January 2010

Consumer and marketing trends: 2010

Introduction

The objective is to highlight a few of the key consumer & marketing trends whilst illustrating a few of the brands activating these opportunities and hinting at some of the possibilities

• We have focused on the following market sectors:• FMCG• Drinks and alcohol• Luxury• Social and Government

• The insights are drawn from trend reports & Polestar sources

The context: Consumer trust in brands has been irrevocably

shaken• Across almost all categories there is a dramatic decline

in consumer trust in brands• Behaviour change (not just reactive communications) is

needed to re-build trust:• Sectors and brands that are fundamentally improving their

consumer interaction & transparency will emerge as champions e.g. Supermarkets

• Stable categories include everyday ‘luxuries’ such as breweries and cosmetics, or enabling gadgets such as PC’s.

• A shift in the basis for trust:• Delivery of product and service promises, reliability and a

determination to resolve problems are the key factors in driving trust

• Factors once seen as the pillars of trust - tradition, origin, size and success - are being rendered increasingly meaningless unless they are combined with a positive current experience

Source: Polestar / MMS (Berlin) brand trust survey November 2009

6Trust in Brands, Polestar Communications & Musiol Munzinger Sasserath November 2009

Winners and losers.

-15.4

-13.8

1.5

-1.1

-15.4

-22.8

-3.9

-3.2

6.5

-5.9

-17.6

-16.1

-9.8

-8.1

-7.9

-4.8

-0.2

1.6

2.3

2.9

-60.0 -50.0 -40.0 -30.0 -20.0 -10.0 0.0 10.0

Breweries

Personal hygiene

Computer Manufacturers

Supermarkets

Daily Newspapers

Airlines

Non-Profit Organizations

Department Stores

Car Manufacturers

Television Networks

Has your trust in these sectors increased or decreased recently?Scale from 1 to 5: 1 = strongly increased, 5 = strongly decreased

„Trust increased“ (TOP 2 Boxes) minus „trust decresed“(BOTTOM 2 Boxes)

GER UK

Source: Trust in Brands. Polestar Communications & MMS. November 2009

7Trust in Brands, Polestar Communications & Musiol Munzinger Sasserath November 2009

Winners and losers.

-34.6

-52.4

-34.4

-32.5

-13.7

-23.1

-10.0

-8.3

-12.2

-50.5

-48.9

-45.2

-36.6

-32.1

-26.6

-22.6

-22.5

-17.9

-60.0 -50.0 -40.0 -30.0 -20.0 -10.0 0.0 10.0

Food Industry

Internet Companies

Health Insurance Companies

Telecommunication Provider

Insurance Companies

Power Supplier

Banking

Oil Companies

Has your trust in these sectors increased or decreased recently? Scale from 1 to 5: 1 = strongly increased, 5 = strongly decreased

Travel Business

GER UK

Source: Trust in Brands. Polestar Communications & MMS. November 2009

8Trust in Brands, Polestar Communications & Musiol Munzinger Sasserath November 2009

16,732,2

47,642,8

49,164,0

43,645,4

50,755,4

66,454,0

72,858,0

65,277,1

67,569,9

67,380,6

73,479,4

80,7

14,238

43,945,445,5

55,561,4

59,961,1

65,266,7

72,274,8

77,581,2

83,484,184,185,1

87,188,288,3

90,1

0 20 40 60 80 100

Größe des UHerkunftTraditionMedien

ErfolgEmpfehlungen

Innov. AngeboteKrisenmgmt

UmweltbewusstseinTransparenz der U-Verhalten FührungSoziales Verantw.

Guter RufUmgang mit MA

Gefühl MühePreisgest.

Freundlichkeit MAOffenheit bei

GarantienKulanz

Kompetenz MAVerlässlichkeit

Qualität P u. DLTOP 2 - Boxes:

Transparency in corporate policy

Reputation of a companyInteraction with employees

Crisis-management of a companyEnvironmental responsibility

Origin of a company

Social responsibility

Friendliness of employees

Warranties on products and offers

Expertise of employeesReliability of a company

Success of a company

Transparency in case of a problem

Straightforward, easy to understand prices

Behaviour of senior executives.

