Chris Byrne

Published in Marketing Magazine, Nov 2010

When it comes to product adoption, some consumers lead, while others follow.  Just as our world has been influenced by the likes of King, Einstein, Mandela, Winfrey and Gaga, our consumption is influenced by the opinion leaders around us.   Influential early adopters serve as the engines of growth for products and markets, driving categories forward and shaping the future of brands.  Identifying and understanding the ‘future shapers’ in your market – the ones that will lead the way and fuel growth – is essential to long-term success.

A sub-set of early adopters, future shapers are the new breed of active, savvy consumers who are curious of new ideas and welcoming of change.  They are highly engaged in the categories dear to them, researching products on offer and formulating strong opinions about brands.  These opinions are voiced; they actively discuss new ideas,spreading the word to others and strongly advocating brands that meet their needs.  Brands need to know: who is driving growth in their category and how? Do their products resonate with the needs and desires of their future shapers?  Have their new products been noticed by those that matter?  Is their brand being talked about?  And, most tellingly, what is being said?

But just like our world’s leaders, future shapers have certain characteristics.  They are influential early adopters, different from standard early adopters in that they do not adopt and discard on a whim.  Rather they adopt in a careful, informed manner and create trends not fads, driving long-term brand value.  Our research has proven them to be four times more likely to adopt a new product and keep it in their brand repertoire than other consumers.  As a result, they’re more profitable and valuable than other consumers.  One future shaper is worth up to four times that of other consumers.  And they influence ‘market followers’ – the older style consumers who are less informed, less curious, less engaged and least likely to advocate brands – resulting in faster  growth for the brands and products they choose to embrace.  As a brand owner you want them on your side.

Who are future shapers? 

Future shapers come from all walks of life – this is important, as no matter what demographic group you are targeting, there will be future shapers present.  They are not the same group of consumers across categories, but have different traits depending on the category.

The characteristics they display are a reflection of mindset rather than demographics; however, some consistent patterns can be found:

• Future shapers tend to be slightly younger, slightly better educated, slightly better off and are more likely to live in metropolitan areas
• They value authenticity and originality in all that they buy and experience
• They are well informed and hugely involved in the products, services and brands that they buy
• They are individualistic – they do things ‘their way’ – and increasingly demand companies do too
• They are time poor and value anything that saves them time
• They are socially responsible – and exercise their ethical awareness via their product and brand choices.

Developing a good rapport with future shapers is of permanent worth to a brand.  As opinion leaders, they’re at the forefront of some of the biggest macro-trends influencing consumer behaviour globally.  The move from ‘old consumerism’ to ‘new consumerism’ is a paradigm shift in consumer behaviour and one of the trends future shapers are driving – the move from passive, uniformed consumption to informed, active choice.  As change diffuses through the pipeline, what the more future-influential groups are doing today will be commonplace tomorrow. Understanding which groups are doing what gives us a glimpse of what lies ahead.

Marketers know the importance of future proofing, but what steps are they taking to predict what comes next?  Understanding who your future shapers are – what they’re doing, saying, dreaming and feeling builds the future perspective into your market insights portfolio.  By applying a simple research framework it is possible to:

• anticipate future trends before they happen
• identify and validate brands which will increase or decrease market share
• analyse categories and which areas to concentrate on for maximum ROI
• analyse the consumer landscape – which segments will most drive future direction of the market and in what direction
  
• identify who will be your competitors in the future
• evaluate what appeals to and motivates emerging consumer groups.

Future shapers are the lifeblood of the market – a window to the future.  Nowadays, markets undergo constant change placing brands under continuous pressure to innovate.  Future shapers will ensure this change continues – after all, individuals cannot be truly future-influential unless they’re acting in ‘new’ ways.  Brands need to understand and predict these new behaviours in order to retain their competitive edge and navigate the road ahead.

Published in B&T, September 2009

With the financial crisis has come the emergence of a new shopper – the ‘recessionista’.  This new breed of shrewd consumer is a tireless value seeker, able to sniff out promotional offers, premium brands on mark down and innovative offers.  As a result, the recessionista gives off the air of thriving despite the downturn – they can still afford to shout their mates a drink (at happy hour), splurge on status symbols (offering recession-buster sales), and go for weekends away (flying Tiger and crashing at a mate’s).  With a few practical insights, retailers can target these value-seeking super shoppers, and make them flock to their stores in a bargain hunting frenzy.

