Dolla in the Bank

June 28, 2011

The Irish are now saving at a rate of 12%, double the 6% that has been the national average for the last 50 years. We have now been asked, officially, by our Minister for Finance (one of them) to stop saving and start spending. It seems such a short time ago that they were asking us to do the opposite by setting up the SSIA scheme….those were the days.

The request has, predictably, gone down badly with the large numbers of people who have no money to spend. Still, if there are people out there who can afford to put away more money than usual, it stands to reason that those same people could afford to be spending it, all else being equal. But of course, all else isn’t equal. Economics 101 will tell you that when consumer confidence is low, money is stuffed under the mattress. People are saving for a rainy day because, most people feel, rightly or wrongly, like those rainclouds are looming in a much more real way than ever before.

But, the sentiment is correct, bringing down the exceptionally high levels of savings by getting people spending should help to speed up the recovery process, after all, it’s the domestic economy that’s struggling, exports are still doing well. The irony of course is that all these savings should mean the banks have plenty to lend out, which would allow businesses to develop and grow. But that, of course, is not the world (…country) we’re living in.

But this fearfulness is not the only reason why people aren’t spending. We’ve all recognised the ‘End of Bling’ as a real and ongoing trend. Consumers who have money don’t want to be seen to be wantonly throwing it around. One of the most successful fashion brands of the last year has been luxury brand Mulberry, who announced a 69% increase in revenue for the year to March 31st. Mulberry is seriously expensive, but very understated. The products are of high quality and classic design and are seen as genuine investment pieces.

This is one example of how I think brands, particularly high-end brands, can succeed in selling to ‘the people who still have money’.

Our basic needs don’t change. I buy into Maslow’s hierarchy as much as I ever did. What these needs mean within the context of the current climate is what we need to focus on. Where our need to belong used to be fulfilled by buying the latest x and having this year’s registration on the car, it is now fulfilled by not buying a new car at all, unless of course there is an exceptionally good reason to, one that ‘excuses’ the purchase. If buying a certain brand says something positive about us and therefore fulfils our esteem needs, then what that brand says can no longer be “I’m rich”. “I’m conscious of the environment”, or “I’m exceptionally good at getting a bargain” are both good alternatives.

Brands now need to give consumers more, better, richer reasons to buy them. Good value is a given, the added dimensions could be that they’re a good long- term buy, or good for the environment, or the brand is doing good in the world, or that they understand the consumer better than the other guy.

Regardless, one- dimensional brands can’t stand out in this climate.

Claire

 

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Enjoy!

Aoife

 

 

 

The so called mantra of the post recession consumer as a person that has pared back, cut out and stays at home I believe is somewhat a common misconception. Whilst yes, we are getting greener fingers in our new found allotments,  whilst we are proud to announce our bargains from LIDL and the rise of the Come Dine with me circles are the new supper clubs, have we really detoxified and let go of our acquired habits and culture that the Celtic Tiger bred?

Whilst NAMA rampages us on one hand- on the other hand all too frequently I get a sniff of the Celtic Cub lurking around the corner, whether it be the plethora of children in their expensive celebratory First Holy Communion outfits (a recent survey by Milward Browne said each outfit costs on average €213) or most recently the numerous limousines I saw dropping excited teenagers off to Take That.

It seems that with the onset of the recession, we may have temporarily swapped to “own brand” labels and supermarket dine in for two deals meant dining out was the new “dining in”; however the adjustment wasn’t for long. A recent statistic released by Bord Bia, revealed that eating out is still very much on the menu for Irish Diners with almost half (46%) eating out at least once a month, the only difference being now that 80% of them are willing to query the cost of an item on a bill.

Are these subtle signs that we are emerging from economic recession or simply our struggle with the frugality of Keeping Down with the Jones versus our acquired mentality of Keeping up with the Jones? I believe that the latter is true, you can’t give a child a lollipop and then try and take it back, likewise with adults, we still want our Chanel bag, but at the right price, thus giving rise to the “bargain-ista” and haggler within us.

