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THE GREAT UNWIND




2   Source: Conde Naste Portfolio, January 2009   Copyright John Gerzema/Young & Rubicam
THE NEW FEAR ECONOMY


UNEMPLOYMENT                        NATIONAL DEBT
HOUSING VALUES                      DETROIT
EQUITY MARKETS                      CURRENCY VALUATION ?
INTEREST RATES ?                    HEALTHCARE ?
COMMODITY PRICES                    BANK LENDING
IN(STAG)FLATION ?                   FACTORY & HOUSING STARTS
BAILOUT ?                           CREDIT CARD EXPOSURE
                     }
                    CONSUMER CONFIDENCE
7                                                     Copyright John Gerzema/Young & Rubicam
THE 50-20 PARADOX




9   Source: Board of Governors of the Federal Reserve System   Copyright John Gerzema/Young & Rubicam
THE LARGEST BUDGET DEFICIT POST WWII




9   Source: Board of Governors of the Federal Reserve System   Copyright John Gerzema/Young & Rubicam
VISUALIZING THE BAILOUT




10   Source: The Atlantic   Copyright John Gerzema/Young & Rubicam
AFTER YEARS OF INDULGENCE,
AMERICANS ARE SPENT




10   Source: The Atlantic    Copyright John Gerzema/Young & Rubicam
AMERICAN’S HOMES NO LONGER
PERSONAL LINES OF CREDIT




13   Source:Us Department of Housing and Labor, 2009   Copyright John Gerzema/Young & Rubicam
HOUSING VALUES CONTINUE TO DECLINE
ACROSS THE U.S.




12   Source: “Irrational Exuberance”, 2nd edition, 2006, by Robert J. Schiller   Copyright John Gerzema/Young & Rubicam
THIS PERIOD MARKED BY MOST JOB LOSSES, WEAKEST
RECOVERY




16   Source: Change in Nonfarm Pay rolls, Reported Monthly, Bureau of Labor Statistics, U.S Dept of Labor   Copyright John Gerzema/Young & Rubicam
AFFLUENT MORTGAGE
RATE DEFAULTS




18   Source: LPS Applied Analytics   Copyright John Gerzema/Young & Rubicam
DEALING WITH THE STRESS
OF THE CURRENT ECONOMY




3   Source: Comscore      Copyright John Gerzema/Young & Rubicam
MASLOW UPENDED




                                                   20
                                                   07



                                                        20
                                                          09
19   Source: American Progress.org February 2009               Copyright John Gerzema/Young & Rubicam
MOVING FROM MINDLESS TO
     MINDFUL CONSUMPTION


     PRODUCER OF QUALITY RATHER
     THAN CONSUMER OF QUANTITY




     32
     39                           Copyright John Gerzema/Young & Rubicam
39
WE EXAMINED 15 YEARS
OF DATA FROM BRANDASSET
VALUATOR®




WORLD’S LARGEST   40,000 BRANDS   QUARTERLY U.S.
DATABASE OF                       PANEL OF 15,000+
BRANDS            215 STUDIES     RESPONDENTS
OVER 500,00       ACROSS 44       72 DIFFERENT
CONSUMERS         COUNTRIES       BRAND METRICS

15
THE NEW RULES OF
‘POST-CRISIS CONSUMERISM’



           NEW CULTURAL VALUES


          NEW CONSUMER BEHAVIORS


        NEW MANAGEMENT PRINCIPLES
49                                  Copyright John Gerzema/Young & Rubicam
POST-CRISIS CONSUMERISM
     RULE #1


        CULTURAL VALUE         =   LIQUID LIFE

     CONSUMER STRATEGY =           DÉCLASSÉ
                                    CONSUMPTION

          MANAGEMENT           =   DOLLARS AND
            PRINCIPLE                SENSE

56                                               Copyright John Gerzema/Young & Rubicam
DÉCLASSÉ CONSUMPTION                  CULTURAL VALUE=LIQUID LIFE
                       CONSUMER BEHAVIOR = DÉCLASSÉ CONSUMPTION
                        MANAGEMENT PRINCIPLE= DOLLARS AND SENSE




