Jim Taylor Keynote

1© 2009, All Rights Reserved

CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION This document contains confidential, proprietary and trade secret information of American Express Travel Related Services Company, Inc. (“American Express”) and its subsidiaries and affiliates, and must not be disclosed whole or in part to any third parties without prior written consent of American Express.

The Emergence of the Resourceful Consumer

Dr. Jim Taylor, Vice Chairman


Today’s Results

1st Quarter 2009 Field

• 1,539 total households

– 1,387: January-February (Main Field)

– 152: March

• Averaged across 4 levels of discretionary income:

– Emergent Affluent: $100K to $124K(n=358)

– Affluent: $125K to $249K(n=390)

– Super Affluent: $250K to $499K(n=357)

– Wealthy: $500K+(n=314)


Life Has Changed


My Future

My child’s Future

Extremely/Very Optimistic About…

O P T I M I S M


Recession will last longer than a year…

R E C E S S I O N


41%

22%2%

11%

24% Somewhat

Not Very

Not at All

Extremely

Very

How likely do you feel that the U.S. is heading for a depression?

35%Extremely/VeryLikely

Somewhat

Very

Extremely

Not at All

Not Very

Depression


Q4-08 Q1-09

The recent real estate and banking crisis has affected

my sense of financial security

Nearly All Affected


Q1-08 Q1-09

I worry that at some point I could run out of money

Over Half Worried of Running Out


The Spend Pattern


Among those “active” in the category

Spending next 12 months, versus last 12…

Sep2008

%

Jan/Feb2009

%

Mar2009

%

Apr2009

%

Hybrid automobile 15 7 7 14

Children’s clothing 2 6 2 5

Family car 2 1 -1 4

Home electronics NA -8 -10 1

Home décor & furnishings -3 -8 -8 0

Business Travel -2 -7 -7 -3

Weekend getaways -6 -4 -7 -4

Vacations -7 -7 -11 -4

Footwear -4 -4 -5 -5

Projected Future Spend


Among those “active” in the category

Spending next 12 months, versus last 12…

Sep2008

%

Jan/Feb2009

%

Mar2009

%

Apr2009

%

SUV -15 -10 -14 -5

Resorts and fine hotels -11 -12 -17 -8

Eating in restaurants -10 -10 -16 -9

Personal leather goods -11 -10 -9 -9

Apparel/fashion -8 -9 -8 -10

Accessories -11 -11 -12 -10

Handbags -13 -12 -15 -13

Jewelry -15 -18 -17 -17

Projected Future Spend


All Categories Average:

Apr2008

Jun2008

Sep2008

Jan/Feb

2009

Mar2008

Apr2009

Gap Average (pts) -18 -21 -9 -9 -13 -5

$ Spend Average (%)

NA NA -6 -7 -9 -4

Anticipated Spend Summary

Among those “active” in the category… Does not take into account total spend per category

Planned spending next 12 months, versus last 12…


I Like My Content Control!


Consider self technologically intelligent

76%Affluent+

A Part of Life


Own…Affluent+

%

High speed Internet service 87

Laptop computer 82Desktop computer 79High Definition or Flat Screen TV 76

Wireless Internet router 75

Standard cell/mobile phone 75

Center of the Universe


Knowledge of technology has been

important to my success

72%Affluent+

A Part of Success


Participate in some sort of content sharing

activity on the Internet

58%Affluent+

Content Sharing


Internet activities currently do…Affluent+

%

Maintain a profile on a social networking site 32Upload my own photos to a photo sharing site 30Add comments or postings to a newsgroup, message board, online forum, Usenet group, or any other type of online discussion

21

Maintain my own website 13Add comments or postings to news or special interest stories I read on the Internet

13

Contribute to a blog (not my own) by adding comments or postings 8Maintain my own blog (web log) for others to read about myself and my opinions

6

Content Sharing Activities


It's more important to know how to search for a fact than

it is to know a fact

79%Affluent+

Knowledge Today


Regularly visit websites as a result of…

Affluent+%

Search engine results 53Someone’s recommendation 33Seeing ad in magazines 15Email offers 14Advertising on other websites 13Seeing ad on TV 10Seeing ad in newspapers 10Mail offers 9Hearing ad on radio 5

Website Drivers


I can get information faster on the Internet than dealing directly with a

company's customer service representative

90%Affluent+

More Efficient Life


Past 6 months… Affluent+%

Made a purchase online 96

Purchased luxury goods online 34

Amount spent online(excluding travel)

