The economic year in review

Today’s New York Times offers some commentary, as well as a number of charts, to summarize the economic events of 2010. Their view is a bit less than gratifying, and it is only one point of view. But the supporting visuals offer an empirical glimpse at things like unemployment (related to population growth), as well as inflation, stocks, housing and healthcare.

Click here for the full story.

Implications: Before the recession was even announced, we started telling companies to focus less on the events of Wall Street or Pennsylvania Avenue… and pay more attention to the consumers they serve; the people who ostensibly life on “Elm Street.” Local consumers, and their needs, wants and purchase priorities.

It looks to me like that will remain sound advice for the foreseeable future.

Mike Anderson

Broke-ville, U.S.A. (The deferred impact of recession on city governments)

Today’s New York Times features an important story about Hamtramck, Michigan: A city that has fallen on very tough economic times, and is considering all options. The reason I believe the story to be relevant is that Hamtramck, Michigan could be just one example of an issue that we could surface again and again over the next two to four years… as short-term budget cuts fail to solve long-term financial issues. Cities are facing the perfect storm of reduced revenue from three years of flat retail sales, falling property tax assessments, and shrinking state and federal aid.

Because most consumers live in a municipality of some sort, this story is relevant to consumer trends. Click here to read the full article.

Implications: Whether or not cities begin to claim bankruptcy, they have begun to cut services and will likely need to raise taxes in order to return to functionality, if not solvency.

How will your business be impacted by this chain of events (reduction in services, increase in expenses)? How will your consumers be impacted? Will new business opportunities arise that replace services formerly delivered by a town or municipality?

Mike Anderson

Holiday sales success! (A return to the "old" normal?)

For the past three years, we’ve heard a lot of chatter about “the new normal,” a state in which people are credit-averse, financially responsible, and frugal in their spending habits. I thought the phrase was a bit over-used, to the point that it became cliché. (Any phrase that is used in a way that is thoughtless eventually becomes meaningless.)

Anyway… this morning’s New York Times offers one estimate of retail performance for the holiday season: UP 5.5%. Click here to see the article.

Implications: I loved seeing the good news this morning, and I hope your company was among the businesses that enjoyed strong revenue. But I’m wondering: Will the pundits now herald a return to the “old” normal?

Mike Anderson

Real estate unlikely to begin recovery until late 2011

A few moments ago, The Washington Post published a story featuring executives from Radar Logic, Inc., and Zillow.com… who suggest that—and explain why—they believe real estate prices will fall another five to seven percent, and then begin to recover (nationally) toward the end of 2011.

As primary reason for this forecase, both guests point to plentiful supply (more homes available that demand for housing) and high unemployment (making people cautious—or incapable—of committing to major purchases or plans). Click here to read the story, or, click here to watch the video (commercial pre-roll required).

Implications: First, it is important to remember that this is a forecast which could be influenced by unforeseen events (an accelerating recovery, a slow-down in the recovery, etc.). Also, note that national trends don’t always reflect local realities. The real estate market in your metro area could behave dramatically different than the national market. I’m told the real estate market remains comparatively resilient in New England, for example, while it remains frustrating in places like south Florida and Arizona.

It’s important to look for tools that help you keep abreast of what’s going on in your area… like this Washington Post graphic that helps you monitor unemployment rates by county (click to link).

Finally, note that even in adversity, there is opportunity. If people are not shopping for their next dream home, are they considering home improvements, home theatres, new appliances or new furniture to make their current house the home of their dreams?

I think so.

Mike Anderson

The value of trend watching... from all sides

There is an obvious importance that drives smart business owners and managers to monitor consumer trends: They might notice a shift in purchase priorities, consumer behavior, or pop culture that they can respond to and profit from. But there is another important reason to watch consumer trends: An opportunity could reveal itself that contradicts the prevailing sentiment.

Examples: When big cars were all the rage, Volkswagen introduced the Beetle. When full-bodied flavor was hot, Miller introduce Lite Beer (“Everything you’ve always wanted in a beer… and less”). Sometimes, a company can profit not by following the trend, but the counter-trend.

To that point, there was a good opinion piece by Joseph Gelman in this morning’s Media Post Marketing Daily. Click here to see it.