18                            Copyright John Gerzema/Young & Rubicam
19
20
21
22
23
24
25
DOLLARS AND SENSE                  CULTURAL VALUE=LIQUID LIFE
                    CONSUMER BEHAVIOR = DÉCLASSÉ CONSUMPTION
                     MANAGEMENT PRINCIPLE= DOLLARS AND SENSE




26                           Copyright John Gerzema/Young & Rubicam
27
28
29
30
31
POST-CRISIS CONSUMERISM
RULE #2


     CULTURAL VALUE       =   ETHICS AND
                                FAIR PLAY
CONSUMER STRATEGY =           EMPATHY AND
                                  RESPECT
     MANAGEMENT           =    VALUE AND
      PRINCIPLE                  VALUES

32                                          Copyright John Gerzema/Young & Rubicam
EMPATHY AND RESPECT      CULTURAL VALUE = ETHICS AND FAIR PLAY
                           CONSUMER BEHAVIOR = R-E-S-P-E-C-T
                      MANAGEMENT PRINCIPLE = VALUE AND VALUES




54                           Copyright John Gerzema/Young & Rubicam
34
35
36
37
38
39
VALUE AND VALUES      CULTURAL VALUE = ETHICS AND FAIR PLAY
                             CONSUMER BEHAVIOR = R-E-S-P-E-C-T
                        MANAGEMENT PRINCIPLE = VALUE AND VALUES




55                             Copyright John Gerzema/Young & Rubicam
41
42
43
44
45
46
47
POST-CRISIS CONSUMERISM
     RULE #3


       CULTURAL VALUE          = INDESTRUCTIBLE
                                        SPIRIT
CONSUMER STRATEGY = DURABLE LIVING
        MANAGEMENT         =        BRAND THAT
          PRINCIPLE                   LASTS


50                                               Copyright John Gerzema/Young & Rubicam
DURABLE LIVING     CULTURAL VALUE = INDESTRUCTIBLE SPIRIT
                     CONSUMER BEHAVIOR = DURABLE LIVING
                 MANAGEMENT PRINCIPLE = BRAND THAT LASTS




51                    Copyright John Gerzema/Young & Rubicam
50
51
52
53
54
BRAND THAT LASTS     CULTURAL VALUE = INDESTRUCTIBLE SPIRIT
                       CONSUMER BEHAVIOR = DURABLE LIVING
                   MANAGEMENT PRINCIPLE = BRAND THAT LASTS




55                        Copyright John Gerzema/Young & Rubicam
56
57
58
59
60
61
62
POST-CRISIS CONSUMERISM
     RULE #4


      CULTURAL VALUE       =       RETURN TO THE
                                         FOLD
CONSUMER STRATEGY =                COOPERATIVE
                                     CONSUMERISM
        MANAGEMENT             =     COMMUNITY
         PRINCIPLE                   ORGANIZER

59                                            Copyright John Gerzema/Young & Rubicam
COOPERATIVE            CULTURAL VALUE = RETURN TO THE FOLD
              CONSUMER BEHAVIOR = COOPERATIVE CONSUMERISM



CONSUMERISM
               MANAGEMENT PRINCIPLE= COMMUNITY ORGANIZER




64                        Copyright John Gerzema/Young & Rubicam
65
66
67
68
69
70
71
COMMUNITY ORGANIZER            CULTURAL VALUE = RETURN TO THE FOLD
                      CONSUMER BEHAVIOR = COOPERATIVE CONSUMERISM
                       MANAGEMENT PRINCIPLE= COMMUNITY ORGANIZER




72                                Copyright John Gerzema/Young & Rubicam
73
74
75
76
77
78
79
THE CHINESE CHARACTER FOR CRISIS
     ALSO MEANS OPPORTUNITY




     BAD COMPANIES ARE DESTROYED
     BY CRISIS. GOOD COMPANIES
     SURVIVE THEM. GREAT COMPANIES
     ARE IMPROVED BY THEM.”
     —ANDY GROVE


