BBDO navigates a path through the downturn

Singapore – The economic tsunami may be enveloping Singapore but big opportunities for marketers remain in the island-state. Consumers may be trading down in some categories but they are spending more in others, with unique recession-specific consumption habits and attitudes emerging, according to new local research conducted by BBDO/Proximity.

The study on Singapore consumers, titled ‘Trading Up Trading Down’, was unveiled last night to BBDO\Proximity clients such as SingTel, Aviva, Mercedes, Citibank, Fonterra and NETS at a special event, and is part of global research that the agency is conducting. The Singapore-focused study is the first to be completed in Asia Pacific but will be extended into other markets across the region.

Andy Wilson, head of planning at BBDO Singapore and chairman of the network's Asia Planning Council, said: “Taking the view that the impact of the recession runs far deeper than consumer confidence, ‘Trading Up Trading Down’ enables BBDO/Proximity and their clients to understand how the recession has changed the way Singaporeans consider, buy and consume brands, how it has created a new set of consumer needs, and how brands can respond to meet those opportunities, and thrive in these challenging times.”

The research has unearthed some interesting insights about Singapore consumers, breaking down their recession-era spending habits and attitudes by category, age, gender and race. The agency surveyed local consumers and business owners over several months.

At the event Wilson said for the past few months consumers have undergone a seismic trauma with the “tsunami of bad news” which has “taken its toll”.

“It’s about not convincing you [marketers] to spend more,” he said.

“For every consumption habit that’s going down, another counter habit is going up. Consumer attitudes are changing.”

Some of the examples from ‘Trading Up Trading Down’ show that in Singapore while cooking magazine subscriptions are up, fashion magazine sales are down, alcohol sales are down but business media sales are up, taxi rides are down but spending on home entertainment is up, text messaging is up but eating away from the home is down, and so on.

“For every spending category that suffers, there’s a spending category that prospers,” Wilson said.

According to the study, Singaporeans aged 15-24 years old are the most resilient consumers and Singaporean Chinese are the most resilient ethnic group. Among the genders, women are cocooning and retreating – spending more on things like household items and pets – while men are posturing to look strong and resilient – cutting back on household items but spending more on other things.

The study also found that the downturn has caused consumers to move into a siege mentality with a low-trust behaviour of brands; new unmet needs for Singaporean consumers have been created. Brands must play up their familiarity and hertiage, aim to surprise and delight, as well as utilise more world of mouth and make consumption at home easier.

BBDO/Proximity is holding more of these events for its clients as well as one-day individual workshops. For more on ‘Trading Up Trading Down’, see the April issue of Marketing Singapore.