So what are Brits doing with their smartphones?  Mobile web browsing was the fastest growing activity, with 10.4 million using that function in the third quarter, up from 8.8 million in the second quarter.  Downloading applications was the second fastest growing activity, with 1 million new users in the third quarter to 4.1 million.

“Although there have been sizable increases in the take-up of new mobile technologies such as video and location-based services, they remain niche forms of behavior,” said Edward Kershaw, Vice President of Mobile Media at Nielsen.  “The era of the handset as a truly multi-media device on a mass-market level lies somewhere on the horizon, and the key for companies to successfully harness mobile lies in a realistic understanding of what activities people on a large-scale are actually doing with their handsets now.”

Perhaps as a sign of the times, the second and third fastest growing sectors were food and cooking, which saw a 56 percent increase in unique UK visitors, and coupons and rewards, up 55 percent.  Promotions offering discounts on holidays boosted traffic to Ribena’s site, from 12,000 unique UK visitors in July 2008 to almost 950,000 in July 2009.  Coupons and rewards web sites saw 10.9 million visitors in July 2009, up from 7 million a year ago.  The ability to earn reward points or getting discount vouchers towards purchases drove traffic to sites such as Nectar and MyVoucherCodes.co.uk.

“Although saving money is a major theme across the fastest growing online sectors, the variety of sectors – from mobile phones to food and cooking, from automotive and health to technology and parenting – shows the diminishing areas of daily life that aren’t being significantly enhanced or touched by the Internet.  Strong growth online isn’t just about social media,” said Alex Burmaster, Communications Director at Nielsen’s Online Division in the UK.

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“The poor weather resulted in shoppers making fewer shopping trips this year.  But with grocers increasing promotional activity, with 33 percent of sales this month being on promotion, we expect monthly growth going forward to be in the 4 to 5 percent range as food inflation continues to slow,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

Of the top 9 grocers, Waitrose continued to perform well with double digit growth of 10.5 percent for the quarter and more than 11 percent in the last four weeks.  Asda, Sainsbury’s and Morrisons continue to grow at the expense of smaller retailers, while Tesco has launched a new customer loyalty scheme to intensify the battle for shoppers.

“With shopper promiscuity increasing and loyalty levels falling over the longer term, the added benefits of Tesco’s Club Card 2 may do the trick in keeping Tesco customers loyal to the shop and ultimately spending more of their money there,” said Watkins.

“Shoppers continue to respond to offers, with another all-time high for promotional spend at 33 percent of fast moving consumer goods spend in the last four weeks.  As a result, all retailers are attracting new shoppers, but their loyalty and commitment are likely to be lower,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

Sainsbury shoppers increased the frequency of their visits by 6 percent in the last four weeks, while ASDA showed strong growth in grocery and general merchandise. 

“The recent wet weather, combined with the start of the school holiday could make the level of improvement short-lived.  However, last year was a washout both in terms of weather and sales, so we are still likely to see good year-on-year improvements from food retailers over the rest of the summer,” said Watkins.

“Waitrose has gained strong momentum going into the summer, which is the time of year that brings incremental sales of fresh foods.  With new stores opening and a major media campaign in early June to support the launch of the retailer’s new private label offerings, the outlook, based on recent performance, is positive,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

“With a record of 32 percent of all sales being goods on offer in the four weeks to May 2009, retailers recognize that they need to show good value for money as a fundamental shift in consumer behavior has taken place over the past few months.  At face value, this will be good news for Asda, Tesco and the other discounters, but it is also an opportunity for all other retailers to get a bigger share of wallet of the recession-struck shopper,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

% Share of Grocery market Spend, 12 Weeks Ending May 16, 2009

Sales over Easter week benefited the out-of-town megastores, which rung up sales 22 percent over the same period last year.

“Over 20 percent growth is a welcome boost for retailers.  The better weather and later Easter drove shoppers out and got them spending not only on grocery, but also confectionary, snacks and alcohol,” said Mike Watkins, senior manager, retailer services at Nielsen.

Sainsbury benefited from strong in-store offers and prices cuts, drawing new shoppers and once again increasing its share to just under 15 percent.

Percent share of grocery market spend by retailer

Read the full press release here.

According to a new report from Nielsen UK, total UK ad spending for banks declined about 10 percent in 2008 to £1.4 billion from 2007.  But brand-building campaigns accounted for more than £138 million – a 6.2 percent increase from the year before – and that spending is expected increase this year as banks recognize the importance of investing in their brand during a downturn.

To help them do that, some banks have turned to NeuroFocus, the global leader in neuromarketing in which Nielsen is a strategic investor, to help test messaging and other concepts to ensure that their advertising is on the mark.

Key findings of the NeuroFocus study:

• Empathy is most important: Consumers want to hear that banks understand their pain. Claims of “sacrifices” and applying “hard work” did not resonate as well.
• Age trumps beauty: Marketing materials featuring older people resonated better than young people.
• Use images that evoke stability: Photos and other images that showcase families, solid structures, “clarity in chaos,” and light in darkness scored best in consumers’ subconscious.
• Blogs work: Blog postings – even those written by parties with a vested interest in the subject – were deemed to be the most effective form of written advocacy among consumers.

“The strongest message consumers want to hear from banks is how much their bank empathizes with their pain.  These are neurological insights that banks cannot afford to ignore right now,” said A.K. Pradeep, CEO of NeuroFocus.

The full study is available from NeuroFocus here.