Quality of products and services

Willingness to resolve problems

Innovativeness of offers

Tradition of a company

Factors to trust a company.

Feeling that the company is making an effort

Size of company20

GER UK

Reports from friends and family

Positive media coverage

Which factors are most important for you to trust a company?Scale from 1 to 5: 1 = very important, 5 = not improtant at all

Source: Trust in Brands. Polestar Communications & MMS. November 2009

2. Generosity of brands and individuals3. New ways to gain and define status

9. Infolust

4. Limited, hand crafted, niche and local

8. On the go and always on

6. Joyning – Partnerships & Co-creation

5. Grown up brands

1. Green

7. Extreme customisation

10. Choice rejection and info blindness

Green continues to be a major trend despite the recession and reaches new levels of corporate acceptance

Eco-frugal

Modularity

AdvertisingEco-easy Econcierges

Recycling

Reuse, reduce, recycle, regulate?

Sainsbury’s/ Hindmarch bag

Verticalfarming in Boston

Sainsbury’s – Freedom Foods & Marine

Stewardship

FMCG

FMCG key themes• Variants refresh markets, personality differentiates

brands• Global and corporate vs local – 2009 has knocked trust

in more than just MPs and banks• As the world gets bigger, the public increasingly seek meaning

and connection at a local level. From simple local adaptation and the carbon benefit of local production to direct community benefits

• Social networking creates community and a feedback loop to brands• Also creates networking neurosis and information overload• More opportunities for backlashes against brands• Canny consumers tapping into price alerting and online BOGOFs

and vouchers• Shared experiences – brands use this to create

products, ads and ideas while generating PR at the same time

Joyning

Partnerships Crowd Sourcing

Brands are creating partnerships both with other brands and consumers

Orange Rockcorps concerts for volunteers

Phiiips/ Swarosvski USB ring

Crowd sourced restaurant wine list

Crowd sourced Peperami ad - $15,00

prize

Walkers – consumers vote on flavours

DIY

Monitising creations

Self service Effortless customisation

Consumers are back in control – they can create professional products tailored to their wishes and

monetise them

Ebay type site for craft, home created items

Online book creation, publishing & marketing

Locality

In an uncertain world people embrace the known and familiar. Environmental concerns promote local ingredients & transparency

of food sources.

Pride in provenance

Support local businesses

Deliveries to local pubs

Local currency in

Brixton, Totnes, Lewes, Stroud

Reduce carbon footprints

Waitrose local bottling

Duchy Originals

Timberland Dalesford Organics – delivery and outlets in

London stores

Chain of production

Waitrose

Roaming ice cream trucks in NYC, local ingredients

Always on

Price tracking services

AlertsReal time reviews and updates Online sharing

Consumers can connect, share and be updated constantly via all channels at any time of day or

night.

Allows local bakers to notify people when hot cakes are available cf Krispy Kremes

InPulse watch synched with Blackberry launches Feb 2010

DRINKS AND ALCOHOL

Drinks and alcohol key themes

• Self expression – changing nature of status

• Instant gratification – self serve and vending machines

• Looking for the new – pop ups, limited editions

• Counter negative associations of alcohol−Many brands, not just alcohol, are including generosity as part of

their marketingoResponse to recession and consumer rejectionoDesire for institutions that careoMore opportunities for giving and sharing

Effortless generosity

Positive halo from giving both to charities and individuals

Free love

Brand ButlersOrange festival phone charger

Tryvertising aka sampling

Effortless support

KitKat goes Fairtrade, Nov 09

Game combines wine tasting

Co-donation

Statusphere

Green

ConnectedInformation is powerStatus stories

Time saving

Status is no longer just being bigger or most expensive

A personal blend and

tour for 100 special

customers.

Wellbeing pop-up for Vital juicesExclusive concierge firms create links

between members

Elemis spas at Heathrow and Cowshed treatments in Virgin Clubhouse

Virgin space flights

Statusphere

Status skills Unique & Customised

People want experiences & products with a story that they can tell others about and that says something

about themselves.

