With consumers all shopped out, smart marketers are tuning in to what people desire, discovers Jane Simms

Consumers in the world's main markets are all spent out and becoming more disenchanted with the particular form of materialism that most companies - and governments - continue to peddle, according to research from The Henley Centre.

Through the HenleyWorld study, it surveyed 21,500 consumers in the US, Mexico, Italy, Spain, Poland, Japan, Great Britain, France, Germany and China - which between them account for more than 75% of global consumer expenditure - and found them close to saturation point.

"Many of these people don't actually need anything any more, and this has profound implications for marketers developing products and services," says Martin Hayward, chairman of The Henley Centre.

What's more, he points out: "Many consumers are so surfeited with 'stuff', they're starting to question the very notion of consumption and the fundamental purpose of companies. We've identified a big disconnect between what consumers want and what companies are doing."

Hayward argues that most companies continue to take a short-term, price- and efficiency-focused approach to marketing. This is evident in the drive for global economies of scale and two-for-one type offers.

But the biggest potential opportunities lie in satisfying consumers' more intangible desires - for more time, space and energy, a greater sense of wellbeing and better information.

Hayward cites the work of psychologist Daniel Kahneman, winner of the 2002 Nobel Prize for Economics, who has spent his career pointing out that the better off society becomes, the less rational it becomes, spending increasing amounts of money on pointless things in search of some elusive emotional benefits.

The trend is exacerbated by consumers' unrealistic expectations and role models, argues Hayward. "Thirty years ago our main concerns were to be fit and healthy, whereas today we aspire to the lifestyles of celebrities or Premiership football players. It used to be about keeping up with the Joneses; now it's more like keeping up with the Beckhams."

This inevitably leads to continuous disappointment and explains why people are less happy than they were in the 70s, says Hayward.

"Once people get beyond the point of poverty, their happiness doesn't increase in line with growing wealth," he points out.

However, most governments encourage the short-term agenda. They measure their success in terms of gross domestic product (GDP) and in countries such as the US, shopping accounts for 78% of GDP. The most explicit manifestation of this agenda was President Bush's exhortation to US consumers after September 11 to "Go shopping for America!"

The challenge for marketing is to stimulate desire for new sources of consumption that satisfy people's often unarticulated real needs, rather than what they think they want.

So rather than coercing them to spend more by providing 'designer credit cards', for instance, it would serve banks better in the long-run to find a way of making pensions sexy.

"Consumers in all the markets we researched were worried that they aren't saving enough for their pensions," says Hayward. "Proliferating choice, information and disinformation on pensions means consumers need personal help to make sense of it. There's a clear market gap."

He concedes that many consumers are still poor and needs-driven. "There are still plenty of people who deem a large Coke and ice the height of sophistication," he says. And the biggest consumer markets are at different stages of development.

Nevertheless, needs and desires within markets are becoming divergent.

Even in China, where the average consumer spends $454 (£267.90) a year, compared with an average spend per head of $25,450 (£15,017) in the US, there's already a dawning sense of post-materialism. A Chinese executive quoted by The Henley Centre says: "Houses, cars and other toys don't bring spiritual contentment. When Deng Xiaoping told us to go make money, we never expected it wouldn't be all we needed."

Hayward says: "Businesses should be looking at what we might call 'the thinking classes' as a segment - albeit a growing and extremely valuable one," says Hayward. "What seems clear is that desire, rather than need, will increasingly drive value."

One of the most obvious casualties of this trend could be globalisation.

Contrary to received wisdom a few years ago, consumers are becoming less, rather than more, homogeneous.

The arrogance of companies (McDonald's, for example) that have tried to impose their own values on local markets has backfired, as consumers demonstrate their growing desire to connect at a local level.

Coca-Cola's much-vaunted 'think global, act local' strategy attempts to reconcile the twin imperatives of reaping economies of scale and being personally relevant. As UK president Tom Long puts it: "The brand has to address what matters to me personally: my hopes, my aspirations, my personal daily encounters."

NatWest's recent decision to offer customers 24-hour phone access to their local branch satisfies many of its customers' desires - local connection, authenticity, time, quality of information and a sense of wellbeing. By contrast, HSBC's new call centre in India may save it money, but offers no additional benefits for customers.

Hayward predicts that the trend toward 'localisation' will continue.

"We've already got bobbies back on the beat and it can only be a matter of time before the NHS reverses its drive for scale and efficiency by taking health back into the community with more cottage hospitals and so on. Those businesses and organisations that tap into this desire for authenticity will steal a march."

