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Copyright © 2012 Nielsen. Confidential and proprietary
• Understanding African American Consumer Power – February 21st
• Digital Shopping: Topline on Online – February 28th
• Hispanic Insights – TBD
Upcoming Webinars
2
Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Title of PresentationCopyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
James RussoVP, Global Consumer InsightsJanuary 24, 2012
What’s In Store: 2012
Today’s presenterJames RussoVP, Global Consumer Insights, Nielsen
James Russo serves as Vice President, Global Consumer Insights for Nielsen and is based in New York. He has more than 19 years of experience in marketing, sales, business development and research across the retail and manufacturing industries. His responsibilities at Nielsen include taking a leadership role in integrating the company’s efforts to leverage and customize its broad array of insights and analytics to enhance growth strategies for its clients. James is one of the today’s leading experts on consumer attitudes and behavior, prominently and frequently featured in the nation’s top business outlets. He is a frequent contributor to leading media outlets such as: CNBC, Bloomberg News, Fox Business, Wall Street Journal and the Financial Times. James earned an MBA and BA from St. John’s University in Queens, New York.
Poll #1
Do you think we are still in a recession?
1. Yes2. No3. Not Sure
2011: Markets and consumers driven by uncertainty
Source: Yahoo Finance; DQNews; ChicagoFed.org; EIA.gov
FUEL COSTS
EQUITY MARKETS LABOR MARKETSHOME PRICES
INFLATION
Concerns continue and underscore a precarious state of recovery
WHAT ARE YOUR BIGGEST CONCERNS OVER THE NEXT SIX MONTHS……
Economy 28%
Jobs 17%
Debt 15%
Fuel prices 5%
Work/Live Balance 5%
In 2011 labor market improved
Source: U.S. Government
U.S. Annual & Monthly Job Losses/Gains
2008
2009
2000
2001
2002
2003
2004
2005
2006
2007
2010
1.95 mil -1.76 mil -540k 87k 2.04 mil 2.46 mil 2.06 mil 1.07 mil -3.63 mil -4.74 mil
2011
1.12 mil 1.547 mil
But contrasts in job situation impacting consumer segments differently
Race/Ethnicity
Asian 6.5%White 7.6%Hispanic 11.4%Afr-American 15.5%
Age Group
20-24 14.2%25-34 9.2%35-44 7.0%45-54 6.7%55+ 6.4%
Gender (adults 20 +)
Women 7.8%Men 8.3%
Education
Less than high school diploma 13.2%High school grad; no college 8.8%Some college, or assoc degree 7.6%Bachelor degree and higher 4.4%
Nov 2011 Unemployment Rates – Seasonally AdjustedNov 2011 Unemployment Rates – Seasonally Adjusted
Source: Seasonally Adjusted U.S. Total Non Farm Employment, Bureau of Labor Statistics U.S. Department of Labor
9
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
As median household income continues a downslide
Source: THE CINCINNATI ENQUIRER, The New York Times, Census Bureau & USA Today
Ultimately reflective in U.S. consumer confidence near recessionary levels
96
103 106 108 106100
83 8280 80
8482
85 87
81 81 83
78 77
Source: Nielsen Global Online Consumer Confidence and Opinion Survey 2Q11
Nielsen Consumer Confidence IndexNielsen Consumer Confidence Index
Sluggish confidence impacting retail sales
The Conference Board, Nielsen Total FDM including WMT Unit Sales
20062006 20072007 2011201120082008 20092009 20102010
Ttl Unit Sales
171 bill
Ttl Unit Sales
170 bill
Ttl Unit Sales
167 bill
Slow growth in retail sales, driven by inflationary gains
Source: dollar sales % chg 52 wks ending 12/27/10, total all depts, fdm inc wmtYTD thru June 2011
1Q10
3Q102Q10 4Q10YTD 2011
Retail winners are innovating and communicating on more than just value
QM Months QuartersWinning Streaks*
815 1515 15 15 16 2213 8824 26 3
% Change in Same-Store-Sales
Discretionary Spending Value & Convenience Stock-Up& Save
2
Economic Outlook
WHAT’SNEXT?
