According to the latest Consumerology report, a sizeable and growing percentage of Canadians feel as though the country is in a recession, revealing a lack of confidence in current economic conditions.
Toronto agency Bensimon Byrne and market research firm Gandalf Group publish Consumerology quarterly to examine a variety of topics such as the environment and economy.
Survey by: Gandalf Group, Bensimon Byrne
Methodology: conducted in English and French with 1,500 Canadians between July 26 and Aug. 7.
• “Almost half (47%) of Canadians feel that the country is in a recession” – 27% said the same in 2011
• “Women (52%), Atlantic Canadians (53%) and Quebecers (61%) believe more strongly that Canada is in a recession than other provinces”
• “67% of Canadians expect the economy to be stronger a year from now”
• “Optimism for economic growth is strongest in the Prairies (79% expect it to be stronger) and B.C. (73%) and weakest in Quebec (60%), and the Atlantic Region (57%)”
For David Herle, partner at the Gandalf Group, the report doesn’t contain any surprises, but it is “disturbing.”
“It’s a confirmation of a trend – diminished economic confidence – that’s been in place for the past couple of years,” he said.
“Clearly, since 2008, people who are relatively affluent and relatively well-educated have been doing all right and the situation for those with average to below average annual income is deteriorating,” said Herle. “We’ve got this notion that the overall economy is growing. Underneath that, about half of Canadians said their situation has deteriorated over the past year.”
What practical information can ad agencies take away from the report?
“A lot of the measures that are traditionally included in determining consumer spending patterns, such as optimism about the future, or lack thereof, are really not key to the consumer decision about spending,” said Herle. “Ultimately, you’re not going to buy a car or a big-screen television because you think things might be better next year. You’ll make your assessment of the way things are right now.
“Everything we see in the survey lets us know that consumer spending will be flat or down this year compared to last year.
Based on his findings, Herle offers marketers two tips.
1. “You need to know which group your consumers are in; are they struggling or affluent? Depending on who your customers are, you’ll want to incorporate that mindset into the way you talk to them. A lot of the aspirational nature of traditional advertising is probably out of tune with what people are feeling.”
2. “These dynamics drive consumers in an ever-greater search for what they consider value: a constantly fluctuating calculation of price, perceived product attribute and customer service. If you’re not the lowest-priced supplier, you’d better have something else that makes people think of you as value.”
The full report is available online.