The Global Consumer Confidence Survey, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 online consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. Consumer confidence fell globally from 89 to 88, down for the seventh consecutive quarter. “We’ve been on a roller-coaster ride, with a lot of ups and downs and screaming along the way and the ride is not over yet,” said Carman Allison, director of consumer insights, Nielsen. “We’re about to hit another turn.”

Employment is Up – But So is Pessimism
A key component of national confidence is how Canadians perceive the job market. Fifty four percent rated job prospects as good or excellent, better than the global average (43%), but down from 58 percent in Q2 of 2011. Canadians also continue to grow more negative about how they view their personal finances. Globally, 51 percent of respondents felt good or excellent about the state of their finances over the next 12 months. That’s up one percent from the Q2 survey. Yet Canada trends in the opposite direction, with 54 percent of Canadian respondents rating their finances as good or excellent, down from 61 percent just three months earlier. “Canadians may be feeling more optimistic than the global average, amidst some positive economic trends in this country over the past year. Yet a combination of recent factors, such as rising prices of goods, stock market turbulence and bad economic news from the U.S. and Europe, are affecting consumer confidence,” noted Allison.

Discretionary Spending Flat
When asked what they are doing with spare cash, 37 percent of Canadians said they direct spare cash to paying off debts and another 30 percent pour it into savings. “Households are showing increasing fiscal responsibility. Spending is also hampered by this new reality; almost one-quarter of consumers (23%) report that no spending money remains after they’ve paid for the essentials,” Allison said.

• For more insights, download Consumer Confidence: A Canadian Perspective – Q3 2011

With inflation and the cost of food, fuel and other basic necessities taking a bigger share of Vietnamese consumers’ wallets, it might not seem to be the best time for the country’s banks to think about expanding. But despite the fairly cloudy economic environment, Vietnamese continue to try to save money, whether for their own security, their children’s education or for the future, according to the new edition of the Nielsen Vietnam Personal Finance Monitor. With the number of Vietnamese consumers using banks is still relatively low, banks have ample opportunitiy for growth – provided they communicate with consumers in ways that resonate with them given the current mood.

Consumers are aware of the basic services offered by banks such as transactional and savings accounts, ATM/debit cards and loan services, but the number of people actually using them is limited. Just 32 percent said they maintain a transactional account and 31 percent use an ATM/debit card. Only 12 percent use banks for deposit accounts.

When it comes to other services, consumer awareness and usage drop significantly. For example, fewer than half (42%) are aware of credit card services, and they are used by just one percent of Vietnamese consumers. If the experiences of other countries in the region serve as an example, however, it’s just a matter of time before credit cards take off. In Indonesia, which has seen rapid economic growth like Vietnam has, credit card usage stands at five percent. In Hong Kong, 60 percent of consumers currently use one or more credit cards. Plastic has only been popular in Indonesia for the past 10 years, but the number of cards has been increasing at an average rate of 10 percent, while the value of transactions charged has gone up 28 percent each year. The grocery channel is the top place Indonesians swipe their cards, which are used primarily for routine household and personal expenses.

But banks in Vietnam are going to have to do some work to increase awareness and use of credit cards: over half the market does not fully understand what a card is and for those who do, there are some significant barriers to entry. More than one-third (36%) said they don’t see a need for one, while 19 percent were not knowledgeable about how they work. Another 18 percent thought that credit cards were complicated and inconvenient to use.

According to Nielsen research, consumers said they started using their banks because they featured “simple and quick procedures,” their prestige or the interest rates they offered. On the other side of the coin, they also identified several barriers that prevented them from using banks, saying that bank procedures were “lengthy” or that the financial/income information required was onerous.

Effective marketing and advertising can help overcome these perceptions. Currently, banks’ ad campaigns seem limited to building brand awareness, but beyond achieving that one goal, efficacy is limited in terms of differentiating brands. Those banks that focus on telling consumers how they are different from others, or dispel some of the myths about doing business with them will likely break through.

Another area of growth potential is the rural market. More than two-thirds (70%) of Vietnamese live outside of major cities, and while the income levels are currently well below those of urban denizens, the growth levels are actually very similar.

