J.D. Power and Associates has tapped five consumer trends emerging from the social media commentary it has been studying as part of its new digital trend-spotting division.
The company says that since consumers' access to social networks will accelerate through the proliferation of smartphone and mobile devices, brands must focus on being on the ball in terms of serving up timely and accurate information on those platforms.
And people are scaling back and favoring simpler, "minimalist" lifestyles over ostentation and excess, per the firm. That means brands and marketers need to focus more strongly on the value of products and services, "and tell stories that lead people to perceive products as essential to their lifestyles."
Also, because of the economic meltdown, people have curtailed purchases of more expensive products, at times at the expense of quality. The firm says that this year, they are questioning why low price and high quality have to be mutually exclusive, which means brands that offer both will have an advantage.
With the proliferation of online information and smart devices, users are taking greater control over their purchase experiences and by extension, their lives. "As a result, conveying a sense of empowerment to consumers may be a particularly effective marketing theme," says the firm.
Finally, the firm says that traditional notions of life stages are changing and evolving. People are getting married and having kids later in life and redefining retirement. And the firm says about 85% of college students who will graduate in 2011 plan to move back in with parents. "As a result, marketers must re-evaluate how they segment and target consumers, as traditional perceptions and roles may no longer apply," says the company.
Dave Howlett, senior director of consumer insight and strategy at J.D. Power, says the implications for the auto category are good for mainstream brands moving up to luxury -- Hyundai, for instance, with its new Equus -- and offering more standard equipment.
"One of the interesting things we saw with Hyundai began a couple of years ago, where more affluent people started buying the brand because of the lower price paired with the brand's service programs," he says, adding that down-shifting to Hyundai was particularly notable in urban settings like San Francisco and New York.
"One of the things we found from Hyundai is these programs where companies are offering things like free oil changes for 36 months, or free maintenance is resonating with consumers; it lets them justify purchase."
Howlett says there was also a lot of positive buzz about Ford's Sync technology. "People are really talking about how easy it is to use and the convenience of having it in their cars. We saw lots of recommendations in social media for Sync."
The firm says the auto sector is on the upswing this month, however, with new vehicle sales in October building on the strength of September, and showing more of a recovery trend. The company predicts that new car retail sales will be at 756,300 -- which would make October the first month this year to reach an annualized rate of 10 million units.
The company says that unlike August and September -- which in the middle of the month saw sales sag -- October sales have remained strong, and that September and October are the first back-to-back months of strong sales since the spring.
"Despite the drag from high unemployment and lower incentive levels, improvement in the auto market in October suggests that consumers are discounting the negative sentiment," says Jeff Schuster, J.D. Power's executive director of industry forecasting. The firm predicts a 14% higher October sales tally than the month last year.