65                                   Copyright John Gerzema/Young & Rubicam
RECESSION-PROOF
 YOUR BRAND


 JOIN THE CONVERSATION AT
 THEBRANDBUBBLE.COM
 ON FACEBOOK
 OR TWITTER
 @JOHNGERZEMA




81

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TEDxKC-The Great Unwind

  • 1.
  • 2. THE GREAT UNWIND 2 Source: Conde Naste Portfolio, January 2009 Copyright John Gerzema/Young & Rubicam
  • 3. THE NEW FEAR ECONOMY UNEMPLOYMENT NATIONAL DEBT HOUSING VALUES DETROIT EQUITY MARKETS CURRENCY VALUATION ? INTEREST RATES ? HEALTHCARE ? COMMODITY PRICES BANK LENDING IN(STAG)FLATION ? FACTORY & HOUSING STARTS BAILOUT ? CREDIT CARD EXPOSURE } CONSUMER CONFIDENCE 7 Copyright John Gerzema/Young & Rubicam
  • 4. THE 50-20 PARADOX 9 Source: Board of Governors of the Federal Reserve System Copyright John Gerzema/Young & Rubicam
  • 5. THE LARGEST BUDGET DEFICIT POST WWII 9 Source: Board of Governors of the Federal Reserve System Copyright John Gerzema/Young & Rubicam
  • 6. VISUALIZING THE BAILOUT 10 Source: The Atlantic Copyright John Gerzema/Young & Rubicam
  • 7. AFTER YEARS OF INDULGENCE, AMERICANS ARE SPENT 10 Source: The Atlantic Copyright John Gerzema/Young & Rubicam
  • 8. AMERICAN’S HOMES NO LONGER PERSONAL LINES OF CREDIT 13 Source:Us Department of Housing and Labor, 2009 Copyright John Gerzema/Young & Rubicam
  • 9. HOUSING VALUES CONTINUE TO DECLINE ACROSS THE U.S. 12 Source: “Irrational Exuberance”, 2nd edition, 2006, by Robert J. Schiller Copyright John Gerzema/Young & Rubicam
  • 10. THIS PERIOD MARKED BY MOST JOB LOSSES, WEAKEST RECOVERY 16 Source: Change in Nonfarm Pay rolls, Reported Monthly, Bureau of Labor Statistics, U.S Dept of Labor Copyright John Gerzema/Young & Rubicam
  • 11. AFFLUENT MORTGAGE RATE DEFAULTS 18 Source: LPS Applied Analytics Copyright John Gerzema/Young & Rubicam
  • 12. DEALING WITH THE STRESS OF THE CURRENT ECONOMY 3 Source: Comscore Copyright John Gerzema/Young & Rubicam
  • 13. MASLOW UPENDED 20 07 20 09 19 Source: American Progress.org February 2009 Copyright John Gerzema/Young & Rubicam
  • 14. MOVING FROM MINDLESS TO MINDFUL CONSUMPTION PRODUCER OF QUALITY RATHER THAN CONSUMER OF QUANTITY 32 39 Copyright John Gerzema/Young & Rubicam 39
  • 15. WE EXAMINED 15 YEARS OF DATA FROM BRANDASSET VALUATOR® WORLD’S LARGEST 40,000 BRANDS QUARTERLY U.S. DATABASE OF PANEL OF 15,000+ BRANDS 215 STUDIES RESPONDENTS OVER 500,00 ACROSS 44 72 DIFFERENT CONSUMERS COUNTRIES BRAND METRICS 15
  • 16. THE NEW RULES OF ‘POST-CRISIS CONSUMERISM’ NEW CULTURAL VALUES NEW CONSUMER BEHAVIORS NEW MANAGEMENT PRINCIPLES 49 Copyright John Gerzema/Young & Rubicam
  • 17. POST-CRISIS CONSUMERISM RULE #1 CULTURAL VALUE = LIQUID LIFE CONSUMER STRATEGY = DÉCLASSÉ CONSUMPTION MANAGEMENT = DOLLARS AND PRINCIPLE SENSE 56 Copyright John Gerzema/Young & Rubicam