$2,675

Online Purchasing


I research the items on the web I am going to buy to

make sure that I am not taken advantage of

86%Affluent+

Risk Managemant


The quality of the store's website impacts whether I choose to

shop at their retail store

42%Affluent+

Clicks to Bricks


Content Manufacturing:Internet Activities Q1

2009%

Maintain a profile on a social networking site 32Upload my own photos to a photo sharing site 30

Add comments or postings to a newsgroup, message board, online forum, Usenet group, or any other type of online discussion

21

Maintain my own website 13Add comments or postings to news or special interest stories I read on the Internet 13

Contribute to a blog (not my own) by adding comments or postings 8

Maintain my own blog (web log) for others to read about myself and my opinions 6

Upload my own videos on YouTube.com 4Upload my own videos to an Internet site other than YouTube.com 4


Have friends online considered to be very close, yet have never

actually met in person

15%Affluent+

Not Insignificant…


Frequently download television shows and

movies from the Internet

25%Affluent+

As is My Power to Control Content


Do It Yourself

Music & Entertainment

IT & Computing

Hobby and Special Interest

Sports

Professional and Trade

Money & Business

Men's Interest

Travel

42%

48%

50%

46%

37%

47%

43%

46%

Extremely Very

44%

Paper Subscription to Digital

Source: 2009 study among 1,131 Zinio customers (current subscriptions/single magazine purchasers), as well as 1,100 non-customers who currently subscribe to 3+ paper magazines

Likelihood of Changing

Magazine ContentPreferences


Attention Paid to Digital Versus Print Ads

Much more attention to ads in digital magazines

Somewhat more attention to ads in digital magazines

The same amount of attention to ads in digital magazines and paper

magazines

Somewhat less attention to ads in digital magazines

Much less attention to ads in digital magazines

41%

11%

2009

10%

25%

51%

8%

6%

2007

35%

14%



I Want to Save My Magazines

Paper Magazines

Save Most Save a Few

Digital Magazines

Do It Yourself Magazines

Music & Entertainment Magazines

Home & Garden Magazines

Money & Business Magazines

Sports Magazines

Celebrity Magazines

Save Most Save a Few

99%

98%

97%

97%

96%

96%

91%

66%

77%

69%

60%

39%



Total Acceptors

%

Allows me to easily save and archive issues of magazines that I read 70

Allows me to search/retrieve previous articles in magazines that I’ve saved 65

Provides immediate and free delivery 58

A little bit “greener” and more environmentally friendly by going paperless 58

Provides back issues to many magazines I enjoy 58

Top Reasons to go Digital



The Role of Television…Affluent+

%

News/current events 68

Pure entertainment 63

Watching sports 45

An escape 33

Background noise 22

Education 20

Quality programming 19

A source of guilty pleasure 16

Staying on top of current trends 11

Appreciation for fine arts 4

But not from TV… But the Role is Changing…


A Little Segmentation


• Fabulists

• Victors

• Givers

• Strivers

• Skeptics

Victors

SkepticsFabulists

Strivers

Givers

SalespersonDependent

SeriousShopper

Like ShoppingMalls

CelebrityKnock-Offs

Ethically Conscious

Influence of InternetSkillful Shopper

Segmentation


FABULISTS

Q1 2007

VICTORS

GIVERS

STRIVERS

SKEPTICS

Q1 2009

4.1MM

1.9MM

A Huge Shift


“…I Am Learning to Plan…”

Q1-09%

I have done a good job of making my household more fiscally responsible

88

My household has a monthly household budget to which we try our best to stick to

61


I Like Brands That…

Q42007

%

Q12009

%

Help me feel different and unique 70 55

Help me feel part of tradition 66 55Help me feel successful 66 50Help me feel I own something rare 60 45

Help me feel like a leader 53 39Help me feel privileged 48 34Communicate that I'm successful 51 34

Communicate I'm loved 45 32

“…I Watch the Appeals to My Ego…”


Q1-08 Q1-09

Noticed a product being worn or endorsed by a celebrity/athlete that

increased interest in the product:

“…I Am Disconnecting From Celebrities…”


Today’s New

Resourcefulness


Q1-08 Q1-09

I am looking closely at every spending category to see where we can save

“Above All, You Need to Know That I Have Become Resourceful”


Purchased Past Year:

Q12008

%

Q12009

%

Vacation in a resort destination 56 54

Bottle of spirits $30+ 53 53

Beauty or cosmetic item $30+ 51 49

Fragrance/cologne $50 (per oz.) 36 32

Cruise ship vacation (past 3 years) 30 27

Fashion apparel item $500+ 21 17

Designer footwear $300+ 18 15

Women's handbag $500+ 15 14

“I Am Still Participating in Good Things”


Q12007

%

Q12009

%

I depend on the salesperson to know the specific details of a product that makes it worth more

67 49

I prefer stores that are really elegant inside 52 37

I would buy a really expensive item, like jewelry, at a store like Costco or Sam's Club

36 50

“Only Now, I Trade Off Experience…”


“…But Not Quality…”

Q12008

%

Q12009

%

I am willing to spend more for designer brands because they are:

High quality 68 67

Among those who spent $5,000 or more in department stores


Q12007

%

Q42009

%

I usually wait for something to go on sale before I buy it

66 80

I shop with coupons fairly regularly 47 65

“As Long as You ‘Pay Me’ for My Demand!”


