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September 1, 2015

How Should Crayola Respond to the Growing Fad of Using Colouring Pencils as Eyeliner?

Rob WalkerAnalyst Insight by Rob Walker - Contributing Analyst

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Sometimes, a new consumer fad comes out of nowhere that reshapes the way people identify with a brand. This is becoming more common as the quirky world of social media and the blogosphere grows in power.

Consider the case of Crayola, the best-selling brand in the world in retail value terms. Thanks to some left-field thinking by popular young beauty bloggers, a new trend has emerged whereby growing numbers of teenage girls are using Crayola pencils as a low-cost substitute for eyeliner.

Global retail sales of Crayola colouring pencils have been growing at less than 1% a year since 2010 (at fixed US dollar prices), so the brand could benefit from a new injection of vitality. Is this unsolicited online advertising just what the doctor ordered, or is it potentially damaging to the brand’s image?


Source: Euromonitor International

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August 31, 2015

Lessons for G7 Economies from Japan’s Super High Public Debt-to-GDP Ratio

Carrie LennardAnalyst Insight by Carrie Lennard - Business Environment Manager

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As a member of the G7 group of the world’s key economies, Japan’s economic fortunes have an impact on the wider global economy. It has by far the largest public debt-to-GDP ratio in the world, rising every year from 2009-2014, hitting 247% in 2014, and is forecast by the OECD to reach 400% by 2040 if it does not undertake more sweeping reforms. This is negatively impacting business and consumer confidence. Key contributing factors are a high old age dependency ratio and low female employment rate, which some other G7 members share, and must tackle if they are to circumvent a similar fate.


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Top Developed World Cities with Low Reliance on Car-Based Mobility

Kasparas AdomaitisAnalyst Insight by Kasparas Adomaitis - Senior City Analyst

The passenger car is seen as a necessity rather than a luxury item in developed countries. In fact, in 2014, 80% of households in the developed world owned at least one car. Despite omnipresent passenger cars, there are areas where car dependency is surprisingly low in developed countries – namely, some of the most affluent and largest urban centres actually record notably more modest vehicle ownership rates. For example, only 67% of households own a vehicle in the New York metropolitan area, compared to an average of 89% in the US.

Table 1. 15 Major Cities by Largest Difference in Vehicle Ownership Rate, Developed Countries, % of Households with Passenger Car, 2014

  City Country (Difference)
Berlin (Germany) 53.2 77.3 (24.1)
New York (US) 67.4 89 (21.6)
Brussels (Belgium) 63.1 84.2 (21.1)
Hamburg (Germany) 56.4 77.3 (20.9)
Vienna (Austria) 67.1 86.2 (19.1)
Helsinki (Finland) 64 79.2 (15.2)
Tokyo (Japan) 60.5 75.6 (15.1)
Paris (France) 69.9 83.9 (14)
Jerusalem (Israel) 51.9 65.1 (13.2)
Copenhagen (Denmark) 62.1 74.8 (12.7)
London (UK) 63.3 75.4 (12.1)
Osaka (Japan) 64.4 75.6 (11.2)
Zurich (Switzerland) 70.6 80.7 (10.1)
Taipei (Taiwan) 48.8 58.4 (9.6)
Amsterdam (Netherlands) 71.2 80.6 (9.4)

Source: Euromonitor International

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August 30, 2015

Deception of Expanding Urban Populations

Ugne SaltenyteAnalyst Insight by Ugne Saltenyte - City Analyst

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Over the next 15 years, the world’s urban population growth will be fed by the two principal regions – Middle East and Africa (MEA) and Asia Pacific – which together will account for 84% (or 986 million people) of the global urban population increase. While the process of urbanisation is good news for many consumer goods and services companies, as it is traditionally related to the spread of modern lifestyles in emerging countries, over the next 15 years living standards in most emerging metropolises will remain well below the current averages of the developed world.

Forecast Urban Population Growth by Region, 2014-2030


Source: Euromonitor International

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August 29, 2015

Despite Lipitor Setback, Future for Switches Remains Bright

Chris SchmidtAnalyst Insight by Chris Schmidt - Senior Consumer Health Analyst

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While quarterly earnings reports are not often cause for excitement in the consumer health industry, Pfizer’s recent second-quarter conference held the promise of a potentially industry-shifting announcement. Though the buzzing rumours of a new mega-merger had largely died off, it was widely believed the company would announce the results of its Phase 3 trial for over-the-counter (OTC) Lipitor (atorvastatin, 10 mg). A positive outcome could help usher one of the most successful prescription drugs in history into the OTC market. Unfortunately for Pfizer, the study did not demonstrate patient compliance, and the company terminated it after feedback from the US Food and Drug Administration (FDA). Though that potential blockbuster OTC drug may never come to fruition, consumer demands for innovative, efficacious products, advancements in mass health literacy and the desire of insurers and regulators to shift the burden of cost continue to pave the way for future prescription (Rx)-to-OTC switches. Though the sun may have set on OTC Lipitor, the future remains bright for switches.

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Emerging Markets Tech: 5 Digital Trends to Watch

Pavel MarceuxAnalyst Insight by Pavel Marceux - Technology, Communications and Media Specialist

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The unique challenges, both technical and cultural, of emerging markets translate into specific digital trends that are becoming clear across some of the world’s largest economies. There is growing demand for FinTech products among large underbanked populations, digital healthcare is a more pressing concern for the emerging world, music streaming looks to be making gradual inroads, lightweight apps designed specifically for emerging markets are being rolled out, and the sharing economy is expanding its reach beyond the developed markets. How quickly these segments develop in specific regions largely depends on growth in Internet usage and smartphone uptake.

