One of the most acknowledged effects of the digital revolution is the fragmentation of consumer behavior. The ease of access to information, together with the multiplication of offers and distribution channels, and the ability to compare prices, means that consumers have now become real experts in managing their spending priorities.

This means that these same consumers may fall within the ‘big spenders’ segment for some categories and in the “low cost” profile for others. It’s common these days for consumers to buy a low cost flight for a weekend in a luxury hotel or to park their BMW in a supermarket car park. This individual purchasing power drives market polarization and results in an uncomfortable position for products and services that fall in the “middle market” segment. Mc Kinsey analyzed this phenomenon in 2005 in his study “The Vanishing Middle Market” – without linking it to digital media at the time.

While consumers’ purchasing power is under pressure and a worldwide recession looms, this phenomenon amplifies. The difficulty for Marketing Directors who attempt to tackle the trend with tools and concepts derived from traditional marketing, lies in the unforeseeable and unpredictable nature of this phenomenon.

This fragmentation of behaviors signifies the end of SPC as it currently stands. As soon as a consumer can be categorized as both an SPC+ within one category and as an SPC- in another, it becomes clear that the notion of “SPC” is obsolete.

A more accurate cluster or consumer-based approach should have the upper hand, with the aim of understanding consumers’ business potential per category instead of a generic transversal view.

This crisis raises strategic questions for all brands historically positioned on the basis of best “quality/price” ratio without competing in either the “aspirational” or the “best price” territories. The answer is not necessarily to revisit the offer or pricing structure, but rather to focus on a more accurate consumer understanding. This consists of better clustering, targeting more specific consumer groups and offering of the right product to the right person.

For some consumers, a “middle-weight” offer could either represent a “cheap” or an “expensive” deal, so the main challenge is to exit the concept of being “average”. To put this into perspective, digital marketing can play a key role thanks to its unique ability to deliver exactly the right message, at the right moment, to the right consumer. This is the new factor of the upcoming recession: thanks to the massive and well-defined exploitation of digital, advertisers have at their disposal an efficient solution as an alternative to cutting budgets and crossing their fingers that the decision to do so is the right one to make.

This trust-related crisis will touch consumers across all categories and encourage them to pay more careful attention to their expenses, creating an even stronger behavioral and attitudinal polarization. Marketing budgets in times of crisis can survive (and even grow), but only if each dollar invested is justified. Without a doubt, every dollar invested in traditional SPC clustering will be lost.

Anne France ALLALI - General Manager Deputy, OTO Research
After 8 years at Secodip and Taylor Nelson Sofres, Anne-France Allali (ESC) entered in 2000 Millward Brown France as client account manager, where she was in charge of many clients' budgets, such as Unilever, Pepsi, ING, Kodak, Club Med. In 2002, she moved to the Italian Branch of the research institute, where she was appointed, successively, Business Development Director, Account Manager and Business Unit Manager.
Anne France joined OTO Research in 2007 as General Manager Deputy, where she is in charge of client management and development as well as of the institute’s R&D. In particular, she participated to the creation of new marketing research tools, such as ISARA Engagement Measurement tool to support marketing teams in optimizing their client relationship strategies.


Main photo: © Apolaine