recession-rewired
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RECESSION-REWIRED: Leaner times hit home for moms and younger millennialsKELLY MOONEYPresident, Resource Interactive and co-author of The Open Brand
PRESENTED BY: SPONSORED BY:
RECESSIONOBSESSION
DEPRESSION
DEPRESSION
THE LOST DECADE?Median household income in 2008 slipped to $50,303 from $51,295 in 1998.
THE LOST DECADE?Median household income in 2008 slipped to $50,303 from $51,295 in 1998.Source: U.S. Census Bureau, 2009
Real Personal Consumption per Capita vs. Savings
YEA
R O
VER
YEA
R C
HA
NG
E /
PER
CEN
T
Source: EconomPic Data, June 2009
Shifting gears...
CONSUMPTION
SAVINGS
“90% of the U.S. respondents said that their households had reduced spending as a result of the recession. 45% of those who reduced spending did so by necessity, 55% by choice.”
—McKinsey Quarterly, March 2009
CONSPICUOUS CONSUMPTION
CONSPICUOUS CURTAILING
“After completing a shopping trip…23% of those surveyed admitted to feeling relieved…But 5.3% felt guilty and 20% said they were downright depressed.”
—WWD, April 2009
Abercrombie & Fitch
Percent Change Same Store Sales August 2009 vs. August 2008
Aeropostale
American Eagle
Buckle
CostcoGap, Inc.
Hot Topic JCPenney
Kohl's
Limited Brands
Macy’s
Neiman Marcus
Nordstrom
Target
TJX Companies
Source: Retail Forward, August 2009
Sales at Goodwill stores open at least a year
rose 7.1% in the first three months of 2009 over the same period a year earlier. Source: NYT, June 10, 2009
Q.How has the consumer changed?
Will the changes be enduring?
Is there untapped opportunity in this crisis for online retailers?
Remember the 1990s?
During the early ‘90s recession, teens were discovered as a valuable demo and peer pressure emerged as a powerful market force.
“Their parents might have gone bargain basement but kids, it turned out, were still willing to pay up to fit in.”
Source: No Logo, Naomi Klein
GEN Y: The prematurely affluent generation
1st wave feel recession is unfair
My generation is being dealt an unfair blow because of this recession
The current situation with housing prices actually makes me feel
optimistic about buying a home
All of the online resources for jobs searches and networking make me
feel less anxious about losing/finding a job
If the employment situation worsens, I may have to move back in with my
parents
Most of the people my age that I know are not that worried about the
recession
My friends are doing interesting entrepreneurial things to make more
money
If I lose/have trouble finding a job, I’ll just start my own business
% who agree
Among young adults 18-29
Besides fear, how do most Millennials feel about the recession? A narcissistic sense of being unfairly burdened. Yet some optimism emerges as well.
NO FAIR!
Source: JWT, 2009
Thrift is an alien virtue
73% of women said the recession has fundamentally changed the way they think about saving and spending money vs. 57% of men. Source: Performics Survey, April 2009
OU
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OD
OLO
GY
SECONDARY SYNTHESIS
150+ articles, Forrester, Nielsen, McKinsey, ExactTarget, JWT, Gen
Buy +PRIMARY RESEARCH• 20 in-person interviews• 50 online participants in a 10-day
forum discussion with Harris Interactive
• Tested 3 RI visual prototypes• Conducted survey with BIGResearch• Partnered with ExpoTV• Tapped RI Trendwatching practice
DIGITAL TEEN•Age 13-18, mix of race, income-earning/non-income-earning
•Shops online, regular internet and email user, use of social networking and SMS and owns cell phone.
DIGITAL MOM•Age 30-55, mix of married/single, income, and race
•Shops and purchases online; frequent email user; some use of blogs, social networks, and/or Twitter, online reviews and texting.
UNDERSTAND THE REWIRING
RECESSION
BRANDSHOPPING
DIGITAL
RECESSION
BRANDSHOPPING
DIGITAL
Forced to grow up fasterTypical teen egocentric worries displaced.
Reconciled yet feeling fortunateChance to reset family values, become more resourceful, prepare for the future.
DIG
ITA
L TEEN
SD
IGIT
AL
MO
MS
“It’s the fault of the previous generations who
over-consumed. So I hope we can learn from their mistakes and be the generation that lives within their means.”
81% of household heads
say that kids are aware of the recession and the impact it is having on household budgets.
Source: Ad Age, April 2009
—Alicia, 18
Recession-related issues have replaced more typical teenage ego-centric worries as their top concerns. (Among teenagers 13-19)
2nd wave facing recession head-on
If there will be good jobs when I graduate
Whether I’ll have to give up some of the things I like because of the
recessionHow my parents are doing money-
wiseThe condition of planet Earth that
will be left to my generation
How attractive I am to others
How I’m doing in school
Which college I/my family can afford
Source: JWT, 2009
Which college will accept me
How many friends I have
How popular I am at school
How I’m doing in extracurricular activities
Keeping up with what other kids my age have
Base = 100
293
251
249
221
201
180
151
143
92
78
75
73
75% are getting more or the same allowance as last year
parentsgrandparents, aunts & uncles
jobs (babysitting, dog walking, etc.)
eBay, Craigslist
allowance
Source: Seventeen survey, 2009
“I’ve now seen how quickly a recession can come on and how long it can take to get out of
one. I’d like to set a good example for my children and teach them to be smarter with their money.”
