Price still an important thing, but it’s not the only thing at drug and grocery

Observation:   That’s according to this story from Drug Store News, citing research from SymphonyIRI (click to link).

Implications:   “Value” isn’t always about price.  Consider, instead, how the product or service you sell—or the way you sell it—adds value to the consumer’s life.  I’m banking on more and more digital interaction (especially mobile), concern about The Fuel Economy, and increasing Time Sensitivity as issues that drive consumer trends in the next few years. 

What are you anticipating?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

The risks of research: Asking too much of your customers

Observation:   A recent story in the New York Times suggests that the frequency with which companies are asking customers for feedback could be approaching a point of no response; the consumer does not have time to answer every questionnaire she is invited to fill-out.  Click here to read the story.

Implications:   Few things are more precious to a company than the input of its customers.  Their feedback tells you what you’re doing right, what you could do better, and it might even reveal services or products you could provide that you haven’t even thought of yet.

Keep in touch with your customers, but don’t take their attention for granted.  With each survey you write and every question you ask, scrutinize whether you are likely to harvest information that is actually useful.  The response of your consumer is not something to take for granted.  And you don’t want to burn them out with pointless research that presents nothing more than patronizing answers to softball questions.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Another casualty of the digital age

Observation:   Last week, I posted an article noting the end of the printed edition Encyclopaedia Britannica.  Over the weekend, a story in the Los Angeles Times pointed to another casualty of the Internet age:  The printed business card.  Click here to see the story.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Furniture sales on the rise (again) in February

Observation:   A story in Crain’s New York yesterday indicated that sales in the home furnishings category are really taking-off nicely.  Click here to see the story.

Implications:   In recent Audience DNA research workshops, I’ve encouraged marketing professionals to stop thinking about “Adults 25-54” or “Women 18-49” as their target audience.   People don’t buy furniture just because they’re a particular age.  Their purchases are often influenced by the length of residence in their current home, and the extent to which they plan to stay there.

The foreclosure crisis created a whole new segment of renters; when someone moves from a house to an apartment, the McMansion-sized furniture often won’t fit.  Families who fall into this group often have up to a year to plan, however, so they sell the old stuff on Craigslist and save up some cash to outfit their new dwelling.

There’s a growing number of folks who are not victims of the real estate meltdown… but beneficiaries of it.  They’re swooping in to upgrade to a new home while there are still lots of great deals on houses out there.  New house = new furniture. 

As much press as was given to foreclosures, there is an even larger number of people who purchased their home at the peak of the real estate bubble are now up-side-down.  They’re not at risk of foreclosure, but they are unlikely to flip their current house and move into a new dream home anytime soon.  So they’re doing things to make this house the home of their dreams.  Alas, new home furnishings and home improvements can be a part of their plan.

Finally, folks who’ve been in their current home for eight to ten years or more are simply eager to do an upgrade.  Their current home furnishings look dated or worn, so they’re likely to welcome any new ideas that give their house a fresh new look and greater functionality.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

The dumb bell economy hits the food aisle

Observation:   This morning’s newsletter from Phil Lempert explains that food retailers have their own version of the “haves” and “have-nots” landscape.  He divides consumer sentiment into the two groups of pessimistic and optimistic.  The latter group is feeling better about the economy, more likely to try new products and experiences, and indulge a little more freely.  Pessimists might be more likely to change retail channels frequently (going from grocery stores to club, discount and dollar stores), clipping coupons more religiously, and taking extreme measures to maintain a frugal lifestyle.  Click here to see the story.

Implications:   I’ve written pretty extensively about the Dumb Bell Economy, and you can review those past stories by clicking here.  This Phil Lempert piece does a good job of reminding us that—just as was the case with the recession—the economic recovery is a very personal thing, and might look drastically different from one household to the next.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

A by-product of bank stress tests: Stressful PR?

Observation:   A story from today’s New York Times explains how banks fared during the most recent round of Federal Reserve stress tests.  This systemic scrutiny was created after the banking collapse of the Great Recession, as a way to determine whether major banks were solid enough to survive another dramatic economic downturn or other difficult events.  According to the NY Times article, 15 of 19 major banks are in strong condition.  Click here to see the story.

Implications:   Think about this.  When you see a headline that indicates, “15 of 19 banks are solid,” I can’t be the only person who’s first thought is:  Who flunked?  Who’s in trouble?  Who are the four kids that had to stay after school?! 

Stories like this remind us that, just a few years ago, we were hearing many institutions described as, “too big to fail.”  And it might represent an opportunity for smaller, more local/regional institutions to present a more human side to the financial industry.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

A dramatic sign of our digital times

Observation:   If you want to know just how wired we have become, you can look it up in an encyclopedia… but soon, the only up-to-date version of that information source will be online.  Encyclopaedia Britannica has announced that it will discontinue its printed version, according to this story from the New York Times (click to link).

Implications:   The company has been publishing these impressive volumes for 244 years.  Wisely, they’ve also been publishing on the web for many years, and seem to be focused on staying current with mobile devices.   What remains to be seen is whether their business model can prosper in a world where information has become so eager to be free, through sources like Wikipedia and a seemingly infinite list of other web resources.