Implications: When you see a series of behavioral changes that could represent a trend, it’s a smart idea to ask, “In what ways might my company (product or service) profit by appealing to consumers who are involved with or influenced by this trend… or consumers who belong to an opposing behavioral/sentimental set?”

Mike Anderson

A new twist on "Experiential Philanthropy?"

Over the past several years, I have noted frequent examples of something we refer to as Experiential Philanthropy: When someone gives of their time or talents, rather than (or in addition to) making a financial donation to a worthy charity.

In this week’s Springwise.com newsletter, I saw what might be another example of this hands-on contact with worthwhile causes: Tours of London… conducted by the homeless. Click here to see the complete article.

Implications: Move over, tourist attractions. People’s move toward authenticity in response to the recent recession could have an impact on destinations from Big Ben to Mickey Mouse.
Consumers are increasingly in touch with reality.

Are you?

Can you contribute to the realism consumers are increasingly after?

Mike Anderson

Internet use is often evidence of higher income

A Research Brief published about two hours ago suggests that people with higher incomes are more likely to be consistent users of the Internet. (Click here to see the full story.)

Implications: Once upon a time (and it wasn’t that long ago), the Internet was a great way to reach a niche group. As we move into 2011, the Internet audience is more aptly described as mainstream, if not upscale.

Does your site look like a portal waiting to serve a niche… or an additional front door to your business? Do you have just one site? Should your company have more than one site—a number of micro-sites, perhaps—that super-serve it the wide variety of niche markets which comprise that market we call, “the mainstream?”

Mike Anderson

Birth rate among teen mothers declines

The overall birth rate has declined, including and especially among teen moms, according to a story published yesterday by The Washington Post. It is the second year in a row of decline, and results in the lowest birthrate among teen moms in the 70 years since the federal government began collecting the data. (Click here to read the full story.)

Implications: The Post story suggests that teens have responded to the financial constraints of the recession with increased personal responsibilities, perhaps not adding to the stress in a household. I’m not sure whether that holds… but the cause might be less interesting than the effect: The only increase in birthrate was among women over forty.

Mike Anderson

More consumer and business trends for 2011

The annual barrage of year-end "trend" articles continues. Trendhunter has released their set of top trends for 2011. Look beyond the sometimes overly-cute names, and you might just discover some meaningful ideas that coincide with your own, local observations. Click here to see the printed version, or click on the screen below to watch the Trendhunter TV video.

Mike Anderson

Food trends for 2011

Looks like I’m hardly the only person who quotes packaged goods and supermarket guru, Phil Lempert. A friend sent me this clip from the Vancouver Sun, summing-up Phil’s top picks for food trends in 2011. (Click here to read the full story.)

If you prefer, here’s another take on 2011 Food Trends, provided by The Food Channel (click to play, or visit The Food Channel site on Vimeo).

2011 Trends Forecast from The Food Channel on Vimeo.

Implications: Some of what is presented as a trend is actually more of a prediction. But I share the information here with the idea that you’ll watch for what’s important to you, consider implications for your business, and discard the rest. But the overwhelming message: Watch for changes in your target consumer... and be prepared to meet shifting needs and wants.

[Editor's note: Thanks to friend and fellow trend-watcher JoAnne Naganawa for the leads on these stories!]

Mike Anderson

An educated guess: Cost of higher education going higher

Last week, Research Brief published an analysis of National Center for Education Statistics data done by the Pew Research Center. The analysis suggests that college students are borrowing much more money in recent years. (Click here to read the full article.)

The following day, the New York Times published a story that points to a cloudy future for the funding of Pell Grants. (Click here to see that story.)

Implications: Think about book stores, back-to-school clothing, wireless phones, laptops, local pizza delivery shops… right down to the beer vendors: There are lots of business categories that rely on college student spending for their livelihood. But this trend stands to impact more than just the companies who build or sell those small dorm-room-sized refrigerators. These reports suggest that we might be wise to look for fundamental changes in the way some people seek education.

Could increasing costs lead more people to online classrooms, or at least to down-grade from a distant, private college to a hometown, public university? Or, could these costs inspire students to take classes with the idea of gaining specific collection of knowledge, a skill, or ability… instead of seeking a broad degree?

