Deck The Malls….It’s October!

Are you in the Yuletide mood yet? Thought not. Christmas decorations and lights have already gone up in Nottingham’s Old Market Square this week and it’s still a good fortnight until Halloween; Christmas Trees have been available in John Lewis since the start of the month, whilst the BBC will film its “Songs of Praise” Christmas special on October 24th. And if you thought that was early, they will film the Easter special the following day. As Loudon Wainwright III sang: “Suddenly it's Christmas, right after Halloween. Forget about Thanksgiving; It's just a buffet in between.” So has Christmas arrived earlier to fill the post-Jubilympic gap? Are retailers trying to keep a low level of celebratory consumption bubbling in the background with crackers & cauldrons competing? Whether Christmas is indeed arriving earlier or not, one thing is for certain. Throughout the recession, talk of an austerity Christmas has never really come to reality as families have saved and stockpiled to ensure they have the best Yuletide season they can. The same will be the case this year. During what has been an undeniably tough few years, many people have clung like limpets to calendar staples like Christmas and Halloween as opportunities for an escape from everyday drudgery. It’s arguably one of the reasons why both the Jubilee and the Olympic Games inspired such overt public enthusiasm and excitement. But if we have clung to such events, so have brands and retailers, placing most of their hopes on a consequent economic bounce. That may be misplaced given that any post Jubilee/Olympic lift seems to have been transitory. Alternatively we may be heading towards an economy that simply bases itself on lurching from one special occasion or set-piece event to the next and just takes the economic benefit of each as they come along. The challenge for brands is to understand who is buying and for whom, what is influencing those purchasing decisions and to be able to respond to changing attitudes and behaviours in a way that enables them exploit whatever potential exists. This is where the use of online research and its ability to deliver insights quickly can assist brands in re-pointing activity fast, rather than having to wait ‘til the following season to implement slower moving research findings. Engage has also been creating more “experiential” qualitative research to transport consumers to a different mindset – useful for “out of season” research. Understanding how, where and why the shopper is buying is should be central to a merry Christmas for brands. The multi-channel shopping environment, of course, could also mean that Christmas may be less evident than when we shopped in a purely bricks and mortar world. Royal Mail reports that 40 million people shop online for Christmas gifts. This, coupled with the efficiency of high street retailers in terms of getting stock into store, also means we seem more comfortable buying later in the year than ever before. The propensity for retailers to start their January sales pre-Christmas means that more and more people are waiting as late as possible in order to bag a bargain. That also means it’s harder and harder for brands to calculate their own Christmas figures, particularly if they are forced into promotional or discounting programmes. Figures from 2009 found that nearly one fifth of Britons left at least part of their Christmas shopping until Christmas Eve, with Selfridges saying that around 80 per cent of its customers on Christmas Eve were men. So in these uncertain times it’s nice to see that some things don’t change.

Is Crowd Clout here to stay?

