Blame it all on your dad

This amusing article appeared in in the Sunday papers about a hapless Yoof who blames his workless plight on “the boomers”. A bit like wasps, every year we get a swarm of these articles, all whining about the same argument.

This sentence gives you a feel for what is to follow: “a university-¬educated man shouldn't experience this (unemployment). I amassed student debt in the belief that graduation would be followed by a huge bubble bath filled with sexy young jobs and beautiful, cigar-smoking status symbols.Not joblessness.”

Words like naïve, fool, dimwit and cretin start forming in my mind. Words like certifiable half-wit start forming when you then learn that our “university educated man” has a journalism qualification from Darlington College. That is not Darlington College Oxford or Cambridge it is Darlington College Darlington.


The article then moves on to the blame game.

"People are feeling incredibly angry," Wes Streeting, president of the National Union of Students, told me. "They have debts in excess of £20,000 after being told they would get a job at the end of their degree and earn more money. Instead they're just heavily indebted."

The anger is due to intergenerational unfairness. Baby boomers had free education, affordable houses, fat pensions, early retirement and second homes (150,000 at the last census).

This emotional waffle is not worth the time rebutting. During one of the previous bouts of Booomer bashing I had a letter published in the FT that provides some of obvious responses. This might be on subscription only.

In February, David Willetts (a senior and very bright Conservative MP) has a book being published called "The Pinch: How the Baby Boomers Took Their Children's Future - And Why They Should Give it Back”. One thing is for certain; his arguments will be worth the time understanding. I suspect I may not agree with him but you can be certain they will be marshalled with precision.

Do we have a problem with youth unemployment – absolutely? So somebody must be to blame, mustn’t they? The reasons we are where we are results from a much more complicated set of interactions than our chum with his 2:2 in journalism is likely to understand. That fact alone is part of the problem.

Let me give you an example. Every month the Office for National Statistics publishes a detailed analysis about the employment scene in the UK. Every month there is one section of the analysis that always seems to be ignored by the media. I quote from the January bulletin: “The number of UK born people in employment was 25.31 million in the three months to September 2009, down 457,000 on a year earlier. The number of non-UK born people in employment was 3.68 million, down 45,000 from a year earlier.

Look at the way the recession seems to have had a disproportional impact on the UK’s indigenous population compared to those not born in our shores.


Maybe, just maybe, part of the explanation for our journalistic chum’s plight is the 3,680,000 people who now work in the UK who were not around when his dad was looking for a job. Secondly, maybe, just maybe, this group have a better work ethic than a lot of my fellow Brits.

Belive it or not, I do feel sorry for this guy and those of his generation, but trying to apportion blame, in this crude idiotic way will not help him one jot.

If you have stuck with this stream of consciousness then there is one 50-plus marketing message to take away. Is it better to spend your marketing bucks targeting our Darlington College graduate or his parent’s generation. Dick Stroud

Just when you think you're out, they pull you back in

The ‘they’ in this case is the recession. Data from Pew Research shows the impact of the recession on the young people and especially where they live (back home).

Just get your head around this fact: “13% of parents with grown children say one of their adult sons or daughters has moved back home in the past year.” That is a big change in the dynamics of the household and they way it operates and purchases.

Overall, the proportion of adults ages 18 to 29 who live alone declined from 7.9% in 2007 to 7.3% in 2009. Similar drops in the proportion of young people who live by themselves occurred during or immediately after the recessions of 1982 and 2001.

The current decline has been particularly steep among young women; the proportion who live by themselves fell by a full percentage point to 6.1%. Among young men, the share living on their own fell 0.2 percentage points to 8.4%, a statistically insignificant change.

While the recession has touched Americans of all ages, it has been particularly hard on young adults. According to the Bureau of Labor Statistics, a smaller share of 16- to 24-year-olds are currently employed—46.1%—than at any time since the government began collecting such data in 1948.

That’s terrible, but putting the social implications to one side, marketers must understand the implications on the priorities they give to the generations. Yoof seems to me to be going down the list. Dick Stroud

Understanding how the 50-plus are thinking about the recession

I have been amazed how few companies have reflected the changes in consumer attitudes, resulting from the recession, in their advertising. Most companies have been limited to reducing prices and stressing their “good deal” credentials. That might be step one, but the recession has changed a lot more than just wanting to trade down.

This ad from Prudential, whilst not startling in its creativity, at least recognises that older people will have responded in different way to the trauma of the past 24 months. Hopefully you can read the copy (click on the image for a larger version) – the weakest part of the ad. Dick Stroud

UK taxpayers face a generation of pain

How much do reckon disposable income in the UK will fall in the next 2-3 years as a result of higher taxation. Come on; don’t tell me you have built that into your marketing plans. What am I offered - 2% - 5% - 10%?

Of course it will not be the same across all of UK society but as sure as eggs are eggs we are in for a significant, arguably the greatest, hike in the rate of tax take. You don’t want me to go over the reasons for this, if you are interested read this article in the FT.

Let me leave you with the concluding sentence: “Whatever happens, people in Britain will have to get used to paying much more for their public services and receiving much less.”

Want to rethink those budgets for 2010? Dick Stroud

Britain - vision of Japan’s decade of stagnation

I haven’t written anything about the recession for some while. That doesn’t mean to say that it is no longer important or that it is still not the only show in town for marketers – it is.

