Should businesses go compare?

Price comparison websites are big business, netting their founders huge dividends while enabling customers to shop around for the best prices from the comfort of their own homes – and in this climate, where every penny counts, more and more people are taking advantage of these websites. 

Indeed, a recent report by energyhelpline.com highlights how consumers are taking control of their finances in as much as "by switching suppliers, customers are standing up for themselves and showing that they will not tolerate high prices”.

The benefits of price comparison websites are clear: they help consumers save both time and money, whilst enabling sellers - including those less well-known - to have their products viewed, which, potentially, leads to increased sales.

So what do the likes of Aviva and Direct Line gain from their self-imposed exclusion from price comparison websites? Firstly, by removing the middleman they avoid referral fees. They also avoid being compared to the budget / lower priced products whilst, through their marketing, challenging the assumption that the lowest prices can only be found via price comparison websites. 

Also, by staying away, they're maintaining the stance that savvy shoppers will also ask them for a quote directly and make their own comparisons. This not only saves them the costs associated with being on a price comparison website but also strengthens their brands proposition.

Jez Simms

Group Research Manager

The 80/20 Principle and the three “agents of change”

The 80/20 Principle (which is based on Pareto’s Principle) says that in any situation roughly 80% of the 'work' will be done by 20% of the participants. The key for advertisers is, naturally, to find the 20%. In his book “The Tipping Point: How Little Things Can Make a Big Difference” Malcolm Gladwell describes the three “agents of change” describing them as:

• Connectors – people who are both known by a lot of people and who are in the habit of making introductions. They have the “ability to span many different worlds is a function of something intrinsic to their personality, some combination of curiosity, self-confidence, sociability, and energy”
• Mavens – people who have special knowledge or experience. They are “information specialists” or “people we rely upon to connect us with new information"
• Salespeople – people who are persuaders. They have powerful negotiation skills and have a knack which makes others want to agree with them

Perhaps the real key is to make the most of your time - or your money - by not only focusing in the right direction but by also using the time wisely.


Jez Simms
Group Research Manager

For Better or for Worse?

Divorces became popular in the 1970’s with the introduction of a ‘quickie’ divorce, since then the figures have soared, up until 2012.

The recession and financial difficulties is thought to have caused more strain on relationships, raising the figure in 2008. Data published by the Office for National Statistics shows that 119,589 couples got divorced in 2010, an increase of 4.9% since 2009. Following several years of decreases – last year's figure was at its lowest since 1974.
In 2012 the figure has declined. Thought to be because less people are getting married, and when they are, they are marrying later on in life. Pushing the average age for marriage up to 36.2 years for men and 33.6 for women.

A Ministry of Justice analyst says “The younger a person marries, the higher the probability of divorce so the trend to delay marriage has contributed to the decline in divorce over the last 20 years.” The expense of a divorce could also explain the dip in statistics.

Divorce rates are now at their lowest for 40 years. The Office for National Statistics say that the last year there were fewer than 120,000. So it appears romance isn’t dead and the trend is turning back on itself, away from divorces.

The Death of the Credit Card?

UK consumers are among the most indebted in the world. The average UK family owes £7,900 on personal loans, credit cards and overdrafts.

Type this topic into your search engine and the results are endless, money managing and saving tools are readily available with little or no cost. With financial matters appearing so frequently in the news, are people now starting to get on top of their finances?

Card repayments overtook new borrowing by £118 million in April, the largest amount since August 2006, when they outweighed borrowing by £152 million. Coupled with the younger generation showing an inclination for debit cards and digital technology, this trend indicates that the use of credit cards will continue to fall. Suggesting that debit cards and other innovations will force the credit card into a dwindling market.

PricewaterhouseCoopers' (PwC) recent report argued that credit card use could plummet into permanent decline. The rise of digital technology such as mobile payments and payday lenders is changing how people access credit.

