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Consumer-preneurs

We’ve all heard the line…the consumer is in control now…consumers are more empowered and they are calling the shots. This remains true, but in the downturn, where there is so much uncertainty, some of this control has been taken out of their hands, especially as regards employment and finance. Consequently, they are channelling their energy into specific areas where they do have a greater degree of control. Here are some observations where they are asserting control:

- Reigning in expenditure: It goes without saying that this is a top priority. Consumers are flexing their muscle to find bargains and brands that offer real value. Many are exploiting the army of tools online to help them make better choices, compare prices, and seek cheaper options. New start-up, Hunch.com goes one step further by aiming to help consumers make better decisions. Effectively, it aims to enable consumers to "get as good a decision as if he/she had interviewed a group of knowledgeable people or done hours of careful research online." We're having a play, so we will let you know our experiences.

- Enhancing the wage packet: Whilst making cost-savings is a key part of the equation, consumers are also looking at ways to make extra money. TRENDWATCHING.com's latest briefing looking at SELLSUMERS embodies this trend. Reflecting a broader entrepreneurial mindset, there are a host of examples in this briefing highlighting where consumers can increase their weekly budget from sub-letting physical spaces, energy and turning hobbies into a product or service. One of our observations is consumers sub-letting cars in urban cities. In our local neighbourhood, where most people commute by train, sharing cars is not only cost-effective but greener. It takes the concept of Streetcar a step further.

- Slowing down in an era of change: Travel publisher Alastair Sawday observes a more conscious decision-making process. This applies to looking for cheaper options, as well as removing excess. He notes that whilst consumers are travelling less, there is a need to travel better. In terms of food, eating less, but eating better. And in an age where excessive consumerism is being frowned upon, to consume less and recycle.

In February, The National Trust announced it would be creating over 1,000 allotments from its land, as more consumers look for a cost-effective, and also a greener solution to obtaining organic and locally-produced vegetables. London is also pushing the 'slow down' message as part of its Slow Down London campaign. It offers consumers a week of free entertainment to help them relax and be calmer in an era of so much change. The campaign runs from April 24th to 4th May 2009. 

- Transparency & social responsibility: Although premium products, such as organics and green options may be too expensive for some right now, there is still expectancy over transparency and honesty. The requirement to know the story behind how products are made and companies operate remains important, no matter what pricing is attached to the brand. Major UK retailer, Sainsbury's Basic private label range has pushed the message that 'low price, does not mean low quality,' explaining on pack how they manage to keep their price lower. Together with promotional campaigns, this approach has been used to boost sales of the range by 60%.

The age of entrepreneurs

Web-preneurs, social media entrepreneurs, open entrepreneurs, serial entrepreneurs....These are just a few of the titles I have observed on Twitter, the ever popular and fast-growing microblogging tool. The overall job market may be contracting, but the ability for individuals to create their own brand and set up shop is easier and more accessible than it has ever been, spawning a new generation of micro businesses.

Broadly, there are a few macro-drivers underpinning this shift: falling cost of technology; the proliferation of free open-source applications; availability of cheaper digital data storage (cloud computing); cultural shifts in working life (at home/on-the-go/virtual); and the push by legal/political entities. 

Rising levels of unemployment is also playing a key role. Some consumers are taking greater control of their lives, and those that are losing their jobs are taking the opportunity to go solo, rather than try to rejoin the employed sector. Richard Branson was recently quoted saying that these new entrepreneurs will play a significant role in taking economies through the recession. Mark Penn, author of Microtrends: The Small Forces Behind Tomorrow's Big Changes, talks about how an 'increasingly independent-minded population,' are playing a key role in creating new markets, and are able to have a major impact on society.      

Social media is acting as a major catalyst for entrepreneurial activity. Adoption is growing at a pace, particularly among small businesses. In the UK, a survey of 500 small businesses by O2 found that one-fifth is using Twitter for marketing, networking and customer service, saving on costs in the process. Separate research by Michael Stelzner in the US, finds that businesses with 2-100 employees are the most experienced when it comes to social media, over one-quarter having embraced it for years.

The Universe in 2009: according to SEED magazine

I must admit I have never been drawn to a science publication, but SEED has me here. This rather clever digital showcase from SEED magazine, delves into optimism looking at the ideas that get us there. A wide range of trends and insights from around the world, showcased beautifully on this digital map.

The Universe in 09

Looking at China's economy and consumers

Chinese New Year has just passed + Juicy has just completed some research looking at China = an opportunity to delve into this fascinating marketplace.

China is one of the BRIC economies, with GDP growth the envy of many an advanced nation. It has a growing base of more prosperous consumers living in urban locations, eager to spend cash and indulge their material aspirations. McKinsey's 2008 Chinese Consumer Survey recently reported that over one billion people will be urban-based by 2030, at which time the high-earners will account for around one-third of this total. 