There is only so much doom and gloom that you can read and write. Of course recessions create lots of business opportunities but, for most marketers, it is and will be grim.

I am sure you will have seen the countless ads that infected the UK TV for “consolidation loans”. The proposition was simple. You might be up to your neck in debt one of these loans can help by consolidating the debt into a single loan, give you a bit of breather from paying the interest, secure the loan on your house and then charge you an even larger interest rate in the future.

The UK is like the consumer who was duped by this sales line. It has consolidated its debts, into a staggeringly large public sector debt, and the nation is waiting for the first repayment bill to drop through the Treasury's letter box.

Until now it is only the unemployed who have suffered from the recession. The task of paying back the debt will affect everybody.

If you think I am overstating things have a read of this leader in today’s New York Times. Not a happy story. Dick Stroud

Britain may finally be emerging from recession, but many analysts warn that it is a false dawn. In fact, they argue, the economy here is so ravaged by growing debts and ruined banks that it could well be following in the steps of Japan’s lost decade of the 1990s.

The parallels are eerie: Like Japan, Britain enjoyed more than a decade of booming growth, fed by aggressive bank lending and real estate investments. Haunted by the comparison, policy makers have been extra aggressive in using fiscal and monetary levers in hope of preventing the stagnation and banking stasis that plagued Japan for so many years.

Some economic indicators over the last week have been positive: an uptake in retail sales, fewer jobs lost and an export revival. Yet analysts say they may well turn out to be teasers that cloak deeper, more structural flaws in the economy.

In addition to rising debt, the tax base is collapsing and the crippled banking industry has yet to show it can generate profit by lending to companies. And so on and so on and so on…..

Recession forces luxury brands to target the wealthy

The first thing that popped up on “must blog” list is another item about luxury.

According to a Luxury Institute study, summarized by AdWeek, state-of-the-market series, 77% of high-end shoppers "agreed that luxury is less important in today's economy."

Surprisingly, the majority of affluent consumers aren't big luxury shoppers. Pre-recession, most of the luxury market's power came from lower-income aspirational buyers. Now they can no longer afford to shop that way, so luxury brands are looking for new ways to sell to the actual wealthy.

According to the survey, many affluent consumers said that they're primarily interested in quality and service, which they consider hard to find in luxury goods.

The survey also found that the rise of discounting has damaged people's brand perception.

"Radical discounting is a disaster. It tells people how big the margins were." Shoppers are confused, forgetting that luxury items are more expensive because they are of higher quality.
AdWeek suspects that shoppers will be much more discriminating in the future. One expert mentions a "rise of connoisseurship."

Interesting stuff. So if the aspirational buyers are having a hard time and it is the really wealthy who are still buying, what difference does that make to the profile of the target customer? Methinks it has just got older. Dick Stroud

"Luxury Shame" a byproduct of the recession

According to the consulting group Bain & Co, shoppers are suffering from "luxury shame". These results appear in its latest report about the global luxury industry.

The WSJ (sorry subscription only) covers this research and has a fascinating article about the trials and tribulations of the luxury suppliers.

Guilt has really increased in the last year, says the brand strategist Martin Lindstrom.

Why am I talking about this? Well, it is an extreme example of the impact of the recession on consumer behaviour, something all marketers should be interested in understanding. Secondly, the 50-plus are significant purchasers of luxury goods so a large number of this generation are experiencing this phenomenon.

Apparently some luxury brands are emphasising marketing tactics they hope will be an antidote to the guilt syndrome. Things like promising to channel profits to a charity, as shoe brand Cole Haan recently did with its offer to get a 15% discount on a new pair of shoes when you donate an old pair to a designated charity.

The good old catch-all of promise of saving the planet from climate change is another wheeze being used to make people feel better, like the Swedish clothing brand Filippa K that opened a second-hand store in Stockholm that sells used clothes of its own brand for at least 50% off.

What seems like a much more commercial approach is encouraging Internet shopping (i.e. let people get the luxury buzz at home instead of in the store, away from the scorn of the poor). Not surprising that there has been an estimated 20% jump in online luxury sales this year (according to Bain & Co).

In the same week as the “luxury shame” story was being covered in the media there was news that, Milan's Versace Group announced that it would cut 26% of its worldwide workforce and consolidate its operations in an effort to return to profitability by 2011. The fashion house has also made plans to close all three of its stores in Japan due to poor sales, though the company's business is successful elsewhere in East Asia.

“We’re reviewing in a comprehensive way the whole structure of the company,” said the company’s chief executive - that sounds bad.

Next time you open a magazine that is full of ads for luxury watches, jewelry, holidays etc that are the same campaigns as were used pre-recession, just think what a total waste of promotional spend. Most of the luxury brands are still living in a state of denial. Dick Stroud

Spending on the Xmas holiday season in the US looks grim

If you haven’t subscribed to the Boomer Project newsletter you should.

In the most recent edition it has the results of their research into the spending intentions of Americans for the holiday season.

Not good as you can see (click to enlarge image). As the newsletter says: “We have seen the future and it stinks for retailers, except for the discounters.” Happy Xmas. Dick Stroud

What’s going on in the UK residential care market?

I have written a lot about the perilous state of some of the biggest companies in the UK residential care business. Too much investment in property at too high a price creating too much debt with too little thought about the long term consequences.