So who are the recessionistas?  Our recent national study, investigating consumers’ emotional response to the recession, found that different people react to the recession in different ways, with many Australians rejecting the doom and gloom, instead viewing the current situation as an opportunity.  One such subset or ‘archetype’ is the ‘recessionistas’.  Members of this group share common psychographic characteristics but not always common demographic profiles.  Attitudinally, they are organised and motivated individuals who demand respect and challenge, rather than accept offers at face value.  They seek opportunities to fast track their success, recognition of their standing in the world and status symbols.  When it comes to purchasing behaviour, they are methodical and like to be well informed in order to make the smartest buy.  They actively seek information about the offer in order to evaluate it against competing offers.  

We can apply what we know about how the recessionista is responding to the downturn to analyse their shopping behaviour.  We know they do not accept the first offer they come across, instead preferring to hunt for alternative deals and new routes of purchase to find value.  They feed off price wars between retailers, avidly following promotional offers and sales.  The Sydney Morning Herald recently reported that variety department stores in Australia are winning market share from high-end retailers.  In the first quarter of 2009, Big W experienced a 6.7% sales increase compared to the same period last year, while high-end retailer David Jones saw a decrease of 10.8%.  Recessionistas display this kind of ‘trading down’ when shopping in low-status categories to ensure their budget stretches further when it comes to acquiring high-status items. 

In addition to trading down between stores, recessionistas are also trading down within stores in low-status categories.  Grocery shopping, in particular, is an experience where consumers typically display lower engagement.  As a result, recessionistas have identified this as an area where they can minimise spend in order to maximise spend where it matters.  In the supermarket, the popularity of supermarket-own brand products is on the way up – one-third of Australians currently buy own brand products as frequently as branded products, and more than one in two expect to buy more in the future.

All Australians, not just the recessionistas, are on high alert for promotional offers in the current economic climate, with 45% of Australians buying more products on promotion than they used to.  To some extent, retailers need to come to the party with these kinds of offers, or run the risk of losing face with consumers.  However, when we investigated deeper emotional drivers, price emerged as more of a surface factor for consumers, with value the real driver underpinning purchase behaviour.  This is especially so for recessionistas, who are more easily upsold on the proposition of greater value.  If possible, avoiding the price war is a smart move for retailers and manufacturers, as it reduces the danger of devaluing brand equity in the long term, which can happen when consumers spend time re-evaluating the value of a product.  Essentially, avoiding the price war is avoiding the threat of eating into the future to survive the present.

With more disposable income than many other consumers, the recessionistas are a great group to target.  Premium brands and innovative offers are their weakness – they see the current situation as an opportunity to acquire status symbols as prices drop and other consumers drop out.  They run in a pack – gaining their support and influence by praising them for their smartness can generate a wave of excitement amongst the group.  Whether marketers are targeting the recessionista group or other groups, they can take heart from the fact that the market doesn’t disappear in a recession.  Different archetypes of consumers respond differently to the recession – the marketer must understand how their consumers are responding and the emotive positioning of their brand in order to communicate effectively.  Understanding and resonating with the recessionista group could prove a highly lucrative coup for today’s marketer as they try to pin down the moving goal posts of the current climate.

Published in AdNews, July 2009

Imagine looking back on 2009 50 years from now and reflecting on the mood of the time.  Stories of Australia in recession and the ‘GFC’ abound, a nation subjected to ‘Reject the Recession dancers’ on Sunrise.  Times must have been tough for brand owners and retailers alike. Of course recessions are nothing new – the US alone has been through 28 ‘financial crises’ since 1854.  On closer inspection it appears that this current recession has accelerated a number of macro trends that have shaped consumer attitudes for a number of years.  These include the need for back to basics, authenticity (including for some: Australian made), as well as a new-found consumer smartness shaping a new ‘value equation’ for retailers.

In a recent Retail and Shopper Insight study TNS conducted to measure the mood of our time, we have found almost 60% of consumers will adjust their spending by looking for cheaper products at the supermarket.  However, when we investigated deeper emotional drivers, price emerged as more of a surface factor for consumers, with value the real driver underpinning purchase behaviour.  But what does ‘value’ mean?  Value does not equal just price, it is a combination of price plus benefit.  The benefit for today’s smart shopper can be expressed in many different ways, be it the best quality, most authentic, cheapest promotion, the best bundle offer or indeed the best in-store environment.  The challenge for the retailer is to develop the right value equation to capitalise on consumer trends heightened by the recession.

Increasing value placed on the authenticity of products, coupled with the influence of the recession, has seen ‘Australian owned and operated’ grow in meaning.  In the past few years ‘Australian’ has begun to stand for quality, when comparing products to overseas manufactured goods.  ‘Growers markets’ have never been more popular.  And more recently, ‘Australian’ has begun to stand for ‘Australian jobs’ and ‘Australian economic recovery’.  Our research found that older generations are more likely to value the Australian made tag than younger generations.  Across the generations, around 50% of Generation Y and X “always try to buy Australian made products” compared to 57% of Baby Boomers and 69% of True Believers*.