Mike Anderson

Smartphone Santa: Shopping from the small screen

A recent New York Times story indicates that more people are using the shopping capacity of their smartphones to get some of that holiday shopping done this year. Click here to read the full story.

Implications: As time pressure continues to drive many consumer behaviors, this evolution in the use of handsets is not surprising.

Is your site ready for the small screen? Should it be? In what ways might the needs of a mobile-phone wielding shopper be different than the point-and-click user of a full-sized computer? How about a walk-in shopper?

Mike Anderson

My opinion: A smart use of email marketing

Last night, I was flying from Atlanta to Minneapolis, and learned of a special “holiday gift” from Delta Airlines, Google Chrome, and GoGo in-flight internet service: Free Wi-Fi on this flight. So I fired-up the laptop and started working… free, except that I had to give GoGo my email address during the registration process.

Today, I received a very simple email from GoGo, with “Receipt” in the subject line of the message. It showed a table like this:

$12.95 for In-flight Internet Service
-12.95 for promotional discount
0.00 Sales Tax
-------------------------------------
$0.00 Total Cost (Happy Holidays!)

Implications: This was a smart way for GoGo to get me (and thousands of others, I will assume) to try in-flight Wi-Fi. Some people will pay to use the service in the future, some people will not. But I loved the way GoGo didn’t just give me value. They reminded me that they gave me value! (No harm in that, is there!?)

Next time I need to get some work done when I'm in the air, will I remember how easy logging-on to the plane's Wi-Fi system was? Absolutely.

Mike Anderson

My opinion: How to not run a loyalty program

I keep a folder in my personal email account called “Bad Business.” It is the place I deposit examples of what I believe to be really poorly executed email marketing. This is not faceless spam that comes from some nameless hacker, mind you… the folder holds examples of email marketing that I believe could be doing more harm than good. Now, I don’t like to single-out or pick on any company in particular, but a recent sequence of messages I’ve received from Best Buy simply offers too many good teaching moments. I can’t resist. Can you spot the missteps that lead to the risk of losing a loyal customer?

Back on October 29th, I received an email from Best Buy Reward Zone that included the following text:

“We are writing to let you know that Best Buy has changed the way it manages opt-out preferences. Going forward, opting out of either Reward Zone or Best Buy marketing communications will result in being removed from both marketing lists. In order to honor your request to receive Reward Zone program e-mails containing special offers, invitations to events and account updates, you have been opted-in to receiving Best Buy marketing communications generally.”

In other words, Best Buy was letting me know that they were going to start using my email address the way they wanted to, not the way I wanted them to. Within a few days, I had already received several sales messages that struck me as abuse-of-access, so I opted-out of the program they had shoved me into. The notice I got back said, “It could take up to ten days” to stop receiving emails. (Funny, when I change the auto-response setting in Outlook, it happens the moment I click on, “OK.” Best Buy sells a lot of tech equipment, and they even have their own Geek Squad; they should be able to figure this out much more quickly than ten days… like, NOW.)

Anyway, the opt-out was not successful. I continued to receive emails (I wanted to see how long this foolishness would go on). But it wasn’t just the number of unwanted advances that was stunning to me… it was the nature of the messages. I received coupons for movie tickets (to shows that had no appeal to me), tacos and pizza (Taco Bell and Pizza Hut, you are complicit in this insanity), and other offers that had little or nothing to do with Best Buy’s knowledge of what kind of things I might spend on! (I’ve received at least ten smartphone offers, even though I purchased one just weeks before the spamming started.)

After too many unwelcome and irrelevant advances, I added the company to my spam list this morning. Best Buy, I’ve opted-out of my relationship with you... whether you like it or not.

Implications: If your marketing efforts include an email component… go back through this story to spot the mistakes Best Buy may have made (in my humble opinion), and see if your company could be at risk of making some of the same missteps.

“Opt-in” is short for giving people the option of participating. A company cannot “opt me in.” That’s my decision. Ask your customers for permission, and sell them on why it’s a good idea to receive communication from your company.

“Opt-out” means knock it off! “No,” means “no.” Consumers are not so stupid to think that a “stop sending me email” command is delivered by pony express and could thus take ten days to arrive.

