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Tuesday, June 26, 2012
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Posted by Mike Anderson at 5:51 PM
Trend Observation: Today’s edition of the Atlanta Journal-Constitution features the S&P/Case Shiller report about rising home prices in many U.S. cities. 19 of the 20 markets measured reported an increase in home prices from March to April, and a national index of home prices also rose 1.3%. Click here to see the story.
Marketing Implications: We have a lot of ground to recover, but this story suggests that home prices are now, on average, at the level they were in 2003. A healthy housing market, of course, improves a lot of directly related categories, such as mortgage lending, home furnishings and home improvement. But there are many indirect beneficiaries too… so this is very good news.
Monday, June 25, 2012
Trend Observation: Once upon a time, it was not unusual for an advertiser to target consumers on the basis of an age or gender (i.e., adults 25-54, women 18-49, men 35-64, etc.) But if you sell home improvements, electronics or furnishings, is that the best method of zooming-in to your target market?
Recently, I spoke at a conference of respected home furnishings professionals at the annual ART conference in New Orleans. I was able to obtain some interesting research in advance of that talk, courtesy of Scarborough Research in New York. Specifically, I was provided some data from Scarborough USA+ 2011 Release 2, and here is the information I was looking for:
New to the neighborhood: 28% of adults are living in a home they’ve been in for less than four years. This is an attractive target group, wouldn’t you agree? After all, they’ve just moved into a new place, and they’re doing all the things one does to make a new house their home. Of this “new to the neighborhood” group, 40% are owners. That means they didn’t just buy a new home… they got a great bargain on it! After all, they purchased after the real estate bubble burst and home prices fell. You’ll find a lot of first-time homeowners in this group; folks who likely moved from an apartment with sparse furnishings, who need a lot of goods to fill up their relatively spacious new home. 56% of the people in this group are renters. While the foreclosure crisis has received a lot of press over the past few years, there is also a tremendous share of this group that could be called habitual renters… people who move around a lot and therefore prefer to rent, rather than own. This transient lifestyle is also a frequent behavior of young adults who haven’t decided where they want to settle down, or haven’t the financial means to buy just yet. (By the way, 4% of “New to the Neighborhood” residents could be classified as “other,” neither renters nor owners.)
Burned by the bubble. 20% of adults are living in a home they’ve been in for more than four years but less than eight years. That means they bought near the peak of the real estate bubble. But don’t write them off as a marketing target (see the marketing implications below)! Think about it this way: While the number of foreclosures got a lot of press over the past few years, there are far more people who may have negative equity in their property but are not at risk of losing it because they remain gainfully employed. When the bottom fell out of the market and their home equity vanished, it is likely these folks went through a period of outright anger. But at the national level, the recession has been over for more than three years (at this writing). After what might be called a financial grieving period, many of the folks in this group have decided they can’t stay angry with their home forever; they’re talking about what kinds of improvements might make this a place they can love again.
Long-term homeowners. More than half of U.S. adults—52 percent—have been living in their current home for eight years or more. That means original equipment is starting to require repair or replacement, and original furnishings and features are beginning to look dated. For the purveyor of home furnishings or home improvement, it’s the perfect storm… and it comes with a target consumer that is more likely than most to still have some equity in their home.
New to the Neighborhood. If someone has been living in their home less than four years, they’re doing a lot of home improvements that could be classified as cosmetic and aesthetic. Think paint, wallpaper, window coverings, rugs; anything that, in terms of décor, makes their new house their home. If they were previously renters but are now homeowners, they are likely to have a lot of needs, along with plenty of money to spend on those new home furnishings and improvements. If they were previously homeowners but are now renters, it is likely they had to shed larger furnishings, but are now in a position to re-furnish their new rental with smaller, more mobile goods. If you’re talking to renters, position home furnishings as “home improvements you can take with you,” because renters seem to re-locate more frequently.
Burned by the Bubble. If they can’t afford to sell (because they likely owe more than the home is worth) and move into their next dream home, they’re talking about the kinds of things they can do to make this house the home of their dreams. So this group is an attractive target for what we refer to as experiential home improvements and home furnishings. Think granite countertops, outdoor kitchens and patio fireplaces, hardwood floors, and home theatres. Having gone through a financial reconciliation, these folks are living within their means… but that more pragmatic spending style is likely to include investing in a home they know they’ll be spending more time in, enjoying family and entertaining friends. They now recognize their house as a place to… live. Can you help them with that?