U.S. Real GDP Projected to grow at a weak-to-moderate pace over the next several years
Actual and Projected US GDP Growth (2006-2016)
FORECAST PERIOD
Source: IMF World Economic Outlook, September 2011 Update; TCG Analysis
20102009 2011F20072006 2008 2014F 2015F 2016F2013F2012F
Moderate forecasted growth will keep unemployment rate at elevated levels
Forecast Period
4.8%
2000-2002 2003-2005 2006-2008 2009-2011 2012-2014 2015
5.5%
9.3%
8.5%
7.0%
Recession Period
Pre Recession Period
Avg 50 yrUn Rate 5.5%
6.1%
2016
Source: IMF, September 2011; TCG Analysis
5.0%
Strong GDP growth in emerging markets in 2012, with some developed markets lagging
Projected Real GDP Growth Rates Avg. in 2012 – Major Developed/Emerging Markets
0-2%
2.1-4%
4.1-6%
More than 6%
Note: Country numbers denote real GDP growth forecast for 2011Source: IMF, September 2011; TCG Analysis
25%
0%
10%
20%
30%
40%
50%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
The U.S. consumer remains increasingly cautious about the future.
DO YOU THINK YOUR COUNTRY WILL BE OUT OF A RECESSION IN THE NEXT 12 MONTHS?
% SAYING YES
MostOptimistic
Source: NGCCI
0%
5%10%
15%
20%25%
30%
35%
40%45%
50%
Savings Paying Debts
No sparecash
HomeImprov
Out ofHome Ent
Vacations Apparel TechProds
Retirement Funds
Investing
1Q11 2Q11 3Q11
Current behavior raises red flag for spending in 2012
ONCE YOU HAVE COVERED YOUR ESSENTIAL LIVING EXPENSES, WHAT DO YOU DO WITH YOUR SPARE CASH? I SPEND IT ON…
Source: Nielsen Consumer Confidence Survey
Negative sign for 2012 consumer spending
Negative sign for 2012 consumer spending
Expect pragmatic consumer behavior to continue in 2012
Will Continue To DoDid This Past Year
54% Save on gas & utilities
34% Reduce take-out
28% Reduce entertainment
31% Spend less on clothes
32% Reduce grocery spend
23% use car less
20% Reduce phone expenses
52% Save on gas & utilities
40% Reduce take-out
37% Reduce entertainment
34% Spend less on clothes
33% Reduce grocery spend
23% use car less
17% Reduce phone expenses
Source: Nielsen Global Online Consumer Confidence and Opinion Survey Comparison of 2Q10 vs 2Q 2011 - US
As not so new normal behavior continues
• Combining Trips: 66%
• Shopping More Supercenters: 24%
Pre Recession2005-2007
Pre Recession2005-2007
Recession2008-2009Recession2008-2009
PostRecession2010-2011
PostRecession2010-2011
• Combining Trips: 75%
• Shopping More Supercenters: 29%
• Combining Trips: 66%
• Shopping More Supercenters: 24%
• Eating out less: 36%
• More at home: 36%
• Value Brands: 19%
• Eating out less: 52%
• More at home: 48%
• Value Brands: 34%
• Eating out less: 46%
• More at home: 40%
• Value Brands: 31%
• More Coupons: 22% • More Coupons: 35% • More Coupons: 37%
KEYS GROWTH
TO
IN 2012
1. REACH: An increasingly polarized consumer
2. LEVERAGE: Redefinition of value
3. ALIGN: With consumer need states for ad effectiveness
4. ENGAGE: The connected consumer in ways they trust
5. TARGET: Economically powerful consumer segments
Increasingly polarized consumers
Source: msnbc.com; CNN Money*Supplemental Nutrition Assistance Program (SNAP)
1 in 7 Americans rely on food stamps
1 in 2 Americans own stock, mutual fund, 401K or IRA
20% of Americans earn less than $20,000 a year
20% of Americans earn less than $20,000 a year
87% of Americans earning over $75,000 own stocks
87% of Americans earning over $75,000 own stocks
Polarized Consumers: Retail spending being driven by affluent HHs
Retail Spending: 2 year trend
Approximately20% of HHs earn
over $100k
Approximately20% of HHs earn
over $100k
Source: Nielsen Homescan, 52 w/e 10/1/2011 versus 10/3/2009 excludes gas-only or Rx-only trips
-9%
-1%
-3%
-8%
-1%-1%
4%
< $20K $20K - $29K $30K - $39K $40K - $49K $50K - $69K $70K - $99K $100K +
Household Income
Polarized Consumers: Shopper trips correlating to HH Income
Shopper Trips: 2 year trend
Approximately20% of HHs earn
over $100k
Approximately20% of HHs earn
over $100k