If I give you access, give me respect. You knew my age and interest, based on information I had given you and transactions I had completed with you in the past. Don’t send tickets to a teenage-appeal suspense movie to a fifty year-old guy. That’s just common sense.

Smart email policy is not dictated by your company. It is decided by your customers.

[Note: The New York Times offered a story about Best Buy’s current state of operations in their December 17th edition. Click here to see it, and see whether there are more learning opportunities within.]

Mike Anderson

Hands-on vs. Homemade

According to an article in Media Post Marketing Daily today, more consumers are giving homemade gifts this year. Click here to read the story.

Implications: I don’t think many retailers will be put out-of-business because consumers are spending less this year… but I think some retailers could profit more by using the attitude that, “if you can’t beat them, join them!”

At risk of spoiling a holiday surprise, here’s one example: Someone on my gift list will receive a leather-bound photo album with a few dozen of my favorite wildlife shots. I took the pictures, but a retailer printed and bound the product. Is this a homemade gift? Perhaps not (maybe it’s more hands-on than homemade). But I’m hoping it will be received as a personal, one-of-a-kind gift.

This holiday gift season, for the most part, is done. But for future occasions, how could your company let the consumer finish or personalize the gift they will give… even if that gift originates in your store? If you are a restaurant, could you let the consumer modify a special menu for an upcoming date night? (Note: Valentine’s Day is the only weeks away.) How could the family tree be brought into Mother’s Day or Father’s Day this year? Can your product or service become an even more attractive Wedding Anniversary option, if some aspect of the relationship were brought into it?

Less “stuff,” and more “personal touch.” I encourage you to think of that as a long-term trend, and figure out how to profit from it.

Mike Anderson

The 2011 choice: Higher prices, or lower margins?

I’ve been out of the country for the past eight days, with limited access to email (or news, for that matter). So I have some catching up to do here… but year-end trend reports and studies leave me with plenty of raw material to work with.

The first item that caught my eye when I got “back on the grid” last night was this quarterly report from McKinsey: The Commodity Crunch in Consumer Packaged Goods (click here to see it). It suggests that the cost of raw materials will continue to rise, and that companies are quickly approaching a tipping point where those increased costs will have to be passed along to the consumer.

Implications: During the recession, many companies did their best to absorb cost increases, so as to appeal to already value-conscious consumers. But as world demand for commodities grows, we can expect the laws of supply and demand to further push prices… so there will come a time—soon—when companies simply have to ask the consumer for more money in exchange for goods.

Has your marketing message focused on price for so long that this issue exposes you to risk? Is it time to focus more on the value your product or service adds to the consumer’s life… and less on the price one pays for it?

Mike Anderson

I wonder if this just-in-time marketing idea will fly

In the Springwise newsletter that arrived yesterday, one article featured a new approach to dining-on the-fly while waiting for your flight from JFK or LaGuardia airports in New York Airport.

Near select gates, there are designated seating areas that are equipped with i-Pad-powered menus. You place an order, and a participating restaurant will deliver the food to your gate within ten minutes. (No more walking away, and risking the loss of your upgrade!) Click here to see the story.

Implications: Yet another example of companies responding to time-sensitive consumers, and exploiting the capabilities of new technology.

Mike Anderson

UPDATE: More trend watching for 2011

As I mentioned earlier today, this is the season that trend watchers and futurists offer their forecasts for the coming year. Many are hyperbole. But some are consistently reliable. Here’s the trend set from Trendwatching.com… which I put in to the “well thought out, fairly reliable” category.

Click here to enjoy the full story/series.

Mike Anderson

Is "not losing" the new "gaining?"

A story in the New York Times last week inspired the question in the above headline; interest rates on most savings accounts and investment instruments are very low. Click here to read the full story.

Implications: I’m certainly not the only person whose IRA took a beating throughout the recession. But now, I’m wondering whether that pounding has created a different paradigm in folks like me: Do we feel really good… just because we’re not getting punched?

That seems to be plausible, given the fact that folks are prepared to tolerate such low rates on their savings instruments these days. But even if I don’t make a dime this year on my savings accounts…

It will be more profit than I’ve made in the past three years.