Melanie Bowler, an economist at Moody's Analytics, said: "Households are favouring paying down debt, rather than undertaking new borrowing”. Consumer Credit Counselling Service (CCCS) saw a 27% increase in the number of people contacting it for help with council tax arrears, from 13,353 in 2010 to 16,958 in 2011. The average amount owed in council tax arrears also increased, from £675 in 2010 to £717 in 2011. Suggesting people are looking for alternative solutions, rather than paying a bill on credit.

However with the rise in funds borrowed from payday loan companies, households run the risk of purely shifting their debt to another commodity. With 2012 not yet bringing an end to financial uncertainty, demand for credit is likely to remain high; however credit cards are no longer the favourable source.

Lauren Overton
Consumer Analyst

How Hard is it to be Healthy?

Recent statistics show that if current trends continue 60% of men and 50% of women will be clinically obese by 2050. The government have responded with £2bn spend allocated over the past decade tackling obesity levels, including £733m on school sport.

A healthy way of life takes up time, effort and money. Going beyond just eating; encompassing physical activity, work-life balance and behaviour change.

The government’s white paper ‘Healthy lives, healthy people’ was launched in December 2010. The initiative aims to improve the nation’s health by focusing on five areas: food, alcohol, physical activity, health at work and behaviour change. In research conducted by Group Risk Development (GRiD), more than one in three (38%) said their top priority in 2012 was taking steps to improve work-life balance.

Price is a main concern for being part of the well-being trend. In a poll conducted by World Cancer Research Fund, only 17% of people in low income households eat their 5 a day compared to 27% in higher income groups.

Exercise also needs to be more accessible and convenient. With faster results in demand, quicker solutions to get fit such as HIT (Higher Intensity Training) are proving popular. Mintel’s research indicates that many consumers no longer wish to be tied in to lengthy contracts. Instead, they are looking for flexibility - demonstrated in the success of 24-hour gym opening times. In 2010, Pure Gyms, a national 24-hour chain, ran just 12 outlets. By 2013, that will rise to 45.

For brands to engage with consumers in the health trend they need to introduce healthy lifestyle changes in small convenient bites. Providing a solution that is easy and affordable for the consumer to adopt into their daily routine.

Lauren Overton
Consumer Analyst

Will People Ever Go Shopping On Their Mobile?

According to Kantar Worldpanel, over half of the UK population now have a smartphone. But will people ever use it as a market place that could challenge the traditional retail environment?

Internet and application access on mobiles has empowered customers to make purchases in almost any place at any time; should they wish to. According to the IAB and PWC, the percentage of mobile visits to online retail sites rose from 2.6% in 2010 to 8.2% in 2011 while the average transaction carried out on a mobile device rose from £12.20 to £17.49.

However, claims of mobile retail replacing the high street are exaggerated. Shopping online is complementary to the retail experience, not competition. Purchasing on a 3 inch screen as an experience barely compares with going into a store to try on clothes, test out the latest gadget or browse interesting books. Even as a proportion of online sales, only 5% are done via mobile.

What mobile is great for is to assist retail, both online and in-store. Whether this is to increase footfall, pay for products in-store, or mobile marketing. Sarah Ballie, Mobile Commerce Manager from Debenhams has made the point “There are many benefits of people engaging on mobile within the store: allowing them to double check prices against the website, read reviews or share products with friends for a second opinion”

  Mobile is a platform that is often used in conjunction with other media, it is important to be used with broad mix of media to engage with users. It is an engagement tool, not a market place. At least not yet.

Paul Barnes

Media Analyst

Inflation and Trading Down Brands

Rising prices and a move to cheaper brands are a hallmark feature of the economy over the last 5 years. However, with the UK recently reaching the lowest inflation level for 2 years, could this be the start of the premium brand revival? 

How to Achieve Consumer Satisfaction?

TEDx posted this entertaining and interesting talk from Rory Sutherland explaining why perspective is so important and how reframing is key to happiness. 

Rory gives some great insight into how brands and marketers can refine their message for consumer satisfaction.
   

Sutherland argues that consumer satisfaction is greater when individuals feel they have more control over their lives. 

