Mintel Consumer Insights Event
28th November 2011
Cogent Elliott have held 3 events this year. After Social Media and Behavioural Economics we finished the year with a great presentation from Mintel on Consumer Insights.
Toby Clark, Head of Financial Services Research at Mintel gave this insightful presentation at Cogent's main offices at Heath Farm in Meriden on Tuesday 22nd November. The evening was a fantastic success both in terms of insights and opportunities delivered by Mintel, but also in terms of socialising and networking, with a roomful of great guests from brands such as Jaguar and Land Rover, Poundland, and one of Cogent's newest clients, Hozelock.
Mintel: "The state we're in"
Based on findings from Mintel's Quarterly Update - Consumers and the Economic Outlook - Toby gave an entertaining and thought provoking presentation about the financial health and well being of today's consumers. We also learnt about magnetic nail varnish, but more of that later.
Toby took the audience through 5 main areas from the report and painted a true picture of consumers and, as we should expect in light of the ongoing Leveson Inquiry, the picture isn't as bleak as the papers would have us believe.
Currently just over one in five consumers (21%) have stated their financial health is currently 'healthy' with nearly 40% 'getting by'. This compares favourably to those who are 'struggling' (8%) or at worst, 'in trouble' (3%). Interestingly however, people are worried about the future, more worried than they are about the present. They aren't sure how long their financial health will remain as it is, presumably from external factors.
Emotional Well Being
With regards to emotional well being, again the picture isn't as bleak as we'd expect. On the whole people are relatively positive, but the cliche that money buys you happiness is true, with higher income households showing greater levels of satisfaction with life. Where another cliche may not hold true is the location of the UK's most satisfied people. Yorkshire. Who knew?!
When looking at changing attitudes towards spending Mintel have created 3 new mutually exclusive consumer groups - the 'Newly Prudent' (30%), 'Stretched' (37%) and 'Well Prepared' (25%). The group 'Newly Prudent' are where Mintel believe the real potential in the market comes from, and the group who best represent the change in consumer mindsets over the past year or so.
For example, those in the Newly Prudent group have changed their attitude to borrowing, they've not needed to as they're not financially stretched, but they will no longer buy something if they cannot afford to. Much of their behaviour is fashion led than out of necessity. A great example is the continued rise in baking items, a return to more traditional values.
Mintel showed that, generally, consumers are still spending but they're just prioritising what matters to them; they're concentrating on their day to day lifestyle. So bigger items, such as holidays, are being sacrificed, indeed overseas trips are down by 20%. They're prioritising 'lifestyle essentials' - little ways of treating themselves. Consumers feel that things that give a lift in fairly bleak times are worth spending money on.
When will the 'feel good factor' return?
However, despite the relatively good news, the fairly good health and emotional well being, consumers are quite pessimistic. Over 42% are expecting austere times for at least two more years. However, despite this, Toby drew attention to the increase in sentiment that 3 key events in 2012 will bring - Jubilee, Olympics and Euro 2012.
This will give a boost to consumer confidence.
Toby summarised with 3 key areas:
1. Consumers are changing behaviour, but these changes are voluntary. As such, they can be persuaded, not fooled, into buying things. They can be given good reasons to spend their money.
2. Lifestyle essentials will thrive. We will return to more traditional values, traditional budgeting and traditional money values. For example, the rise in baking may be due to the success of the great British bake off, but what is an important factor is that it's easy refuse to move to the past when the present is really difficult.
3. People will delay big ticket purchases. But it's these big purchases that will bounce back pretty quickly as soon as the economy starts to improve.
But one last thing. Let's consider the lipstick index. This is the idea that in tough times it is small purchases that make people feel better about themselves, that grow in sales. But the Health and Beauty expert at Mintel has refined the concept of the lipstick index; "Today, the lipstick index encompasses colour cosmetics in general and not just lipsticks. There's a lot of activity in nail colour with funky finishes including nail polish that works with magnets to create unexpected designs."
So, now we know!
To view the presentation on our YouTube channel, please click here .