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Price:
US$495
This special edition
of Consumer Insight features our Seventh Annual
Consumer and Market Trends Report. The complete report
is available for a purchase price of US$495.
To obtain your copy,
please call 1-800-988-4ACN, or email your request to CommunicationsDept@Nielsen.com.
Complimentary issues of Consumer Insight will
resume with the Winter edition.
Introduction
An early success
in Iraq caught military planners off balance, working to establish
a functioning infrastructure to deliver much-needed food,
water and supplies. By mid-year 2003, peacekeeping was proving
far more dangerous than the war effort, and a firm date for
a pullout had yet to be announced.
The Domestic Outlook
Stateside, the economy continued to baffle the experts, who
reluctantly agreed that it was possible to experience an economic
recovery along with a contracting labor market. The disenfranchised
(a net loss of 938,000 payroll jobs) joined the disillusioned
(150,000 people dropped out of the labor market by choice)
generating free market drag. The National Bureau of Economic
Research did see its way clear to declare that the recession,
which began in March 2001, had officially ended eight months
later.
The housing market rested on a solid foundation characterized
by unrelenting demand and decades-low mortgage rates. Escalating
home values prompted owners to refinance at lower rates and
free up hostage cash, which fueled consumer spending. In the
words of Federal Reserve Chairman Alan Greenspan, “The
frenetic pace of home equity extraction…is likely to
appreciably simmer down in 2003, possibly notably lessening
support to household purchases of goods and services.”
Under Attack
The bomb shelters of the 1960s gave way to the terror alerts
of the 2000s, where a rainbow color bar became the visual
cue signaling the need for heightened awareness. Some of the
most serious threats to domestic tranquility originated within
U.S. borders: from natural disasters like the wildfires that
destroyed more than six million acres in western states to
the malevolent sniper activity that took ten lives in the
greater Washington, D.C., area.
Greed—personal and corporate—continued to dominate
the headlines. Winona Ryder plundered the shelves at Saks
Fifth Avenue, while domestic diva Martha Stewart is accused
of doing the same in the financial markets, allegedly dumping
4,000 shares of ImClone stock based on insider information.
The concept of personal accountability and corporate ethics
so consumed the public dialectic that Time magazine named
three whistleblowers (Cynthia Cooper of Worldcom, Coleen Rowley
of the FBI and Sherron Watkins of Enron) as Persons of the
Year 2002.
On a Lighter Note
France, among the most vocal opponents to the Iraqi incursion,
attempted to co-opt the United Nations and pressure the United
States to moderate its stance. Congress reacted with calls
from the floor for a boycott of French goods. Months later,
another French offensive was launched, this time on the Internet
front. The Ministry of Culture announced that the word e-mail
was banned, and would henceforth be known as courriel, a contraction
of the phrase le courrier electronique.
A Sporting Chance
Ethical dilemmas came into play on the athletic front as well.
Baseball slid in the standings as the all-American sport thanks
to a triple threat: steroids, strike threats and Sammy's corked
bat. Olympic skating enthusiasts were on edge after a French
judge admitted to rigging results in the pairs figure skating
competition.
Offsetting these troubling reports was a series of stellar
performances. Serena Williams continued her reign as queen
of women’s tennis, relegating older sister Venus to
attendant status. LPGA legend Annika Sorenstam proved she
could play with the boys, hitting a 243-yard opening drive
on her first day at the PGA’s Colonial tournament.
Speaking of big drivers, 13-year-old wunderkind Michelle Wie
leveraged every inch of her six-foot frame to connect on 300-yard
drives and place ninth at the Kraft Nabisco Championship.
Unknown Ben Curtis shrugged off his 396th world ranking to
win the British Open, outshooting the likes of Tiger Woods
and Vijay Singh.
Lance Armstrong pedaled his way to Sports Illustrated Sportsman
of the Year honors and his fifth consecutive win of the Tour
de France. The San Antonio Spurs pounded the floorboards and
the New Jersey Nets into submission, netting their second
NBA championship title. The most exciting thing about Super
Bowl XXXVII wasn’t the Tampa Bay Buccaneers, but the
$2 million cost to advertisers whose commercials jolted viewers
awake during a wearisome game.