Two interesting points are highlighted 

Post-Recession Consumer Trends

Despite slipping back into recession, sooner or later the UK economy will start to grow again. Recently I read a great article ‘Understanding the Post-Recession Consumer’ from Paul Flatters and Michael Willmott, about future trends in consumption for the near post-recession and longer term trends. 

Flatters and Willmott identified 8 key trends as below. 

How will the Olympics Benefit Sponsors and the UK

Summer 2012 will bring the Olympics to the UK, with several million spectators following closely behind.

 “The Olympic Games give the host country exposure on the front page, in the middle pages and on the back pages of every newspaper in every country on Earth over a six-week period.”

Michael Payne, International Olympic Committee.

Consumer Habits: Why Having Children Changes Everything

Parents are, and always have been, a key consumer demographic. Becoming a parent changes everything, from lifestyle to new worries, to saving, to spending. Yet over recent years parenthood has experienced change, impacting how and why it is important to market to them. 

Will Zeebox Change TV Habits?

Since the unveiling of Zeebox in August 2011, it was been championed as the “future of TV”. The app’s own description on iTunes boasts;

- "it's brilliant. App of the week”- The Sun 

- "5 stars" - T3 

- "I can't recall the last time I've been so excited about an iPad app" - The Huffington Post 

- "Zeebox may change everything about the way we watch TV forever" - Stephen Fry

But, is Zeebox really that great? Does it have many commercial opportunities and does it impact TV habits?

The Faceless Crowd

There is a basic human need to be part of a group. We move through many on a daily basis. Individuals gather for countless reasons; from organized events to unintentionally on a busy street.

The increase of mass media also allows the rapid exchange of information and opinions around the world to form online groups. For example, #100daystogo is currently trending on twitter – a mixture of thousands of people and companies sharing their views and sponsorship offers on the Olympics. A perfect opportunity to influence the masses.

Is Too Much Choice a Problem for Consumers?

Today’s choice of products has never been so great. Tesco stocks 91 different shampoos, 93 varieties of tooth paste and 115 types of household cleaner according to The Economist. This should be great - conventional economic theory points to competition and choice as two important drivers for welfare and profits. 

Yet too much choice can have considerable negative effects. In 2004, Barry Schwartz wrote ‘The Paradox of Choice-Why More is Less’ arguing that wide choice causes anxiety for the consumer. Who wouldn’t be anxious when Starbucks offer 87,000 different drink combinations?

Social Media Users and Engagement: Why Engage With Brands on Social Media?

We commissioned original research in a study of 1,115 respondents via our website, to find out about social media engagement. We wanted to know how people interact and engage on social media and how important brands are to the experience. 

90% use social media to catch up with friends, while commenting on friends’ pages and photos are the most popular interactions. Sharing is prolific - almost half (43%) say getting news is one of the main reasons they use social media. 

Self-Control...or Lack of

Social comparison has always been prominent; what someone else has or does can be the root of much envy. An emotion that is usually combatted by acquiring what is causing it, testing the strength of our self-control.

Richard Easterlin, a professor in Economics, suggests people of all income levels tend to compare themselves to those who are slightly better off.

How Consumers Save Money

Since 2008, consumer spending has weakened and people started to focus on saving their money. Households are likely to remain under pressure for the near future and are looking for ways to get more for their pound. 

Here are 3 interesting ways in which consumers save and squeeze more value from their money:

Type A Woman

A recent article by Marketing Magazine introduced the ‘Type A Woman’.

This affluent and influencing group exerts more consumer domination than any other. Aged 50+ the ‘baby-boomers’ have now been propelled to the ‘Type A woman’ - gaining more and more recognition. Carol Orsborn, Ph.D, a leading marketing expert on this particular generation, attributes the spending power of these individuals to successful careers, investments made during the “boom” years, and inheritances from parents or husbands. Making this group “more financially empowered than any previous generation of women.”

Consumer Behaviour: Why Consumers Pay for Covenience

The recession has upset the balance between work and life for many people. Higher stress, longer hours, lower pay and redundancies have all increased the scarcity of leisure time. 

