Automotive: Dynamics that could shape future sales and market share

There was a good piece in this morning’s Media Post Marketing Daily, reporting on an IHS/Global Insight presentation at the New York Auto Show. I say that because the conversation focused on trends that will have significant impact on the car business, including the future availability of credit and the fact that right now, nobody is a clear winner with young people (future consumers). Click here to read the story.

Implications: As consumers continue the process of de-leveraging, and as credit remains tight for all but well-qualified buyers, financing will be an important issue for the car business. Many people simply can’t get it, and many others simply don’t want it. But as credit markets recover and consumers regain their confidence (about future income prospects and financial stability), the credit issue should diminish as a barrier for the industry.

What remains more within the industry’s control is that second observation from IHS/Global Insight. My interpretation: Focused so hard on trying to salvage their core (older, more established) customers, nobody enjoys a clear lead among younger automotive consumers. That’s not just a manufacturing issue, suggesting that the new cars aren’t quite right; it could be argued that the digital dashboard many vehicles offer now is just the thing for today’s younger, connected buyers.

But has the way dealerships sell evolved, too? Yes, most dealers have embraced online shopping and buying. But what of the in-dealership experience? That might be an area worth review. Because it seems to me that lack of leadership among young car buyers is not a problem.

For someone, it's a tremendous opportunity.

Mike Anderson

Automotive: Supply and demand strikes again

As traumatic as life has been for car makers and dealerships over the past three years, there is a silver lining that is now being revealed: The average price per vehicle has begun to rise… and for the first time in years. That’s according to this story from Forbes/MSNBC. In addition to an uptick in sales, the spike is attributed to the fact that major manufacturers cut their capacity to produce vehicles, which has reduced supply.

To get precisely the vehicle with the options desired, the consumer has had to pay more.

Implications: The price for many models has been stagnant for three years or more, according to the MSNBC story. As frugal as folks are trying to be, it seems that those who are “in the market” for a vehicle can accept the idea that prices are going up.

One challenge to this momentum will be the recent incentive wars that have once again erupted. (Toyota has been using incentive plans to recover from the effects of bad publicity following their recent recalls, and some other makers have followed with similar programs.)

There are a lot of moving parts to this story, but one thing should not go un-noticed: When a need exists, this is evidence that the consumer is willing to spend more to get what they want.

Mike Anderson

Generational Economics: Is old the new young?

Some friends on LinkedIn have been talking-up this column from AdWeek, about the way older folks are behaving younger, and younger folks are behaving older. (Click here to read it.)

Implications: At age fifty, who knew I would be thought of as the psychological equivalent of Benjamin Button, getting younger as time moves on!

If nothing else, the AdWeek piece reminds us that targeting consumers based on stereotypes can be dangerous. Replace pre-conceived notions with some customer conversations (research), and you’ll profit for it.

Mike Anderson

Social Security reaches a tipping point

In case you missed it last week, a story from the NY Times pointed-out that, for the first time, Social Security Administration will pay-out more in benefits than it takes in as revenue. This tipping-point was not expected to be reached until 2016, but the system—like many other human services programs—has been hit by the perfect storm of more people filing for benefits, and fewer receipts from payroll withholding, both attributable to the recent recession.

Implications: Whether social security would “still be around by the time I’m ready to use it” has long been fodder for conversation among many baby boomers and younger generations. The recession seems to have accelerated the pivotal moment what that hypothetical conversation becomes a reality that must be faced. The largest generation in U.S. history continues to move toward retirement age like a pig through a python, and simple math suggests the program will need a major overhaul, both in terms of revenue generated and expectations of those receiving payouts.

It is not my intent to dabble into a political or fiscal policy debate, here. Only to point-out that if you cater to seniors, or if you provide financial services or advice… significant market shifts are going to happen sooner than most people expected. Consumer trends are less scary if you know they’re coming. Can your company, in any way, help would-be retirees "hedge their social security bet?"

Mike Anderson

An "up" category during the recession: Snacking occasions

A recent Lempert Report newsletter led me to a PR Newswire realease from Technomic, which suggests that 21% of consumers are snacking more frequently than they did two years ago. The public preview of the report also suggests that 42% of people skip at least one meal a day, or replace at least one meal with a snack.