Ooops nearly forgot. Too much faith in the simplistic notion that an increasing number of older people means that care home fees are on a one way journey in the upward direction.

The magazine Health Investor (subscription) has an article suggesting that Royal Bank of Scotland has: “earmarked some £250 million of capital for various development projects in the residential and social care sector.”

The argument goes that there could be a bonanza for companies, with cash, being able to buy land at greatly reduced costs and probably also get building work done at knock down prices.

I am not so sure. There are two elephants in the room. First, domiciliary care is definitely the flavour of the day. Older people want to stay in their home longer and Government loves it because it is cheap. Second elephant, is a massive pressure on funding for elder care that is about to hit as public expenditure is slashed.

The Health Investor article tempers its views with some pessimistic opinions from people in the Care Industry who say that it is impossible to raise funds for new developments.

I have another explanation why RBS might be freeing up a few millions for further investment in the Care Sector. This bank was the largest investor in the sector during the boom times and has consequently taken the biggest hit as asset prices tumble. The bank has funded a lot of development projects that are just about coming on stream and will start to eat more cash.

I suspect the new money is going to find its way in keeping the bank’s existing investments alive rather than funding new ventures. Anybody from RBS like to comment? Dick Stroud

Mockery + price fighting - a positive strategy or fight for survival?

This posting has little or nothing to do with the 50-plus but a lot to do with marketing and hopefully has an amusing twist.

There is store chain in the UK called Dixons. It is from an old era when you could get the best discounts on the high street. Times have changed but memories persist of its rather dowdy stores, even though the company has evolved from bricks, to bricks and clicks, to clicks and clicks.

The recession has made it OK to shop for rock bottom prices and the new Dixons ad campaign is relying on this emotion to overcome our hesitancy to deal with a somewhat shop soiled brand.

The campaign mocks the affluent culture of two of the UK’s premier stores, John Lewis and Selfridges, by suggesting the consumer use them as an expensive showroom and “Then go to Dixons.co.uk - the last place you want to go”. You can either see this as inspired advertising that has tapped into the post-credit crunch consumer psychology or a last ditch attempt to keep trading.

Some wag from the advertising world created a spoof version that appeared in Campaign, the Ad World’s trade mag. Something to make you laugh and think. Many thanks to Reg Starkey for telling me about the campaign and the spoof. Dick Stroud

Wal-mart's views about how consumers are reacting to the recession

Consumers around the world are looking to fulfil their "basic needs", but are also displaying considerably higher levels of caution when it comes to making discretionary purchases. So says Wal-Mart’s ceo.

What else can we learn from the US supermarket giant?

Buyer behaviour is also increasingly shaped by the "pay cycle" – with the start of each month seeing particularly high levels of demand.

Customers are buying basic needs but are not spending as much on discretionary items like apparel.

Health and well-being is a sector where the company has seen considerable interest. It appears as if consumers are saying: "I have to stay healthy. I can't afford to miss work. I can't afford to get sick."

In the US, the perceptions about sustainability have improved dramatically in the recent past.

I reckon there is more to learn from the reflections of Wal-Mart than the musings of Jo Average Consultant.

There is no doubt that the recession is having a significant impact on consumer behaviour. Dick Stroud

Americans and Europeans have lost the ‘luxury’ habit - not so in Asia

Since the 50-plus are (were) big purchasers of luxury goods this is of interest.

Gucci Group, the luxury-goods company has announced that acquisitions are part of its long-term strategy and will focus on Asian expansion for a “long time to come”.

Gucci’s head honcho said : “The U.S. and Europe “is where we have seen the biggest change in consumer behaviour, eighteen months ago, people were happy and wanting to have products that showed more the brand name and logos, let’s say, slightly more ostentatious.” Not so now.

Apparently it is only a rumour that Gucci is launching its own designer version of sack cloth and ashes. Dick Stroud

The birth of the “Cautionary Generation”

This blog posting by Jay Suhr makes a great deal of sense in which he tries to answer the question that fascinates me: “is the recession a defining moment for our consumer-driven society.” If it is, what impact will it have?

The conclusion he reaches is that the Boomer, Me, X and Millennial generations may have morphed into a new “Cautionary Generation” that saves that is committed to using less that now associates the amassing of stuff with the loss of financial cushions, secure retirement or the ability to pay their mortgage.

Even though there is much talk of green shouts, he believes that many people are still bracing for another unexpected dip.

He thinks that those who feel they survived are likely to go into an aggressive form of preventative maintenance, with no back sliding on bad spending habits. He thinks that people have learned that they can do without and live happily. They’ve rediscovered coupons, soup and board games. They’ve learned the discipline of thinking twice, three or four times before making purchases. They’ve learned to research and shop and bargain.

I agree with much he says and what is for sure, few brands have got their head around what implications these changes have on the way they interact with consumers.

A very interesting posting and one that it is well worth reading.

I like the term “Cautionary Generation” but feel there are probably more descriptive and memorable ways of describing today’s consumers. My favourite is the “Tightrope Generation”.

This is not an age based generation but includes anybody who is working. If you are in work, then life aint too bad. The instant you slip off of the employment rope then your world can implode. Difficulty getting reemployed (especially if you are 40+), probably with a reduced salary and a period of no income when the bills, especially credit card payments, keep coming.