Long-term Homeowners. The headline for this group: Infrastructural Home Improvements. When you’ve been living in your home for eight years or more, home improvement is more than a new throw rug from Pier One. Think windows, siding, roofing, HVAC and more; the stuff that stings. The good news: These folks are likely to be among your most qualified buyers when it comes to credit-driven, big-ticket purchases. They might not have as much home equity as they did five years ago, but they still have some value in their home. If you sell home furnishings or décor, this is a group that is often tired of the overall look, and might still consider buying rooms of furniture at a time.
Summary: Does your marketing message (from advertising to the way you talk on the sales floor) still target people based on age, gender or income? It might be smart to talk with your biggest customers, and determine whether term of residency plays a role in the way they set purchase priorities for home furnishings and improvements.
[Editor’s note: Our thanks to Deirdre McFarland, Haley Dercher, and Scarborough Research for providing the statistics that inform this perspective. For more information, visit Scarborough.com, or contact them at info@Scarborough.com.]
Trend Observation: Two interesting (and very contrasting) stories caught my attention today, and both of them were focused on Baby Boomers. First, USA Today published an article about Boomers that can finally afford the car of their dreams. The observation is that once parents have emptied their nest of children and paid-down much of the consumer debt, they have more discretion over their income… and more money for toys (click to link).
But then I caught a second story, this one from the Minneapolis Star Tribune, talking about an overhaul of the traffic light system that will accommodate Boomers… who presumably don’t cross the street on foot as fast as they used to (click to link).
Marketing Implications: America’s biggest generation (and arguably still the most significant consumer base) is changing. Does your company, product or service target these consumers? Are you changing in response to their current life stage? Boomers are changing in both their physical and financial stature, and those changes are sure to impact their purchasing priorities and preferences.
Trend Observation: Today’s newsletter from McKinsey takes a look at consumers’ progress in pairing-down their debt, a process widely known as deleveraging. Click here to see the story.
Mike Anderson, for The Marketing Mind consumer trends blog, service of The Center for Sales Strategy
Marketing Implications: According to this analysis, consumers in the U.S. are getting a handle on their debt faster than some other parts of the world. However, the study indicates that roughly 70% of mortgage debt and 80% of this deleveraging has come from default. In other words, much of this “progress” has come from lenders writing-off the amount, rather than debtor’s paying-down the balance. Further, up to 35% of defaults could be described as “strategic decisions,” where the debtor elected to walk away from a financial obligation.
The McKinsey paper seems to suggest that our deleveraging process will continue into the middle of 2013, but it might be over-simplifying the situation to suggest that means our storm of credit issues will be over. Just because a consumer has little or no outstanding debt on their personal balance sheet does not necessarily make him or her a good risk; it could mean that someone else had to write-off an obligation that consumer once held. If you sell big-ticket items where some form of credit often facilitates the purchase, this matters to you… and it makes qualifying your customers more important than ever. (A process that can begin with the marketing message you create.)
Friday, June 22, 2012
Trend Observation: Not that long ago—perhaps 40 or 50 years—the stereotypical American family included a father, mother (the two were married), and two or three children. The unit was celebrated in situation comedies like The Adventures of Ozzie and Harriet, or Leave it to Beaver. But these days, the idea that all families look like June and Ward Cleaver, Wally and the Beav are far from accurate; things have changed, and not just in wardrobe, vocabulary and parenting styles, but in the composition of the family itself.
Evidence of this shift is difficult to overlook, especially after data started rolling out following the 2010 Census. (As one example, see this post from the Elm Street Economics consumer trends blog in August, 2010, or the story that it referred to from USA Today.) But it’s a good idea to check-in, consistently, when information is changing this fast. So, with help from my respected friends at Scarborough Research, we did just that. The data set we considered is from Scarborough USA+ 2011 Release 2, and here’s what we found:
Barely one in four U.S. adults describes themselves as “Married with Children.” Specifically, just 26% of adults describe themselves as being married with one or more children aged 17 or under in the household.
Just 56% of adults are married, according to the research (without regard to the presence of children in the home), while 85% of adults say they live in a home where two or more adults are present.
In other words, more American adults live in a non-traditional household than in what we used to think of as a traditional family unit. Just subtract the percent of adults that are married from those who live in a two adult household: 85% - 56% = 29%. So, more than 29% of adults live in a two-adult household, but are not married… while just 26% are married with children.