I Like Brands That…

Q12009

%

I've used and liked before 97Reflect high craftsmanship 96Have a reputation for the best quality 96

Have a reputation for good service 96

Reflect my values 86

“I Won’t Give Up My Brand Standards…”


I am buying fewer big ticket items now than I did a year ago

5356

62

77

Q2-08 Q3-08 Q4-08 Q1-09

“But I Will Give Up My Impulses…”


Affluent+%

Finding the best deals possible

63

Figuring out which brands best fit my needs

46

Discovering the latest trends, advances or products

39

Encountering ads that make me interested in new products and services

26

Importance of Internet...Summary of Very Important

Top 3 Box (8, 9,10 on a 10 pt. Scale)


And the Irony is: People Are…


Self-Descriptors

Q12009

%

Intelligent 84

Loyal 81

Family-focused 73

Smart shopper 69

Self-sufficient 68

Good neighbor 67

Healthy 67

Optimistic 65

Feeling Pretty Good About Themselves…


Q1-2008 Q1-2009

Happiness Rating:

Very HappyTop 3 Box (10-pt scale)

…And Are Even MORE Happy Today


Q1-2008 Q1-2009

Happiness Rating:

Very HappyTop 3 Box (10-pt scale)

Q1-2008 Q1-2009

Driven By Women


It’s Not About Affluence, Per Se…

Q1-09Q1-07

As I have accumulated more money in my life, I have become happier


Q12009

%

I take pride in my shopping skills 76

I have become a much smarter shopper thanks to today's economic situation

65

It’s About “Needs-Driven Resourcefulness”


Household Financial Planning Responsibilities

He Says%

She Says%

I have sole/most responsibility 59 21

We share responsibility equally

39 56

Spouse has sole/most responsibility

2 23

Reality Lies Somewhere in the Middle

“Joint” Decision Making?


He Says%

She Says%

I have sole/most responsibility 35 7

We share responsibility equally

63 82

Spouse has sole/most responsibility

2 11

“Joint” Car Buying?

Household Car Buying Responsibilities


Q1-2008 Q1-2009

Like brands that:

Are preferred by my children

Among those with kids <18 in the household

Kids Weigh In More Too


19%

Q1-2009

(49% Top 3 Box)

Childs Role is Extremely/Very Important:

Buying Cars

Among those with kids <18 in the household

Kids Weigh In More Too


A Few Thoughts


Shopping is Selective Outreach: The Trillion Dollar Question--How Do We Get Them To Choose Us?

Summary of Regularly Visit

Q12009

%

Results from using Internet search engines 53

Sales and product offers I receive in emails 14

Advertising I see at other websites 13


A World of New Resourcefulness…

We Need


• Position Against Need

• Sell to Happiness

• Understand the Family Decision Process

• Respect the Role of Women As Arbiters of Need

• Make Sure Your Brand Insures Risk

Suggestions


• Communication Failure Is a Brand Killer.

– Invest in trusted channels

– Simplify

– Reduce hyperbole

– Be clear

– Be open

– Be Happy!

…And


-5%*

Purchasing in next 12 months (16 category average)

Q1 2009

* NOTE: Estimate unadjusted for variable impact of savings rate, employment adjustment or tax adjustments.

Purchasing Forecast: Back to Normal (e.g. 1998)


Winners: Single Points of Light

• Performance is necessary.

• Craftsmanship is quality.

• Saving is virtue.

• Communication is value.

• Detail is angelic.


THINKMANSHIP…


IMAGINATION…


ENGAGEMENT…


AND CONFIDENCE


CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION This document contains confidential, proprietary and trade secret information of American Express Travel Related Services Company, Inc. (“American Express”) and its subsidiaries and affiliates, and must not be disclosed whole or in part to any third parties without prior written consent of American Express.

Thank You.

www.HarrisonGroupInc.com

Jim Taylor Keynote

Documents

Transcript of Jim Taylor Keynote