Implications: The word “snack” can have many definitions… from the pretzels or wings served by the pub at happy hour, to the foil-pouch packaged granola bar. But in spite of the high-profile enjoyed by the idea of healthier eating lately, there is clearly a cohort of people who are abbreviating or deleting an important part of their diet.

Is this frequency of snacking attributable to a lifestyle that is busier than ever? Are we grabbing something convenient as a measure of “comfort food?” Is the war on obesity more talk than walk for many people? (The story does indicate that many people are trying to choose healthier options when deciding on a snack.)

I think any—or some blend—of these questions could be answered “yes.” But whether you’re designing a restaurant menu, selling packaged foods or setting-up displays in a grocery or convenience store, it would be smart to remember that, if it ever left, the snack is back.

Mike Anderson

UPDATE: Governments seeking new revenue streams

On more than a couple of occasions, I've written about various state and local government efforts to increase revenue in creative ways. [See "Digging through the couch cushions" from 1/18/10, and "Seeking new revenue streams" from 2/23/10.]

Yesterday, the New York Times had another story on the topic, focusing on the trend toward taxation of services. Click here to read the story.

Resilient through it all: Connectivity

Fourth quarter results from Best Buy were strong, according to an article from today’s Media Post Marketing Daily. The CEO attributes the good news, in part, to consumer’s desire to stay connected, and his company’s ability to provide tools that make it happen. He includes mobile phones, computers and televisions in the list of “connected devices.”

Implications: I’m not so much interested in Best Buy’s performance as I am the products that are driving it. The Media Post story indicated a “low double-digit decline” in music and movie sales… but an improvement in connectivity products that more than compensates for that (neither new or surprising) drop in the sale of CDs and DVDs.

Consumers want the ability to connect. Does your company provide the channels of access the consumer wants? Are you making those channels easy to find and access? Do you talk about those customer conduits on the sales floor and in your advertising?

Mike Anderson

Frugality fatigue

In today’s Research Brief, they again pointed to an interesting element of the recent report from Price Waterhouse Coopers… suggesting that many consumers are just plain tired of being thrifty. I’ve cited this study before (see “Generation Why Not”, 3/9/10), but the concept of “frugality fatigue” is a separate and sovereign point worth thinking about.

[Again, here is a link to the full briefing from Price Waterhouse Coopers.]

Implications: In Elm Street workshops, we often suggest that when consumers are feeling the doldrums, your product or service might be precisely the thing that can lift them out of their funk. That doesn’t necessarily suggest you should encourage “conspicuous consumption.” Think, instead, about simple pleasures like customer satisfaction, small indulgences, or the pleasant experience that sales-floor interactions can be (when done right).

If people are tired of focusing on “cheap” or “purchasing restraint,” how can you give them a little nudge? And what can you do to make the purchase something to smile about, so the practice goes from “isolated incident” to “a shift in mind-set?”

Mike Anderson

Getting real: How homebuyers see real estate

I had a conversation with a veteran real estate agent yesterday… who shared some interesting insights about the ownership intentions of home buyers. When asked how long they intended to keep their home:

In 2006, prospective buyers answered, “2 to 3 years.”

Buyers in 2007 said, “3 to 5 years.”

2008 shoppers answered, “8 to 10 years.”

And the most common response in 2009: “I’m not sure.”

Implications: Since the advent of the Great Recession back in 2007, people have begun to do something very strange with the houses they buy.

They’re living in them.

My realtor friend explained that fewer buyers are “playing the market,” looking for properties they can “flip” in the short term, or thinking of their house purchase as an investment to be cashed-out in a few years. Instead, they’re looking at their home as a place to live… and a place to enjoy family.

A lot of companies are still focused on price-points as if a discount is the only reason someone might buy. But given this kind of insight, I’m wondering about related purchase priorities.
If we’ll be sticking around for a while, will we be shopping for appliances that will last longer, too? (After all, we won’t be leaving that noisy fridge or washing machine behind as if it is the next owner’s problem!)

Will durability and ease-of-care become a greater priority where furniture purchases are concerned?

Many consumers have been “turning” their homes regularly, trading up and moving on the way people used to buy and sell cars. Will those folks be able to quit “cold turkey?” Perhaps the substitute for home buying will be home improvement… helping consumers who don’t want to (or can’t afford to) sell their home still make their current house “the home of their dreams.”

[Special thanks to friend and former colleague Kevin Sperle for sharing the insights that led to this story.]

