Targeting Emerging Consumer Segments – The Cautious Consumer

Introduction

The recessionary environment is encouraging consumer segments to emerge and develop. Cautious consumers are now looking to shield themselves from future loss through making the correct financial decisions today. FS providers must therefore understand what these consumers want and how their Cautious status may influence their behavior.

Scope

*Using data from our global FSCI survey this report profiles the attitudes and behaviors of the emerging Cautious consumer segment.

*The report identifies these consumers and analyses the drivers of their future behavior.

*The report provides concrete actions for FS providers to position themselves competitively in order to capture a share of the Cautious wallet.

Highlights

Limiting exposure to loss is the chief concern of the Cautious consumer segment. Cautious consumers are always looking to reduce their downside on future financial transactions and are willing to spend time, money and effort in achieving this goal.

Older generations may be more resilient to changes in their finances, having a harder time altering lifelong habits. It could be this greater inflexibility that explains the higher representation of Cautious consumers among the younger demographics.

Through attracting young Cautious consumers with high earning potential and developed financial intelligence, advisors can effectively build a relationship that may last a lifetime.

Reasons to Purchase

*Access the results of Datamonitor's Global FS Consumer Insight survey in order to profile this key emerging Cautious segment.

*Identify what drives Cautious consumer action and predict their future behaviors.

*Identify the opportunities Cautious consumers represent and advise strategies you can take to effectively gain share of the Cautious wallet.


Report Highlights

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TABLE OF CONTENTS
Overview 1
Catalyst 1
Summary 1
Methodology 1
Introduction 8
Customer segmentation is vital for an effective marketing strategy 8
The Future Decoded 10
Trend: Lower numbers of Conscientious consumers have emerged than expected 10
Insight: Financial pressures do not dictate Conscientious behavior 11
Insight: Demographic and lifestage findings have had some bearing on the emergence of Conscientious behavior 15
Trend: Conscientious consumers have a greater appetite for FS products than the average consumer 20
Insight: Though seemingly debt-averse, Conscientious consumers have more credit cards than the average consumer 26
Insight: Conscientious consumers are financially intelligent 27
Insight: Conscientious consumers still have higher than average product holdings with their primary bank and represent a key cross-selling opportunity 32
Insight: Conscientious consumers are more trusting than the average consumer 35
Insight: Conscientious consumers are receptive to financial advice through a wide variety of sources 38
Trend: Conscientious consumers are optimistic about the future 43
Insight: Conscientious consumers’ future actions are aligned with their positivity 44
Action Points 49
Action: Emerging markets can provide valuable lessons for FS providers 49
Action: Target Conscientious consumers with innovative regular savings products 50
Action: Datamonitor’s Megatrend Framework can help identify strategies for targeting this segment 52
APPENDIX 57
Data tables 57
Methodology 77
Definitions 78
Further reading 79
Ask the analyst 80
Datamonitor consulting 80
Disclaimer 80