Just to be clear, that non-traditional household could be composed of many different relationships. It could be a male-female couple that is living together but not wedded. It could be two folks who live together so as to pool their financial resources during difficult economic times. It could be couples described as gay, lesbian, bi-sexual or transgender. It could be a single mom with an 18-year-old daughter (in the eyes of the research that is still two adults). It could be a middle-aged man whose aging mother lives with him. We don’t know precisely how to define these non-traditional households. But these estimates make very clear: Today’s traditional American family doesn’t always look very traditional.
Marketing Implications: If you sell furniture that’s perfect for the family room… does your message reflect what today’s family really looks like? If you sell “the perfect family automobile,” does your marketing consider—or even celebrate—the diversity of family styles that are out there today? Once upon a time, Ozzie and Harriet were presented in black and white.
Today’s family is not.
[Editor’s note: Our thanks to Deirdre McFarland, Haley Dercher, and Scarborough Research for providing the statistics that inform this perspective. For more information, visit Scarborough.com, or contact them at info@Scarborough.com.]
Trend Observation: Do you know what the average teenager spends during the course of one week? Before you settle on a specific number, let me confess that I do not know the answer to that question, at least not as a marketer. But I do know the answer from the perspective of being a parent. How much money does a teen spend in a week? All of it!
In fact, it could be argued that they spend more than 100% of their money. Because in addition to the income they might generate through a job or allowance, they often spend at least some of their parents’ money, too. Teenagers are not a wise market to overlook, because the money they have access to could be described as almost entirely discretionary.
(Caveats and counter-trends: Many teens are responsible for maintaining their own smartphone contract and paying for their monthly gaming expenses. Some buy their own clothes, and some even have a car payment. And post-recession, more teens are helping out with general household expenses when a family has been impacted by job loss.)
Marketing Implications: If you’re not convinced just how big the potential is in marketing to pre-adults, just ask some people who sell X-Box or PlayStations, Droids or iPhones, or Abercrombie & Fitch. In addition to being ravenous about their consumption of entertainment and fun (in-theater movies, theme parks, parties, etc.), they are playing an ever-growing role in procuring goods for the household; grocery and other shopping needs are often delegated to the youth of a household, especially when there is more than one head-of-household that is employed outside the home.
And by the way, the older-end of this spectrum is also behind the wheel.
Which of your products and services fit into the pre-adult life stage? Have you found the best ways to connect with these consumers? (Beyond traditional media, they are fanatics about social networking and micro-blogging; but getting into their group is not always easy and requires both finesse and authenticity.) And when you think about the life-value potential of gaining customers in their youth… the payoff can be remarkable.
Trend Observation: A story in today’s edition of USA Today suggests that gasoline prices could stay low—or fall even lower—between now and fall. That’s a far cry from what we were hearing last winter, when there were concerns about stability in the Middle East and problems with major refineries. Click here to see the story.
Marketing Implications: Some businesses might profit from going after this “commuter’s dividend” of lower gas prices. Many drivers anticipated the kind of peak gas prices we saw in the summer of 2008, when the average price per gallon hit $4.11. With each commute costing less, the consumer might feel as if they have a windfall of found money in their pocket at the end of each week or month.
Any ideas about what they should spend it on?
Trend Observation: A story from Supermarket News indicates that consumers are making fewer trips to the grocery store, and more diligently looking for bargains. The article cites a study by Acosta, and suggests that this more prudent approach is in response to food inflation; consumers are paying about 11% more for groceries, largely due to increasing food prices, according to the story. Click here to see it.
Marketing Implications: Consumers are more nimble about changing their habits in response to changing conditions. Is your company just as nimble about responding to a changing consumer? How has their purchase experience changed in your particular business category? What are their current purchasing priorities when they’re considering your product or service?
Thursday, June 21, 2012
Trend Observation: Let me revisit the story I published just a few moments ago [see “Merged Households” immediately below]. The Washington Post story I cited goes on to include this observation: “Economists estimate that there are more than 2 million fewer occupied homes in the country than there would have been had Americans continued forming households at the rate they did before the recession. The slowdown has lowered demand for housing as well as for furnishings and appliances, placing a further drag on the economy.”
Marketing Implications: Let’s focus on the fact that the story is talking about Census data with a window from 2007 through 2010. So I’m wondering: What happens when people living in a merged household decide their financial house is in sufficient order that they are ready to once again move out on their own?
