Analysts To Brands: Stick To Your Knitting

knittingResearch firm Landor Associates' second annual trends outlook, a prediction for this year, says consumers will spend less. That means trouble for most segments of the consumer-products market, from automotive to electronics.

Brands will have to make their messages simple, honest and clear, says Landor Associates analyst Susan Nelson. "Non-essential product features that encourage consumers to trade up will be even less successful than usual," she predicts.

"We expect 'home and hearth' brands--Disney, Wal-Mart, Johnson & Johnson and Dove--to do well," she writes, "While the me too's and latecomers will likely suffer."

Analyst Allen Adamson writes that there will be more consolidation of players and co-branding initiatives. Among the stand-out brands, he predicts: Google, Blyk, Skype and Flickr for online services; Dell on consumer input; and Nike, Apple, Netflix and TiVo in digital co-branding. Procter & Gamble, Johnson & Johnson and Ameriprise will remain leaders in integrated marketing, he says.



Ostentatious Trump-like displays of wealth and hubris will give way to "acceptable consumerism." Landor analysts Richard Brandt and Patricia Verdolino see conspicuous consumption as a thing of the past, noting that Neiman Marcus has experienced a 30% decline in sales, while Wal-Mart has enjoyed sales gains.

Says Landor Associates Chief Marketing Officer Hayes Roth: "When the market turns south, the business in quality socks goes up. Maybe you're buying a luggage tag from Coach rather than the thousand-dollar purse; people want to be seen as frugal to a certain extent, less flashy."

The analysts say travel will lose cachet as vacations are replaced by "staycations." "Consumers with more substantial means will be less interested in displays of wealth ... flaunting it will be considered bad taste," they write. Companies will focus on quality, value and sustainability in products, packaging and messages as "consumer brands hope to encourage spending without guilt," they write.

On the technology front, Landor analyst Luke Mansfield writes that 2009 will not see as seismic a shift in user-friendly tech as the current year. He writes that the economy will force companies to look for margin enhancement. "Overall, we'll see much less new-product development than in 2008," he writes. He predicts that Nokia and BlackBerry will challenge Apple's iPhone--the latter with the new Storm, which he says could win over corporate users.

"If you look back eight years ago, the iPod emerged after the economy last hit the skids; it was an example of an inventive product that had something to offer in a compact mode and was a hit," says Roth. "So I'm a big believer that in times like these both tried-and-true brands that stick to their knitting and don't get thrown off course, and brands that emerge with a better idea will fare well.

"What we are saying is that brands can't get thrown off the track. If you have done your homework on your brand, are clear about who your customers are, are determined to deliver on that brand promise and don't cut corners on brand fundamentals, you will stay the course. You may have to reduce margins and some services but the core brand promise you cannot walk away from," says Roth.

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