Can completely different options—different from stocks, bonds, CDs and other investment options—be terribly far away? (Will individuals be tempted to invest in small enterprises, rather than public companies? Will we see more peer-to-peer lending? What other options could pose a threat to conventional banking, savings and lending relationships?)

Mike Anderson

Tis' the season for consumer trends and 2011 predictions

I’ve long evaded the description of “futurist.” Someone who watches trends (like myself) is quite different that someone who predicts the future, in my opinion, especially in the wake of the Great Recession (which precious few futurists saw in their future).

That having been said, I do enjoy glancing at the work of various futurists, from time to time... especially when they are founded in trend watching, like this piece from a recent Marketing Daily newsletter. It offers the annual forecast of events from JWT. Click here to enjoy.

Mike Anderson

UPDATE: More on the motives behind gift giving

Earlier this evening, I shared a Research Brief on this topic. Well here’s another story, this time from the newsletter at Iconoculture. Click here to read the full posting from Josh Kimball.

Implications: Why do people want to open the package holding your product or service this holiday season? (I can always count on at least one golden nugget every time I read that newsletter. If you like these kinds of postings, too, click here to subscribe to the Iconoculture newsletter.)

Mike Anderson

No fee unless we win your case... to be offered by divorce lawyers?

Last Friday, a story in the New York Times explained how one California law firm was prepared to “invest” in the name of their client, much the way a personal injury law firm takes-on a case with nothing down, and the promise of no fee unless they win the case.

The twist in this story: It was about a new breed of family law firms handling big-ticket divorces. Click here to read the piece.

Implications: It was only a matter of time, I guess. But watch for this trend to spread quickly, as law firms on the east coast, too, are entering their markets with this kind of contingency fee-for-service pricing.

Mike Anderson

The deeper motives and mentality of gift giving

Today’s Research Brief highlighted results of the Liberty Mutual "2010 Responsible Giving Survey," and sheds light on the how and why… behind the way people buy gifts. Click here to read the full story.

Implications: I smiled at the finding that 49% of men say their spouse handles the gift-buying responsibilities, but women answered that question with 75%. (Still, it seems, she is not getting the credit she thinks she deserves!)

Some gifts are given out of obligation, others out of love, others out of appreciation, and others out of tradition. The truth is, reasons for giving could be virutally infininte. But, why would someone presented the gift of your product or service (if it would make an appropriate or logical gift)? Does your messaging speak to that motive… and satisfy the benefits sought by a gift buyer?

If it truly is better to give than receive… why should people want to give what you offer?

Mike Anderson

Will your product or service be left behind?

An interesting story from the New York Times last Friday pointed-out what many of us already knew: More sophisticated mobile phones (smart phones with cameras, more specifically) are causing folks to leave their point-and-shoot cameras in a drawer. Click here to read the story.

Implications: The casual-use digital camera is about to fall victim to technology, just as they made their film-photo predecessors obsolete just a few years ago. But the consumer driver was quite predictable: If I can carry fewer devices, and still enjoy the functions, why not!?

One must wonder whether ever more sophisticated hand-held devices (like Androids and i-Phones) might render less critical the need to carry along a small laptop. Or whether the i-Pad or similar devices might render a larger laptop less critical… especially with so many options in cloud computing coming into the market.

How are you reaching customers, digitally speaking? Is your presence as friendly on a phone as it is on a desktop? The answer to that question could dictate whether the consumer brings your message along for the ride.

Mike Anderson

Consumers have a plan. Do you know what it is?

More consumers are arriving at the grocery store with a plan in hand, according to data from NPD and featured in a Marketing Daily article just yesterday. (Click here to see the story.)

Implications: From cars to gifts to groceries, many consumers have held-on to the recession-inspired habit of planning for more purchases, and making fewer purchases “spontaneously.”

In your category, what does that buying cycle look like? Will they replace the vehicle when they hit a certain mileage point? Or are they waiting for the first major repair, and then ready to dump the vehicle they have now? How thin or dated must their wardrobe become before they’ll replenish the closet?

A grocery shopping list is not just a logical, tangible example of planned purchasing. It is emblematic of a new way of life for lots of folks. Is your product or service category impacted by this practice?