With three-quarters of rural families claiming to save every month and just eight percent using any sort of financial product (primarily savings accounts or insurance), the market is ripe for banks to expand their presence in these areas. Presently, there are only two major banks making a serious play in this sector.

These are unsettled times in Vietnam, but banks that create an easy customer experience and let consumers know they understand their concerns will be well positioned for continued growth now and even more so once uncertainty subsides.

With its political stability, economic development and improved income distribution, Brazil stands out among world economies – even among the other “BRIC” countries. It possesses an adequate energy supply, abundant raw materials and an absence of ethnic or territorial conflicts. So it should be no surprise that the retail sector posted solid growth of 5.7 percent in volume and 5.5 percent in value in 2010. But what might surprise some observers is that much of that growth is being driven by consumers in the lower socioeconomic levels (SELs).

Consumers from lower and middle SELs shop more frequently than others and contributed 65 percent of the total increase in Brazilian consumption. These groups – which combined make up about 59 percent of all consumers – are now playing an important role in the future of the economy.

These same consumers now have access to categories with greater added value and to brands with price positioning above the market average, all of which have become part of their shopping baskets. This has influenced the growth of several categories, through the different drivers mapped in 2010.

Brazilians are also more open to trying new products and different categories, thereby prompting new product uses and changing consumers’ habits.

To meet the demands of these consumers, manufacturers of fast moving consumer goods (FMCGs) stepped up their games in terms of product variety and innovation. Nielsen found that those factors, along with offering price and assertive distribution, formed the pillars of solid growth in 2010. The top 40 FMCG manufacturers have grown by 7.4 percent, with the top 10 contributing additional revenues of R$ 9.4 billion.

This growth has been achieved by understanding the dynamics of consumption, by taking strong action on growth drivers, and by focusing on innovation, launches and precision in execution. Manufacturers have become more assertive in their decisions and offer more affordable products to the low and middle classes. As Brazil’s economy continues to grow, we expect these trends to continue for the foreseeable future.

After an inconsistent 2010, consumers, retailers and consumer-packaged goods manufacturers are undoubtedly hoping for renewed growth and a return to normalcy in 2011. But what does “normal” really mean these days? At the start of the year, there remain some conflicting signs about what might happen in the next 12 months. Globally, consumer confidence stalled after three quarters of growth. In Canada, consumer confidence remains fairly high and well above that of Americans. What’s more, Canadians are more optimistic than American consumers: 57 percent say that their personal finances will be good or excellent compared to just 44 percent of Americans. Despite the assurances from economists that the recession is over, 58 percent of Canadians believe the country is still in a recession, with 19 percent believing that the nation will emerge from the recession in the next 12 months (contrast this with Americans, the vast majority of whom (86%) believe that the U.S. is still in recession and 19 percent believing the recession will end in 2011).

While Canadians may be more confident than Americans, they are using their spare cash the same way: to pay off debt. Health remains their top concern, followed by debt and the economy. To cut household expenses, they spent less on clothes, scaled back out-of-home entertainment and dining, and spent less on consumer packaged goods. In the year ahead, 30 percent of survey respondents said they would continue to spend less on those goods, presenting an ongoing challenge to retailers and consumer packaged goods (CPG) manufacturers to attracter greater market share.

Where CPG is Headed in 2011
The big winner in the current market environment is the consumer. CPG prices have started to deflate for the 3rd consecutive quarter.

While regular prices have continued to rise, feature pricing or promotions have caused prices to drop, a nod to consumers looking to get value for money. In the third quarter of 2010, $90 million stayed in consumers’ wallets due to feature pricing, and over the past three years, the percent of retail sales with a price cut increased and was up to one-third of sales or 48 percent of units.

While pricing is critical, consumers look at a number of factors when choosing where to shop. They want stores that are well-stocked with high-quality and fresh goods, are convenient and offer a pleasant overall experience. Competitive prices are considered a given. The need for promotions will continue, but price discounting needs to be aggressively managed to sustain dollar volume growth. As seen in the U.S., lower prices do not necessarily equal increased sales. Rising commodity prices will result in increased prices for many goods, but manufacturers and retailers who overlook consumers’ unprecedented power and choice will be making a significant error.