Smirnoff teaches men to be ‘Modern Gentlemen’ with Hugo

Boss and A Suit That Fits

Learn to cook like Jamie in small groups

Royal Academy secret auction on artist postcards

Anya Hindmarch bespoke handbags –

embossed handwritten message from the giver t on inside of hand made

bag. £1,000 - £6,500

LUXURY

Luxury key themes

• Self expression

• Redefinition of what luxury is – experiences and stories over just ‘things’

• Instant gratification – despite thrift chic & credit crunch

• Looking for the new, unique and differentiated

• Simplification of life – time & clarity are increasingly scarce

• Needing recommendations for ‘investment’ buys

Luxyoury

Eco friendly

Time saved and access

Craft

Extreme personalisation

Luxury means bespoke, time saving, unique, green & hard to get

Adding handles to shoe boxes saves bags

Transforming local restaurant grease into candles ($24)

Design your own Nike shoes

Grown Up BrandsInclusiveEdgyRisqué

Audiences appreciate brands that stand out and treat them as adults

Philips ‘intimate massager’

Comme des Garcon uses synthetics to

create ‘anti-perfumes: ’ Dry clean', 'Garage', 'Soda' and 'Tar'

Limited edition in Vermont of ice cream usually called Chubby Hubby

Icecreamists at Selfridges and in vans – flavours include ‘Molotoffee Cocktail’, ' Taking the Pistacchio’

Limited locations

Limited editions, limited places = thrill of the hunt

Hyperlocal

Fortnum & Mason rooftop exclusive honey

Urban pride

Guerlain city themed perfumes

Bond #9 NYC neighbourhood perfumes

City inspired flavoursBurger King £95 burger – only available at Gloucester Road branch.

(video)

Exclusive access

SOCIAL AND GOVERNMENT

Social & Governement key themes

• Greater personal responsibility of individuals

• More information available but still limited time

• Transparency & accountability – overall decline in trust

• Information overload

• Need aggregators on advice e.g. DirectGov

Realtime Infolust

Technology allows for governments to become more transparent and for audiences to reclaim control over

their lives

Report vandalism, fly tipping and graffiti, the council fixes it

Consumer activism & advocacy

A combination of frustration and connectivity has increased public activism. This means that from the Christmas No.1 to

more serious issues, consumer advocacy & how this is managed is more important than ever

Public demand for ethics and transparency

Research from the Economist shows how angry the public are with both big business and government. Behaviour has to

change; this is not just about green policy, but about broader ethics and greater transparency

SurrenderSearch for simplicity

In the face of complexity, consumers react and search for simplicity and trusted brands

Most trusted brands by category (Reader’s Digest)

MEDIA TRENDS

From branded content to branded App

From content that entertains to content that helps you live your life. Be that finding hire cars, the nearest pizza or helping you know the quickest routes to work. The public increasingly

expect this type of facilitation NB: beware the fad - UK penetration of Smart phones only = 2% at the moment

The real arrival of mobile

Mobile isn’t just about apps. 10.4 m UK consumers access the internet via mobile. There are 1.6bn bank accounts in the

world but 4bn phones so financial transactions will drive use. Furthermore technical advances will mean TV & print content

will increasingly be consumed

The role of TV evolves not declines

The UK is still viewing over 26 hours of TV a week. Its use as an ‘event’ broadcast or to trigger viral activity has never been greater. 44% of people claim to have researched on-line in

response to a TV ad (Deloitte 09)

So what next?

• Some trends, whilst important, are ephemeral. Some will continue to develop in the future. However all these trends are resonating with audiences and brands now.

• Tapping into these trends, applying them and challenging established, accepted wisdom will create consumer connections and advocacy.

• If you would be interested in a workshop exploring how any of these trends could be applicable for your specific brand and category, please get in touch....

Simon Mathews: simonm@polestarcommunications.comOllie Joyce: Olliej@polestarcommunications.com

Mark Bauer: markb@polestracommunications.com