Point ofview Focusing the Brand for the Coming Recovery CONSUMER Is there a glimmer of light on the horizon? Perhaps. There are GOODS certainly glimmers of optimism that the worst recession since SECTOR the 1930’s1 may be abating, yet unemployment is still on the increase and consumer spending continues to be noticeably down, wreaking havoc on economies and confounding Marketers. The ultimate outcome and timeframe may still be uncertain, but what is clear is that this recession is not merely deep; it is creating a sea-change in consumer behavior. By all accounts we are witnessing what economists term a ‘structural break’– a concept popularized by David Hendry meaning an unexpected shift in a macroeconomic time series.This break represents the discontinu- David Pring Executive Vice President, ity of a trend whose origin dates back to the post-war boom of Head of Global Client Development, the 1950s. While we will hopefully see a return to some measur- Ipsos Marketing, Consumer Goods Sector able degree of growth in the next year or so, the behavioral
[email protected] changes are considerable such that traditional notions of consumer behavior and market segments may no longer be valid. The world that the Marketer is likely to find post-recession therefore may be very different from the one before. As Richard Rumelt cites in his paper Strategy in a Structural Break, “Old sources of competitive advantage weaken and new sources appear. Afterwards, upstarts can leap ahead of seemingly entrenched players.”2 He is not the only economist who points out that continuing to do things in the same way has proven unsuccessful, and that the traditional moves of reducing fixed costs, scope and variety are insufficient.