The pent-up demand for home furnishings, home improvement—indeed, homes—could be amazing.
Are you watching the real estate market where you live (sell goods and services)? If you sell appliances, home furnishings, or almost anything else that might fit into the traditional American home, you should be. I may be stating the obvious, but jobs and housing will be a harbinger of sales opportunity in a lot of categories.
Trend Observation: Census data published in a story from the Washington Post last night indicates that more than 1 in 6 households across the U.S. are home to more than one family. 22 million households hold combined families or returned family members, which is 18.7% of U.S. households. The number could include any kind of merge, including return-to-nesters, left-left-the-nesters, multi-generational households, or simply people sharing a place as a means of coping with economic reality. And adults 25-34 made up about two thirds of the increase. Click here to see the whole story.
Marketing Implications: Among those choosing to retreat from tough economic times by moving in with parents or other friends and family, the strategy seems to be working. According to the story, fewer than 1 in 10 young adults who live with their parents are living below the poverty line (8.4%), when entire household incomes are taken into consideration. Among this group (co-habitants), the poverty rate would be more than 45% if calculated by individual income.
Parents, friends or other hosts have helped create a situation where many young adults who would be otherwise impoverished are creating a situation where the guest can re-group, stash some cash, or afford more discretionary spending like out-of-home dining, entertainment, or asset acquisition (whether that means a car, clothing, home furnishings for the day they move out, etc.)
“I live with my parents” might not be a comfortable statement for the proud young adult to make. But it’s setting them up to live a little, while they become more financially comfortable to set off on their own.
Wednesday, June 20, 2012
Trend Observation: A report from today’s Wall Street Journal reminds us of the old real estate adage that location is everything. And not just in terms of the city or region where your home is located; the value of property might come right down to the neighborhood where it sits. Evidence is mounting that the chasm between upscale areas and those facing economic challenge is only widening, as buyers are likely to pass on the most distressed neighborhoods until inventory in more desirable areas is sold out. Click here to see the story (subscription may be required).
Marketing Implications: Understanding the landscape around your place of business might influence your strategy for the near term, or perhaps even an extended period of time. Are you seeing home prices rebound in your area (the trade territory in which you do business)? Like a good dance partner, your marketing should mirror the steps of the consumers you serve. And let them lead.
Trend Observation: Recent research from Pew is getting a lot of coverage this week, as it announces a shift in the origin of Americas greatest immigrant group. According to the report, that is because of an influx from Asia, but also a decline in Hispanic immigration… which is the result of efforts to slow the flow of illegal immigration along U.S.-Mexico border, as well as the number of immigrants heading back to Mexico in the face of a challenging U.S. economy and employment outlook, as well as more stringent immigration law enforcement. Click here to see the text of coverage that was provided by CBS News last night, and click here to see a supporting video interview (video pre-roll required).
Marketing Implications: Whether in terms of net worth, housing status, employment, family composition or ethnic diversity… the face of America is constantly shifting.
Is your neighborhood (customer base) shifting, too? Are you shifting with it?
Tuesday, June 19, 2012
Trend Observation: I live in Minneapolis, the home-base to retail giants like Target and Best Buy. So I take no pleasure in sharing a story from today’s New York Times about the shake-up in the retail category of electronics, which focuses particularly on Best Buy. Click here to see it.
Marketing Implications: In part, Best Buy’s success was in using their massive size to create a price advantage; their sheer scale and buying power let them out-price competitors (remember Circuit City, or other smaller retailers who are long gone?). In a way, Amazon and Walmart are doing some of the same things. Amazon skips the expense of a physical store and staff by selling online, and can thus sell cheaper. And while Walmart might offer a more limited variety of electronics, it can sell those products cheaper, again, due to scale. It might seem that a couple of big competitors are doing unto Best Buy what Best Buy did unto others only a few years ago.
While they don’t disclose revenue in the story, Best Buy competitor Abt Electronics is attracting customers with experiences. Target is also less enchanted with the price strategy, opting to begin carrying more Apple products.
What is your competitive advantage? Could it be used against you, in months or years from now? Is your competitive advantage as relevant as it once was, or should you be considering new approaches? All of these are questions, of course, that are best answered by involving your best customers and target consumers. After all… they’re the ones who will decide whether or not someone is “best.”