Source: Nielsen Homescan, 52 w/e 10/1/2011 versus 10/3/2009 excludes gas-only or Rx-only trips
-12%
-3%
-6%
-9%
-2%-1%
4%
< $20K $20K - $29K $30K - $39K $40K - $49K $50K - $69K $70K - $99K $100K +
Household Income
KEYS GROWTH
TO
IN 2012
1. REACH: An increasingly polarized consumer
2. LEVERAGE: Redefinition of value
3. ALIGN: With consumer need states for ad effectiveness
4. ENGAGE: The connected consumer in ways they trust
5. TARGET: Economically powerful consumer segments
Redefinition of Value: Balance how you connect with consumers on Value & Emotion
Value is not about price, it’s about the balance between price and benefits
Value Consumer = Price
All other Yogurt Greek YogurtAvg Price +107% higherUnit Sales 134%
Unit Sales -8%
Unit Sales 6% Premium Chocolate Avg Price 83% higher Unit Sales 10%
Mainstream Chocolate
Pound Sales 1% Healthy PastaAvg Price 57% higher Pound Sales 5%
Pasta Excluding Health
Unit Sales -4%
Premium CoffeeAvg Price 18% higher Unit Sales 5%
Mainstream Coffee
Value Consumer = Benefits/Price
KEYS GROWTH
TO
IN 2012
1. REACH: An increasingly polarized consumer
2. LEVERAGE: Redefinition of value
3. ALIGN: With consumer need states for ad effectiveness
4. ENGAGE: The connected consumer in ways they trust
5. TARGET: Economically powerful consumer segments
Consumers’ sense of financial security has clearly been shaken
KEY QUESTION FOR ADVERTISERS: To what extent, if any, has this attitude shift impacted consumer responsiveness to various creative tactics?
Consumer Confidence
10780
56
Pre Recession 2006 - 2007
Recession2008 - 2009 Post Recession
2010 - 2011
Source: Conference Board Consumer Confidence
What We Did
• Selected a list of major CPG and Retail advertiser brands to include in the analysis
– Please note: this is a sample of our database
• Categorized ads (4000+) by creative approach: humor, narrative, sentimental, product, promotional & value
• Evaluated the “effectiveness” of each creative approach throughout the recession (from 2006 through 2011) among Adults 18+
Key Findings
• Humorous ads have consistently resonated best among viewers from 2006 through 2011 . . . people always like to laugh.
• The performance of Narrative & Sentimental ads has improved since 2006, suggesting a consumer interest in harkening back to better times
• Ads focused on product features and promotion/price do not resonate with viewers . . . . even during tough economic times
• Viewers respond to ads that make a connection. Advertisers should focus on creating ads that engage audiences with humor, sentimental/family themes, and relatable/engaging storylines over those that tout price/promotion/product features
Advertising Performance Index Since 2006:When designing ads, the smart money is on use of humor, narrative and sentimentality
2006 - 2007 2008 - 2009 2010 - 2011
KEYS GROWTH
TO
IN 2012
1. REACH: An increasingly polarized consumer
2. LEVERAGE: Redefinition of value
3. ALIGN: With consumer need states for ad effectiveness
4. ENGAGE: The connected consumer in ways they trust
5. TARGET: Economically powerful consumer segments
Online consumption leading to online production
Nearly 70%
of Americans use TV and the
Internet simultaneously
of online consumers create reviews
about products and services online
60%
Reaching an engaged consumer using strategies they trust…
Completely Completely/somewhatBrand Sponsorships 7% 47%TV Ads 6% 48%Radio Ads 5% 43%Newspaper Ads 6% 46%Magazine Ads 6% 47%Ads before movies 4% 41%TV product placements 5% 41%Outdoor billboards 4% 46%
Completely Completely/somewhatBrand Sponsorships 7% 47%TV Ads 6% 48%Radio Ads 5% 43%Newspaper Ads 6% 46%Magazine Ads 6% 47%Ads before movies 4% 41%TV product placements 5% 41%Outdoor billboards 4% 46%
TraditionalMedia
Completely Completely/somewhatBranded websites 9% 57%Emails I signed up for 6% 50%Ads in search engine results 5% 40%Online video ads 4% 36%Online banner ads 4% 33%Ads on social networks 4% 36%Txt ads on mobile phones 3% 29% Display Ads on mobile devices 4% 33%
