure has declined across demographic groups. Consumer sentiment remains weak. These trends are not going to change, no matter the pace of economic change.

Annual consumer surveys conducted by Booz & Company during the past two years suggest that the deep and prolonged nature of the recession, in conjunction with longer-term trends — such as ongoing shifts in the share captured by retailers’ private labels and the greater online research shoppers do before going to the store — has hardened changes in consumer spending and behavior. Even as a slow recovery is under way, it is becoming clear that consumers are not going to step up to store counters with pre-recession alacrity. Marketers and retailers that wait for them to do so are taking a major risk with the futures of their companies. And as consumer demand returns, it will likely center on a different mix of price points, brands and private labels, and retail formats than prior to the recession.

Read more at strategy + business: The New Consumer Frugality (by Matthew Egol, Andrew Clyde, Kasturi Rangan)

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Guest Blogger: Chris Bonney

You Talkin to Me?

We know that consumers aren’t all alike, that different consumers have different value to us, and that they have different interests and expectations.

Then why do so many marketers continue to speak to them in the same voice or the wrong voice?

Over the years I’ve reviewed or evaluated hundreds of advertising campaigns. Some have been exceptionally good. But a lot of them—at least half or more—fly completely past the non-verbal consciousness of the target audience, that recess of the brain where you want your name to be planted, because they don’t know enough about the target audience to know how to talk to and connect with them.

In the 1980s most hospitals settled on women as the primary target audience. Hospital ads that had once included a rainbow of faces, ages, genders and races began to be populated instead by scenes featuring clusters of “girlfriends” and hackneyed vignettes of knowing mothers counseling apprehensive daughters. The target audience got it. They recognized and even applauded that hospitals were finally recognizing their role as household healthcare gatekeepers.

For all the sister-girl-friendliness of these campaigns, a lot of these new ads didn’t work much better than the old ones. The basics were all there: pictures of women sharing life experience; lots of information; and recommendations for particular hospitals or programs. You’d have thought they had this problem licked.

But they didn’t. Most missed the mark because they: 1) treated woman as if they are all alike; 2) they just took their old campaigns, repainted them “pink,” and sent them back out again; and 3) they wrote copy for women that assumed that women were just men in dresses.

Here are a few thoughts to keep in mind:

• Everyone resents being pandered to, especially when it comes to age and gender.
• Women process information differently than men.
• Women can tell when men are writing the copy. (Vocabulary and logic don’t ring true.)
• Women’s lives are different today than they were twenty-five years ago.
• Women’s lives are different at age 25 than they are at 35 or 45 or 55 or 65. If you want to communicate effectively to women, speak to the circumstances and emotions of life stage, not age.

Chris Bonney is president of Bonney & Company, a Virginia-based marketing research firm. He can be reached at 757-481-7030 or by e-mail at: chris@bonneyresearch.com.