Trend Observation: Today’s New York Times offers a stark reminder that while many people are in a period of financial reconciliation, if not recovery, there are many folks who—because of their job situation—are still working very hard to create or build household income. Click here to see that story.
Marketing Implications: There is a significant share of people out there who will remain price-driven for some time to come. It’s not everyone. But it’s a significant number of people across the U.S.
Do you offer a product or service line that appeals to the price-sensitive nature of people trying to make ends meet? Are some of your long-term customers in a different financial position than they were five years ago… and is that income likely to come back? How are you—or are you—messaging to this constituency, in a way that they’ll appreciate your empathy when their incomes (and consumer appetites) return?
Trend Observation: An article from today’s Supermarket News indicates that more grocery store meat cases are filled with products that reflect a consumer base with greater ethnic and cultural diversity. Click here to see the full story.
Marketing Implications: Does your target customer look the same as they did ten or twenty years ago? Does it claim the same national origin as it may have back in the 90s… or even earlier this decade? The composition of the U.S. population is changing. If that is also true in the community or neighborhood you serve, what are you doing to facilitate new tastes? (That’s not just a question about groceries.)
Friday, June 15, 2012
Trend Observation: Today’s Marketing Daily newsletter included a story about perceptions related to consumer feedback. While 85% of participants said they’ve given feedback when asked, only 29% believe it does any good. Click here to see the story, which is informed by research from Empathica out of Toronto.
Marketing Implications: Do you listen to your customers? Can you PROVE that you listen to your customers? In this day and age, a little empathy can go a long way; in a world where few companies seem to be listening to their customers (at least according to this story and study), the company that DOES listen has already distinguished itself.
Trend Observation: Some states are considering the sale of “sponsorships” for way-side rest areas and other state-owned assets, according to a story in today’s USA Today. It’s one way that states can make up for revenue shortfalls. One state is even considering selling naming rights to a few bridges. Click here to see the story.
Marketing Implications: What government-owned structure might you logically put your name on? Would it be smart for a beverage or soap company to put their name on a town’s water treatment plant? Should a tire company put their logo on a recently paved street? Maybe it would be smart to put your company name on a ________________.
Associating your company, product or service might be more than just a natural plug. Explained in your other marketing materials, it could be a way of endearing yourself to consumers as a business enterprise that is doing its share to keep taxes low.
Thursday, June 14, 2012
Trend Observation: Automotive was among the hardest-hit categories during the recession of 12/1/07 through 6/1/09. The contraction was illustrated by the closure of many dealerships, as well as vanishing name plates like Saturn, Hummer, Mercury, Pontiac and Plymouth. But it seems the pendulum has headed the other way, according to this story from the Detroit News; there are 66 new dealerships, and roughly 2,400 new jobs in the retail automotive sector, and sales are pacing up about 10% year-over-year. Click here for the full story.
Marketing Implications: What does the comeback look like in your category? Is it as robust as the increases in the automotive, home furnishings and home improvement industry?
While it is critically important for a company to see a downturn coming, and time its’ more conservative approach very carefully… it is just as important to recognize when your category is on the rebound, and time your more assertive plans with equal precision.
Wednesday, June 13, 2012
Trend Observation: A story from today’s Marketing Daily suggests that men are doing more of the supermarket sharing in many consumer households… at least from his point of view. But in a significant number of households, she acknowledges that he is helping more at the grocery store. Click here to see the story.
Marketing Implications: This is a great example of why we recommend that you revisit issues like your target audience, what kinds of benefits they seek and purchase priorities they have; these things evolve over time.
Does your consumer look the same as she (or he) did a few years ago? Are they buying based on the same purchase priorities?
Trend Observation: Once upon a time, bigger was better… and all the market had to do to succeed was become a super-market. But it would appear that a tipping point has been reached, in which smaller, “growth format” stores are taking more of the grocery budget share that used to belong to the gigantic grocers that offered “one stop shopping.” That is one suggestion in a story from this recent edition of Supermarket News (click to link).
Marketing Implications: One might argue that one-stop-shopping is still the clear winner, and that some share erosion has come in response to companies like Walmart and Target getting into the grocery business. But growth formats are coming on strong, by this account. Maybe, rather than use the term “growth format,” which is a popular industry moniker, we should call these stores what they are: Stores with a theme or focus (i.e., Trader Joe’s, Whole Foods, etc.)
What about your category? Is bigger better? Do you serve a niche that could grow to become a core for your business? Innovation often (almost always) comes from the fringe...
