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Take-aways

 

1. Demonstrate value for money

Green shoots are appearing in the economy, but there is still no appetite for any spending that is ultimately wasteful. If a product or brand costs more than those around it, that premium has to be clearly justified. The rapid growth of discount supermarkets since the recession hit has shown people that choosing something less expensive doesn’t have to involve a compromise on quality; they have come to expect more for less. Low prices that in some markets would be taken as a sign of inferior quality, or would be seen as a somewhat embarrassing option, no longer trigger alarm bells for consumers here. If an item offers decent quality for an affordable price, it’s likely to be appealing. In some cases, people have had to opt for a different level of experience than they’ve been used to. Older generations have returned to sharing drinks with friends in a park, for instance, because it’s less expensive than a night out in a club. This is usually a habit people leave behind in their 20s, but has made a comeback. What haven’t changed are consumers’ demands for quality, which are undiminished by tighter budgets.

 

2. Ride the rise and fall of dining out

When Spanish consumers have disposable income, the number of times they eat out each week tends to go up, and the reverse is true when times are hard. For food and drink brands, this creates volatility in demand that needs to be factored in to strategic planning – including communications planning. Kantar Worldpanel data shows that in 2016, sales of fast-moving consumer goods in Spain slipped 1.6 percent by volume and 1.2 percent by value as people with a little more money in their pockets bought fewer ingredients for home-cooked meals and returned to the more expensive option of dining out. Similarly, hair and beauty products for home use sell well when people feel unable to indulge in salon treatments; there’s a dip when these outings feel affordable again. Communications campaigns are an essential tool in maintaining demand – or the value of sales through higher pricing – during these ups and downs.

 

3. Family life has moved on

The reality of modern family life in Spain is quite different to that of half a century ago. Both parents in a family generally work outside the home, and with maternity leave usually only a few months, young children tend to be in nurseries or with grandparents from an early age. Spain was among the first countries in the world to legalise gay marriage, back in 2005, and while this was not without controversy in a traditionally catholic country, it is now widely accepted. Similarly, couples are having fewer children or none at all. Advertising is starting to reflect this new picture of family life. The pizza brand Casa Tarradellas uses different takes on modern family life – a dad with his daughter, and a gay couple – in ads that focus on families sharing meals. The bonds between family members of course remain important, but to stick solely with imagery of a nuclear or multi-generational family being served at the dinner table by the mother is to mark out a brand as being a bit behind the times. Ahead of Christmas 2016, Audi in Spain created an ad that challenged traditional gender stereotyping of toys. They showed a doll breaking free of the pink toy aisle and racing off in a blue Audi.

 

4. Feed the desire to be healthy

One in six adults in Spain is obese, and the problem of children being overweight is among the most severe in the developed world. About a quarter of all children in Spain are classed as overweight. Convenience foods and an increasingly sedentary lifestyle have taken a toll on waistlines. While many consumers are concerned about the effect of carrying extra weight on their appearance – and there are plenty of diet products and plans that focus on the link between being slim and being attractive – the greater concern is about the effect on personal health and longevity. The national health service tends to be slow-moving for non-urgent cases, so rather than get sick and wait in line, people want to look out for their own health and avoid getting ill in the first place. Low-sugar, low-carbohydrate and fat-free or “light” products are in demand among both men and women. Organic or “bio” food is still a niche market in Spain, though gluten-free foods are on the rise.

 

5. Draw on your past but move with the times

Some of the strongest and most highly regarded brands in Spain are over a century old, but often they thrive because they're agile. Trust earned over many years is a compelling reason not to make sudden changes, but staying relevant means adapting both what you offer and how you present it. Telefonica and BBVA are powerful examples of building on people’s long-term association with a brand being part of their lives, but also moving on. In the case of Telefonica, it’s gone from being a state-owned provider of fixed-line phone services to one of the biggest mobile operators in the world, while BBVA is promoting digital banking and backs Spain’s growing legion of tech entrepreneurs. Home-grown Spanish brands seem more reluctant than global brands to combine the old with the new; their rich heritage cannot be replicated and should be celebrated, but it is not enough to future-proof their role in consumers’ lives.

 

6. Relevance matters more than nationality

When it comes to food and drink items that are part of Spanish culture – think cured meats, olives and wine – consumers tend to seek out not just “Made in Spain” or Spanish brands, but specialist regional or local brands over global names. For everything else, however, they’re equally open to Spanish and global brands – what matters is relevance to their lives or personal preferences. In some families, battle lines are drawn over which chocolate milk powder is best, local brand ColaCao or Nestle’s Nesquik, but because of taste, not country of origin. Indeed, many global brands are widely viewed as local brands because they have been a key part of people’s lives here for so long. The Brand Footprint 2017 study by Kantar Worldpanel shows that both global and local brands have clear roles in the everyday lives of Spanish consumers. The brand with the greatest reach in the world, Coca-Cola, also has the greatest reach in Spain. Colgate is a byword for toothpaste, while Lay’s, Sunsilk and Dove are leaders in their category and “feel” local, alongside local names like El Pozo, Campofrío and Don Simon.