Engaging the Canadian Consumer
What’s good for the consumer is not necessarily good for the retailer or CPG manufacturer. One critical element for creating a win-win situation is finding new ways to connect with the consumer and leverage technology, particularly mobile phones and social media.

Smartphone ownership in Canada stood at 18 percent in April 2010. But with 29 percent of survey respondents indicating that they plan on buying a smartphone (in the next twelve months), almost half of the population will have the devices in the near term. Already consumers are using smartphones as part of their shopping routine: mobile coupons are increasingly popular and offer the deals consumers are looking for without the hassle of clipping a paper coupon. Smartphone loyalty cards eliminate the need to carry a plastic membership card and help consumers track their spending. Other apps enable shoppers to plan their grocery lists, view nutritional information or schedule delivery. But don’t expect smartphones to replace credit or cards just yet: just 15 percent of Canadians said they would be willing to use their phones to make payments while 61 percent said they would not (although amongst younger consumers, about a quarter said that they would be willing to do so).

Social media is another way consumers have increased their power. Advertising and marketing were traditionally one-way, from advertiser to consumer. Social media has turned the relationship between retailers, brands and consumers on its head: consumers now interact – with brands and, more importantly – with each other. If they have something to say about a product or service, there’s a ready-made audience listening: 27 percent of Canadians surveyed said they are more likely to share a negative product experience online. Friends and family dominate the “trust zone” when it comes to recommendations about a purchase decision, but 40 percent of consumers place trust in online product reviews.

Some businesses have been slow to adapt to this new medium. But before dismissing social media as a fad, consider the facts: it took radio almost 40 years to reach 50 million users, while TV took 13 years. The Internet had 50 million users in just four years, and Facebook alone had 200 million users in less than a year! With more than 500 million members, Facebook would be the world’s third largest country.

Canadians have embraced social media with gusto: 60 percent said they visit social media sites, and more than a quarter (26%) spends six or more hours a week at such sites. Social media now cuts across all age groups, and females are more likely to be engaged with such sites – key to the CPG industry as moms are the key decision-maker when it comes to buying goods for the household.

Retailers and CPG manufacturers should view social media as a store front through which to draw consumers. Offer consumers opportunities to save money or free apps that help them shop. Features such as these tend to prompt them to provide personal information. Consumers want to be involved, and companies need to find a way to engage with them in a meaningful, whether it is responding to consumer complaints or offering promotions.

To take advantage of these trends, companies need to change their media mix. No longer is it sufficient to just produce a TV commercial or newspaper ad. In less than five years, social media has taken a place at the marketing table – and has, by many measures, become one of the most efficient ways of reaching consumers. Consider the experience of a well-known food manufacturer: five years ago, marketing was focused on TV and print. Today, advertising is supplemented with a web site, offering recipes and other information, a YouTube channel, recipe emails and Facebook pages which allow consumers to leave comments about the company’s products and where the company will respond when appropriate. They have also connected consumers with a charitable cause, attracting tens of thousands of friends. They have a mobile site, easily accessible on smartphones, as well as an app. Today, social media is 50% of this company’s marketing emphasis.

The Takeaway
The economic outlook remains uncertain, and Canadians remain somewhat skittish about spending their money. But retailers and CPG manufacturers that manage pricing, keep innovating and acknowledge the power of social media are well-positioned to succeed. Here’s how they can connect with the consumer:

Maintain sustainable pricing strategies for growth

• Need for promotions will continue in the short term, but aggressive prices means lower dollar sales growth
• We are at the tipping point of where lower promoted prices are not generating incremental dollar growth

Social Media is not a fad

• Mobile technology is the game changer
• Converse with – not at – consumers and simplify their lives
• Connect with consumers’ culture

Evolve marketing plans

• Balance between traditional and new media
• Commit and be in it for the long term
• Be creative and test concepts

While there’s no magic bullet, the key for CPG companies and retailers is acknowledging the unprecedented power of consumers and maintain the flexibility to evolve with market conditions. Opening a dialogue with shoppers and engaging them is an important first step in attracting and retaining them, and social media is a critical component of that strategy.

