Trend-setting 'recessionistas' in search for quality without labels
Modern-day seers say the downturn has changed consumers and business will have to follow to survive
'PREDICTION is very difficult, especially about the future," quipped Nobel prize winner Niels Bohr but even the Danish nuclear physicist admitted that it makes sense to try to figure out what is going to happen next in our lives.
One prediction that seems fairly safe is that few of us are likely to look back too fondly on 2009, except for personal reasons; but has the worst recession in modern times changed Ireland permanently and if so, how?
There isn't a great amount of agreement on this topic among the select group of modern-day seers whose job it is to predict trends but they see a few common threads and warn that consumers have changed and business will have to follow them if it is to survive and prosper.
"There's been a tectonic shift in consumers' attitude to price and price sensitivity," says Gerard O'Neill, the chairman and founder of Dublin-based market research company Amarach. "We've been tracking it for a few years and we've changed here. We're not going back (to the old ways)."
This price sensitivity means Irish consumers are using the internet more for price comparisons and are engaging in what Mr O'Neill terms hybrid retailing, which involves buying cheap goods from overseas and then using local labour to fit them.
Market research
Mintel, one of the world's biggest market research companies, says the recession has had a much deeper impact in the Republic of Ireland than in the North and that consequent changes in consumer behaviour are likely to be more widespread and longer lasting south of the border.
"While in 2009, fear played an important role in shaping consumer behaviour, 2010 will see a return of confidence and adaptation to overcome the restraints previously imposed on consumers," says Richard Cope who is director of foresight at Mintel, one of the world's biggest market research companies.
"Balance has become the new mantra. As consumers find they are able to spend again, we'll see balanced spending and balanced consumption as key characteristics of next year."
A theme that seems to emerge again and again in predictions for Ireland and further overseas is that consumers are engaged in a more intense search for authenticity because people here and elsewhere have become disillusioned with once rock-solid brand names.
Revelations that the banks and the Catholic Church have been playing fast and loose with the rules, means that far fewer consumers are inclined to trust business. If you can't believe your bishop to protect your children or your bank manager to protect your money, why should believe anybody else?
Society of doubters
"We've become a society of doubters, sceptical of nutrition claims, the motives of "green" companies, and the competitiveness of bank rates," says Mintel's Mr Cope.
"A company's need for accountability is nothing new, but the quantity of information available today adds to the challenge." Mintel predicts that in 2010, brands will need to pull out all the stops to gain consumers' trust.
Mintel says 2010 will see consumers demanding proof and results for companies' claims. "People are tracking more areas of their lives through online forums, comparison sites and micro-blogging sites, so transparency is no longer a differentiator for brands; it is a requirement."
US academics Paul Flatters and Michael Willmott, in a July article in the 'Harvard Business Review' which looks at consumer trends after eight other recessions, see something similar happening.
The two authors paint a picture of chastened consumers who will seek simplicity in products and services; pursue "discretionary" thrift (virtuous but not essential cost cutting); flit capriciously from brand to brand; make green consumption more a matter of reducing waste than purchasing premium products; and steer away from frivolous, extreme leisure experiences in favour of wholesome, authentic ones.
"Like their great-grandparents, who grew up in the Great Depression, young consumers today will be permanently changed by coming of age during a profound economic downturn," they argue.
Tom Walsh, a partner at Hay Management's office in Dublin which focuses on executive pay, says one clear trend will see employers trying to offer high-flying employees interesting work instead of pay rises. "It's a challenge. How do you keep your high-fliers? We're seeing a lot of focus on this," he says.
Mr Walsh believes it is too early to say whether average pay will rise next year. "Some of our clients have implemented pay freezes or zero percent movement and some haven't," he notes.
Another trend Mr Walsh sees accelerating next year is take-overs of Irish firms by Japanese and Chinese companies. "We're going to see growth in mergers and acquisition activity from the Far East," he predicts.
The seemingly inexorable rise of the Asian Tigers is a theme picked up by Enterprise Ireland's Gerry Murphy who believes one of the key business trends for large companies will be expansion beyond the English-speaking countries traditionally favoured by Irish exporters.
Eurozone attractions
Mr Murphy, who oversees Enterprise Ireland's network of branches overseas, says 2010 will be the year that Irish companies wake up to the attractions of the eurozone.
"Our foot print in Asia is remarkably weak," says Mr Murphy. "We've chased the low-lying fruit that was culturally easy for us." Companies will be chasing work in 2010 like never before, he says. "We've seen a surge in companies getting out and hustling a bit."
An expert paid to think about the future is Emma Fric, a French woman who visited Dublin and Cork recently to discuss consumer and fashion trends over the next five years. In a world of the 'X Factor', Ms Fric believes counter intuitively that consumers will show an increasing desire to reconnect with culture.
She also believes customers will become bolder and most challenging, looking for quality without labels -- what she calls a recessionista.
These "emancipated" customers will look for in-season food or "mechanotec" goods where transparent coverings and casings allow them to see the inside of products such as watches and mobile phones.
A trend she points to is the increase in spirituality and humanity among consumers.
While this is currently a niche segment, Ms Fric believes the trend will grow over the period with consumers balking at ostentation and preferring to celebrate the simple, the everyday, that which preserves culture and the environment. The resulting fashions will celebrate raw materials such as sand and rock, she adds.
One positive trend Dublin-based Amarach's Gerard O'Neill doesn't see changing next year is our happiness levels. Amarach measures happiness every month, asking people whether they felt very happy the previous day.
The most recent polls show an amazing 55pc of those asked felt happy yesterday -- the same figure Amarach was registering back at the height of the boom.
"There's a lot of private contentment and publish anguish out there," he notes. Another trend that is unlikely to abate for quite some time.
Irish Independent