  • 18. DÉCLASSÉ CONSUMPTION CULTURAL VALUE=LIQUID LIFE CONSUMER BEHAVIOR = DÉCLASSÉ CONSUMPTION MANAGEMENT PRINCIPLE= DOLLARS AND SENSE 18 Copyright John Gerzema/Young & Rubicam
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  • 26. DOLLARS AND SENSE CULTURAL VALUE=LIQUID LIFE CONSUMER BEHAVIOR = DÉCLASSÉ CONSUMPTION MANAGEMENT PRINCIPLE= DOLLARS AND SENSE 26 Copyright John Gerzema/Young & Rubicam
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  • 32. POST-CRISIS CONSUMERISM RULE #2 CULTURAL VALUE = ETHICS AND FAIR PLAY CONSUMER STRATEGY = EMPATHY AND RESPECT MANAGEMENT = VALUE AND PRINCIPLE VALUES 32 Copyright John Gerzema/Young & Rubicam
  • 33. EMPATHY AND RESPECT CULTURAL VALUE = ETHICS AND FAIR PLAY CONSUMER BEHAVIOR = R-E-S-P-E-C-T MANAGEMENT PRINCIPLE = VALUE AND VALUES 54 Copyright John Gerzema/Young & Rubicam
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  • 40. VALUE AND VALUES CULTURAL VALUE = ETHICS AND FAIR PLAY CONSUMER BEHAVIOR = R-E-S-P-E-C-T MANAGEMENT PRINCIPLE = VALUE AND VALUES 55 Copyright John Gerzema/Young & Rubicam
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  • 48. POST-CRISIS CONSUMERISM RULE #3 CULTURAL VALUE = INDESTRUCTIBLE SPIRIT CONSUMER STRATEGY = DURABLE LIVING MANAGEMENT = BRAND THAT PRINCIPLE LASTS 50 Copyright John Gerzema/Young & Rubicam
  • 49. DURABLE LIVING CULTURAL VALUE = INDESTRUCTIBLE SPIRIT CONSUMER BEHAVIOR = DURABLE LIVING MANAGEMENT PRINCIPLE = BRAND THAT LASTS 51 Copyright John Gerzema/Young & Rubicam
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  • 55. BRAND THAT LASTS CULTURAL VALUE = INDESTRUCTIBLE SPIRIT CONSUMER BEHAVIOR = DURABLE LIVING MANAGEMENT PRINCIPLE = BRAND THAT LASTS 55 Copyright John Gerzema/Young & Rubicam
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  • 63. POST-CRISIS CONSUMERISM RULE #4 CULTURAL VALUE = RETURN TO THE FOLD CONSUMER STRATEGY = COOPERATIVE CONSUMERISM MANAGEMENT = COMMUNITY PRINCIPLE ORGANIZER 59 Copyright John Gerzema/Young & Rubicam
  • 64. COOPERATIVE CULTURAL VALUE = RETURN TO THE FOLD CONSUMER BEHAVIOR = COOPERATIVE CONSUMERISM CONSUMERISM MANAGEMENT PRINCIPLE= COMMUNITY ORGANIZER 64 Copyright John Gerzema/Young & Rubicam
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  • 72. COMMUNITY ORGANIZER CULTURAL VALUE = RETURN TO THE FOLD CONSUMER BEHAVIOR = COOPERATIVE CONSUMERISM MANAGEMENT PRINCIPLE= COMMUNITY ORGANIZER 72 Copyright John Gerzema/Young & Rubicam
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  • 80. THE CHINESE CHARACTER FOR CRISIS ALSO MEANS OPPORTUNITY BAD COMPANIES ARE DESTROYED BY CRISIS. GOOD COMPANIES SURVIVE THEM. GREAT COMPANIES ARE IMPROVED BY THEM.” —ANDY GROVE 65 Copyright John Gerzema/Young & Rubicam
  • 81. RECESSION-PROOF YOUR BRAND JOIN THE CONVERSATION AT THEBRANDBUBBLE.COM ON FACEBOOK OR TWITTER @JOHNGERZEMA 81