Mike Anderson

Smarty pants: Finally, a pocket for your phone

I was amused by an entry in today’s Springwise newsletter. Someone has finally created pants with pockets intended to hold mobile phones. (Click here to see the example.)

Implications: Blue jeans have been around since the gold rush of the mid-1800s. (Use of the copper rivet in jeans was patented in 1873 by Jacob Davis and his business partner, Levi Strauss.) They were designed to be “work pants.” But “work” in 2010 looks much different than it did in the 1870’s. We carry different tools.

A lot of guys wear cargo pants (or shorts) for the simple reason that they wanted a pocket to carry their mobile phone. I’ve often worn a sport coat on days when one was not required, for the same reason: Smart-phone friendly pockets. (I’m not the man-purse type.)

People are carrying mobile devices in this day and age. This Springwise story was a great example of someone not overlooking the obvious… and converting a consumer trend into a business opportunity.

Mike Anderson

The healthy dialogue between kids and parents about money

It appears that parents are spending more time talking with their kids about how to use money responsibly (a conversation inspired, perhaps, by their mutual voyage through the Great Recession). That’s according to some data from American Express that appeared in a recent story from Research Brief.

Many economists and pundits have suggested that the behaviors influenced by our recent economic turmoil could out-last the recession. (To use a now-cliché remark, “The new frugality could stick around for a while.”)

Implications: None of us can be certain how long this new, more pragmatic approach to money will last. But it is telling that so many grown-ups appear to have learned from their financial misfortunes, and are proactively helping their children learn from them, too.

My parents were both born while the Great Depression was still fresh in everyone’s mind. And the experiences of their parents (my grandparents) had a great deal of influence over their attitudes toward money. It will be interesting to see if the recent recession was—if not as severe—as formative an event.

Mike Anderson

Extreme couponing

I'm among those folks who have taken note of the rising popularity of coupons. So I was struck by some information from The Nielsen Company that gives me a new—and slightly different—perspective on the matter. The information was published in a story from the Wall Street Journal.

Coupons use/redemption is up 27%, according to the story. But that doesn’t necessarily mean “everyone” is using more coupons. Indeed, the Nielsen data suggests that much of the increase can be attributed to coupon “super users.”

To read the WSJ story, click here. Or, you can review the companion video segment immediately below.


Implications: As popular as they are, perhaps coupon use is not as wide-spread has previously thought, even in an economy that still presents a challenge to many a family budget. That is the first assumption to be challenged by this story.

Next, one might assume that coupons would be most attractive to low-income households who are trying to stretch their dollars. But the Nielsen data cited in the story indicates that these “heavy users” of coupons are women under the age of 54 with a college degree and a household income of greater than $70,000/yr. So, a second assumption gets kicked to the curb.

It’s good to be aware of what “the masses” are doing. But what matters most are the behaviors, preferences and priorities of your “heavy users” (the people who buy lots of the product or service you sell). Are coupons valued by the consumers you serve, when it comes to the product or service you sell? Only your customers can tell you that. The good news is that coupons are increasingly easy to offer, and their redemption is imminently easy to track… so you can experiment with little risk.

This story might also reinforce this important point: There are people who will buy a product for little other reason than, “it was cheap.” But those people are relatively few and far between.

Mike Anderson

Opting-out... of privacy

My thanks to Seattle trend-watcher (and friend) JoAnne Naganawa… for pointing-out this story from USA Today on the use of “private” consumer data to solve an important public health problem.

It seems the Centers for Disease Control used loyalty-card data from consenting supermarket customers to help track-down the source of a salmonella outbreak.

Implications: There are a lot of people who are fixated on protecting our Civil Rights or our right to privacy in the digital age. But this example demonstrates a willingness by the consumer to share that personal information, when it can be harnessed to serve the greater good.

I thought the matter was worth noting.

Mike Anderson

A car dealership that isn't

In this morning’s Media Post, there was an interesting story about a pilot program from General Motors, intended to facilitate “comparison shopping.” Even if you’re not in the car business, it’s worth the read (which you can do by clicking here).

Implications: In their advertising, “May the best car win” is an implicit claim by General Motors. When you are offered the chance to compare several competitive cars with the GM model in that category, the campaign theme is no longer just a claim, but something the company is prepared to demonstrate. That idea has a certain “moxy,” and will probably attract some consumers that aren’t even thinking about multiple test drives.

Does your company challenge customers to “compare,” or do you make comparison less challenging?