In Tune with the Times
Bruce Springsteen and The E Street Band staged a revival with
The Rising album, attracting critical praise and a new generation
of fans. Hipster performer Beck bobbed onto the charts with
Sea Change, a down-tempo melange of blues and folk melody
lines punctuated by emotion-laden lyrics. The Eminem Show
album quieted skeptics and proved that everybody’s least
favorite bad boy has staying power.
“The King” ruled the Billboard charts again with
the posthumous release of Elvis: 30 #1 Hits. Sales were up
for Shania Twain with her double-edged album Up!, which paired
country renditions with pop interpretations of the same songs.
Seeing Double
Sequels breathed a second wind into a waning box office this
year as film remakes had moviegoers seeing double. The cinema
redux offerings included: Legally Blonde 2, Charlie's Angels
2, X2: X-Men United, 2 Fast 2 Furious, Bad Boys II, Tomb Raider
2 and The Matrix Reloaded.
On the silver screen, Terminator 3 outmuscled The Hulk and
other summer movie competition. Awash in a celluloid ocean,
The Pirates of the Caribbean and Finding Nemo surfaced as
nautically themed film winners.
The Retail Perspective. Tax cuts. Rate reductions.
Military spending. Modest inflation. Mortgage availability.
Economic stimulus. Yet a solid market recovery remains elusive.
Wal-Mart expanded its global footprint and tied up the top
retailer spot again with sales of $244 billion. The accounting
scandals associated with telecommunications and energy companies
crept into retail as Ahold executives acknowledged massive
overstatement of earnings. Grocery’s former stranglehold
on consumers has slipped to a whisper touch, with attrition
of 10 trips per household per year.
Categorically Speaking. The medical community
is getting exercised over obesity and its toll on society.
The second most preventable cause of death, obesity is grabbing
a fat share of headlines, and spawning an expansion of weight-control
products and ingredients. High fat, sugar and carbohydrate
foods rounded out the roster of top product classes and contributed
to the heavyweight issue.
The World View. The French and the Swiss
broke the bank with their highest per capita annual spends
at retail. Storage, refrigeration and family size dictated
trip count, with Hong Kong leading on the frequency measure
(one shopping excursion every 1.4 days). Geography contributed
to supermarket channel dominance in Australia, where 96% of
purchases ring up at grocery.
Marketing Online. The image of online advertising
benefited from some plastic surgery, as consumers charged
ahead with beauty purchases. As advertisers acclimate to the
potential of the medium, content becomes more interactive
and sticky, building customer relationships and loyalty. Two
great examples: the M&M Global Color Vote and the Altoid
Acid Test campaigns.
The Hispanic Consumer. Say hello to the newly
recognized dominant minority in the United States, the Latino
population. Numbering almost 40 million strong, the Hispanic
segment has spiced up popular culture, introducing a Latin
accent to everything from menus to music. Marketers interested
in merchandising to Hispanics will need to consider country
of origin and language preference when determining the marketing
mix.
Rx Health Trends. A growing aging population
and escalating incidence of chronic conditions has fueled
the more than three billion dollar annual prescription drug
business. Consumers plagued with chronic ailments comprise
a growing and high-potential market for retailers and manufacturers.
With annual average shopping spends double their non-Rx buying
counterparts, these high-value patrons are worth getting to
know.
Private Label. Coming into their own as a
market force, private label goods borrowed a page from consumer
brands and now boast sophisticated packaging and visual presentations.
Once the exclusive purview of staples like bread and cheese,
private label has migrated to value-add categories including
pre-cut fresh salad and refrigerated meal starters. Since
quality ranks at parity vis-à-vis national brands while
price lags, private label ran circles around branded items,
growing twice as fast over the last five years.
Marketing to the Right Consumer. It’s
no longer enough to market to consumers; the challenge becomes
marketing to the most profitable consumer segments. Draw a
bead on high-spending consumers to calibrate the marketing
mix for maximum returns. Indexing a brand against the category
can reveal helpful insights for shaping campaigns and distributing
marketing dollars across channels. Making each dollar work
smarter and harder can reduce the overall spend and turbocharge
results.
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