The “bargain-ista” and value driver consumer has been born out of our desire to retain some of life little luxuries acquired during the “Hey Days”.  Our appetite has been largely satisfied by the rise of Group buying websites such as Citydeals, Livingsocial,  Grabone, pigsback, Boardsdeal, Dealrush to name but a few. The concept behind group buying sites is that by coming together as a group, consumers can leverage their collective buying power. Businesses offer a massively discounted deal for a limited period of time on the condition that a minimum number of customers sign up for the deal. The mushrooming of these sites in Ireland is a clear reflection of their success in fulfilling the Irish consumer’s desire.

In short we are still eating out, we are still buying houses – In April, one of the biggest ever property auctions sold 80 of the 81 lots in a packed Shelbourne Hotel with a turnover of €15 million, thanks to the scrappage scheme we are still buying new cars, personal trainer and boot camp culture is still very much alive and we are keeping our homes chic as we have embraced the “flat pack culture”, Ikea boasted a €11.4 million profit in Ireland as Irish shoppers spend €2 million a week.

So, whilst we may re-cycle, re-use, re-invent we will not return to the past, we see connectivity, entertainment and treats as a “right” we have gained, we have simply adjusted to our circumstances and overcome to retain life luxuries, we will barter,  we will negotiate and can we haggle? Is feidir linn… yes we can.

 Oilbhe

Enjoy!

Aoife

Enjoy!

Aoife

For those who aren’t familiar with it, this international event focuses on recognising and rewarding existing donors, motivating new donors, and promoting the strong need for blood over the summer season. The day also highlights the need to give blood to prevent shortages in hospitals.

 

 

This year’s theme is “More blood, more life”. Last week, 150 volunteers came together to paint the town red for a large scale group formation photo taken at night, in the grounds of St. Patricks Cathedral. The recruitment process was a nice example of how to engage your fans in your facebook communities. The response was phenomenal, and the event was a great success.

I’m proud to say that 3 OMD’ers were a part of it. Equipped with red umbrellas, torches and flash cameras, we helped form a human blood drop. Photographers positioned themselves on top of the cathedral to capture the moment and the end result was amazing.

As someone who is unable to donate blood, I was really keen to be a part of this, and to be able to give something back to a truly inspiring organisation. As the event was made up entirely of volunteers, and people who wanted to be there, the positive vibe and feel good attitude was infectious. Giving blood is an altruistic act, and this was another way of giving donors and volunteers the opportunity to get involved in a different way but with the same aim of promoting blood donation.

After the event, IBTS posted the photographs to their Facebook page, encouraging participants to tag themselves, thus further sharing their experience and good deed with their friends. Check out the pictures for yourself! Well done to all involved, looking forward to next year already.

 As IBTS say, you really do “get more than you give”.

 https://www.facebook.com/#!/giveblood 

Photography was by seanandyvette, and production by abgc – fantastic job!

Aoife

Last week’s Apprentice asked contestants to create and brand a new pet food product. Team Venture chose to manufacture a type of cat food designed to keep felines trim and healthy, with their rivals, Team Logic, bringing their canine expertise to bear on a dog food suitable for any pooch, with the imaginative title of ‘Every Dog’. Team Logic put together a quirky ad, but when it came to the crunch, the one-fits-all approach just wasn’t good enough. Their efforts fell short, branded ‘tragic’ by the show’s host, the pugnacious Alan Sugar. It’s not the first time a new product targeting a broad market has come acropper.

In the ‘Long Tail’  Chris Anderson points out the importance of offering niche products in small quantities. The growth of online retailing provides evidence for the success of this type of business model. There’s now an array of products from a huge number of websites. Something out there to suit every need, or so it appears. Amazon attributes much of its success to its ability to offer obscure titles that bricks-and-mortar stores just don’t have space to stock. New marketing techniques such as PPC and viral marketing across social networks are also seemingly better suited to niche products than traditional advertising.

Despite a wider range of tailored products, the popularity of mass-consumed goods continues unfettered. In a previous post, Tim pointed out that certain products, Coke and Ford cases in point, have yet to lose their mass appeal after decades of first being launched. A one-fits-all product is fine – if there’s a gap in the market. Which there wasn’t for ‘Every Dog’. Maybe next time, Alan Sugar’s would-be Apprentices should listen to what their focus groups have to say.

-Carly

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