In addition to better information, more time and greater wellbeing, consumers also want more space, says Hayward. As people concentrate in urban areas, often living in smaller homes, space is at a premium. They have less room in their cupboards for large packs and are looking to rent garages or lock-ups for extra storage.

"When you consider that people are prepared to pay about 35 times the price of a standard ticket just to get more space on an aircraft, you start to see the potential in selling space in different areas," he says.

Equally, people will be more willing to buy space to escape to, such as land or second homes in rural areas, he predicts. And the allure of brands such as Center Parcs, with its promise of sylvan idyll, will increase.

Hayward believes marketers need to rethink what they are in business to do. "The basic transaction model is becoming outmoded," he claims.

"For example, a restaurant isn't in the business of feeding people, but of giving people a nice time, offering them relaxation in pleasant surroundings and creating an environment in which they can seduce their partner. The human need is becoming divorced from what we are actually buying."

The response of UK marketing directors to the Henley Centre conclusions is interested pragmatism. "I think society has been gradually polarising between the haves and the have-nots for a while now, and you have to cater for a range of needs," says Andrew Gillespie, marketing director for personal financial services at Barclays. "That means providing flashy credit cards at one end of the spectrum and help on dealing with debt at the other. The trick for marketing is to anticipate the turning points in people's lives when they recalibrate what's important."

Yet, he points out, most companies fail to do the basics well, and for this reason Barclays won't be extending its brand into other service areas, at least for the time being. "Consumers' perceptions of a bank are overwhelmingly defined by the physical relationship they have with it. And the more time-pressured they become, the readier they are to reject brands that make their lives more difficult."

Centrica marketing director Simon Waugh agrees. "At British Gas we're in the business of meeting people's basic needs," he says. "But if there's a problem with the gas supply that we don't resolve properly, or we keep sending out the wrong bills, the sense of disappointment and frustration can be a lot more acute than getting a bad pint of Guinness."

Colin Green, marketing director at Land Rover UK, says transcending the functional and utilitarian aspects of products to create desire lies at the very heart of branding. Thus, for the past two years Land Rover has put more effort into creating The Land Rover Experience, which positions the car at the centre of a particular leisure lifestyle.

But Tim Mason, marketing director of Tesco, is mindful of the sector of society that's still more concerned with needs than desires: "There are still lots of people, even in the UK, who can't afford decent food, so we can't get too bamboozled by all this."


"Being well used to be about not being ill," says Martin Hayward, chairman of The Henley Centre. "These days, people may be fit, look fantastic, but don't feel as great as they think they should. This has led to growing numbers of healthy people popping pills and vitamins or going for counselling."

Consumers' increasing preoccupation with their own wellbeing offers enormous potential to marketers - if they can understand different consumer groups' attitudes toward health. The way people think about their bodies provides a clue, says Hayward. For example, Americans think of their bodies as temples; the British think of their bodies as cars or factories, and the French and Germans think of their bodies as trees that should be fed and nurtured.

"The more prevalent the notion of body as 'car/factory', the greater the appeal of 'quick fixes' such as prescribed drugs or over-the-counter medicines," he says.

In the US, a drug called Paxil is designed to treat a newly diagnosed condition called Generalised Anxiety Disorder, the symptoms of which are worry, anxiety and tension. "But isn't that just life?" asks Hayward.

"Sufferers would arguably feel much better by simply going for a run, but there are huge opportunities for marketers to provide these kinds of alternatives."


Consumers are becoming more prepared to buy time, as evidenced by growing numbers of employees trading salary for more flexible working and the rise of convenience foods and home shopping.

One largely untapped area for marketers is domestic chores - from housework and ironing to gardening and car cleaning. Much of this work is done - often not terribly well - by unqualified people on the black economy.

Many consumers would be prepared to pay more for such services if they were provided in a more professional manner.

Linked with the desire for more time is the desire for better, more relevant information. "When was the last time you bought something from someone who knew more about it than you?" asks Martin Hayward, chairman of The Henley Centre. "The drive toward homogeneity has resulted in a gradual de-skilling.

Rather than chucking more choice and information at consumers, the savvy company is the one that rationalises its brand portfolio to make it easier for us to understand and provides high-quality guidance to help us make decisions. In some markets - mobile phones, for instance - you could argue that the operators practise deliberate confusion marketing."

Independent financial advisers should arguably have done better, he says, whereas a company such as John Lewis is trusted by its customers to provide impartial advice on any purchase they make.


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