“It has been a tremendous lesson in how to live within your means and
separate wants from needs.”
—Pamela, 47
—Alanna, 34
RECESSION
DIGITAL MOMS
RECESSION
BRANDSHOPPING
DIGITAL
Savvier about financing their purchasesHave discovered online research, coupons, clearance racks, selling and swapping.
Smarter, prouder about living with lessDistinguishing between needs vs. wants, relying on codes and coupons, shopping clearance first.
DIG
ITA
L TEEN
SD
IGIT
AL
MO
MS
“I feel good because I can
actually save my money before I make a purchase. I feel that I’m handling my business as a young man should.”
69% of young people now
research all purchases before they buy anything.
Source: OTX, May 2009
—John, 16
—Luke, 13
Over the next five years, moms of teens plan to:
57% consider purchases carefully57% be more price conscious55% stick to a budget57% dine out less Source: BIGResearch, July 2009
“My shopping habits will not change back once the recession is over. We are not lacking for the basics and still have a wonderful life. Less is more in our family now.”
“My shopping habits will not change back once the recession is over. We are not lacking for the basics and still have a wonderful life. Less is more in our family now.”
Coupon sites have been the second-most-visited category on the Internet—behind job sites—for about a year.
Coupon sites have been the second-most-visited category on the Internet—behind job sites—for about a year.
Source: eMarketer, May 2009
—Blanca, 43
RECESSION
BRANDSHOPPING
DIGITAL
Holding outDeferring purchases and selectively trading down or changing channels
Trading WAY downMore than ever, putting the family’s needs before their own; rethinking luxury
DIG
ITA
L TEEN
DIG
ITA
L M
OM
Brand loyalty is increasingly important among 13-21 year olds,
as 73% now shop at a fixed group of stores.
“I’m pretty picky about clothes. They’re the hardest to give up. I notice the difference in quality so I usually compromise by
buying good brands on sale.“
Source: Euro RSCG Discovery survey, May, 2009
“I haven’t really given up any brands. I maybe don’t buy quite as much, but I still buy the same brands I always did.“
—Alicia, 18
—David, 17
Favorite Brands During the Recession, Resource Interactive and Harris Interactive, 2009
SHOPPING
DIGITAL MOMS Favorite Brands During the Recession, Resource Interactive and Harris Interactive, 2009
“I’m not really into any specific brands anymore. I realized that I don’t need a $300 purse as much as my kids need clothes and food.”
“I’m not really into any specific brands anymore. I realized that I don’t need a $300 purse as much as my kids need clothes and food.”
“Definitely more Target shopping going now ....previously it was Nordstrom, Coach, Dior.”
43% are buying store brands instead of national or high-end brands.
Source: TNS Retail Forward, August 2008
—Keri-Anne, 32
—Sheryl, 49
RECESSION
BRANDSHOPPING
DIGITAL
Seeking independence from adults through digital devicesAs the first true digital “natives,” teens have more ways to experience freedom
Seeking control and connectionA means of getting answers and more value, monitoring kids, finding social fulfillment
DIG
ITA
L TEEN
SD
IGIT
AL
MO
MS
“There’s a mini-generation gap between under-twenty and over-twenty Gen Y’rs, due to the swift progression of technology in the past two decades.”—GenBuY, October 8, 2009
% N
ET C
HA
NG
E I
N U
SA
GE
Net Change in Communication Usage by 15-17 year olds in last 6 months
Source: Exact Target, July 2009
Text SocialNetwor
k
Instant Messag
e
% more often - % less often
• Texting, social networking grow at IM's expense
• Email usage rising slightly, significantly more among smartphone owners (25% of teens)
44
25
4
(7)
Reliance on texting and SNing
“Today’s teens are so focused on communication that iPhones are the new jean.”
Most of 8-14 year olds report having online chores including sharing pictures with relatives (38%) and getting driving directions (35%).
Source: GenBuY, October 8, 2009
DIGITAL = Teenage Freedom
Source: AdAge.com, April 2009
“I will almost always check online….even if I’m going to buy it in the store.”
—Louise, 49
“I will almost always check online….even if I’m going to buy it in the store.”
—Louise, 49
“I’m a serial Googler.”
“SECRET” SHOPPERS
40% of total online spending came from $100K HH consumers, who increased shopping by 17% in Q4, 2008.
Source: comScore, 2009—Tracee, 51
Moms with teens said the internet...
46% Helped me save money through access to easier price comparisons, coupons, and deal alerts.
41% Helped me become a smarter shopper; product reviews and ratings, blogs, and product information has helped me make more informed purchases.
21% Helped me make money through selling things I no longer need on sites like Craigslist, eBay, etc.