Mike Anderson

We've got some good news and some bad news

First, the bad news: The labor market did not expand as much as we had hoped in November, according to this report from the Washington Post. 39,000 jobs were added, but the increase in job seekers led the unemployment rate higher to 9.8%. Click here for the story.

Then, the good news: Retail sales were up more than expected last month, too… reaching a 6% increase in same store sales compared to November last year. That’s according to this article from Media Post Marketing Daily (click to link).

Implications: For some, the recovery is going strong. For some, it is just beginning. For others, it is still something they are waiting for… and will not see until they or members of their household are more fully employed.

One might ask: Which of my consumers are gainfully into recovery? Which have begun their recovery, but are still in a state of caution? Should my marketing message—or my sales floor conversation—be the same for each of these differing targets?

Mike Anderson

Auto industry on the road to recovery

For November, sales at GM were up 22% over last year, and Ford was up 24%, according to many accounts, including this story from today’s Marketing Daily (click to link).

In other goods news from the auto industry, Hyundai reported a unit-sales increase of 45% compared to last year, according to this article from yesterday’s USA Today (click to link).

Implications: These sales figures might imply that the recovery is gaining momentum in the automotive category, or that pent-up-demand has finally reached a tipping-point for many drivers, or that manufacturers have brought more exciting values to the market... or all of the above.

What other reasons could explain why this category seems to be gaining momentum?

Mike Anderson

Consumers are operating on a need-to-know basis

This morning’s Research Brief features a Pew Research report about People and the Press. The study was designed to examine how much—or how little—people know about the balance of power in their own government and other high-profile topics, such as the recession, TARP, and more.

Click here to read the full article.

Implications: After first reading this report, it would be easy (and a bit unnerving) to assume that a lot of people are generally idiots. But thankfully, I don’t think that is the case, and I don’t think that’s what this data implies. In my humble opinion, the report might indicate that people are operating on a need-to-know basis.

They’re very busy trying to get or keep a job, raise families, make payments, catch-up on retirement, go to PTA meetings, take care of aging parents… et al. Political rhetoric has turned government into something that would often be more compatible with Entertainment Tonight than C-SPAN, and people don’t have time for it. Bailouts and recovery plans seem like out-of-reach topics that are decided behind closed doors and topics over which the consumer (voter) has little influence… so why pay attention? They have plenty of other things to worry about.

Certainly, ignorance about how our country works is a fundamental problem, and it needs to be addressed. But lack of education is only one cause; a greater cause might be lack of interest.

When it comes to your business, how complicated has life become for the consumer? Is you marketing message focused on things you want people to know? Or does it focus on what consumers need to know?

An important question to ask… when so many consumers are operating on a need-to-know basis.

Mike Anderson

Does your product focus blur the customer experience?

Okay, this posting is a little different, because it is based purely on personal observation and experience rather than an issue I found from some web site, trade publication or news organization.

My wife and I had stopped at a JC Penney store to pick-up a gift item we had ordered online. While walking to the catalog pick-up area, we passed a rack of nice sport coats that were just my size… so I tried one on. Then, wanting to see how it looked, I scanned the men’s department for a simple mirror.

There weren’t any.

Really? In the area of the store that sells sport coats, suits, tuxedos, pants, shirts and ties... no mirror? Thus, I placed the coat back on the rack, and didn’t even pick-up the other two that I thought might be nice. So the opportunity to make a perfect add-on sale was lost. (I say “perfect” because a spontaneous purchase like this involves no additional-overhead for the retailer; they already had me in the store on another mission.)

Implications:

Dear local clothing provider (and other small businesses),

Do you study these nuances to notice your competitive advantages? Companies so focused on the type or volume of the product they sell can easily overlook the other, more important part of the transaction: Their shoppers.

I really prefer buying clothes in-person, rather than online, for the simple reason that I can try-on an item to see what it will look like on me. (I don’t care what it looks like on the male model at the website or in a catalog.) But in this particular store, that advantage has been squandered… as the retailer had squashed so much inventory into the department that they did not leave space for even a single mirror outside of those in the dressing rooms down the hall (which nixes getting second opinion from my wife.)

How do you help people consider the product you sell? Has that that device or assistance been overlooked, in recent years, as you try to keep up with warehouse stores, big discounters, department stores or other competitors?

Mike Anderson