Keep balancing and you are fine – slip and you are history.

Any other ideas for a generational name? Dick Stroud

The good old recession and the 50-plus

I have already referenced that I was talking at a conference in Switzerland about “Mature Marketing”.

You can now see and hear what I was saying by downloading this Flash version of the presentation. Enjoy – probably not the right word. Be worried – probably more appropriate. Dick Stroud

It is not a secret - we are in a recession

I am amazed how few companies are reflecting the fact that most people are, in one way or another, concerned about the recession.

OK, some people are doing well and some doing really badly and there are lot in the middle who don’t know which of these two groups they will join over the coming months.

Great to see that my chums in Holland who run a 50-plus agency are reflecting the reality. As much as I hate Web Intro pages I reckon this works. Dick Stroud

Interview with Harvard Business School professor John Quelch.

If you get a chance go to the Harvard Business Review Web site and look at the video interview with John Quelch, about the impact of the psychology on consumer behaviour.

I reckon this guy talks a lot of sense. Dick Stroud

Making sense of consumers' recession behaviour

Chief Marketer contains a very sensible article about consumer behaviour during the recession (from the US).

The research shows that consumers have cut spending in many ways, but certain industries have been hit harder than others, for example:

• 20% of consumers have cancelled summer vacations
• 46% reported spending less on home improvements
• more than two thirds of consumers reported cutting back their household spending on luxury goods and services, as well as entertainment
• 50%+ reported cutting back spending on apparel and personal care (clothing, shoes, accessories, cosmetics) and major household items (electronics, appliances, household accessories)

In addition, consumers also seem to be losing optimism that the end of this recession is near.

In April 40% of said their household economic situation was improving or that they expected it to improve this year. Those reporting the same feeling in May fell to 29%.

I know it is US based and is multi-age but I think there are some good lessons for the UK’s 50-plus market. Dick Stroud

The old have seen it all before

McKinsey has just published a paper about how the spending behaviour of US consumers is changing and concluded that after two decades of unsustainably high levels it is returning to where it was in the past - much lower.

The bit of the research that really interested me was the difference in the expectations of how the stock market will behave over the next 30 years. Of course nobody has the faintest idea, but answering this question is a good proxy for people’s optimism about the future and the extent to which they perceive today’s economic problems as transitory. The chart says it all.

McKinsey concludes.

Finally, the historically poor returns of US equity markets during the lives of investors under the age of 45 may be creating a generation of equity-averse consumers. Less than half of US respondents believe that the stock market will produce returns above inflation over the next 30 years. Eighty-five percent of consumers from 36 to 45 believe that it won’t.

What a fascinating conclusion. Do the young know something the old don’t? Methinks not. This is all about the dent this recession has created to the risk averseness of the younger age groups. A factor that will be around for a long time to come. Dick Stroud

Pressure on public spending – portents of the future?

I have been wittering on about the consequences for the UK’s future when public spending is slashed to reduce the fiscal deficit. Here are a couple of examples of what this means in reality.

Headline: Elderly left at risk by NHS bidding wars to find cheapest care with reverse auctions

An online auction system developed for councils to buy the cheapest refuge bins and stationery is being used to buy end-of-life and dementia care for vulnerable elderly people. The NHS in London has held a series of 30 “reverse e-auctions”, where bids are driven down instead of up, for £195 million worth of contracts for palliative and dementia care for patients leaving hospital.

The Times reports that standards and quality have deteriorated rapidly where these auctions have been used and in one case a company that won a local authority’s auction was struck off the national register of approved providers weeks later because the care it offered was of such poor quality.

Headline: Age Concern threatens to sue PCT over loss of contract

A regional division of Age Concern has lost a palliative care contract to Allied Healthcare. A charity spokesman said that many other charities were losing tenders because of the pressure on councils to cut costs. "What councils call 'best value' often means cheapest."

OK, OK so what does this mean? It means that if you supply services directly or indirectly to the public sector you will come under extreme pricing pressure. If you are interested in the 50-plus then this might well apply to you.

Terrifyingly, these two examples come from the era before the real pressure to reduce public spending started. Dick Stroud

A joke is a joke but this is a pantomime

This is blog posting is about the marketing environment in the UK and is not specific to the 50-plus.

If you are a Brit you will know that we are living in weird times. Sorry, that is a daft understatement. We are living in terrifying times.

If you are gazing at the UK from overseas you might be picking up on the horror of a country where the 'ruling' political party is in terminal meltdown.

The news is dominated by the comings and goings of Labour MPs as Gordon Brown convulses and staggers to his ultimate demise. It is an unedifying and desperate sight.

During the past month we (Brits) seem to have forgotten that we are living slap bang in the early phases of long drawn out recession. Yes we have lots of “green shoot” stories and indeed things have stopped deteriorating at the same pace. Unfortunately, the UK’s future, for the next 5, maybe 10 years, will be one of a country with a horrendous fiscal deficit (i.e. we are spending far more money than we generate).

Last week Martin Wolf, chief economics commentator for the FT said: “The debate on how to curb public spending is, quite simply, the central issue in UK politics – the issue to be debated; it is not MPs’ expenses. It is how to share out the seemingly inescapable pain.”

Marketers in the UK, and US, had better start living in a world where taxes increase and government spending declines. Not for a year but for a decade. You had better be sure you know how this is going to affect your target markets.