SHOPPING
DIGITAL MOMS Source: BIGresearch and Resource Interactive, August 2009
UNDERSTAND THE REWIRING
Listen with a new ear—let go of truisms!
Seek to understand the clashing value systems
Identify new segments to serve or new ways to deliver value
UNDERSTAND THE REWIRING
DECONSTRUCT THE (CO-) SHOPPING JOURNEY
EVALUATE RATIONAL
E
NEGOTIATE
COORDINATE
PURCHASE
OBSERVE & RE-ARM
I WANT I NEED I WANT
DESIRE BUILD THE CASEPRESENT THE CASE
NEGOTIATE ACQUIRESHARE & SWAP
DIFFUSESELF-
EDUCATE
TEENS:
MOMS:
Check Lucky
at Your Service
app
Earmark magazin
e ad
Stream fave TV show on
Hulu
Check out compariso
n shopping
sites
Search past
emails for
promo codes
Google “coupon
” + brand namePost
Q. on favorite mom blog
Google item
Poll friends
on Facebo
okwall
Check MobileSMS
Visit the web site
Text friends about meetin
g at mall
Downloadfilm
trailer to iPhone
Visit brand/store
site and build wish
list
Check teen’s
shopping cart
Check her
PayPal Student Account
Check store for clearanc
e
Review items
held in cart
Assign more
chores in
exchange for $
Send phone pix to Mom from store
Discuss upcomin
g gift cards
Post outfit
on Polyvo
re
Upload pix to
fan page
Ratings&
reviews
List new
item on Craigsli
st
Wear to
game & take snapsSay
yes on Bill My Parent
s
DECONSTRUCT THE (CO-) SHOPPING JOURNEY
Create new hooks that support needs-based shopping and teens' fact-finding zeal
Allow moms and teens to shop together without being together
Look for ways to help moms help teens become financially responsible
UNDERSTAND THE REWIRING
DECONSTRUCT THE (CO-) SHOPPING JOURNEY
INNOVATE YOUR WAY OUT
TEENS (still) want a
continuous stream of new
items in their lives
because they are
overstimulated and they
care what their friends
think and have.
However, they often
have to justify their
desires to parents.
MOMS want to teach
their kids smart shopping
because they have
learned valuable lessons
from the recession.
However, they feel
guilty bringing more stuff
into the household.
Generally receptive overall —“neat,” “cool” and “useful”
Reuse concept is unique and appealing with strong interest in swapping with others
Option of setting communication preferences or having offers consolidated didn’t seem unique (not fully understood)
Generally receptive overall – “cool,” “helpful” and “user-friendly”
Reduce/reuse appealing; perceived as reducing waste
Appreciates how the personalized experience makes finding her promotions easier and ensures she’ll not miss out on a good deal.
TEENS MOMS
MOMS do not enjoy
shopping with their teens
because they are
unfocused and inefficient.
However, moms need
to see what teens have in
mind to provide guidance,
consent and payment
assistance.
TEENS do not enjoy
shopping with their moms
because they crave
independence and time
with friends. However, connectivity with mom is
essential to getting timely
consent and access to
funds.
Receptive overall – “cool,” “fun” and “something new”
Downloading a brand-specific app for this purpose was too time-consuming, complicated
Like that they can get pre-approval from Mom and solicit input from friends
Mixed overall – “cool” and “innovative,” but “too many steps’’
Good way to participate in bigger purchases
“Get the OK to buy” and "Bill My Parents" was perceived to be irritating, potentially unsecure or encouraging more shopping
TEENS MOMS
MOMS want to feel
smart about how they
maximize their shopping
because they have
budget limitations.
However, this isn’t
much fun because there’s
no room for impulse.
TEENS are impressively
savvy with their OWN
money because they
“feel” the transaction more
fully. However, they
need help shopping within
a budget.
Very receptive overall – “cool,” “creative” and “handy”
Most indicated this saves time and makes it easier (and more fun) to shop within their budget
Some suggested it makes them smarter about money
Very receptive overall – “more efficient,” and “helps me get the most for my money”
Some questions/concerns about shipping, “hold it” details and in-store pick-up
See the promise for their teens, as it would teach spending within their means; and ideal for holiday shopping
TEENS MOMS
INNOVATE YOUR WAY OUT
Begin with an Insight Formula
Create rapid prototypes Test, (fail quickly), learn,
launch – agility is key!
Support consumers as marketers and merchandisers!
???
Autofill codes, points, and special offers; deal expiration alerts
Support social marketing and merchandising
Monetize your Facebook page
Add Raves to your Ratings &
ReviewsGet more relevant at the shelf levelGet more relevant at the shelf level
Use messaging to tap into thrift
mentality
Make meaningful service changes based on
feedback
Use social networks to share shipping codes or
offers
Introduce new products and price points
Shift the dialogOffer new utility/fun
A crisis is a terrible thing to waste.
—Paul Romer, Stanford economist
thank you.COMPLIMENTARY PRESENTATION FILE:
www.resource.com
by Kit Yarrow and Jayne O'Donnell
Special thanks to our research partners: