Targeting Emerging Consumer Segments The Recession-Proof Consumer

Published by: Datamonitor

Published: Oct. 28, 2009

Table of Contents

Overview

Catalyst

Summary

Methodology

Table of Contents

Table of figures

Table of tables

Introduction

Customer segmentation is vital for an effective marketing strategy

The recessionary environment is forcing providers to make decisions

Identifying fads as opposed to long term trends is important when analyzing emerging consumer segments

Recession-Proof consumers are a valuable target for providers

The Future Decoded

Trend: Recession-Proof consumers are not distributed according to expected geographic and demographic patterns

Insight: Economic factors do not dictate Recession-Proof behaviors

Recession-Proof consumers are found in the fastest growing emerging markets

Brazilians recognize the reality of recession but remain optimistic

Consumer confidence in India is characterized by cautious optimism

Higher consumer confidence is reflected by a generally positive outlook among Chinese consumers

Russia has disproportionately few Recession-Proof consumers compared to other emerging economies

Perception gaps are particularly apparent when looking into the emergence of Recession-Proof consumers in the rest of the world

Insight: Recession-Proof consumers behave similarly across all demographics

Younger age segments appear to contain the most Recession-Proof consumers

Demographic distribution of Recession-Proof consumers is similar in all regions

Trend: Recession-Proof consumers have greater appetite for FS products

Insight: The difference between the Recession-Proof consumer and the average consumer is particularly obvious in savings behaviors

Instant access savings products are also the most popular other product held with the primary bank

Insight: Recession-Proof consumers will look outside their primary bank for their FS needs

Primary bank loyalty is relatively weak in developed markets

There is huge opportunity for other FS providers to capture share of the Recession-Proof wallet

Insight: Recession-Proof consumers use a variety of sources for advice

Recession-Proof consumers can afford professional advice but still shop around for the best deals

Insight: Recession-Proof consumers are more trusting of the FS industry than the average consumer

Recession-Proof consumers have had less negative experiences

Trend: Recession-Proof consumers' future actions are aligned with their optimism

Recession-Proof consumers are generally happy - across all elements of their lives

Insight: Despite being economically secure they are not lazy with their finances

Recession-Proof consumers are motivated to take action in order to maintain their financial security

Recession-Proof consumers also plan to maintain their quality of life whilst remaining Recession-Proof

Action Points

Action: Emerging markets can provide valuable lessons for FS providers

Yes Bank is has been a key innovator in the Indian banking sector

Improve the in-branch experience is reflected in Western banking strategies

Action: Understand the value of Generation Y

Action: Focus marketing efforts on product value and financial security

Provide multiple channels for financial advice

Target Recession-Proof consumers for savings, pension and life insurance products

Action: Datamonitor's Megatrend Framework can help identify strategies for targeting this segment

Recession-Proof consumers desire elements of the Connectivity Megatrend in their financial needs

Experiment more boldly with Web 2.0 technology

Ethical consumerism is a key component of the Connectivity Megatrend

Capture Recession-Proof consumers through highlighting the Convenience of the offering

Individualism is invaluable to the Recession-Proof segment

APPENDIX

Data tables

Definitions

The Datamonitor Financial Services Consumer Insight Megatrend Framework

Authenticity

Comfort

Connectivity

Convenience

Individualism

Wellbeing

Demographic Complexity

Financial Intelligence Complexity

Lifestage Complexity

Wealth Complexity

Methodology

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

Overview

Table 1: Recession-Proof and non Recession-Proof consumers segmented by country

Table 2: Recession-Proof and Non Recession-Proof consumers, segmented by age

Table 3: Recession-Proof consumers segmented by region and age

Table 4: Proportion of Recession-Proof consumers and global consumers with two or more financial service products

Table 5: Levels of product holding for each other product held with primary bank

Table 6: Number of non-current account products held by Recession-Proof consumers with primary bank, by region

Table 7: Drivers of financial decision making for Recession-Proof consumers and the average global consumer

Table 8: Indicators of trust for Recession-Proof consumers and the average global consumer

Table 9: Expectations for the next 12 months for Recession-Proof consumers and the average global consumer

Table 10: Actions over the next six months for Recession-Proof consumers and the average global consumer

List of Figures

Figure 1: Most Recession-Proof consumers are based in China, Brazil or India, although Russia is an anomaly

Figure 2: The distribution of Recession-Proof consumers in BRIC appears to correlate with the economic impact of the recession on those countries

Figure 3: The 18-24 age segment contains the highest proportion of Recession-Proof consumers

Figure 4: Distribution of Recession-Proof consumers by age segment is similar in all regions

Figure 5: Levels of product holding are higher amongst Recession-Proof consumers for all products in comparison to the global consumer

Figure 6: Holding levels of non-current account products with the primary bank are lower amongst Recession-Proof consumers

Figure 7: Asia Pacific Recession-Proof consumers show the least primary bank loyalty

Figure 8: Recession-Proof consumers seek financial advice from a wide variety of sources

Figure 9: Recession-Proof consumers are more trusting than the average consumer

Figure 10: Recession-Proof consumers are far more optimistic on all accounts in comparison to global consumers

Figure 11: Recession-Proof consumer intend to take actions which will keep them Recession-Proof

Figure 12: YES Bank has been technologically innovative in its branch design

Figure 13: Barclays pilots Microsoft Surface technology in its concept branch, launched in December 2008

Figure 14: Harnessing new connective technologies such as Twitter will help engage younger Recession-Proof consumers

Figure 15: Virgin's Climate Change ISA is a prime example of ethical and green credentials

Abstract

Introduction

Recession-Proof consumers have emerged from the recession without experiencing a negative effect on their lifestyle. As such, they represent potentially the most profitable segment for FS providers to target as economies emerge from recession. FS providers must therefore understand what these consumers want and how their Recession-Proof status may influence their behaviour.

Scope

• Using data from our global FSCI survey this report profiles the attitudes and behaviours of the emerging Recession-Proof consumer segment
• The report identifies these consumers and analyses the drivers of their future behavior
• The report provides concrete actions for FS providers to position themselves competitively in order to capture a share of the Recession-Proof wallet.

Highlights

Although increasing demographic complexities means that age segmentation has become over simplistic, more Recession-Proof consumers have emerged in younger age segments, so FS providers must capture them now as they plan for the future.

Recession-Proof consumers have been found to be significantly more receptive to financial advice than the average consumer. However, they have a more well rounded and financially intelligent approach to their research than the average consumer and therefore require a range of channels at their disposal through which to obtain advice.

Recession-Proof consumers' have generally happier than the average consumer, and but this has not led to complacency. Rather, they are motivated to take actions which maintain both their financial security (saving more) and lifestyle (spending more).

Reasons to Purchase

• Access the results of Datamonitor's Global FS Consumer Insight survey in order to profile this key emerging Recession-Proof segment.
• Identify why the Recession Proof consumers are potentially the most profitable segment and predict their future behaviors.
• Identify strategies you can take to effectively gain share of the Recession-Proof wallet.

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