If you think I am being overly pessimistic read this report from Policy Exchange and the IMF’s view of the UK’s future prospects. Dick Stroud

Marketing in the Hotel Industry recession

At the end of May I was asked to present to the general managers and marketers at Classic Hotels, about the joys and heartbreaks of marketing in the Hospitality Industry during the recession.

It is a raw PowerPoint presentation but I thought it might be of interest.

Not surprisingly, I believe that parts of the over-50s market are reasonably recession-proof, however, this presentation is not limited to the older market. Hope you find it useful. Dick Stroud

Winners and opportunities in the recession

I was recently asked to write a short article for the Royal Mail’s Mail Media Centre (MMC) that appears on the web site that Redwood manages for the company.

MMC is a really useful site that provides a source of intelligence and innovation for the direct mail industry.

I thought that there was a tad too much bad news about so I would lighten things up by looking at those who have been ‘winners’ from the recession. Hope you enjoy it.

A slightly longer version of the article can be downloaded from my Web site. Dick Stroud

The UK recession is good for lots of people

All is not doom and gloom.

The way the recession is affecting consumers in the UK is nothing like the previous bad times.

The economic pundits keep comparing it with the really bad times we had in 1990 but as this chart from the excellent presentation from Lord Turner at the FSA shows, interest payments are now much smaller as a percentage of income than back then.

In his speech he says

The extent to which mortgagees have benefited from this fall has been highly variable.

Some – with tracker mortgages – are enjoying spectacular decreases in mortgage interest payments, some much milder benefits, but only a minority of people (for instance, among subprime borrowers coming off very low fixed-rate deals) are likely to face a material rise in mortgage payments. And on average the effect is very significant, with total household disposable income after taxes and mortgage interest payments, actually up 6% over the year to Q4 2008.

Falling house prices may shift many people into negative equity, and a rise in unemployment will produce an increase in arrears and defaults, but compared to the early 1990s, we are less likely to see mortgage repayment problems among the vast majority of people who, even under the most extreme forecasts for unemployment, will still be in a job.

The distinction between the employed and the unemployed in the UK is huge. You might be employed and feeling grumpy and frightened about the future but actually you are doing financially OK - even more than that you might be doing very well.

If you are unemployed then the chances of you getting a new job is remote and you are really feeling the pain.

Marketers need to understand the difference between real and perceived pain and adapt their campaigns accordingly. Dick Stroud

Effects of the recession

The branding consultancy Clear (part of M&C Saatchi) has divided the way UK consumers are reacting to the recession into eight groups. The original article was published in Marketing Week – unfortunately it is subscriber only.

The most extreme group are those who are "cutting back". These tend to be older females on a lower income and have changed their behaviour the most, compared with any other group.

Other consumers that are living more cautiously are joining the "life on hold" tribe. These people are staying in more and cutting out big-ticket purchases such as cars.

This group are generally in the 35 to 54 age bracket. Vauxhall's "You pay we pay" redundancy marketing campaign is an example of a company responding to the fears of this group.

There is another group who are slightly less pessimistic frame of mind. The groups have been divided into those who are trading off, those who are trading down and those who have the occasional treats.

Those who are "trading off" tend to be between 25 and 44 years old and might decide not to buy a new car in order to jet off for an annual holiday. Those who are "trading down" are still buying the same types of goods but looking for cheaper options, such as own-brand or searching for bargains in less pricey shops.

The group that is probably least targeted by marketers - despite making up 42% of the population - is those that are still spending money and feeling positive about their own financial situation. This group has been sub-divided into three segments - "it's worth it", "life goes on" and "on the up". Marketers should take note of these groups, which are largely made up of male high earners. Of the "on the up" group, 37% bought a new car in the past two years and claim they won't put off replacing it.

It is interesting to see how the “life goes on” group increased in the period until Nov 2008. I wonder if anybody has more recent data? What would be really interesting is to see an age breakdown of each of these groups. Dick Stroud

Post-recessionary consumerism

Marketers should have a couple (well two business and one personal) questions that are dominating their thinking.

The business ones are - how does my business navigate and prosper during the recession - secondly how will consumer behaviour change as we move into the post-recessionary era.

The personal question, and probably the most pressing, is how the hell do I keep my job.

This article in Marketing Week is a perfect example of Xmas Tree speculation about post recessionary consumer behaviour. Beware; I am not sure how long the article will remain freely accessible.

This question enables writers to take all of their personal prejudices, wishes, desires and hunches and dress-up the Xmas tree so that it appears to have a pattern and form. Exactly the same thing happens with much of the commentary about global warming.

This writer has four propositions that he attempts to support with the scantiest of evidence.

Using vs wasting. Sustainability and thrift will become mainstream.

Being good at something. A return of ‘skills’, particularly among young people.

Trading vs consuming. Consumers recognise and exert their buying power.

Social vs individual objects. Individualism still prospers but not at the expense of shared values and endeavours.

The fairy on the top of the tree is that: “the new era should be more communal and shared; purchases will be more considered, young people will understand the importance of developing a skill and we will be more likely to live within our means financially and ecologically.”