In the last few months I’ve joined the Groupon crowd. I used the discount voucher site to treat my wife and daughter to a pamper day and sent my son off drift racing at Brands Hatch and all, I’m told, at a fraction of the cost of booking it independently. They were happy and so was I, enjoying the benefits of crowd purchasing or ‘crowd clout’ which delivers compelling offers to consumers on a daily basis. And it’s big business as the rise of rivals Living Social and Wowcher has proven. Even Amazon has now launched its own daily deal website in the UK, beginning with London, where AmazonLocal will email geographically-relevant offers to users every morning, and offer reward points to those using an Amazon credit card. What’s more interesting, though, is whether this is a passing trend or one which will redefine the way we, as consumers, begin to purchase any number of items. In this, though, the signs are not positive. To do so, the benefit has to be as evident to the supplier as it is to the consumer and the intermediary and that is where the jury remains out. We know it’s big business – so far. Sales at Groupon exceeded $750 million in its first two and half years, whilst the company’s activities cross four continents and reach nearly 40 million subscribers. However, after the publication of worse than expected financials recently, an analyst at Citi Investment Research suggested “a rapidly deteriorating core business - ie the daily deals business - and Groupon needs to act fast to fill up this hole with new initiatives”. The company believes that growth may likely come from new services including an instant mobile deal feature; Groupon Goods, for deals with national retailers; and Groupon Getaways, for high-end travel deals, but only time will tell if the model will serve vendors as well as it serves consumers. The interesting thing about daily deal sites is also the extent to which they change not just the products that we buy, but the classic decision making processes we use - does the increase of impulse buying of things that we hadn't previously thought we needed, just because they are a bargain make us more rational and careful in our regular grocery shop, to balance our frivolity; or less so, because we have a taste of bargain spontaneity? What is sure is that now the initial excitement of daily deals has died down, they are going to have to be much smarter to survive. At the moment, they feel a bit like a particularly manic jumble sale, where you have to rummage endlessly though rubbish to come across the odd, only slightly soiled, bargain. And who wants to do that? Classic example of this is the juxtaposition of increasingly unlikely products - I saw cheap wills being offered just above bikini line lasering the other day - that is crazy. And some things should just not be offered on a special deal. Long-term it could impact on the service industries in particular. Services that pre-Groupon were too expensive for the majority have now decreased radically in price, because of the number of Groupon offers available. Daily deals could continue to stimulate consumer spending and help businesses - but they need to start working in a more sophisticated, thought-through way, if they are to do it. But, and it’s a big but, a study by Rice University in Houston, Texas, found that 40% of companies which had used Groupon to promote their goods or services said they would not consider using Groupon again. Presumably, although suppliers pay a significant premium for the service, they would be happy to do so if it were delivering sustainable custom. The findings from the study are interesting. Two thirds of customers won’t buy more goods and services than are offered in the deal; only one in five Groupon users becomes a repeat buyer, and 80% of Groupon users are using the site for the first time. Like me, they are often for sporadic, opportunistic purposes as treats or for gifts and I, like many I suspect, pay little attention to the name and nature of the business I am buying the services from. I pay even less attention to the torrent of emails that rain down on me and others and which actively turn me away from becoming more engaged with the site – more grouped-off than group-on! All this seems to suggest a pattern of short-term relationships between the vendor and the consumer and, consequently, short-term relationships between Groupon and the vendor. And, if the old adage is correct, that it costs five times as much to win a new customer than to retain an existing one, crowdpurchasing sites like Groupon are failing to secure long term relationships with vendors because they are not yet delivering enough sticky, repeat business for them. Increasing and broadening the opportunities for consumers, which would then in turn increase and broaden the benefits for suppliers would likely increase sales and embed crowdpurchasing as a way of moving forward, even for opportunists like me.

Will short term discounting harm brands?

Heavy vouchering and discounting have helped end 18 consecutive months of declining volumes for retailers whilst promotional activity has remained unchanged at 35% of FMCG sales, following continual use of money-off vouchers and coupons. Although this is primarily a retailer initiative what are the implications for brands in being discounted? How can brands maintain perceptions of quality if you're being discounted? What are consumer views? Is this the thin end of the wedge where the only way to sell is going to be heavily promoted or discounted? All of us, of course, have brands that we are likely to buy no matter what; discount or no discount those products will continue to find their way into our baskets. But they are probably in the minority. We are in a phase where brands will need a compelling proposition for not discounting or for remaining at a premium within their category. However whilst discounting may persuade consumers to try something new, it is unlikely to lead to sustainable business unless the products deliver as well as offer a better experience than their competitors. The challenge for brands is to retain those consumers without retaining the price reductions. Discounting, of course, doesn’t need to be quite so overt. There are 'brands' that discount more discretely but equally successfully. The secret hotels on lastminute.com, the 'shopping clubs' or Groupon style offerings can help bridge the gap between getting sales and occupancy up whilst avoiding brand equity erosion that accompanies continual overt promotion. This works online too with sites offering large discounts on higher end fashion brands. To many, this makes premium brands more accessible without feeling like they are compromising on quality. Whilst it doesn't necessarily impact on how they feel about the brand it may elevate how they feel about themselves. This can rub off on the brand by association. There is also, though, a more pragmatic view of discounting. Whilst if you are a premium brand, being constantly discounted might eventually tarnish the premium positioning, this will (in the current climate) be more than balanced by consumers' delight at bagging themselves a bargain. In fact to not be discounted could be perceived as brand arrogance, as if you are out of touch with the problems of your audience. For FMCG brands, premium often equals a touch of affordable luxury, a small treat to brighten your day so frankly the danger of undermining your quality perception through careful promotion is probably quite low. What might be an issue is who the discount is attributed to - as a brand you will be paying for the promotion, but the retailer will probably get the accolades and be seen as the shopper’s friend. So it might be important to communicate to consumers that the brand is responsible for the promotion rather than the retailer. Brands should perhaps take note from politics - it is important to demonstrate to people how you share their pain, rather than telling them we are all in this together and retreating to your ivory tower of price premium.