Mike Anderson

Doing well while doing good

In many ways, the recent recession inspired people to cast-aside “conspicuous consumption” in favor of products, services and purchasing practices that could be described as more authentic. I’ve written about this gravitation toward the purpose-driven purchase before (see the posting from 11/9/0).

As a follow-up, I’ll share two items that seem to be tapping-in to the consumer’s search for authenticity. In yesterday’s Springwise newsletter, there is a story about the “One Billion Minds” project, which rewards professors, students and alumni from various colleges a chance to win prizes for solving real-world problems. In a campaign that leverages the social networking realm, colleague Kim Peek recently brought up the Pepsi Refresh Project, which invites people to submit and describe community-improving projects, and then asks consumers to vote for the projects that deserve to be rewarded. The plan supports cash-strapped non-profits and experiential philanthropists, and sets the stage for some great viral marketing when project sponsors tap their social networks to generate “votes” for their project.

Implications: Can your business do well by doing good? What philanthropic practices are already under way in your company that consumers might like to know about and appreciate? Do you give employees paid time to volunteer in your community?

In their search for authenticity, consumers might find your charitable works more important than ever.

Mike Anderson

Decisions by committee

Think of it as a by-product of an economy that has us comparing Apples to Oranges


A while back, I offered a posting about one of the epiphanies to come out of the Great Recession: While many consumers can still afford to buy almost anything, they now realize they cannot have everything. (See “Comparing Apples to Oranges,” February 2, 2010).

So, in a household that might be forced to decide between a new stereo or a new television (because they can’t afford both), how will the consumers involved decide which one is more important? If you have to choose between the annual vacation or a major home improvement project, what kinds of criteria tip the decision in one direction or the other?

This is an important issue to think about if you sell anything that could be perceived as a big-ticket purchase: If economics force the household to choose between a new room full of furniture or a new family vehicle, how will that choice be made?

Implications: In the foreseeable future, I suspect that more purchase decisions will be made by committee. After all, it’s not just about buying the new car and having the commuter enjoy the benefits it might deliver. If paying for the new vehicle means putting-off the purchase of a new home theatre system, the whole family is more likely to be involved in the discussion. And it might even be fair to expect that favor will be given to those items which benefit the largest number of family members… or those items which might serve multiple purposes.

As families get re-acquainted with the concept of budgeting, you might see family members selling each other on an idea, negotiating, lobbying… or even “trading votes” over which items the household should purchase, or which items should be deferred.

Are you making it easy for someone who wants your product or service to sell the rest of their committee on the idea?

Mike Anderson

One place where the culture of credit remains strong

A summary in today's Research Brief points out that credit card use is still quite healthy when it comes to online purchasing. The article adds that more than half of consumers are using an online-only payment instrument (such as PayPal), and that debit card use is up among online buyers (presumably because some folks have had a hard time getting credit cards in the recession's tighter economic environment, or have their credit cards maxed-out, or simply have a new aversion to the use of credit).

Implications: When I make an online purchase, I consider the use of a credit card more "utilitarian" than extravagant; the plastic simply facilitates the purchase, and I'll pay the amount off as soon as the bill comes. I don't look at the practice as a means of delaying the purchase.

Perhaps that utilitarian approach says something about the way credit card use might regain some popularity in the offline world, as well.

Mike Anderson

Maybe it's not "Gen Y," but rather, "Generation Why Not"

That headline is one of the anecdotes I’ve heard, recently, about how young adults seem to be returning to their pre-recession spending behaviors a little more swiftly than expected. That’s a concept that is reiterated in a story from today’s Media Post Marketing Daily.

(By the way, if your company’s success depends heavily on this age group—or if you’re just into research—Pew Research makes a PDF copy of the full 149-page report available at the website.)

Implications: If your company serves “Generation Y” (defined as 18 – 27 in the Media Post article), this is obviously good news. While the job market in some regions is more challenging for this age group than some others (a job hunt can be more challenging with less experience or a shorter resume’), many Gen Y consumers are demonstrating the resilience of their youth. In terms of investments, they had less to lose than older generations when the stock market was misbehaving… and they have plenty of “career years” ahead of them to rebuild a nest egg. And finally, many of the government-sanctioned incentive programs (first time home buyers, cash for clunkers, rebates for energy-efficient appliances) seem to be spot-on with the needs of young adults. Such programs subsidize this "age of acquisition," while leaving money left over for things entertainment, electronics, and more.

