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Copyright © 2012 Nielsen. Confidential and proprietary Understanding African American Consumer Power – February 21 st Digital Shopping: Topline on Online.

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Presentation on theme: "Copyright © 2012 Nielsen. Confidential and proprietary Understanding African American Consumer Power – February 21 st Digital Shopping: Topline on Online."— Presentation transcript:

1 Copyright © 2012 Nielsen. Confidential and proprietary Understanding African American Consumer Power – February 21 st Digital Shopping: Topline on Online – February 28 th Hispanic Insights – TBD Upcoming Webinars

2 2 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Title of Presentation Copyright © 2012 The Nielsen Company. Confidential and proprietary. Whats In Store: 2012 James Russo VP, Global Consumer Insights January 24, 2012 Whats In Store: 2012

3 Todays presenter James Russo VP, 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 companys efforts to leverage and customize its broad array of insights and analytics to enhance growth strategies for its clients. James is one of the todays leading experts on consumer attitudes and behavior, prominently and frequently featured in the nations 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. Johns University in Queens, New York.

4 Poll #1 Do you think we are still in a recession? 1.Yes 2.No 3.Not Sure

5 2011: Markets and consumers driven by uncertainty Source: Yahoo Finance; DQNews; ChicagoFed.org; EIA.gov FUEL COSTS EQUITY MARKETSLABOR MARKETSHOME PRICES INFLATION

6 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%

7 In 2011 labor market improved Source: U.S. Government U.S. Annual & Monthly Job Losses/Gains 20082009200020012002200320042005200620072010 1.95 mil -1.76 mil -540k 87k 2.04 mil 2.46 mil2.06 mil 1.07 mil -3.63 mil -4.74 mil 2011 1.12 mil 1.547 mil

8 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 Adjusted Source: Seasonally Adjusted U.S. Total Non Farm Employment, Bureau of Labor Statistics U.S. Department of Labor

9 9 Copyright © 2012 The Nielsen Company. Confidential and proprietary. Whats In Store: 2012

10 As median household income continues a downslide Source: THE CINCINNATI ENQUIRER, The New York Times, Census Bureau & USA Today

11 Ultimately reflective in U.S. consumer confidence near recessionary levels Source: Nielsen Global Online Consumer Confidence and Opinion Survey 2Q11 Nielsen Consumer Confidence Index

12 Sluggish confidence impacting retail sales The Conference Board, Nielsen Total FDM including WMT Unit Sales 200620072011200820092010 Ttl Unit Sales 171 bill Ttl Unit Sales 170 bill Ttl Unit Sales 167 bill

13 Slow growth in retail sales, driven by inflationary gains Source: dollar sales % chg 52 wks ending 12/27/10, total all depts, fdm inc wmt YTD thru June 2011 1Q10 3Q102Q104Q10 YTD 2011

14 Retail winners are innovating and communicating on more than just value Q M MonthsQuarters Winning Streaks* 815 1622138824263 % Change in Same-Store-Sales Discretionary SpendingValue & Convenience Stock-Up & Save 2

15 Economic Outlook WHATS NEXT?

16 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 2010 2009 2011F 2007 2006 20082014F2015F2016F2013F2012F

17 Moderate forecasted growth will keep unemployment rate at elevated levels Forecast Period 4.8% 2000-20022003-20052006-20082009-20112012-2014 2015 5.5% 9.3% 8.5% 7.0% Recession Period Pre Recession Period Avg 50 yr Un Rate 5.5% 6.1% 2016 Source: IMF, September 2011; TCG Analysis 5.0%

18 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 2011 Source: IMF, September 2011; TCG Analysis

19 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 Most Optimistic Source: NGCCI

20 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

21 Expect pragmatic consumer behavior to continue in 2012 Will Continue To Do Did 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

22 As not so new normal behavior continues Combining Trips: 66% Shopping More Supercenters: 24% Pre Recession 2005-2007 Recession 2008-2009 Post Recession 2010-2011 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%

23 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

24 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 87% of Americans earning over $75,000 own stocks

25 Polarized Consumers: Retail spending being driven by affluent HHs Retail Spending: 2 year trend Approximately 20% 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

26 Polarized Consumers: Shopper trips correlating to HH Income Shopper Trips: 2 year trend Approximately 20% 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

27 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

28 Redefinition of Value: Balance how you connect with consumers on Value & Emotion

29 Value is not about price, its about the balance between price and benefits Value Consumer = Price All other Yogurt Greek Yogurt Avg Price +107% higher Unit Sales 134% Unit Sales -8% Unit Sales 6% Premium Chocolate Avg Price 83% higher Unit Sales 10% Mainstream Chocolate Pound Sales 1% Healthy Pasta Avg Price 57% higher Pound Sales 5% Pasta Excluding Health Unit Sales -4% Premium Coffee Avg Price 18% higher Unit Sales 5% Mainstream Coffee Value Consumer = Benefits/Price

30 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

31 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 107 80 56 Pre Recession 2006 - 2007 Recession 2008 - 2009 Post Recession 2010 - 2011 Source: Conference Board Consumer Confidence

32 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+

33 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

34 Advertising Performance Index Since 2006: When designing ads, the smart money is on use of humor, narrative and sentimentality 2006 - 20072008 - 20092010 - 2011

35 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

36 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%

37 Reaching an engaged consumer using strategies they trust… Completely Completely/somewhat Brand Sponsorships7%47% TV Ads6%48% Radio Ads5%43% Newspaper Ads6%46% Magazine Ads6%47% Ads before movies4%41% TV product placements5%41% Outdoor billboards4%46% Traditional Media Completely Completely/somewhat Branded websites9%57% Emails I signed up for6%50% Ads in search engine results5%40% Online video ads4%36% Online banner ads4%33% Ads on social networks4%36% Txt ads on mobile phones3%29% Display Ads on mobile devices 4%33% New Media Completely Completely/somewhat Recommendations from people you know28%91% Consumer Opinions posted online9%70% Editorial Content (Newspapers)7%59% Friends & Family Source: Nielsen Global Online Consumer Confidence Survey 3Q2011

38 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

39 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

40 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 from pricing to quality; includes production, marketing, packaging, in-store

41 October 2011 the 7 billionth person was born By 2050, about 70% of the worlds 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

42 By 2020, the global middle class will be more than half of the worlds population By 2030, 79% of the middle class will be in the emerging world Business models move from fixed to flexible

43 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

44 Availability Accessibility Connectivity Mobility

45 Poll #2 Considering the environment ahead, what will be your main analytical focus? 1.Growth and Demand 2.Innovation 3.Marketing Effectiveness 4.Shopper Marketing 5.Social Media Intelligence 6.Cross Platform Audience Measurement

46 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!) 365 IN A YEAR 14 Avg retail banners shopped 152 Avg Retail Trips Avg Annual Retail Spend or $7,000 $2.5 million

47 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 47% of population on social network sites

48 2012 GOAL: 1 New Customer A Day At Stake…..$168,000,000 The Power of One: It is not about the 1%, its actually about the 0.0000003%

49 Q&A Thank 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: CPGSolutions@nielsen.comCPGSolutions@nielsen.com OR if you have any questions regarding the content of this webinar, you can also contact: James Russo, email: james.russo@nielsen.comjames.russo@nielsen.com For insights specific to the Canadian market contact: Carman Allison, email carman.allison@nielsen.comcarman.allison@nielsen.com


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