Importantly, there is still a desire for a greater work-life balance. According to YouGov, half of workers are after more flexible working with only 17% rejecting the possibility. Britain leads the way across Europe in terms of priorities for work-life balance, with work-life balance being the prime motivation for employees leaving their company.

Five Changes in Consumer Behaviour after the Recession

The recession has been a difficult time for millions of households which inevitably caused a profound shift in the behaviour of consumers. There has been a lot of commentary about the recession and associated problems, but very little on how things will change when it is all over.

In response to this we’ve highlighted five key ways in which consumer life has changed due to the economic collapse.

Is the High Street an Experience Worth Leaving Your Laptop For?

British high streets are in crisis. The three most affected areas are Stockport, Nottingham and Grimsby with the North West as a whole the worst affected and it is estimated that 2011 saw 20 shops close every day in the UK.

It all sounds very ominous and even though retail guru Mary Portas has outlined measures she claims will put the high street back on the road to recovery, it is unlikely to be a speedy one. Despite this, last week saw the announcement that consumer spending was up 0.9%, the strongest monthly growth since the Royal Wedding (April 2011). 

The Social Clock is Ticking

According to social norms turning thirty holds major life events; a major watershed, after which come marriage, children, career progression and buying a home.

 A survey undertaken by Gumtree.com found a remarkable 86% of the 1,100 young people questioned admitted feeling under pressure to succeed in their relationships, finances and jobs before hitting 30, and 32% felt hurried to marry and have children by the time they had reached 30.

TV and Online Start Their Relationship

TV and the internet are important mediums for both consumers and advertisers. However, combining the two together has never really been successful until now. Smart TVs were the big topic at the 2012 Consumer Electronics Show and projections are for 892 million smart TVs in homes by 2016.

Smart TVs will establish social networking, web browsing, user-generated content, online purchasing and other media firmly in the centre of the living room.

That’s ‘In-tertainment’

Consumers are increasingly seeing entertaining in-home as a viable and desirable alternative to going out to socialise. As they make changes to how they spend, but stop short of cutting back on luxuries which they feel maintain their identities, entertaining friends at home seems a convenient solution.

According to Mintel, almost eight in ten (79%) consumers drank alcohol at the home in the last six months. Besides price concern, other benefits to drinking in the home were recognised, over a third (35%) of consumers consider drinking at home less hassle than travelling to a bar and 27% find it more intimate to drink at home.

Online and the In-Store Shopping Experience is Vital for Retail’s Future

Retailers are feeling the pressure at the moment. Slow consumer spending coupled with a shift to digital purchasing have created a challenging environment. 

Hawkin’s Bazaar, LaSenza and Barratts have all entered administration within the last few months and the likes of Tesco, Next, HMV and Game are all down in terms of like for like sales.

A Way to Predict the Future - The Importance of Consumer Insight

Consumers now demand return on what they have helped create. In an era of ‘savvy’ spenders – those who are still spending but prioritising where – the need to appease consumers has never been greater.

The power of the consumer is at its height. Knowing exactly what influences purchasing habits and the best way to reach consumers through evolving media is vital. A true reflection can only be gained through the use of intellectual analysis and research.

Tablets, e-readers and the media landscape

2012 has been christened the year of the tablet yet despite their increasing importance, the impact on traditional media is unclear.

Tablets and e-readers are quickly being recognised as an important change in the media landscape. According to research by UM London, 8% own a tablet computer and 12.5% own an e-reader. Significantly, 37% of tablet/e-reader owners said that ‘my device has changed my life’ and 70% stated ‘everyone will own a tablet or e-reader in future’. The telegraph recently reported that 8 million tablets will be sold this year.

What Does 2012 Have in Store for Consumers?

With many question marks over the economy and consumer behaviour in 2011, this year is exceptionally important for commerce.

The Office for Budget Responsibility has recently downgraded its 2012 growth forecast to 0.7% (down from 2.5%), and so how and where people spend their money has never been so important.