Mike Anderson

Notes about the price of gas (an important driver of consumer sentiment)

It remains important to keep an eye on the cost of petroleum, as it is so directly linked to the consumer pocketbook: The cost of a commute can restrain spending in other areas, and the price of gas quickly translates to higher prices for any other product or service. An update on the dynamics of this commodity was published this morning in the New York Times.

Implications: As I’ve presented before in this space, many companies used a discounting response to survive the Great Recession. That means some companies have spent more than two years training their customers to buy only at a lower price. That could be a problem if the cost of petroleum or other factors force prices up.

As the recovery gains momentum, it will be important for any company to get back in touch with their core value proposition: Not just price, but the benefits and reasons why people buy a product or service in the first place. If not because price sensitivity must be mitigated, then because competition is sure to escalate as the economy improves… and a race to the bottom of profit margins can be a dangerous thing.

Mike Anderson

Coloring your offer Green (as in, "envy")

An important (if obvious) point was made by David Almy in his Engage: Green newsletter last week. He suggested that companies focus not on their “green” or “sustainable” offer alone, but what that offer benefits the consumer, personally.

Implications: People generally want to save the planet, but feel that it’s out of their reach. More importantly, in the aftermath of the recent recession, folks are busy simply trying to save their household budget.

It’s a good time to remember that green is not enough. The impact of an environmentally friendly product or service will be most clear and conspicuous at the household level. So translate your benefits accordingly. It’s not “less packaging,” it’s less hassle because I don’t over-stuff my trash bin on garbage day. It’s not just “fuel efficient,” it’s putting gas money back into the grocery purse.

Making a product green does not make the consumer want it, necessarily. Green is a feature that must be translated into benefit.

Thanks for the reminder, David.

Mike Anderson

The average consumer: Who do you think you're talking to?

It would be difficult to grasp any consumer trend without first understanding the consumer. That’s why trend watchers everywhere are looking forward to that decennial gift known as the Census.

Much has already been written about the 2010 Census, including a pretty fair piece from USA Today just last week. (See the 3/3/10 story by clicking here.) The story explains how the census—and citizens—are responding to the reality that many Americans’ lineage is composed of more than one race. (The census first allowed respondents to indicate “one or more” racial categories in 2000, according to the story.)

Implications: Again, just as the landscape changes while one travels, the tapestry of America is changing as we travel through time. I’m reminded of a great article from Advertising Age that appeared last fall (see “No More Joe Consumer,” from 10/12/09).

These days, there really is no such thing as “the average consumer.” There is only a seemingly endless variety of sets and sub-sets. Certainly, the coming census data will verify a population that is more diverse, and in more ways than one.

As much as we would love to sort people into convenient, tidy little categories (like race, ethnicity, demographic cells, or generational cohorts), that’s becoming more and more difficult to do. But that’s okay. Such “global” or “30,000-foot views” of the consumer landscape are not nearly as important as a street-level understanding of who your company serves.

Are you talking (listening) to your customers? Do you find their preferences are based less on age, these days, and more on lifestyle? Do you notice overlap in the tastes of some customers, in spite of distinct generational lines? You’re not alone. Above-average companies are quickly learning they do not serve average consumers.

Stay tuned as detailed Census data begins to be released, about one year from now (here’s a timeline). Meanwhile, start taking a census of your own… by noticing the common denominators among the customers you serve. Look for things like degree of education, household composition, comfort with technology… or other matters that might hold a relationship to the product or service you sell, and why people buy.

Mike Anderson

Debt has been a restraining issue, but we're working on it

More than one in three Americans had difficulty managing their debt over the past two years, and of those people, forty percent said they have sought help in managing the situation, either through the lender holding the debt or through a debt consolidation or credit counselor of some kind. That’s according to an article from this week’s Media Post Marketing Daily.

Implications: Anyone who sells a budget-impacting product or service should take note.
The term “qualified buyer” could refer to a different consumer in 2010 than it did in 2006. (Has the profile of your target consumer changed? Have those changes been reflected in your messaging?)

Consumers are likely to associate the word “financing” with “liability,” as well as “affordability.” (Has your marketing begun to include rationale about why the product is worth a 36-month payment (or whatever the term/amount might be)? Are you helping the consumer compare Apples to Oranges?)