TABLE OF FIGURES
Figure 1: Lower numbers of Conscientious consumers have emerged than expected 10
Figure 2: Financial pressures do not dictate Conscientious behavior 11
Figure 3: The emergence of Conscientious behavior has been more prevalent amongst younger Accumulators 16
Figure 4: Australia has a surprising number of older Conscientious consumers 17
Figure 5: Employment status has also influenced the emergence of more conscientious behaviour 18
Figure 6: Australia contains significantly more Conscientious consumers who are recently unemployed than elsewhere 19
Figure 7: Conscientious consumers have a greater appetite for FS products than the average consumer 21
Figure 8: Conscientious consumers are almost doubly likely to have two or more of each product than the average global consumer 22
Figure 9: Conscientious consumers in the UK are particularly receptive to instant access savings accounts 23
Figure 10: Notice savings accounts in India are more popular than elsewhere 24
Figure 11: Life insurance is relatively unpopular in Australia 25
Figure 12: Credit cards are most populat amongst Conscientious consumers in Japan, Singapore and the US 26
Figure 13: Conscientious consumers are financially intelligent 28
Figure 14: Conscientious consumers in the US are more Conscientious than others 30
Figure 15: Conscientious consumers in Australia, Japan and Singapore are actually slightly less financially intelligent than average 31
Figure 16: Brazilian and Indian Conscientious consumers are at odds in terms of financial awareness 32
Figure 17: Conscientious consumers have higher than average product holdings with their primary bank 33
Figure 18: Conscientious consumers in France are by far the most loyal to their primary bank 34
Figure 19: There is still an opportunity for non-primary bank providers to capture share of the Conscientious wallet 35
Figure 20: Conscientious consumers are more trusting than the average consumer 36
Figure 21: Conscientious consumers in the UK and US feel very differently about the way the crisis has been handled by their banks 38
Figure 22: Conscientious consumers can afford professional advice but still shop around for the best deals 39
Figure 23: Conscientious consumers in the US are comfortable making their decisions through online research rather than using other sources of advice 41
Figure 24: Australians are not keen to take advice from family and friends 42
Figure 25: Conscientious consumers in Brazil are most confident in seeking advice from their primary bank 43
Figure 26: Conscientious consumers’ are optimistic about the future 44
Figure 27: Conscientious consumers intend to pay more into their savings but cut back on insurance premiums 46
Figure 28: Conscientious consumers in the UK are still disinclined to save for either the short- or long-term 48
Figure 29: SmartyPig has created an innovative savings platform 51
Figure 30: ING Direct has employed innovate use of Web 2.0 technology 54
Figure 31: SmartyPig has also harnessed Web 2.0 and social networking to appeal through Connectivity 55
Figure 32: Virgin’s Climate Change ISA is a prime example of ethical and green credentials 56


TABLE OF TABLES
Table 1: Conscientious and Non Conscientious consumers segmented by country 56
Table 2: Degree to which household financial situation has worsened over the last 12 months versus percentage of Conscientious consumers, segmented by country 57
Table 3: Conscientious consumers segmented by age 57
Table 4: Conscientious consumers segmented by age and country 58
Table 5: Conscientious consumers segmented by employment status 58
Table 6: Conscientious consumers segmented by employment status and country 59
Table 7: Average product holding amongst Conscientious and global consumers 60
Table 8: Product holdings amongst Conscientious and global consumers (those with two or more) 61
Table 9: Instant access savings holdings amongst Conscientious consumers, segmented by country 62
Table 10: Notice savings account holdings amongst Conscientious consumers, segmented by country 63
Table 11: Life insurance holdings amongst Conscientious consumers, segmented by country 64
Table 12: Credit card holdings amongst Conscientious consumers, segmented by country 65
Table 13: Indicators of financial intelligence amongst Conscientious and global consumers 66
Table 14: Indicators of financial intelligence amongst Conscientious consumers, segmented by country 67
Table 15: Non current account primary bank product holdings amongst Conscientious and global consumers 68
Table 16: Non current account primary bank product holdings amongst Conscientious consumers, segmented by country 69
Table 17: Products held with primary bank amongst Conscientious and global consumers 70
Table 18: Indicators of trust amongst Conscientious and global consumers 71
Table 19: Opinion of bank handling of the crisis and governmental intervention amongst Conscientious consumers, segmented by country 72
Table 20: Steps before making financial decisions amongst Conscientious and global consumers 73
Table 21: Steps before making financial decisions amongst Conscientious consumers, segmented by country 74
Table 22: Expectations for the future amongst Conscientious and global consumers 75
Table 23: Actions over the next six months among Conscientious and global consumers 75
Table 24: Actions over the next six months among Conscientious consumers, segmented by country 76