Tuesday, June 12, 2012
Observation: A story in today’s Wall Street Journal suggests conservative spending on health care in the near term; a hangover behavior from the effects of the recession. Click here to see the story.
Implications: To the extent that health care “purchases” are elective or where the insurance deductible is too high, people continue to defer spending just like any other discretionary category. (Even things like laser vision correction and dental.)
If you work in health care, specifically, have you returned to explaining the value and quality-of-life issues associated with the care you provide? Do you realize that you must compete with, say, the purchase of new home furnishings, a boat, or other discretionary purchases?
Do you offer a form of financing, beyond the patients’ own insurance?
Health care is complicated. Convincing people to buy it is getting more complicated, too. Like any other purchase, it is important to explain your value proposition: How your treatment adds value to the consumers’ (patients’) life.
Monday, June 11, 2012
Observation: A story from the New York Times (NYTimes.com) explains that, according to the Fed, the financial meltdown of 2007-2009 cost the average American roughly two decades of prosperity; the typical household is revisiting a net worth that they haven’t seen since the early 1990s. Click here to see that story.
Implications: Perhaps we can expect the more careful, prudent spending that has followed the Great Recession to linger for quite a while… interrupted, perhaps, but the occasional indulgence that feels like a bit of a reward.
Are you still explaining the value behind the product or service you sell? (And by value, I don’t just mean “cheap price.” I’m talking about how your product, service and purchase experience add value to the consumer’s life.)
This story has dramatic implications, also, for anyone in the financial planning or investment business. A lot of re-building has yet to be done. Are you messaging in a way that demonstrates how you can help?
Observation: Over the past few days, there has been a flurry of writing about marketing in the mobile space (yes, even more than usual for this popular topic). For example, today’s Research Brief cites MAG research that up to fifty percent of car buyers will use their smartphone in the research or shopping process (click to link).
In the supermarket category, today’s Facts, Figures and the Future newsletter from Phil Lempert sources NPD Research in saying that 25 million Americans have downloaded some form of coupon-providing apps to their mobile device (click to link).
Implications: Okay, it’s easy to get excited, but hold on just a minute here. Before you rush out to spend big money on an “app” for your company, product or service, remember what happened with social media. Everyone said, “You’ve gotta be on Facebook or you’ll miss the boat.” So lots of companies created a FB page for no apparent reason, and started inviting their “fans” to “like” them.
Why should I?
As you read both of these two stories (which I selected quite at random), note that the mobile device tactic is designed to satisfy a consumer need… and move the relationship further up the ladder toward a sale or continued loyalty. Like any other advertising or marketing endeavor, your mobile tactics should support your overall marketing strategy. So…
In what ways might you enhance your relationship with consumers, as you transcend face-to-face, and move into the mobile space?
Observation: A recent article from the New York Times explains that with health care reforms at risk of either passing or being repealed, the industry is not waiting for regulations to mandate more care delivered at less cost. Many hospitals are proactively working to refine their systems and streamline their services. Click here to see the full story.
Implications: Like any business, there’s more to operational change that simply reorganizing a flowchart. When companies introduce “efficiencies,” it is important to mitigate the frustration likely to be felt by customers (patients). When new, favorable features are introduced, the company cannot take for granted their customers will notice.
If you are a stakeholder in a health care organization, how are you communicating the changes that are either underway, or likely inevitable, as the category moves toward a more cost- and profit-oriented future? What kinds of messaging might weave you more deeply into the fabric of the community you serve? For those changes that might be less well received, how can you placate a consumer that might not be all that enthusiastic about the changes you are making?
Observation: An article from Progressive Grocer suggests that more people are cooking at home to save money, based on research from The Harris Poll. Click here to see the story.
Implications: I’ve read trade stories, recently, that folks are more likely to stop at their favorite restaurant, and that the average expenditure per visit is beginning to grow again. And yet, more people indicate they’re still playing it conservative with regard to restaurant spending. Are these assertions in conflict? Or is it is possible for both to be true, as consumers continue to reconcile their finances with the current economic reality?
Whether you’re a restaurateur, convenience store owner or supermarket operator… the competition for food dollars seems to remain strong. (That Progressive Grocer often publishes stories about the out-of-home dining sector is evidence of that fact.) Each food channel must fight to regain the customers they may have lost during the recession, as well as retain those that were gained as consumers traded-down. How does your messaging persuade consumers that your restaurant or store satisfies their needs best?