There are exceptions to every rule. While more and more consumers have taken a “cash is king” approach to their consumption lately… other people have been conservative about their use of credit all-along! (Are you offering incentives to attract these ultra-qualified prospects?)

Mike Anderson

A teeter-totter effect: When the economy goes down, petty crime goes up

A story from Media Post Marketing Daily this week reminds us that when the going gets tough, some people just start grabbing stuff. According to the article, 78% of retailers report an increase in opportunistic and amateur shoplifting.

Implications: If you’re in the business of selling things of value, shrinkage is always a concern; even more so when times are tough. While the recovery may be underway for some, others are still feeling the deep effects of recession, so this problem is likely to be pervasive for a while.

Like anything else, loss prevention is not as simple as it used to be. These days, simple shoplifting is only part of the problem, aggravated by things like organized theft rings, internal theft, returns fraud, and high-tech “fencing” (easily selling stolen goods on various websites, such as Craig’s List or e-Bay).

How long has it been since you considered the fundamental security of your inventory? Countermeasures such as (conspicuous) surveillance cameras, RFID-enabled anti-theft systems, and basic security training for store personnel might help preserve profits.

Mike Anderson

A look at the Millennial cohort

An issue of the Research Brief this week offered a nice overview of the “Millennial” generation (those folks who were coming of age at the turn of the century), and offered a link to the research story that informed the article from the Pew Research Center. I encourage you to read both pieces… but some of the headlines are worth reflection: These 18-29 year-olds are less institutionally religious, more educated, more social, and in some ways, more cautious than previous generations, according to the Pew research.

(By the way, if your company’s success depends heavily on this age group—or if you’re just into research—Pew Research makes a PDF copy of the full 149-page report available at the website.)

Implications: Just as the Matures, Baby Boomers and Generation X were influenced by world events and personal experiences which occurred in their formative years, Millennials have been shaping their worldview over the past decade, and will continue refining that character in the near future.

Hindsight helps us understand the issues that most dramatically influenced previous generations (the Great Depression, World War II, the Cold War, the Civil Rights movement, etc.) But for now, we are equipped with only “now sight” and foresight. In what ways might the tech bubble and corporate chaos of 1999-2002 influence the leading-edge of Millennials? How about 9/11? And what about the so-called Great Recession?

Each of these events has arguably influenced the attitudes and opinions of anyone that was affected. But happening at a formative time in their lives, these events are more likely to have a long-term effect on Millennials. If your company serves “consumers” under the age of 30, all of this is at least worth discussion.

An example of the interesting findings: 52% of this group consider being a good parent to be an important life goal... while only 30% said, "Having a successful marriage." If your business caters to "traditional families," it would be smart to realize that "traditions" continue to change, where famlies are concerned.

Helpful hint: Don’t go through this research looking for absolute answers, or you might drive yourself crazy. Instead, look for a range of relevant possibilities.

Mike Anderson

Good retail and employment news

I’ll cite a story from today’s Minneapolis Star Tribune to amplify news about the growing strength of retail sales: Revenues in February were stronger than expected.

Also, employment figures were stronger than anticipated this week. In a story from USA Today, statistics indicate that the unemployment rate has not gone up since October. In a story from the Wall Street Journal, analysts explain the ripple effect that good employment news is having on the futures market and other parts of the economy.

Implications: It is important to respond to a recession. But it is no less important to be watchful and responsive to a recovery.

Mike Anderson

Consumers expect you to use your manners in social settings

And social networking sites are no different.

There was a very good story in this morning’s New York Times about consumer reactions to advertising in Facebook. The social networking site allows advertisers to design ads in a self-service format, and then deliver those ads to people who match one or more specific criteria (single, married, in their twenties, etc.).

The article cites two issues that rubbed consumers the wrong way. First, the “creative strategy” behind many ads is very poor… to the point where many campaigns come off as a “scam.” Secondly, it is a bit unnerving for some people to realize they haven’t just shared their information with “friends,” they have shared that insight with companies who would like to sell them something. (Although the practice of behavioral and contextual targeting is becoming more commonplace.)

Implications: If an advertiser fails to understand the attributes and needs of the target audience, and the benefits which are sought by those consumers, any resulting ad campaign is likely to be seen as shallow and irrelevant. The same campaign, when modified by name-dropping a person’s favorite movie, song, or actor simply adds another later of gimmicky fluff… resulting in a campaign that is not only shallow but insulting. (It’s like saying, “Hey, we both enjoy movies that feature John Travolta… you should buy our stuff!”)