Who knows this maybe true but it sounds a lot like wishful thinking. In fact this line of argument is really all about rebounding attitudes. The writer reckons we have all been greedy nasty and selfish consumers. We have hit the wall of economic collapse and rebound with these attitudes inverted. Somehow I think it will be a lot more complicated than this. Dick Stroud

Kübler-Ross model finds new application

Come on admit it. I bet you have never heard of the Kubler-Ross model of the five stages of grief.

The model was first introduced in Ms Kubler-Ross’s 1969 book "On Death and Dying" and describes the five stages that people pass through when coming to terms with grief, especially the diagnosis of a terminal illness or catastrophic loss.

The guys at Harvard (The HBR Editor’s blog) reckon that this model might be appropriate to the way people are responding to these troubled economic times. They reason that most people appear to be stuck in one of the first four phases - denial ("this simply can't be happening!"), anger ("string up the evil bankers!") , bargaining ("I'm calling a credit counselor!"), and depression ("goodbye, Future!").

They don’t think, and I agree, that few if any people (and here I am talking about marketers) have reached the acceptance stage ("Hello, Reality").

This blog entry is well worth a read as is the Wikipedia description of the model.

What is interesting to speculate is the speed at which the different age groups will reach the Acceptance Phase and how they will deal with it. How will the 50-plus react when they realise that the wealth they expected to fund their retirement has dimished by 30-50% - that their kids will be hanging around for a lot longer whilst they try and find a job and raise enough money to buy a home – that their dreams of a retirement of fulfilling and useful activities has been replaced with having to find a way of supplementing their diminishing income. Not nice – is it.

So Mr, Mrs and Ms Marketer this is the world you are going to have to inhabit when you try and market to the older market. Dick Stroud

How is the recession for you?

You have to give to the guys at McKinsey, they really do some fascinating research. I think they are in a league of their own.

This posting is nothing specifically to do with the 50-plus their behaviour will do much to determine how things turn out when the history books of this recession are written.

The table shows how the profitbility of US companies changed during the four previous recessions. Not surprisingly the IT industry had a bad 2001 recession (the dot.com bubble) but then finance did OK. Let you into a secret, Finance will be the IT of the 2008/?? recession. So where do you put your money – Healthcare – Consumer staples? Dick Stroud

Segmentation fit for the recession

It was the best of days it was the worst of days for it to be National Stress Down Day. The day when the Samaritans try to raise money to continue its excellent work.

Yesterday the UK froze. There was traffic chaos and what started the week as beautiful landscapes and a cheap way of practising your skiing techniques ended in being a pain in the rump.

National Stress Down Day also marked the news of a massive jump in the insolvency rate of UK companies and new forecasts of record falls in economic growth.

How the hell is Jo Public reacting to the wrath of the financial and meteorological gods?

One of the good things about yesterday was an article in the FT by John Quelch and Katherine Jocz (Keeping a keen eye on consumer behaviour) about the importance of understanding how customers are reacting to the new reality and how their attitudes and behaviours are changing.

It is the first bit of thinking I have seen about the permanent effects of the recession on the consumer psyche. I am sure it will not be the last.

This is a statement worth remembering.

What is certain is that the market segmentation scheme you were using to plan your marketing budget and programmes this time last year is obsolete. You need to listen to your customers and possibly develop a new segmentation approach.

The writers propose six recession segments that are definitely worth considering. Of course they are stereotypes but they are a starting point for you to think about your own customers.

Naysayers are frightened consumers who have stopped buying any discretionary purchases and are trimming their daily purchases.

Short termers are younger, urban consumers with few savings who have, therefore, lost little in the financial meltdown

Long termers are consumers who see the reduction in their retirement accounts as an unfortunate bump in the road. They are worried but not panicked.

Simplifiers are baby boomers who have lost a significant percentage of their savings, and, as a result, have become more risk averse and are reassessing their values. Some will conclude that they must postpone retirement to recover their net worth. Others will decide that they can make do with less, reduce their consumption and simplify their lives.

Sympathisers are savvy consumers who switched into cash ahead of the crash but who know others who did not. They could afford to buy a new car but they do not want to appear ostentatious. They are continuing to spend at near-normal levels but more discreetly.

Permabulls are relentlessly optimistic. Their “here today, gone tomorrow” attitude has them looking for opportunities to make up for lost ground and find the next million dollar idea or stock pick

Which one of these are you? How do you reckon you customers map onto these groupings? If you are marketing to the 50-plus you will find lots of them in the Long termers and Simplifiers categories. Dick Stroud

The elephant in the room

Another day another Boomer conference.

This morning my inbox contained yet another press release about a “Boomer Summit”. The first few paragraphs contained the usual mandatory stuff demonstrating the importance of the older market.

Business leaders and marketers seeking baby boomer customers will discover new strategies, tactics and markets to reach the 78 million baby boomers at the What's Next Boomer Business Summit.

Baby boomers remain the most important demographic for marketers, according to a survey by the Marketing Executives Networking Group (MENG). Seventy-eight percent (78%) of the executives rated baby boomers the most important demographic -- up from 72% last year.

With today’s economic problems I wonder if anybody really gives a damn about Boomers. They should, but I doubt if they do.

There is a fine line between becoming obsessed with the economic ills and ignoring them, or playing down, as if it were just a tiny perturbation. As I have already written, it appears that the Brits are the gloomiest bunch about the lasting impact of the downturn. If you compound that with being an instinctive pessimist then it probably explains my negative attitudes (with a capital 'N').