Completely Completely/somewhatBranded websites 9% 57%Emails I signed up for 6% 50%Ads in search engine results 5% 40%Online video ads 4% 36%Online banner ads 4% 33%Ads on social networks 4% 36%Txt ads on mobile phones 3% 29% Display Ads on mobile devices 4% 33%
NewMedia
Completely Completely/somewhatRecommendations from people you know 28% 91%Consumer Opinions posted online 9% 70%Editorial Content (Newspapers) 7% 59%
Completely Completely/somewhatRecommendations from people you know 28% 91%Consumer Opinions posted online 9% 70%Editorial Content (Newspapers) 7% 59%
Friends&
Family
Source: Nielsen Global Online Consumer Confidence Survey 3Q2011
KEYS GROWTH
TO
IN 2012
1. REACH: An increasingly polarized consumer
2. LEVERAGE: Redefinition of value
3. ALIGN: With consumer need states for ad effectiveness
4. ENGAGE: The connected consumer in ways they trust
5. TARGET: Economically powerful consumer segments
Consumers over 65 watch the most TV, close to 7 hours a day
Only 5% of advertising targets them, despite being the top buyers in 94% of CPG categories
Boomers showed less brand loyalty than their younger counterparts
Satisfying their unique need fuels growth for this consumer segment
Women control $12 of $18 trillion in global consumer spending—close to 70%
Women in 95% of countries say quality is the #1 driver of
brand loyalty
Transitions strategic conversations frompricing to quality; includes production,
marketing, packaging, in-store
October 2011 the 7 billionth person was born
By 2050, about 70% of the world’s population will live in cities
By 2015, 50 mega cities will exist (over 5 MM pop)
Mega city consumers are exposed to more, making them more tolerant, experienced
and prone to try new things
By 2020, the global middle class will be
more than half of the world’s population
By 2030, 79% of the middle class
will be in the emerging world
Business models move fromfixed to flexible
Emerging markets growing 50% faster than developed markets
In 2Q11, Asia Pacific contributed 62% of growth in global consumer spending
Innovation accelerates growth in
consumer spending within emerging markets;
resulting in a true global marketplace
Availability
Accessibility
Connectivity
Mobility
Poll #2
Considering the environment ahead, what will be your main analytical focus?
1. Growth and Demand2. Innovation3. Marketing Effectiveness4. Shopper Marketing5. Social Media Intelligence6. Cross Platform Audience Measurement
The Power of One:It is not about the 1%, its actually about the 0.0000003%
2012 GOAL:
1 New Customer A Day (Not exactly a BHAG!)
2012 GOAL:
1 New Customer A Day (Not exactly a BHAG!)
365 IN A YEAR365 IN A YEAR
14Avg retail banners
shopped
14Avg retail banners
shopped
152Avg Retail Trips
152Avg Retail Trips
Avg Annual Retail Spend orAvg Annual Retail Spend or$7,000
$2.5 million
Avg facebook user has 130 friends =24,000
91% trust recommendations from friends and family
At Stake…..$168,000,000
Avg facebook user has 130 friends =24,000
91% trust recommendations from friends and family
At Stake…..$168,000,000
The Power of One:It is not about the 1%, its actually about the 0.0000003%
2012 GOAL:1 New Customer A Day
2012 GOAL:1 New Customer A Day
47% of population on social network sites
2012 GOAL:1 New Customer A Day
2012 GOAL:1 New Customer A Day
At Stake…..$168,000,000At Stake…..$168,000,000
The Power of One:It is not about the 1%, its actually about the 0.0000003%
Q&AThank you for attending
•If you have follow-up questions or want more information, please contact your Nielsen Professional Services Representative.
•If you are not a current Nielsen client, please contact us at:
Phone: 800-553-3727 email: [email protected]
OR if you have any questions regarding the content of this webinar, you can also contact:
James Russo, email: [email protected]
•For insights specific to the Canadian market contact: Carman Allison, email [email protected]