 

7. Show, don’t explain

Spanish consumers are both sophisticated and impatient. Long lists of product features are not considered interesting; consumers respond not to what a product or brand does, but rather the effect it can have on their lives. If they want to know about the product spec, they can Google it or ask their peers. In the balance between appealing to the rational mind of the shopper and the emotional desires of the consumer, lean towards the latter. Show how you can make them feel. Brands in categories from food to mobile phones should bear this in mind. Demonstrating the effects of a brand makes a more powerful connection than explaining what causes the effect.

 

8. Look beyond cities

The most affluent consumers tend to live in cities, but a significant proportion of the Spanish population – about 20 percent – lives outside urban centers. Until recently, these consumers have had limited choice when it comes to shopping; the brands they see advertised aren’t always available locally. Grocery shopping is often done in small, family-run general stores or mini-supermarkets, and there is little choice when it comes to clothes, household essentials and even larger items like cars and electronics. Rural consumers’ expectations are rapidly changing, however, now that their internet connection gives them access to the same goods available in the cities. Amazon’s fast delivery times are setting the standard for service in consumers’ minds; now non-urban shoppers expect the same speedy service and competitive pricing in stores that they can get online. If brands and retailers can’t compete on price outside the cities, they need to emphasize other strengths and services to stay relevant.

 

9. Sharing is a national sport

The “sharing economy” is flourishing across the world, fuelled by the rise of Airbnb and Uber. But the motivation for sharing is not new to Spain. More than half of all consumers have bought or sold something on second-hand selling sites like Wallapop, domestic tourism involves Airbnb as much as it does hotels, and car-sharing and ride-sharing services like Blablacar and Car2Go are thriving in cities. There is no shame any more in buying second-hand; in fact, it’s not only seen as smart to make a saving, it fits with the cultural reluctance in Spain to waste anything that might still have a use. Building a brand in Spain right now means considering alternative business models that tap into the growing desire to make efficient use of goods, services and household income – rather than own something to keep forever.

 

10. Small is the new mega

The desire for convenience is changing the way people shop; out-of-town hypermarkets are still well used in Spain by shoppers looking to stock up and benefit from economies of scale. But just as tough economic times have led people to rethink the stores they use and the brands they select, fuelling the rise of discounters Aldi and Lidl, e-commerce has simultaneously raised expectations of convenience. Smart retailers are meeting this challenge by offering an increasing range of formats, with a focus on small, urban or community stores with a small but carefully curated range of products to suit a specific location. IKEA’s plans to double the number of stores in Spain between 2015 and 2020 include smaller-format outlets like its Pamplona branch. Providing convenience is not just about shrinking stores, however. Brands can consider ways of making it easier for shoppers to stock up, but also to get the goods they want “just in time”. Think creatively about partnerships with retailers and other brands when it comes to delivery and collection options, and linking these with other useful services.

 

11. If you’re not online, you should be

Booming levels of e-commerce in Spain mean that if you’re relying solely on physical stores for distribution, you’re missing a large trick. The extent of online buying is such that new brands can achieve national recognition without a presence in physical retail at all. Brands need to be available online to give consumers the choice and convenience they’re looking for. They also need to make online a key part of their communications strategy. Shoppers that seal a deal in a physical store have often been influenced by brand messages online or have done their own online research. While mobile and smartphone penetration is among the highest in Europe, only a small proportion of consumers are so far using their mobiles for shopping. M-commerce is something brands in Spain need to prepare for, if not deliver right away.

 

12. Get the (instant) message

Spanish consumers are not just embracing Facebook and Twitter, they’re increasingly signing up to instant messaging and picture-sharing networks. Instagram penetration is over 53 percent in Spain (in 2016), up from 38 percent just one year earlier. Snapchat is enjoying even faster growth, from 9 percent penetration in 2014, to 11 percent a year later, then rocketing to 28 percent in 2016. WhatsApp use is universal among smartphone users. And if you think it’s just teenagers taking selfies, you’d be wrong. Among those aged 55 to 65, Instagram is used by 35 percent of people and Snapchat by 10 percent. All brands from all business sectors should be considering social media in their communications armory. Quite simply, it’s where people are.

 

13. Pester power will backfire

Being where the consumer is makes for smart marketing, but there’s a fine line between being there and making someone feel like they’re being stalked or harassed. The Kantar TNS Connected Life 2016 study highlights Spanish consumers’ exasperation with brands that they feel intrude on what they’re doing. At best, these brands get ignored; at worst, they cause irritation and have a negative impact on brand perceptions. One third of Spanish internet users say they ignore all social media posts or ads placed by brands in social media – higher than the global average of 26 percent. And between about 25 and 28 percent of Spanish adults use online ad blockers – among the highest proportion in the world. Brands must be sure that their content is truly valuable to the target consumer. Hawkers sunglasses show how this is done; their Instagram account has close to half a million followers. Their online activities include a summer countdown promotion with discounts aimed at fashion-savvy music fans, and a stunt linked to people queuing in Madrid for the iPhone 7.