Findings from a 2010 Nielsen global online survey of more than 27,000 respondents across 53 countries show that the private label phenomenon is here to stay. In fact, while more than half of online consumers surveyed said they purchased more private label brands during the economic downturn, fully 91 percent said they will continue to do so when the economy improves.

Global Progress is Continual
On a global scale, the impact of the economic environment on private label has played a more marginal role. Looking at a comparison across markets, there is a slow, but steady continuation of private label progress, which is actually the result of more retailers deploying private label products in a growing number of categories, a phenomenon that’s continued for more than two decades.

The victims of this transformation are the small and medium brands that get de-listed in favor of private label. Generally, the leading brands in the category are not suffering and private label isn’t fatal for healthy brand leaders. Consider this: In Europe where private label is most developed, store brands still only capture an average 35 percent market share. In the U.S., private label’s market share is still under 20 percent.

As retailers continue to become more adept at using national advertising to build store brands, growth will surely continue. The advertising of retailer banners has grown over time and this has a positive impact on the brands that these retailers carry. The evolution of private label products has also resulted in these brands operating above the lowest price band. Increased store visibility through facings and a proliferation of SKUs has resulted in greater familiarity and awareness of these brands among shoppers.

National manufacturers will realize that the best way to guard their brands’ turf will be to treat private label as legitimate competition and reactionary price reduction measures will only provide a temporary reprieve. Clearly, national brands still command a greater proportion of their categories at an overall level and private label usually takes the place of ‘challenger’ to a vibrant and dynamic market for shoppers.

Private label brands are in a position to compete on value and quality—key attributes that today’s consumers seek. The opportunity for retailers is to use private label to differentiate themselves and lead the way with innovation to help build and sustain the image of the entire franchise.

• For more detailed country-by-country review, download the complete report: The Rise of the Value-Conscious Shopper – A Nielsen Global Private Label Report

“Consumers adjusted their behavior during the recession, and we see that trend playing out with the Super Bowl,” said James Russo, vice president, Global Consumer Insights at Nielsen. “Still very concerned about jobs and rising gas prices, consumers remain pragmatic with their spending. They are reducing their spending on entertainment and take-out, spending less on clothes and cutting back on expenses where they can, especially in mid to lower income households. That said consumers overall are cautiously optimistic so we don’t expect to see consumers cutting back as dramatically as they did last year.”

Nielsen’s survey of more than 60,000 U.S. households shows that 85 percent of Super Bowl viewers plan to spend the same amount or less on food and beverages for the Super Bowl this year, while only five percent plan to spend more.

The Most Popular Holiday for Beer Sales?  Not the Super Bowl.
While beer and football may seem like a perfect combination, the Super Bowl is not the most popular beer holiday in the U.S. Nielsen’s research shows that the Super Bowl ranks relatively low among holiday beer sales, after Labor Day, Memorial Day and the Fourth of July.

Snacks, Get Your Snacks
Super Bowl viewers stock their at-home parties with snacks, nearly 177 million pounds of snacks. The potato chip is the Super Bowl king of snacks, with nearly 46 million pounds sold.

“At-home Super Bowl viewing is an opportunity for grocery stores, mass merchandisers and other retailers selling food and beverage items,” said Russo. “The consumer is in control, now more than ever, and how food and beverage retailers demonstrate value and innovation to capture consumer spending, for big at-home viewing events like the Super Bowl or the Oscars is critical.”

Chinese consumers are notorious savers. They consistently show a high saving rate — the highest in the Asia Pacific region and substantially higher than developed economies like those of the United States and the United Kingdom. And while economic theory based on forward looking models suggest that countries experiencing strong GDP growth should see a drop in savings rate, China’s savings rate has continued to remain high despite its remarkable GDP growth.

A popular explanation is that China’s legendary savings habit is influenced by the Confucian values of thrift and frugality. But does this theory apply in the present day?
While the notion of not going into debt is a strong traditional sentiment in China and many East Asian countries, Nielsen’s research shows that aversion to debt is slowly changing. As incomes grow and attractive loan schemes and investment opportunities present themselves, Chinese are keen to avail themselves of them, proof that the cultural factors may not be telling the full story.