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TABLE OF TABLES
Table 1: Conscientious and Non Conscientious consumers segmented by country 56
Table 2: Degree to which household financial situation has worsened over the last 12 months versus percentage of Conscientious consumers, segmented by country 57
Table 3: Conscientious consumers segmented by age 57
Table 4: Conscientious consumers segmented by age and country 58
Table 5: Conscientious consumers segmented by employment status 58
Table 6: Conscientious consumers segmented by employment status and country 59
Table 7: Average product holding amongst Conscientious and global consumers 60
Table 8: Product holdings amongst Conscientious and global consumers (those with two or more) 61
Table 9: Instant access savings holdings amongst Conscientious consumers, segmented by country 62
Table 10: Notice savings account holdings amongst Conscientious consumers, segmented by country 63
Table 11: Life insurance holdings amongst Conscientious consumers, segmented by country 64
Table 12: Credit card holdings amongst Conscientious consumers, segmented by country 65
Table 13: Indicators of financial intelligence amongst Conscientious and global consumers 66
Table 14: Indicators of financial intelligence amongst Conscientious consumers, segmented by country 67
Table 15: Non current account primary bank product holdings amongst Conscientious and global consumers 68
Table 16: Non current account primary bank product holdings amongst Conscientious consumers, segmented by country 69
Table 17: Products held with primary bank amongst Conscientious and global consumers 70
Table 18: Indicators of trust amongst Conscientious and global consumers 71
Table 19: Opinion of bank handling of the crisis and governmental intervention amongst Conscientious consumers, segmented by country 72
Table 20: Steps before making financial decisions amongst Conscientious and global consumers 73
Table 21: Steps before making financial decisions amongst Conscientious consumers, segmented by country 74
Table 22: Expectations for the future amongst Conscientious and global consumers 75
Table 23: Actions over the next six months among Conscientious and global consumers 75
Table 24: Actions over the next six months among Conscientious consumers, segmented by country 76


TABLE OF FIGURES
Figure 1: Lower numbers of Conscientious consumers have emerged than expected 10
Figure 2: Financial pressures do not dictate Conscientious behavior 11
Figure 3: The emergence of Conscientious behavior has been more prevalent amongst younger Accumulators 16
Figure 4: Australia has a surprising number of older Conscientious consumers 17
Figure 5: Employment status has also influenced the emergence of more conscientious behaviour 18
Figure 6: Australia contains significantly more Conscientious consumers who are recently unemployed than elsewhere 19
Figure 7: Conscientious consumers have a greater appetite for FS products than the average consumer 21
Figure 8: Conscientious consumers are almost doubly likely to have two or more of each product than the average global consumer 22
Figure 9: Conscientious consumers in the UK are particularly receptive to instant access savings accounts 23
Figure 10: Notice savings accounts in India are more popular than elsewhere 24
Figure 11: Life insurance is relatively unpopular in Australia 25
Figure 12: Credit cards are most populat amongst Conscientious consumers in Japan, Singapore and the US 26
Figure 13: Conscientious consumers are financially intelligent 28
Figure 14: Conscientious consumers in the US are more Conscientious than others 30
Figure 15: Conscientious consumers in Australia, Japan and Singapore are actually slightly less financially intelligent than average 31
Figure 16: Brazilian and Indian Conscientious consumers are at odds in terms of financial awareness 32
Figure 17: Conscientious consumers have higher than average product holdings with their primary bank 33
Figure 18: Conscientious consumers in France are by far the most loyal to their primary bank 34
Figure 19: There is still an opportunity for non-primary bank providers to capture share of the Conscientious wallet 35
Figure 20: Conscientious consumers are more trusting than the average consumer 36
Figure 21: Conscientious consumers in the UK and US feel very differently about the way the crisis has been handled by their banks 38
Figure 22: Conscientious consumers can afford professional advice but still shop around for the best deals 39
Figure 23: Conscientious consumers in the US are comfortable making their decisions through online research rather than using other sources of advice 41
Figure 24: Australians are not keen to take advice from family and friends 42
Figure 25: Conscientious consumers in Brazil are most confident in seeking advice from their primary bank 43
Figure 26: Conscientious consumers’ are optimistic about the future 44
Figure 27: Conscientious consumers intend to pay more into their savings but cut back on insurance premiums 46
Figure 28: Conscientious consumers in the UK are still disinclined to save for either the short- or long-term 48
Figure 29: SmartyPig has created an innovative savings platform 51
Figure 30: ING Direct has employed innovate use of Web 2.0 technology 54
Figure 31: SmartyPig has also harnessed Web 2.0 and social networking to appeal through Connectivity 55
Figure 32: Virgin’s Climate Change ISA is a prime example of ethical and green credentials 56



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