But, from all I have read there is only one thing of two things on the mind of companies. For the vast majority: “how to get through this messy time”. For a very few: “how to take advantage of it.” I don’t think there is much in-between.

How companies react to the older market can be pivotal in both of these strategies. Elephants are delightful creatures until they inadvertently stand on your head. My clients are only concerned with avoiding a headache – I cannot believe they are alone. Dick Stroud

Generation G

In this case, G stands for ‘Generosity’ not ‘Greed’.

I always like reading the Trendwatching newsletter. I don’t always agree with what it says but it makes me think. The latest edition is the best statement I have seen of the idea that the recession is igniting a fundamental change in consumer desires (so far I agree).

Trendwatching then goes on to propose that this change will be about consumers demanding their suppliers ditch greed and embrace generosity – “ giving is the new taking, and sharing is the new giving.” This is the point where I start to feel slightly nauseous.

The article goes on to say

Whereas you (and we) enjoy broad statements like ‘younger generations are more prone to collaboration, sharing and giving’, some of your colleagues and/or superiors will want to see proof of this phenomenon, especially if they themselves are not (yet) part of GENERATION G. Numbers! Facts! Stats! So here are some tidbits—all related to well-known ‘generous’ sites for and by the people—that may help.

Then for some reason we get a table of users of Flickr showing, as we all know, that it is skewed towards younger users.

Come on guys, this is warp like jump of logic to equate uploading images to being ‘generous’ and ‘giving’. Are we saying that the pile of videos, images and content that sits on the web is driven by the desire to help mankind and to be ‘generous’. Were the adoring acolytes of Saint Obama being ‘generous’ uploading years of video about him to YouTube. I don’t think so.

The most important problem facing UK charities is that the young are a tight fisted bunch who give neither their time nor their money (of course I am generalising) but that is what the stats show.

In my view, once we have moved through Generation 'A' (angry) we will witness the birth of Generation 'V'. The ‘V’ standing for Value – a rejection of tat and the desire to acquire services and products with enduring value. Sure it would be nice if they are festooned with eco kitemarks but that will be secondary requirement. We will get flocks of celebrities prattling on about how the recession has changed their life and how they have seen the errors of their ways and want to be more giving people etc etc etc. That's just mood music.

Speculating what scars the recession will leave on the different generations and their sub-sectors is something we should all be doing. Trendwatching eloquently puts one view. It just happens to be one I disagree with - what do you think? Dick Stroud

A few disconnected muses

This time of year there is not much going on in the 50-plus world. Sure, the world is experiencing financial hell and damnation, there is carnage in the Middle East and the expectation of 2009 are equivalent to Armageddon, but that will all wait until 2009.

Much more interesting is to muse about a few things I have seen in the past couple of days.

Twitter
It is great to see that twitter is now using the video made by commoncraft.com to explain what its service is all about. I reckon these videos are a fantastic way of explaining Internet enabled services. Have a look at their explanation Social Networking.

Social Networking

I have long thought that the future of social networking will be determined by how corporates incorporate the functionality into their online presence. This article from E-Marketer comes to something like the same conclusion

The example that is used to illustrate the trend is the way a Johnson & Johnson has created a social network for families who have children with diabetes.

Government Speak

If you want something to sound important make it sound complicated. I think this must be the first lesson taught to all employees in the UK’s Public Sector. If the truth will be told I can think of some people in my own profession who suffer from this problem.

What do you make of this 61 word sentence?

“Given current efforts to consolidate and extend existing Londonwide shared intelligence capabilities into the London Clinical and Business Support Agency (LCBSA, aka "the London Hub"), it is a particularly opportune time for INEL to determine our near and longer-term health intelligence strategy and its internal capability, to complement and build on services we will be able to access via the hub.”

OK, now you understand?

And finally, what was the most searched for term on the WARC (World Advertising Research Council) web site during 2008? Give you a clue, it begins with ‘r’ and ends with ‘n’. Yep, you got it. RECESSION.

Now as I read forecasts and pundits views about the marketing world I think they should be labelled ‘AR’ and ‘BR’. Any market forecasts made before the credit crunch and the ensuing recession are not worth the paper they are written on. What do you reckon? Dick Stroud

Stop talking about the recession – no way

There is no doubt that the wall of bad news that the media has been chucking at the populace is partly to blame for the hard/harsh/ disastrous/catastrophic (take your pick) economic times we are experiencing.

Of course this collective “doom and gloom” psyche is built on the firm foundations of awful economic conditions.

Now there is no doubt that there is money to be made out of misery. I bet the big consultancies are, as we speak/read, doing a global search and replace on their marketing collateral from “marketing in a growth economy” to “marketing in the downturn”.

But for the majority of marketers the coming couple of years are going to be grim. Deloitte has published a report called: “Stop the presses: print in peril”. The bottom line is that it forecasts that the newspaper and magazine industry will be decimated in 2009, particularly in developed markets like the UK, with one out of every 10 print publications forced to reduce frequency by more than half, move online or close entirely.

Now let’s assume Deloitte’s is over stating the situation to get attention and that they are half right then this is still a huge change to the media landscape of the UK.

Strange that the media that has contributed its bit to the downturn could end up being one if its biggest casualties.