Social networking is a conversation among friends. And just like the friendships you made in high school, or in your neighborhood, or in your office… the most meaningful of these relationships take time to build, require trust to advance, and involve a sense of relevance to both parties. If you don’t play the game by the same rules as everyone else on her “friends” list, you will be seen as intruding on the conversation, and become very easy to ignore.

As long as its networking utility exceeds the accompanying annoyance of really bad advertising, Facebook users are likely to keep using the social networking site in droves. However, advertisers run the risk of diluting the value of exposure on that medium, if they continue to place materials that are either annoying, irrelevant, presumptuous… or all of the above.

[Author’s note: Speaking of Facebook, note that you can now receive Elm Street consumer trend updates via Facebook and Twitter. Just click on the icon of your choice in the right-hand navigation bar, and “Fan” or “Follow.” I promise to remain focused on business and consumer trends. Not your astrological sign or favorite song.]

Mike Anderson

Demonstrations of optimism from retail and restaurants

Two stories from Media Post Marketing Daily in the past week suggest confidence in the forward path for some specialty retailers and restaurant companies. The restaurant story ran last Friday in Marketing Daily, and was fueled by insights from the National Restaurant Association. The same day, a story about specialty retail focused on the expansion plans of GAP and Limited Brands.

Implications: During the shell shock of the Great Recession, some companies were so focused on “the moment” that planning for a post-recession economy was difficult. But the long-term thinkers were doing just that. And now that a recovery is underway for many (though not all) consumers and categories, other companies are getting back to their forward-focused ways.

I’ve said this before, but it’s worth repeating: It is critical for a company to recognize when a recession has begun, but no less critical to know when it has begun to fade.

Mike Anderson

Information (when shared) is power

Another interesting idea shared by the latest issue from Springwise: the open-source restaurant. Not only can customers enjoy the meal… they can get a copy of the recipe, too. (Or for that matter, if they like the furniture in the restaurant, they can get a copy of the plans that show how to build it… according to the Springwise story.)

Implications: Once upon a time, information was power: If I had information that you didn’t have, I was more powerful than you. These days, information is still power. But now it seems the power comes not from having and holding the information… but from sharing it openly.

One example might be Apple. By opening their operating system, Apple made it possible for outside developers to make the i-Phone even better, because of the litany of resulting new applications.

The restaurant mentioned in this story has found a way to profit from sharing their secrets. Customers not only enjoy dining out; they enjoy the secondary experience of trying to re-create the dish at home in their quest to entertain friends and family. In doing so, discussion will be sparked about where the recipe came from, and the next stage of marketing is launched through word-of-mouth.

What’s not to love? For the customer, it’s like getting two adventures for the price of one. And for the restaurant, it's like getting free exposure.

Mike Anderson

When is a recession over?

Once upon a time, an end-of-recession declaration was left to experienced economists at the Federal Reserve, the Treasury Department, or in academic institutions. In the wake of this recession, however, that decision will likely be made household-by-household, as we are reminded by a story in yesterday's Media Post Marketing Daily.

Implications: If you are still feeling unsettled about your job prospects (unemployed or worried about becoming unemployed), or if you are still concerned about your personal finances, it is hard to imagine that you, personally, would proclaim the recession to be over (regardless of what a political pundit or financial expert might say).

It is widely accepted that this recession was different from earlier economic events, because its effects were so broad and deep. Likewise, this recovery is likely to be different from any before it. There could be fits-and-starts, double dips, and unusually prosperous sectors. It’s a good time to stay tuned-in to your core consumers… and recognize that different segments you serve could emerge from the recession in different ways, and some sooner than others.

Mike Anderson

Special delivery: Preparing for changes in traditional mail service

Between private-sector competition like FedEx, UPS, and Mail Boxes Etc., and the trend toward email and other electronic communication… it would appear that significant changes to traditional mail service are only a matter of time and extent. (When will those changes occur, and how dramatic will those changes be?) I make that statement after having read this special report on the matter, published this morning by the Washington Post.

Implications: From electronic bill-paying, to the instant gratification of email, to the overnight guarantee of commercial shippers… the consumer simply has too many reasons to stop thinking of traditional mail as “first class.” The postal service is not immune from the tectonic changes happening in the communications landscape. On the contrary, their semi-private status seems to only inhibit their ability to respond to those changes.