Sunday, June 10, 2012
Observation: Sunday’s Star Tribune features a story about many couples that are deferring their formal wedding and marriage, but starting a family now. Click here to see the full story from the Minneapolis paper.
Implications: I’ve been revisiting some research about how the family dynamic in America is changing, and plan to publish those thoughts very soon. But this story us yet another anecdotal perspective on how traditional families might not be behaving all that traditional anymore.
Thursday, June 7, 2012
Observation: This week’s Springwise.com newsletter delivers on their reputation for reliable business ideas. In this case, there are three examples of business ideas which respond well to emerging or important trends. The first is a smartphone that detects radiation, which comes out of Japan in response to greater anxiety about that issue in the aftermath of the tsunami and resulting nuclear tragedy of last year. Capitalizing on peoples need to know now, the Tim Horton chain in the United Arab Emerates prints the most recent headlines on the sleeve that insulates a customer’s coffee cup. Respecting the more diligent behavior of today’s consumers, a hotel in London working with a furniture partner to facilitate a “try before you buy” campaign. You can own the furniture in your hotel room. Click on any headline to see that particular story, or click here to see the most recent Springwise.com newsletter for yourself.
Implications: It’s not enough to be a trend watcher. One must ask how emerging trends can be exploited for the happiness of your customers and the profit of your company.
Wednesday, June 6, 2012
Observation: A story from Marketing Daily this week explains how the Disney companies plan to limit junk food marketing in media assets that serve youth audiences; the announcement was made in Washington with First Lady Michelle Obama on hand (click here to see that story). And last week, a firestorm debate started with New York City’s mayor Michael Bloomberg suggested restricting the sale of super-sized softdrinks (click here to see one of the stories published by the New York Times on that issue).
Implications: There seems to be growing momentum behind the idea of healthy living. Does your company offer a product or service that fits into this strengthening trend? Should you consider adding one, or altering your current menu in a way that the consumers you serve are given more healthful options?
Observation: Today’s Research Brief offers fascinating insight into the power a select few consumers can have in propelling big sales for new product launches. Click here to see that story.
Implications: At CSS, we frequently pontificate about the importance of identifying your true target consumer—the heavy user of the product or service you sell—and super-serving that constituency.
This article seems to support that body of thought, and add urgency to the idea of identifying your heavy user very early in the lifecycle of a product or service.
Observation: Once upon a time, the idea of an American dream revolved around owning a home, a yard, and a white picket fence. But a story in today’s USA Today suggests that the American dream is not purchased, but rented, for more and more American consumers. Click here to see the story.
Implications: Beyond impacting the way builders might design and sell their neighborhoods (selling to investors rather than individual owners), this issue could impact a lot of different categories, from home improvement to home furnishings and everything in between.
But beyond the obvious categories, this phenomenon might even impact things like general retail (groceries and discount stores) and services (banks and dry cleaners). After all, renters are generally more transient (they move more frequently) than owners… so the long-term relationships that might exist when customers are anchored by ownership could be impacted. The marketing objective of attracting new customers might become more important than ever in markets where rental housing is significantly higher.
What other consequences can you think of in a world where more people are renting their American dream?
Tuesday, June 5, 2012
Observation: Over the past few years, Korean brands like Hyundai swooped up impressive market share, just as Toyota was suffering from the angst of a major recall in 2009 and both Toyota and Honda were impacted by the effects of the 2010 Tsunami. But it seems that those musical chairs are shifting again, according to this recent story from Automotive Week and Automotive News. (Click to link.)
Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.
Implications: I’m not sharing this story only for the benefit of folks in the auto industry. Virtually every company wants to grow their business. But a story like this reminds us to ask some very important marketing questions.
If you expect to grow market share this year, at whose expense will you make those gains? Where will your new business come from? What will your marketing message say that is so convincing that people will leave their past provider, and instead, come to you?
Also… which of your competitors intends to grow their own market share at your expense? How will you defend against that assault, or even grow your own business in the face of that marketplace aggression? Will that threat come from a competing company within your business category, or is it possible this assault could come from an outside category that you now compete with? (For an automotive example, see the story immediately below about the increased use of mass transit.) How will your message help you defend against these new competitive threats? Should you bother defending (is it really a threat to your core business)?