Editor's Notes

  1. Dip = Snip: As Economy Drops, Vasectomy Rates Rise
  2. ‘Bling’ doesn’t sing (P. Diddy) Frugality on the runway (Duckie Brown) Luxury brands are waning Net a porter and pop up shop High end haggling in fashion Interest in flash sales (Woot.com) Inconspicuous consumption (Gilt Groupe) Don’t swagger down Fifth avenue Bargaining is very ‘rock & roll’ (Radiohead) Recessionistas have taken over Forensic Budgeting Lagerfeld “Cheap is an ugly Word” Haggling is in
  3. Attack a weaker competitor (Campbell’s) Educate and invest in your customers (Microsoft) Revamp Promotion Calendars (Frito-Lay) Attack the incumbent with efficiencies (Miller) Line extend/Life extend (Tide) Protect and enhance your assets (Pella) Mine For Unnecessary Waste (KelloGg) Change definitions of ownership: (Avelle) Innovate and cut costs at the same time (Stone Hearth) Go direct (Toll Brothers) Make Your Rival Seem Small (Ben & Jerry’s) Offer certainty (Hyundai) Offer value beyond price (Kraft Foods) FED EX Free Resume Day
  4. Seeking brands that support similar beliefs and causes Be transparent (Whitehouse.gov) User revolt and response (Facebook) ENCOURAGE CONSUMER PROBLEM SOLVIN (LEGO) CONSUMERS EXPECT YOU TO Don’t stop believing going grass roots and green (True North) Cultural shift toward scorning greed Consumers expect to be reassured during a crisis Protest against FARC on Facebook NEW Mom/facebook exchange
  5. Create a special member community (Coke) Be understanding and helpful (Frito Lay) Celebrate your target audience (Burger King) Reward your fan club (Starbucks) Create green packaging (Dial) Imagine end user benefits (IKEA) Success of high quality, low cost private label - (Costco) Forget the reckless (Amex) Actively listen and respond (Tropicana) Frame as an affordable necessity (McDonald’s) Celebrate Frugality (Alpo) Educate the next generation (ING) Be transparent (Whitehouse.gov) Take a stand (Blackspot) User revolt and response (Facebook) Different countries, different values? (Yahoo) Conscious capitalism (Whole Foods) Fix pricing inequalities fast (Apple)
  6. Consumers are driving and dining out less Use of coupons is up 300% private label up 12% “Swishing” parties to exchange clothing Repair for shoes, clothes and cars is up 22% AMERICANS SPENDING IN ‘return to home’ 68% of Americans now carry a library card Spices being used in lieu of expensive foods Value recipes growing more popular Craigslist posting 100% increase in traffic Twittering Politicians Michelle Obama is growing food on whitehouse grounds flexible working keeping cars longer The median avg of cars in operation hit a record of 9.4 years in 2007 (RL polk)+ %  of cars taken out of circulation fell to 5.1 % lowest ever, forcing dealers to secure more cars through auctions than ever before; consumers avoid anything OOP
  7. Stretch Mom’s budget (Campbell’s) Don’t be pointless (Miller) Fine tune your message (Accenture) Make green, green (Xerox) Exploit a weakness (McDonald’s) Change reference set (Prego) Help consumer defer purchases (Sears) think beyond today (data) Extend the life of other purchases (Ziploc) Offer tangible new benefits (Fidelity) Reconsider your segmentation (Mr. Clean) Stand behind your brand (Special K) Trade down to grow (Starbucks) Take on a misconception (Fiber One) Change frame of value (Gillette Fusion) Resurrect a benefit (Continental)
  8. Consumers turn to each other for advice (Yahoo! Finance) Consumers more trusting in each other than institutions (Prosper) Helping each other find value by sharing deals, services, and products (Mint) Financial social networking (Covester) Consumers creating their own marketplace (Etsy) TRUST YOUR NEIGHBOR’S REVIEW (YELP)
  9. Keep innovating (Vanguard) Move to micro-offers (Dell) Actively listen (Wal-Mart) Develop mobile shopping assistance (Amazon) Optimize your SEO (Blendtech) Elicit continuous customer feedback (Starbucks) Live your culture through Twitter (Zappos) Partner to bring virtual promotions (Kroger) Increased ad spend and strong digital ROI (General Mills) Giving back to communities (Frosted Flakes) Extend your brand into social forums (J&J) Invest in the Individual (Ford) Leverage your people as trust marks (Wal-Mart) Create customer transparency and access (Sun)