Nielsen takes a deeper look into the strength of the frugality hypothesis by exploring non-cultural factors that may have a role in explaining China’s high savings rate.

So Why Do Chinese Save So Much?
Nielsen’s research reveals that three key factors play a stronger role in explaining the savings rate than the frugality theory:

1. Young Demographics
   Since the late 1980’s, China’s demographics have favored the younger working group, defined by economists as Prime Savers (20-49 years). Typically this group displays a higher propensity to save as it has to finance a variety of life-stage needs.
2. Big Expenses
   A comparative cost index analysis between first jobbers in China and the United States was conducted to get a deeper look at their saving needs and how they are likely to fund these expenses. Taking into account expenses such as weddings, the purchase of a house, children’s education and the purchase of durables, the research shows that Chinese consumers need to save a greater portion of their salary to fund these expenses than their U.S. counterparts.
3. Medical and Post-Retirement Costs
   China’s social security funds are much lower than those in developed economies, representing just 2% of the country’s total household wealth compared to the U.S. level of 20%. Precautionary savings to cover medical and post-retirement expenses remain an important factor in explaining China’s high savings rate.

   

Read Nielsen’s full report:  Saving a Top Priority for Chinese…But Why?

As we manage through one of the most challenging U.S. economic downturns, American consumers have made significant shifts in what they buy and watch.  From planning their shopping trips to focusing on value to trading down to going out less and staying in more, consumers have pressed the reset button and fundamentally changed their habits.

At the same time, consumer packaged goods (CPG) retailers and manufacturers have seized the moment to drive – - rather than ride — the recession wave through innovation.  How is this innovation impacting consumers today and impacting the evolving retail landscape of 2015?

Some of our Retail 2015 predictions:

1. Mass supercenters and e-commerce will be the big winners.
2. Low and high-end grocery stores will grow share.
3. Pet stores and dollar stores will grow.
4. Retail consolidation: the big will get bigger.
5. Smart phones will be the primary enabler of shopper engagements.
6. Store formats will evolve: new formats, smaller stores, pop-up retailing to accelerate.
7. Anywhere in-store check outs to replace self check-out and open floor space.
8. In-store kiosks, digital media and holograms to interact with shoppers.
9. Demise of traditional consumer age and gender targets as technology enables seamless view across languages and ethnic/generational groups with links to purchase and usage behavior
10. Evolving U.S. demographics have major impacts

Tune in as we review the innovations impacting the retail landscape today, discuss our retail predictions for the future and what retailers can do to prepare during the webinar, Retail Landscape 2015: An Update on Tuesday, October 26.  Join the conversation via Twitter at #Retail2015.

According to a June 2010 survey, people who use their mobile phone for web-based banking tend to be younger, male and more ethnically diverse than their online banking counterparts.

• 36 percent are between the ages of 25-34, while only 18 percent represent that same age group online
• Males represent 53 percent of this population versus 43 percent online
• 30 percent are Hispanic while this same user group represents only 11 percent of the online banking population

Those who use SMS texting for mobile banking – either from a smart phone or a standard feature phone – represent the largest group of mobile bankers. This is not surprising given the growing popularity of texting in general: As of July 2010, two out of three U.S. mobile subscribers used text messaging.

Mobile banking SMS users vary demographically from mobile web users. This group is slightly older than their mobile web banking counterparts, as 48 percent of these users are over the age of 35. With this simple easy-to-use feature, banks can provide customers the ability to track balances, set up alerts, and have much greater and immediate control of their finances.

According to David Gill, Senior Director of Mobile Marketing at The Nielsen Company, “People who are comfortable using their mobile phones for mobile banking tend to check their mobile bank site twice a week. These customers are already highly engaged and eager for real-time solutions based on their specific needs.”

Mobile banking offers something for every degree of technology adoption and comfort level, from sophisticated, mobile web-based banking services to the quick and simple, SMS texting based offerings that are driving mobile banking growth.