The answers to all of these questions begin with knowing who your real target consumer is, and the benefits they seek when buying the product or service you sell. Sure, the competition should be considered! Absolutely! But always in the context of what your most important customers want from your product, service, and purchase experience.
Monday, June 4, 2012
Observation: According to a story in today’s USA Today, more people are taking more trips via mass transit. The surge is seen as a response to high gas prices (although gasoline prices are a few cents lower than last year at this time). Click here to see the story.
Implications: It is interesting to note that for today’s Millennial generation, life does not revolve around automobile ownership the way that it did in the 60s and 70s.
Do you sell a product that can be delivered? I can think of a lot of things that people cannot take home on a light rail or bus ride. Simple delivery could be a very important value-added service if this trend grows.
Do you sell cars or light trucks? It might be time to remind people of the flexibility and convenience that can come with vehicle ownership.
Observation: A story in today’s Dallas Morning News suggests that the age-old practice of bartering could be making a comeback. The full story is available by clicking here.
Implications: Speaking at a home furnishings conference a couple of weeks ago in New Orleans, I mentioned the concept of C2C marketing; where consumers try sell furnishings they already own before (or after) buying the set that will replace them. There were a lot of heads nodding in agreement when I asked if people had noticed that behavior in their stores.
Craig’s List and e-Bay make it easy for folks to sell and recycle property. But might there also be an increasing trend toward trading services, too? We’ll have to watch.
Friday, June 1, 2012
Observation: Consumers are having more favorable experiences when shopping on the web, according to this story from today’s Marketing Daily. Click here to see it.
Implications: What this means, of course, is that your company’s website is never finished. About the time you think it is, other companies have raised the bar with regard to the services, shopping and experiences consumers should expect when they go online.
The best way to decide what features to offer on your website? Talk with your consumer, and understand them better than any of your competitors. Know what they hope to accomplish when they go online… and deliver on those needs better.
You’ll never know everything there is to know about digital marketing (and when you think you do, it’s changing under your feet). But by focusing on your customers, your digital strategy can deliver what matters most… to your customers, and thus, to your company.
Observation: A story in today’s Marketing Daily explains that many people in relationships have kept a financial secret from their spouse or significant other. The article shares some fun insights, and you can read the full story by clicking here.
Implications: Humans are fascinating people.
Another example of financial infidelity that I’ve used over the years is when someone buys a ($500 golf club, laptop, or other) big-ticket item, and pays for it partially with cash, partially on the household bank card, and partially with a credit card. It is, in effect, laundering the household money so that a purchase is not easily traced. When one describes this dastardly behavior in front of a hundred people in a consumer trends workshop… it’s funny how many people in the audience start to blush!
The difficulties that many people went through a few years ago—and the slow recovery they have been experiencing since—have imposed new financial realities on a lot of households. In what could only be called a cultural consumer shift, many folks have denied themselves the kind of indulgences that were commonplace in the pre-recession economy. It only makes sense that eventually, people would become fatigued, act on the idea of pent-up demand, and move forward with some small (and some not-so-small) indulgences. Even if their partner might not know about it.
Have you made a purchase, or stashed some cash, without telling your spouse or partner about it?
Are your customers thinking about doing it as they walk through your business?
Wednesday, May 30, 2012
Observation: Today’s Research Brief provided a summary of findings from the Pew Research Center about the challenges involved with building truly unbiased public opinion research. On the list of challenges: Greater difficulty contacting prospective survey participants, and lower participation rates, overall. Click here to see the Research Brief, or to see the Pew Research Center report, click here.
Implications: Granted, this story focuses on public opinion research, but the findings here serve as a canary in the coal mine of consumer research. One of the reasons survey respondent rates are going down, in my opinion: Everyone seems to be doing a survey, and many consumers are suffering from research fatigue. It seems that every time I buy anything or dine anywhere, the cashier circles a website on the receipt where I can take a survey for the chance to win a gift card or the like.
This is important, because it is critical for companies to acquire the input and feedback of the customers they serve. But as the Research Brief story indicates, it might be more important than ever to have a back-up source (or several) for information, beyond the simple survey. Shopper intercepts (both in-store and online)? Simple observation? Focus groups? Interviews? More refined analysis of your sales data? Secondary (subscription) research?
In what ways might you gain—or retain—the accurate input of your customers, with regard to their preferences, priorities and purchasing motives? Certainly, this much is true: When the right chance to conduct research is available to you, do not ask one gratuitous, unimportant question. Every response matters, so make every question count!