When branding becomes more than just a game

Picture the scene. You’re relaxing at home, catching up with friends on Facebook, playing a game, doing your best to escape from the realities of the outside world. You need to earn a bonus to move yourself up to the next level and just as you’re about to do so, a brand pops up on screen and offers to provide it for you. Irritating or inspired? Well, soon we may have the opportunity to find out because the move into the gaming sphere represents the latest response by advertisers to embrace new techniques to ensure that their advertisements are noticed. Not only has Amazon announced that it is going to start creating games in a bid to earn itself a slice of the $6.2bn social gaming sector, but one of its competitors in the field, King, is to introduce a new in-game ad format that will allow brands to pay to associate themselves with boosts or extra lives. It is easy to see why this could be tempting for brands. King claims that advertising across its gaming network could help brands reach over 30 million, predominantly female game players across Europe and the United States. But how will we, as consumers, feel towards this latest potential move by brands into another area of our private lives and leisure time? We have become accustomed to using technology to bypass advertisements and sponsorship messages, most obviously through the ability to digitally record television and then fast forward. However, when it comes to television or radio, consumers are generally passive, compared to gaming, when they are arguably at their most active. The key, I suspect, will be in the role played by the brand in-game and how heavy-handed that branding might be. Relevant in-game branding - for example a sports brand being represented within a sports stadium environment would seem to be a pertinent even subliminal fit (though the advertiser may argue “too subliminal”). With exposure this subtle and fitting, we would anticipate that it would enhance consumer perceptions of the brand. Research has, in the past, supported this view. An IAB survey in 2007 found that 86% of gamers were happy to see ads placed within games if it brought down the prices they had to pay, whilst a third said they would be either quite likely or very likely to buy a product they had seen advertised while playing.Only 14% said that ads ruined the gaming experience. Interestingly, 40% said that ads in games made them more realistic while 27% said that interacting with a brand during the game, such as gaining more energy by drinking a can of an energy drink, did not constitute advertising. However, if the brand is repeatedly associated with an event within the game that itself becomes frustrating, the player’s perception of the brand is likely to suffer by association. If in-game advertising is realistic, contextual and non-intrusive, it offers great potential to brands. But, beware, because if you get the context wrong, the downside for the brand could be significant.

Do we need an Olympic ideal for business?

Tell the truth, you must have taken a step away from your work for a few minutes at some point over the past week to cheer on Bradley Wiggins, Chris Hoy, Mo Farrah or Jessica Ennis, or perhaps just as importantly to cheer on and admire the athletes who may have missed out on medals but have achieved personal bests. But does it, can it and should it have the power to inspire us in our business lives and, if so, are we harnessing it to best effect? It has clearly had an effect on one of my colleagues at Engage Research who admitted having Bradley Wiggins firmly in mind as she cycled to work, achieving a personal best by knocking a couple of minutes off of her usual commuting time. The reality, of course, is that the Olympics are transient and, come September, will be little more than a happy summer memory. Many brands will already have found ways to tap into the current mood of hope and inspiration, to promote the Olympic ideal of being the best you can be. However, soon we will return to the reality of our economic circumstances, in which case some of the traits that set an Olympian aside could be transferrable to a business environment and could have a positive impact on the way we work. · Leave no stone unturned in your preparation – research is critical to the way brands and businesses function. As the saying goes, if you fail to prepare, you prepare to fail. Securing the customer insights your brand or business needs will be central to your chances of success. · Take a risk – the great athletes, like the most successful businesses, take calculated risks. They know the importance of seeing the main chance when it presents itself and then going for it. · Relentless self belief and enthusiasm – the top athletes will not allow themselves to be battered by negativity. If we don’t believe in our brands, nobody else will either. · A desire to stand out from the crowd – nothing will undermine your brand more than becoming ‘wallpaper’. Creating a distinctive identity with which your market can relate is crucial. · Agility – there is ample evidence of successful brands recognising early that something isn't working and then changing their strategy accordingly. · Being part of a team – you only need to watch a successful relay or rowing team to see the importance of assembling the right team and then playing to the strengths of each of the members. · Get used to disappointment – whether you’re an athlete or a brand, get used to the ups and downs and learn how to ride both to stay ahead of the competition. It’s always been very clear to us that you get out what you put in, if you simply let things happen then you'll get left behind. So be inspired and, when it comes to your own business, hopefully you won’t have to wait four more years to enjoy the fruits of your labour.

