2009 Industry Outlook from Nielsen - When times get tough, the tough go back-to-basics

http://en-us.nielsen.com/main/insights/consumer_insight/issue_13/2009_industry_outlook

By: Tom Pirovano, Director of Industry Insights, The Nielsen Company

 

CI SUMMARY: The economic crunch will drive tighter spending across the board. As consumers continue to make tough choices, they will spend less on products that don’t deliver a rational benefit. Expect continued decreases in the purchasing of premium products, organics and more-expensive sustainable goods. Increases will be found in the online, mobile and in-home entertainment sectors. 

When times get tough, the tough go back-to-basics. Expect a no-frills philosophy to kick into high gear in 2009, reflecting not just a consumer mindset, but one that is paramount to retailers and manufacturers alike, who are looking for growth in a downturn economy. From sustainable manufacturing techniques to innovative national brand offerings, the products and services likely to succeed in 2009 will be those that appeal to the sensible consumer looking for a rational benefit.

Based on industry trends, marketplace dynamics and the expert knowledge of Nielsen analysts, below is a preview into twenty of the trends—in no particular order—that are expected to shape the New Year.

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Cinema admissions will increase fueled by growing availability of 3D movies and theatres.
While many families are likely to keep a tight reign on their budgets in 2009, movie theatres might just be the exception. Why? Consumers appear to love 3D films. In fact, gross sales increased over 60% for films exhibited in 3D as compared to traditional film, and this increase is due to higher prices and higher attendance. With over a 1000 3D theatres already in the U.S. and with studios helping to fund the transition from 35MM to 3D, 2009 is looking particularly good. In fact, with as many as 11 major movie releases expected to hit the screens in 2009, including James Cameron’s 'Avatar', this is bound to have the cinemas seeing green.

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Ad spending will be tight.
Nielsen reported significant ad spending declines in the first half of 2008 by eight of the top 10 advertisers—down roughly 6% during the same period in 2007. As companies continue to downsize and scrutinize spending, expect these declines to continue, especially within the automotive category and with Financial Services companies. However, product categories such Direct Response Product, which increased spending 20.48%, and Credit Card Services (+18.95%), should continue to spend on advertising.

Coupon redemptions will rise.
As consumers look for more deals, expect coupon redemptions to increase. While coupon activity is actually flat versus year ago, this is positive news as it is the first time in many years that redemptions didn’t fall. As more manufacturers and retailers make it easier for consumers to gain access to coupons via email, mobile phones and in-store methods, consumers will take advantage of this cost-cutting strategy.

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