Internet Users in Emerging Markets: 2009-2030


Source: Euromonitor International from International Telecommunications Union/OECD/national statistics

Note: Figures for 2015-2030 are forecast

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August 28, 2015

What Makes a Good Mobile Strategy? Event Recap from CONNECT Mobile Innovation Summit 2015

Amanda BoulierAnalyst Insight by Amanda Boulier - Research Analyst

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Innovation and disruption are hot topics, and perhaps nowhere more so than in mobile technology. Globally, mobile revenues are estimated to account for just 1% of total retailer revenues, but figures like this miss most of the picture. Mobile has significant spillover effect on sales through other channels and mobile is undoubtedly more efficient with regard to marketing than comparable email or paper mailing programmes. The importance of this trend is only going to grow in the years to come, so it is critical that retailers and restaurants have a plan for the mobile shift.

Developing an effective mobile strategy was the theme of CONNECT Mobile Innovation Summit 2015, held in Chicago on 18-19 August 2015. At this event, speakers, panelists and attendees from across the retail, restaurant and payment landscape exchanged insights and ideas about how to get, keep and grow consumers’ attention in the mobile space.

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August 27, 2015

Spiralized Vegetables Succeed as Ersatz Pasta

Simone BarokeAnalyst Insight by Simone Baroke - Contributing Analyst

Supermarket sales of courgettes and root vegetables are revving up this season. 2015 could well be the year when more consumers than ever will be reaching their five (or six, or seven) a day fruit-and-vegetable consumption target, and all thanks to a new trend that sees common vegetables transformed into a substitute for gluten-addled staples.

Pasta is suffering

How the world of pasta has changed. Once, it was all about the content of high quality durum wheat which separated the good from the bad. Now the mere mention of wheat makes consumers feel twitchy. Our packaged food data show that value sales of dried pasta fell by 13% in Western Europe and by 6% in North America over the 2009-2014 review period (based on fixed US$ 2014 exchange rates and constant prices). In Germany, sales dwindled by 13%, in Sweden by 11% and in Italy, pasta’s ancestral home, values plummeted by a disconcerting 25%.

For today’s health and weight conscious consumer, pasta is beset by two increasingly unpalatable problems. First of all, it is made from gluten-containing wheat, and it is precisely gluten and wheat which a growing number of consumers are trying to avoid. The second issue is that pasta is regarded by many as nothing more than a low-in-nutrients-but-high-in-carbs vehicle for tasty sauces. Pasta has thus come to be branded as an “empty calorie” food, much like white bread, sales of which aren’t doing too well either these days.

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Rise of Online Leisure Channel Drives Consumerisation of Corporate Travel

Angelo RossiniAnalyst Insight by Angelo Rossini - Online Travel Analyst

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After disrupting the leisure travel competitive environment, the rise of online travel agencies (OTAs) and of other leisure online travel players, such as metasearch engines and aggregators of peer-to-peer tourist services, is also having a significant impact on corporate business travel. In fact, today’s business travellers, when booking their trips through managed programmes, are increasingly looking for the same level of freedom, convenience and service offered by online leisure players, and expecting a seamless travel experience thanks to mobile services. The gap between the offer of OTAs and corporate travel intermediaries results in business travellers turning to booking channels outside their managed travel programme and to open booking platforms such as TripLink by Concur.

The answer of travel management companies (TMCs) to these developments is to embrace online travel innovation, offering their customers the possibility to choose between traditional phone transactions and online self-booking tools, including a growing number of available online platforms and travel services. TMCs are also increasingly assisting their customers during their trips through mobile apps to enhance their travel experience.

Corporate Business vs Leisure Intermediaries Global Travel Sales in 2014


Source: Euromonitor International

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August 26, 2015

Russia Halts Sales of Major Home Care Brands

Analyst insight by Vitalij Vladykin - Research Manager

On 25 August 2015, Rospotrebnadzor (the Russian Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing) informed retailers that they have to stop sales of several products from the range of famous dishwashing brand Fairy from Procter&Gamble and laundry care brands Persil and Vernel from Henkel. Safety concerns was the main reason for the restrictions. Both companies dominate Russian home care market with a combined value share of over 40% in 2014 and over 50% share in the mentioned categories. There were several other companies affected by this safety check including multinationals Colgate-Palmolive, Clorox, Werner&Mertz and local Nevskaya Kosmetika. This news was immediately connected to the ‘sanctions war’ among Russia and Western countries.

Both Procter&Gamble and Henkel are among the largest FMCG players in Russia. These two companies not only import products, but also have wide production capacities inside Russia. In June 2015, Henkel opened one more factory in Russia and announced that it is still interested in investments into local market. If these restrictions from Rospotrebnadzor are indeed connected only to insufficient quality of products, this issue will be quickly solved by manufacturers. However, if this decision has deep political roots, international companies will need to review their business plan for Russia, which will affect not only local consumers, but also thousands of employees.

Continue reading "Russia Halts Sales of Major Home Care Brands" »


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Recent Posts

How Should Crayola Respond to the Growing Fad of Using Colouring Pencils as Eyeliner?

Lessons for G7 Economies from Japan’s Super High Public Debt-to-GDP Ratio

Top Developed World Cities with Low Reliance on Car-Based Mobility

Deception of Expanding Urban Populations

Despite Lipitor Setback, Future for Switches Remains Bright

Emerging Markets Tech: 5 Digital Trends to Watch

What Makes a Good Mobile Strategy? Event Recap from CONNECT Mobile Innovation Summit 2015

Spiralized Vegetables Succeed as Ersatz Pasta

Rise of Online Leisure Channel Drives Consumerisation of Corporate Travel

Russia Halts Sales of Major Home Care Brands