I personally think the arrival of change for the USPS is inevitable. So the question becomes: How will a reduced service mail system impact your business? For example...

Have your catalogs been fully moved to online? Can I order on the web? If some customers pay their bill with a check that is sent by traditional mail, will your "grace period" need to be adjusted to accomodate one less delivery day per week? Are you invoicing people electronically yet (and can I pay you electronically)? What else can you do to innovate… in preparation for a world where the postal service is different than it is now?

Change is more easily tolerated if you’re the one to initiate it.

Mike Anderson

Don't just claim... demonstrate!

Last night, I read the most recent issue of the Springwise e-newsletter. It contained a brilliant example of evidential marketing (that is, providing proof of performance while serving a customer).

The story was about a flower shop that not only delivered a bouquet to the recipient; they delivered a digital photo of the actual bouquet to the customer that ordered it.

Implications: Isn’t this a perfectly simple and ingenious idea? How many times have you wondered whether the bouquet you sent was wilted on arrival? (After all, one often orders a floral arrangement on the web or by phone, never actually seeing the bouquet.) This shop has gone beyond the claim of freshness. They’re demonstrating their quality with visual evidence.

Consumer confidence isn't just a matter of how people feel about the future of the economy. You can influence the confidence of your consumers by the way you serve them.

Mike Anderson

Trend gut-check: Do you know what's next?

Trendwatcher.com is one of my favorite sources for trend insights. But the value of today’s edition is not in the trends that are offered. Rather, its value is in somewhat of a time-lapse video that illustrates how easy it is for a trend to emerge without “the masses” being aware of it. Take a look:

Implications: Right now, there are products, technologies, and websites that are about to become the next big thing… and at this moment in time, you know nothing about them. Don’t feel bad. I am no more clairvoyant than you.

What we can do is “stay tuned,” paying attention to those constantly-evolving consumer preferences (demand) which give rise to new products (supply). Then, after sifting through the many apparent trends—some of which turn out to be irrelevant or even red herrings—we can prioritize and embrace the ones that matter. The better we observe, the more likely we will embrace the right trends earlier than a competitor.

This video reminds me why being a trend watcher is quite different than being a futurist. In my view, a futurist often predicts a singular outcome or set of outcomes. A futurist must be either right or wrong, as time will tell. On the other hand, a trend watcher considers a range of possibilities. A trend watcher does not forecast an absolute future, but strives to identify shifting behaviors early enough that their company can adapt to or even exploit those changes. It is not the trend watcher’s job to be first, right or wrong… only early, opportunistic and profitable.

Mike Anderson

The "shock box": Discovering the cost of credit

Sometimes, the most dramatic consumer trend observations come not from publications, research or sales records… but from real life.

My wife and I were at a social function this weekend, where one hot topic was the new rules for credit card companies that went into effect a week ago today. One person—in his early twenties—explained that he received a credit card statement last week that now included something he referred to as a “shock box.”

He was referring to the now-mandated “payment information” disclosure: It indicated that if he made only the minimum payments on his $2,967 balance, it would take roughly 23 years to retire the debt.

He was shocked to learn that paying-off the charge card—if paying what the bank required as minimum—would take the equivalent of his lifetime.

He was astounded enough by this epiphany that he pulled-out a copy of the statement to share with the group, and began warning friends of the hazards of credit.

Implications: The Great Recession has held many epiphanies for people from all walks of life. Consumers have had a crash course in mortgage mechanics, investment practices and monetary policy.

But for some people, the most dramatic lesson of the past few years will be arriving in their mailboxes over the next few weeks: Their credit card statement, featuring the new “shock box.” The press has been talking this up (as you can see from one sample video below). But now, get ready for consumers to talk it up amongst themselves. Theoretically, people know that the minimum payment will stretch-out a balance for far longer than necessary. But now, the reality is setting in.

Count on it to influence the way people use (or avoid) credit in the future. That’s not to say they won’t charge or finance a purchase. But they will be more deliberate and careful about it. They’ll consider the length of the burden, and the other things they may have to give up over that time frame. And they might be more demanding… expecting the product (or satisfaction) to last as long as the debt does.

If you’ve been out of touch on the credit card rules issue, review the video from CNN News immediately below, or visit their website to read the text version.

Mike Anderson