It was the rare household that didn’t change spending habits over the last 18 months. Faced with unemployment (or even the prospect of it), higher expenses and crushing debts, consumers around the globe used a number of tactics to stretch their money further to get the most bang for the buck.

The Nielsen Company conducted an online survey in March 2010 of more than 27,000 consumers in 55 markets from Asia Pacific, Europe, Latin America, North America and the Middle East/Africa (consisting of countries from Saudi Arabia, Pakistan, United Arab Emirates, Egypt and South Africa) to get a better sense of the steps being taken to save money in view of uncertain economic conditions.

What’s more, while recovery has taken hold in some regions (Asia Pacific and Latin America in particular), in other regions it has been tentative. Regardless, one thing remains clear: habits picked up during the recession are likely to survive even after economic recovery is in full-swing.

Value Strategies Help Savvy Consumers Save
In addition to a shift toward private label products, global online survey respondents saved money on household expenses in a number of ways, including:

• Buying items on sale (a 57% global average)
• Using coupons (40%)
• Shopping at value retailers (37%), such as supercenters and dollar stores
• Purchasing value packs (35%)
• Shopping close to home/work (25%)
• Stocking up (22%)
• Switching to cheaper health and beauty products (18%)
• Purchasing smaller packs with a lower unit price (17%)

One in 10 consumers in the online study reported no belt-tightening practices in their household.

North Americans led the world in cost-cutting strategies and adopted a host of budget-shrinking tactics. Seven in ten respondents said they bought items on sale, which is 13% more than the global average. Both Asia Pacific (46%) and North American (59%) consumers indicated they presented coupons at a checkout, outstripping the 40% global average.

In the U.S. in particular, manufacturer coupon redemption hit record highs in 2009 after years of no growth or declining growth. Meanwhile, Canadians continued to shift spending to discount or value retailers—now accounting for over one-third of total grocery sales—as their neighbors to the south have done so over the past several years.  Whether prompted by high gas prices or environmental sensitivity, North American respondents were also the most likely to say they shop in stores close to home or the office.

Value packs and stock-up shopping trips were a popular option across regions, with consumers in Middle East/Africa/Pakistan and Europeans lagging slightly behind the global benchmark. Middle East/Africa/Pakistan consumers also had the lowest incidence of using coupons (11%), shopping on promotion (42%), patronizing value retailers (21%) or stocking up to save (12%). The use of coupons as a promotion tool is not a popular marketing method in the region. Additionally, the dearth of established retailers in the Middle East and Pakistan explains the low incidence of patronage.

Roughly one-quarter of Latin (23%) and North Americans (24%) said they sacrificed beauty at the budget altar by switching to cheaper health and beauty products. Asia Pacific and Middle East/Africa/Pakistan respondents were less likely than average to say they made such a switch to save money (15%).

Cash is King; Dining In Trend Heats Up
Consumers found other ways to cope with the cash crunch as well. While 19% of the regions admitted to using credit cards more often, North America at 10% and Europe at 11% were well off that global average pace. Further supporting the belt-tightening approach, 31% of North Americans and 30% of Latin Americans said they recorded less credit card utilization versus the prior year, while only 20% of Europeans did, despite a precarious economic picture.

Foregoing credit was just one consumer coping mechanism. Based on survey findings, restaurants in some countries must be hungry for clients, as more than half of survey respondents said they ate out of the home less often than the year before. The dine-in trend was particularly strong in Latin America, North America, Europe and the Middle East.

Roughly one-fourth of residents of Indonesia, China, the Philippines, Hong Kong and India indicated that they were eating out more often than usual. Asia Pacific as a whole showed a 5% higher rate for eating out than the global average.

Dining out cutbacks appear to correlate with private label purchase patterns, with five of the top 10 “dining out less often” countries also landing on the top 10 “purchased more private label” list: Greece, Ireland, Spain, Turkey and Portugal—countries that continue to face significant economic challenges even as other parts of the world resume growth.

Note about online survey methodology
While online survey methodology allows for tremendous scale and global reach, it provides the perspectives on the habits of existing Internet users, not total populations. Where noted, the Nielsen Global Online Survey data is supplemented with consumption data by market.