 

14. Don't forget about TV

While digital media is creating excitement among brands about new ways to reach consumers, the enduring appeal of television is to be overlooked at their peril. GroupM figures show TV has a strong grip on people’s attention, not just at home but on screens in bars and cafes. In 2017, 50 percent of time consumers spend with any media is forecast to be spent watching TV – exactly the same proportion as in 2007. This adds up to an average of 3 hours and 48 minutes a day, compared to just under 90 minutes a day online, and about 100 minutes a day listening to the radio. While in many markets, advertisers have been slow to switch budgets to match the way consumers are spending their time online, it could be argued in Spain that TV is currently under-invested. It accounts for half of consumers’ media time, but only 40 percent of total advertising investment. Brands and agencies should be discussing the best combination of media for audiences based not just on demographics but behavior.

 

15. Mind the generation gap – as easy as X, Y and Z

Differences between people of different ages affects not just which media they’re likely to be using but also how they react to the brands they encounter there. Kantar Millward Brown’s AdReaction Connecting Generations 2017 research shows nuanced distinctions in habits and preferences, and some apparent contradictions. Generation Z, aged 16 to 19, are the most likely to skip, close or ignore online ads, but they are also most generous with their time – perhaps because they have more of it – when they stumble on something they like. They’ll happily give up to 20 seconds to an ad they’re enjoying, while older groups say 10 seconds is their maximum. Generation X, aged 35 to 49, are most likely to engage with information and advice – blogs or tutorials - than their younger counterparts. They also enjoy content featuring music, events and interesting characters. And Gen Y consumers, those in between, are the most positive about sponsored filters on social media.

 

 

16. Green is mainstream

Environmentalism is increasingly part of most people’s everyday lives, and consumers are comfortable with energy-saving lights and other devices. The amount of waste each household produces has been declining in recent years, and recycling rates are on the rise, with about 80 percent of paper and cardboard used in Spain being recycled. But there is more to do. Air pollution hovering over Madrid, known as “la boina” or “the beret”, led to the introduction in a 2016 of a restriction on traffic that allows only half of the city’s non-electric vehicles on the roads at times when nitrous oxide levels shoot up. Businesses switching to solar power or reducing waste are likely to get a positive hearing from consumers, but brands should think big on the environment, and consider what role they could play in tackling wider-scale environmental challenges.

 

17. Don’t just plant trees

Being a socially responsible corporate citizen in Spain is about more than planting trees, turning off the lights and recycling. These kinds of activities have become a bare minimum in consumers’ eyes. Creating impact with CSR means approaching it creatively in ways that don’t just achieve something “good”; the most effective CSR has a clear impact on individuals or communities, and matches their needs and aspirations. It must also be a logical extension of a brand’s core values. The bank BBVA, for instance, promotes financial literacy through education projects, and links innovation in banking with support for business start-ups. Sometimes CSR inspiration can come from unlikely places: Campofrío turned disaster into a positive exercise in CSR after its factory in Burgos burnt down, leading to huge staff lay-offs. When rebuilding began, every worker was sent a brick made from the ashes of the ruins and invited to come and lay it as the new structure was built.

18. The world is your oyster

The fact that Spanish is the second-most-spoken language in the world, after Chinese, means there’s a ready audience for brands abroad among people already familiar with buying “Made in Spain”. Latin America, despite being far away, has cultural links to Spain that create a somewhat safe haven in which brands with global aspirations can begin to expand. Entering any new market naturally requires brands to adjust to local mores, but being able to talk to more than 400 million people in their own language is a strong starting point. Increasingly, Spanish brands are now launching directly into other European markets either as well as or instead of Latin America. Perhaps emboldened by international respect for the expansion of Zara and Santander, brands including Campofrío and Mercadona have moved into France and Italy, as well as neighboring Portugal. There’s scope to follow in their bold footsteps.

 

19. Export positivity and culture

The world has positive associations with Spain, Spanish people and, by association, Spanish brands, and this can be turned into a competitive advantage. Spanish people and brands want to be associated with a far richer tapestry of life than simply tapas, flamenco and bull-fighting, but there are ways of tapping into “Brand Spain” to connect with global consumers without resorting to clichéd imagery. BAV Consulting’s annual “Best Country” ranking puts Spain at 19th place in the world, winning recognition for its cultural influence, its sense of adventure and rich heritage. Picasso and Gaudí are instantly recognizable as Spanish, and their influence lends credibility to Spanish brands. The BAV study shows that Spain is also seen as being “open for business”.

 

20. Think long term

BrandZ™ research over more than a decade consistently shows that the brands that consistently invest in communicating their strengths tend to ride out the ups and downs of economic cycles far more comfortably – and recover much faster – than those that don’t. Now is the right time to invest in building relationships with consumers, even for brands and products they can't afford or can’t afford to prioritize at the moment. Levels of disposable income are rebounding, and the young people who might be unemployed and short of cash right now won’t always be in this situation. Brands should foster familiarity and trust. They should plant the seeds of aspiration, and meet that aspiration with products and services that consumers’ needs as their lives change and their ability to spend increases, whether that’s for something as simple as shampoo and biscuits, or higher-end purchases like white goods, jewellery or even cars and real estate. Talk to people now, and they’ll remember you when they can afford to buy.