Once upon a time, buying air travel used to be a complicated ordeal, often requiring the intervention of a travel agent to interpret the numerous options and seemingly foreign language of the airlines.  That process was ultimately simplified, and information once controlled by experts was released to the general public; we can now shop for and purchase plane tickets from the miniature screen of our smartphones.  (For that matter, I find the best time to plan my travel is when I’m sitting at 30,000 feet using GoGo.)

What information does your business control?  Could your business actually grow if you figured out a way to relinquish that control to the consumer?  Could your company suffer is someone else figures it out first?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Snack attacks represent opportunity for restaurants

Observation:   Today’s Marketing Daily includes a story about the rise in snacking frequency, and the role that restaurants can (and could) play in that mini-meal category.  Click here to see the story.

Implications:   It seems that things like the dollar menu at fast food restaurants or the pastry display at your nearest coffee shop are serving to facilitate more frequent eating occasions of smaller servings.  This report indicates that snacking occasions have increased; I’m going to keep my eyes open for a report that illustrates whether formal dining occasions have declined.   

Meals used to be an appointment, happening at breakfast time, lunch time, and dinner time… and you better not be late!  These days, though, it seems like many folks have become less meal-time focused, and more likely to graze throughout the day.  (I wonder if this might be a by-product of time poverty.)

If you own or operate a restaurant, the fear here could be that your average ticket revenue might fall.  But in a glass-half-full perspective, realize that this might be a chance to get more people in the door to sample your restaurant, and become comfortable with the idea of returning later for their major meals.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

This time, it’s different: Wells Fargo to end free checking (for some)

Observation:   Last week, a report from the Associated Press explained that Wells Fargo will roll-out a $7 monthly fee for checking accounts that were previously free… unless customers maintain a $1,500 minimum balance, or direct deposit at least $500 per month.  Click here to see the story as it appeared in Crain’s New York.

The fees will roll-out gradually beginning in May, and beginning with six states, according to this story from KSTP News in Minneapolis. 

Eventually, the rate will be in place in each of the 39 states that Wells Fargo serves.

Implications:   So why has Wells Fargo avoided the outcry of unfairness that was cast on Bank of America a few months back when they tried the same move?  I suspect it’s because Wells Fargo did a better job of explaining that the move would not affect customers across-the-board, but that it would impact folks who don’t do much business with the bank anyway.  It seems to me that Wells Fargo is thinning the customer herd.

In the story, one critic complain that the bank is being unfair to folks who are unemployed or on low fixed incomes, but I’m not sure they’re being any less fair than any business that expects to be paid for products received or services rendered.  (Most companies target consumers with incomes.)  Another critic warns that Wells Fargo will lose much more in the way of customers who walk away than from the income these new fees will generate.  I’m betting the folks at Wells Fargo have calculated that trade-off, and are at peace with their decision.

Many companies focus on customers they wish they could have.  But have you thought about those customers that could actually be costing you more than they are likely to be worth, in terms of economic return?  

In the face of rising energy and commodity costs, is it likely that you will have to raise prices on some products or services in the next few months or years?  What can you learn from the way that Wells Fargo has introduced—essentially—a price hike?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Use of mass transit on the rise

Observation:   Today’s USA Today includes a story about the increased use of mass transit in 2011, attributable to high gas prices (people leaving their cars at home) and an improving economy (more people commuting to work).  Click here to see the full story.

Implications:   America’s collective consciousness of higher gasoline prices is becoming evident.  If the price of gas up to or beyond $4.15 per gallon—roughly the price when folks were freaking-out back in 2008—we will have seen the influence of The Fuel Economy on vehicle preferences and other consumer spending. 

But how will higher gas prices affect you?  Can you position your product or service as something that should still be attractive when budgets have again grown tighter?  Have you been talking to your on-floor sales staff about up-selling customers… as a means of helping them accomplish more tasks on a single shopping trip?  Do you sell a bulky product that one might need help getting home (free delivery) because of their inclination to use mass transit? 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Targeting the mass affluent

Observation:   A story from yesterday’s New York Times explains how some financial institutions have turned their attention to consumers who seem to be doing well, but may not fit the description of super-rich.  Click here to see the story.

Implications:   In our on-location “Consumer DNA” workshops, we often use qualitative research to demonstrate that there are far more “emerging investors” available to most business communities than there are “blue chip investors.”  The latter group is composed of people with at least a six figure income who pay for the counsel of a financial planner, accountant or stock broker; the former group—the emerging set—is composed of people with an above-average income but who are NOT receiving the guidance of a paid professional.

Everyone wants to sell stuff to rich people.  But opportunities exist when you reach for the folks who are not quite rich, but might be on their way.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Defining moments for the consumer

Observation:   An interview with BDO’s Stephen Wyss suggests that consumers have moved to a mindset of moderation, and that more men are doing more shopping.  See the story at Marketing Daily’s website. 

Implications:   What Mr. Wyss describes as a “defining moment” for the consumer matches up very nicely with what I’ve referred to as Reconciliation; people have taken into account that they have a different set of financial realities than they did in 2006.  But they’re not freaking out about it… they’re coping, adjusting, and making things work.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.