In doing our research it's clear there is lots to be said about China, and lots of people doing it very well. Just check out the showcase on Alltop for starters. So, in our attempt not to rewrite the wheel, here are five good things to know about China right now. And if you're a marketer, they just might be quite useful.

1) Economy prosperity: They must be a pretty happy lot, what with a strong currency, consistent increases in GDP growth for most of this decade, and the third largest economy in the world. In a rather pessimistic global economy, China's engine continues to be buoyant, albeit at slightly slower growth rates than previous years. The Chinese National Bureau of Statistics this week reported that actual GDP growth for 2007 was some 13%, hitting the $3.4 trillion mark (via Wall Street Journal), but 2008 growth was likely to fall back to 9% in 2008.

2) Happy shoppers: The rise of the middle and upper classes is driving appetite for products and services that are deemed non-essential. The Chinese have a penchant for shopping, especially for luxury brands. Just as one exampple, McKinsey's research found that 15% of consumers were willing to pay over 60% more for high end consumer electronics. There is a lot more great stuff in the PDF (via Slideshare) around consumers' relationships with brands and media analysis.

3) Getting switched on: Stats from The China Internet Network Information Centre  (CNNIC) shows that penetration is about 20% of the population, far below Western levels of around 60% in the US/UK. However, in actuals, it equates to some 298 million users as of end 2008 - clearly not small by any means. Techcrunch reveals Comscore data for December 2008, showing China leading the way in the country stakes. The Internet is fast becoming an important channel for consumers, with penetration climbing nearly 50% in 2008 alone. WARC reports that mobile web media is on the rise and e-Commerce is picking up too. Improved infrastructure will be an important growth driver moving forward, with players like Cisco, who this month underlined its commitment to China, spearheading developments. 

4) Olympic glory: They may not have made in to first place in the medal rankings, overtaken at the post by Mr Phelps et al, but they did put on a good show. Playing host to the Olympics in 2008 put China under the microscope, at times yielding both positive and negative press. China Business Review outlines some of the benefits to the economy from a tourism, environmental and economic perspective, but also highlights some of the 'lingering effects' playing Olympic host will bring in the future.  

5) Future prospects: No article on China would be complete without giving an angle on its fundamental growth prospects. Many of the 1.3 billion people populating this country are still fledgling consumers by Western standards. There's roughly 100 million middle-class consumers representing a relatively small proportion of the country's population. The economic downturn is likely to hamper its recent fortunes, but there's no mistaking the future potential. PwC predicts it could be as early as 2025 when China overtakes the US to become the world's largest global economy.

A year of ups and downs..?

Welcome to 2009! Another year beckons and it looks set to bring its fair share of ups and downs. One thing is for sure, we're all going to need some cheering up in 2009, consumers and business folk alike.

I read that TV producers are getting ready to treat us to more 'entertainment escapism' to help us forget the current woes. In past recessions, TV has made gains in terms of audiences as consumers spend more time at home. Combined with the added benefit of its tried-and-tested qualities, TV spend may be up for a bit of renaissance this year. Just today, Barclays announced its intention to move back to TV after an 18 month absence. The move is part of Barclay's new brand repositioning to be launched later in 2009.

Talking of financial services...and being cheered up. A pleasant surprise popped into the inbox today from price comparison site comparethemarket.com. The clever people have played on words to create www.comparethemeerkat.com, featuring founder Alexandr the meerkat, who can only be described as Borat in the guise of a meerkat. It's worth checking out...and it beats Paul Daniels (sorry Tesco). Alexandr can also be found on Facebook along with pitcures of his family. No doubt he will be twittering away somewhere too! Enjoy.

Opportunities in the banking sector?

With the crisis of confidence in established banking brands, are there opportunities in financial services for trusted brands from other sectors? It seems that Tesco thinks so. It has bought out its banking partner Royal Bank of Scotland, paying the £1 billion for its 50% stake in Tesco Personal Finance. Tesco claims that it has seen the number of applications for savings accounts double in recent weeks and has announced that it plans to expand its banking business, offering current accounts within the next year and mortgages "in due course". Others are expected to follow suit.

There also seems to be an opportunity for new entrants. Cisco in the US recently published results of a survey into customers’ attitudes towards payment trends, both online and offline. It found that people increasingly trust online payment processing solutions such as PayPal and Obopay. And baby boomers, the biggest and richest consumer generation, trusts these alternative payment providers more than traditional banks.

Conversely, traditional banks could up their game and improve their services to these connected consumers.

The Pelorus Group estimates that by 2010, payments made via emerging methods such as radio frequency identification (RFID), SMS, and biometrics are expected to grow to $400 billion. In addition, consumers are increasingly interested in using a mobile device to make contactless payments in physical stores.

According to Jim Greene, vice president and global head of financial services, Cisco IBSG, "consumers not only recognise the conveniences enabled by the internet but now also require the totality of their shopping experiences to afford those same benefits. Given their current interaction with both consumers and merchants, banks are in a unique position to provide these 'connected' propositions and the insight that leads us into 21st-century commerce."