The price element of the value equation means that private label now plays a vital role in the retail offer.  One-third of Australian consumers are buying own brand products as frequently as branded products, and in the future 54% of Australian shoppers expect to buy more own brand products than branded goods.  There are quite marked differences in attitudes amongst different generations: Generations X and Y are significantly more open to private label than Baby Boomers.  Around 40% of X and Y already buy private label as often as branded products and almost 60% foresee buying more private label in the future.  This compares to less than a third of Baby Boomers currently opting for private label options. 

This does not mean that Generations X and Y are bargain hunters across all of their spending habits.  In fact it is more of an expression of the ‘frugal rich’, of spending less on categories that are currently perceived to be of a more functional nature whilst happily spending high on categories they feel passionate about.  The same shopper will choose ALDI for household staples and Thomas Dux for the selection of fresh produce as well as the shopping experience. 

As much as this current recession has been bad news for some, it also opens up new prospects.  At a time when consumers and shoppers are forced to re-evaluate their options, retailers have the opportunity to win over shoppers with a proposition that fits this new value equation, including honest, authentic products and real value.

Published in AdNews, July 2009

As we settle into the long haul of the GFC, we are apprehensive about the future, but we are doing everything we can to look on the bright side of the situation, and make the best of it.

We don’t see any point in whingeing.  We know it’s going to go on for a while, and things aren’t so bad in Australia when you compare us to the rest of the world. So, as marketers, what do we have to be worried about?

Our latest annual in-depth and qualitative Social Trends* study with everyday Australians saw some qualitatively significant changes since previous waves. Of course the GFC has had an impact, but it’s also within the nature of society to be cyclical and we’ve seen this period – in terms of Australians’ attitudes and behaviours towards certain parts of their lives – before.

Within this year’s study we found that many Australians see this challenging period as providing an opportunity to correct some of the problems of our society – focus on the important things in life!  They are taking time to make up for neglecting loved ones over the past few years.  They see it as a time to put some meaning back into everyday events. It is providing a chance to take some time, slow down, experience life and just be happy!

Australians finally feel like they have permission to stop having to keep up with the Jones’, and pull back all that excessive status and materialism capitalist behaviour that got us into this situation in the first place!  Greed has caused this problem!

It’s time to start building a more meaningful and caring society.

We are approaching this in the little ways that we can, and it is creating opportunities to talk to consumers in a new way. Here are three of the more pertinent opportunities, which some companies are already leveraging:

Consumers seeking optimistic and upbeat messages 

Australian’s want to feel positive about the future, they want to provided with a sense of hope.  Messaging around optimism, re-enforcement of choice, encouragement and support of pulling through the economic crisis are all critical to brand engagement and loyalty.  This tone and message is enhanced by the promotion of brand longevity, trust, and corporate responsibility through implied message.  Currently, this optimism appears to be acting as a call to action within consumer categories, allaying fear and avoidance.  Sensitivity in talking to the ‘good times that are coming’ is key.

Consumers are expressing status needs in a new way 

A strong anti-status shift has been identified, with overt expressions of status being moved away from by many consumers.  With a lot of entertainment moving into the home, we are seeing consumers expressing status in more subtle ways around the home.  Premium brands and products are being reserved for items that are ‘on display’ to guest.  Toilet paper, little luxury food items, premium packaged facial tissues (the little touches within the home) are the new expression of status.  On the other hand, those items which are commoditised, and that guests will not see, appear to be being downgraded in spend value – the home brand water crackers instead of the premium brand.

Additionally, environmental and ethical philosophies are being used to justify exits from certain categories, with bottled water a classic example.

Significant shifts in consumer behaviour have already been identified, with six out of 10 Australians reducing their spend on the value of their supermarket basket, luxuries such as clothes, and eating out. 

Gen Y bucking the trends 

In contrast to older generations, Gen Y are seeing the economic crisis as an opportunity to obtain luxury items which in the past have been perceived as too expensive.  It’s not just housing that Gen Y’s are throwing themselves into.  It’s also luxury brand items across a large number of categories.  The key underlying message triggering within this group is ‘smart choice at smart time’, as well as ‘act now before the market bounces back’.  This is a limited window, however, as the long term inevitability of the recession is starting to be acknowledged, and a caution in spending emerging (albeit minimal at this stage).

The Australian consumer landscape will continue to change dramatically over the next couple of years, but this is creating the opportunity for brands to take a stand and meet the needs of these changing social values, creating long term loyalty in the process.  Key to product and comms launches at the moment is getting to market as quickly as possible, whilst consumer optimism is still high.