Preparing your brand for a ‘new world order’

The times, as Dylan once sang, they are a changing. Waitrose has just reported record sales of product via its click & collect service, whilst industry bible, The Grocer, have been reporting that supermarkets have not only been ramping up their Click & Collect services but are also now looking at extending it to non-food items. The publication suggests this could herald the dawn of the grocery drive -thru. This may seem a peripheral development for brands, being as it is more closely connected with the relationship between retailer and shopper, but there are implications and factors to consider. If there is an increased or steady move away from in-store shopping towards delivery or click & collect, product packaging may need to be adjusted to take this into account. Implicit in packaging design at the moment is the combination of front of pack short cuts with more detail on the side and back of pack which are intended to be more actively read and consumed by people who want to know more. If you are not physically seeing the product, you will not have access to this greater detail, the absence of which could influence your choice of brand. This is unlikely to have much of an implication for products that either do not require considerable thought or brands so instantly recognisable as to need more detail (e.g. Kit Kats, Whiskas, Tiger beer...). However, transfer this to a pro-biotic yogurt or a cholesterol-reducing low fat spread, where the choice may require more active thought, then the way the product is presented online versus on-shelf may well impact on how people shop in these categories. By replicating on-pack information but purely as text on a web page, makes it appear strangely out of context and leads to interaction with the brand, without actually seeing any of the branding. More often than not, all you get is a picture of the front of pack. This lack of product shots is a missed opportunity when you are dealing with consumers conditioned by Amazon and Ebay shopping to expect photographs of every single product component from every conceivable angle. We constantly hear from consumers that they like see-through packaging because they like to see what they buy. And often clients can't deliver that because of cost and technology constraints of making that sort of pack. But online they can do it every single time. Yet few do. And then there’s the unpredictable way products are described. A search of salad dressings produces this enticing product description for a Mary Berry product : “While every care has been taken to ensure this information is correct, food products are constantly being reformulated and nutrition content may change. We would therefore recommend that you do not rely solely on this information and always check products labels !”. Whilst other brands (e.g. Green & Black chocolate) have OTT product description essays which surely no consumer will ever read. So brands will need to give active consideration to how their products are being represented in the online shopping environment (size of the image, product details, juxtapositions) as new rules will emerge about how consumers’ respond to new brands or even brand extensions.

Maybe we will have more fun as we get older….

There’s no denying it, we’re getting older as a society. Only last week figures released by The Office for National Statistics showed that the number of people in the UK working beyond the state pension age has almost doubled since 1993, to stand at 1.41 million in 2011. Of course, this growing and ageing population not only puts pressure on more people to work longer, it will put pressure on brands to give greater consideration to how they address and exploit this fast growing demographic. After all, not only are older people likely to be the ones with most readily disposable income, they can be key influencers on both the choices made by their parents and their children. Key to brands could be our changing aspirations and expectations as we get older, as well as our income. Those of us who will work some way into our previously planned retirement because our pensions or our savings had turned out to be inadequate may become miserable and reactive against spending money for fear of running out. This group could end up being of little value to anyone outside of the alcoholic drinks sector. But there will also be those – and hopefully more of them - who do have enough money for themselves, but who will either have to or choose to stay at work because of their children. We know that children are living at home for longer and more children are staying in education, so a lot of parents are having to support them long after they should have flown the nest. It is interesting to note, though, that whilst the concept of an extended family all in one home is seen as a negative here, in some cultures, like Italy, for example it is more of a norm. Arguably this leads to less stigmatisation of those in old age. These developments have placed an added burden on people as they reach their 50s and beyond whilst some may also be having to support even older parents of their own. What makes this group interesting to brands is the enormous breadth of categories they either spend on or act as gatekeepers for. The economic situation is behind much of these newer developments. The Daily Mail recently reported on the rise of "helicopter parents", who having paid of the education of their children and now making a greater financial contribution to their further education, feel they have a right as well as a responsibility to "hover" in their kids' lives and be part of their decision making processes. Many of these “pensioners” will still be “young”, or at least younger than they used to be in terms of health and outlook. Their need to continue in work may well turn out to be a good thing as it minimises the risk of becoming lost in retirement, which in turn will maintain their desire and ability to exercise their purchasing power. This could be good news for travel, lifestyle, automotive and food and drinks brands for a start. The key, though, may be for brands to recognise these developments more overtly than they have to date and be less focused on the young, beautiful demographic. The figures suggest it could be time for brands to focus their messaging more clearly on the over 50s and not restrict it so obviously to age-related products, like healthcare, insurance or dareisay it, even funeral plans. Where’s the fun in that?