Obviously, this all affects media buying when targeting the 50-plus who are the bedrock of the newspaper industry. Is there a silver lining? You bet. Just think of what advertising deals you will be able to get. With ad revenues expected to drop 20%, led by a 30% fall in classified sector, you’re going to get some fantastic deals.

Clearly this is what the chairman and chief executive of Procter & Gamble thinks. He is quoted as saying he wants to "renegotiate" the company's media spend across the world. Speaking to analysts, he said the company was looking to increase its "share of voice", while buying media at a lower cost. He thinks the current media environment was a "big opportunity" because since "whole industries have walked away from advertising (I think he means the car business)everything is getting renegotiated, and we want to be ahead of the curve." That is going to send a shudder down the spines of he media and media planning agencies. Dick Stroud

The Unretired.

This is not a very cheerful article from Business Week that describes the tranche of older people who retired and now find themselves suffering from the results of property and stock market asset deflation.

The proof offered about the scale of the problem are things like RetirementJobs.com, the largest career site for people over 50, saw traffic more than double, from 250,000 visitors in July to 600,000 in November. In April, a survey conducted by AARP found that 17% of responding retirees over 50 were considering or already going back to work. I wonder what that figure is today!

As I have said before, the people who have assets (the 50-plus) have been hit the hardest during Phase 1 of the recession (The ‘credit crunch’). At least most of this group had some assets, unlike most of their kids.

Phase 2 (the real recession) is affecting all ages. It is said that London is 3 meals away from anarchy, meaning that the food logistics relies on a constant flow of refilling of the supermarket shelves. The same applies to the majority of households (at least in the UK) who are 3 pay cheques away from financial hell.

I am afraid the Business Week story is going to be replayed time and time again but with younger and younger people being the focus.

So what is the marketing message in all of this? Be very, very targeted in the groups where you spend your diminishing marketing dollars/pounds/Euros. As the recession broadens to hit all ages and social groups you really need to think if you have identified the “recession proof” consumers in your customer database. Well have you? Dick Stroud

Recession winners and losers

The UK’s Chartered Institute of Marketing has just published it survey that gives a measure of how UK marketers are thinking about the future. Bottom line – not with much enthusiasm.

The most interesting thing was their opinion on the types of marketing activity they expect to be using more/less in the coming 12 months.

The winners - in order
Online (whatever that means)
E-mail
CRM
PR

The losers - in order
Advertising
Sponsorship
Internal marketing (whatever that is)

From talking to guys in media agencies I reckon that CIM has got it right about the main winner. Online is doing well - for now. Dick Stroud

Belt tightening by over 50s will devalue the “grey pound”

That dreaded phrase “New research” tells us that: “the normally robust 50+ consumer group is battening down the hatches.”

Apparently a nationwide YouGov survey shows growing concern and a readiness to cut back on spending in the next few months – pointing to a pretty lean Christmas at the tills.

The release then goes on to say that: “82% are concerned about the oncoming recession and the state of the UK economy over the next couple of years.” Only 82% - cripes what the hell are the other 18% thinking!

Then we get to the interesting bit: “Worryingly for already hard pressed retailers, 61% say they believe they will be directly affected by the recession and intend to curb their spending as a result. This compares with just 45% of the 18-24 age groups. “

Now you can read this in two ways. The oldies are cutting back. OR What have we done in the UK education system to create a bunch of 18-24 year olds that cannot recognise a crisis when it staring them in the face?

The bit to take away from this release is that just 40% of them (the 50+) are actually worried about making ends meet. This reflects the relatively low levels of mortgage and unsecured debt enjoyed by the older group. By contrast, 57% of the 35-44 age groups are worried about making ends meet as they juggle household debt and raising families.

The research was commissioned by Senioragency. This is an organisation that has been silent for a while. Good to have them back. Dick Stroud

Tales of the recession

One thing you can be certain of in these uncertain times is that the recession – what it means to business – how it affects consumers and all other variants of its implications, will dominate the news for the foreseeable future. And so it should.

Here are a couple of examples.

Bad news for the retirement industry

The housing crisis has kept thousands of older Americans who need support and care from moving into retirement communities or assisted-living centers, effectively stranding them in their own homes.

Without selling their houses or condominiums, many cannot buy into retirement homes that require a payment of $100,000 to $500,000 just to move in. So they are scratching themselves off waiting lists, cancelling plans with packing services and staying put, in houses that fit well 30 years ago, but over the years have become lonely, too large or too treacherous to navigate.

Good news for the older consumer

The cruise industry, reeling from the economic crisis and a sharp drop-off in passengers, is offering some incredible deals.

Carnival, the largest cruise company in the world, is offering four-day cruises out of Miami in mid-December that stop in Key West and Cozumel for just $149 a person. The company is even throwing in $25 in credit to spend on the ship. Since that price includes meals, it's cheaper than staying home and eating out for four days. "There's no question, the consumer is shaken," says Carnival Chairman. You can say that again.

The US cruise industry generates $17.6 billion a year in revenue. More accurately, did generate $17.6 billion a year.

The typical passenger is still older and wealthier than most—49 years old, with a household income of more than $104,000 a year – but now sinking (or should I say reducing).

I think it is important that we all keep current with what is happening as result of the recession so please send me any items you see about its impact on older consumer and their suppliers. Dick Stroud