A recent newsletter from Iconoculture led me to a story from the New York Times, which suggests that people who were good at math may have been less likely to lose their home in the recent burst of the real estate bubble. The basis for the story was a study from Columbia University.
Implications: Were “creative mortgages” more attractive to people who didn’t really understand the ramifications of the math? Were alternative solutions too difficult for some folks to understand… leading them to believe that foreclosure was the only way out?
There is a lot going on behind this story… points worth pondering as we all try to learn from history, rather than repeat it.
Mike Anderson
Wednesday, June 30, 2010
UPDATE: About today's earlier post on store brands
In Media Post's Marketing Daily this morning, there was another story discussing the strength of store brands. I think you'll find it supports the piece I offered on the topic earlier today.
Click here to read the MD story.
Implications: If you're a brand, it might be time for more than branding. Consider messaging that includes both Strategy (why buy), and Tactics (why buy now).
Mike Anderson
Click here to read the MD story.
Implications: If you're a brand, it might be time for more than branding. Consider messaging that includes both Strategy (why buy), and Tactics (why buy now).
Mike Anderson
Store brands no longer syonymous with "generic"
According to a recent story from United Press International, more and more companies are doing what they can to improve the quality of store branded goods. The story provides important perspective about the store-brand category… which was launched, for the most part, during the oil shortage of the 70’s as a means of helping the consumer stretch their budget. Click here to read the story.
Implications: As the popularity of private label and store brand goods have increased, it only makes sense that the category would become more competitive and sophisticated. (The UPI story—among others—suggests that consumers can seldom distinguish a difference in quality between name brand or store brand goods.) Thus, the circle of popularity and consumer acceptance is only likely to expand.
[Note: Thanks to friend and trend-watcher JoAnne Naganawa for sharing the UPI story!]
Mike Anderson
Implications: As the popularity of private label and store brand goods have increased, it only makes sense that the category would become more competitive and sophisticated. (The UPI story—among others—suggests that consumers can seldom distinguish a difference in quality between name brand or store brand goods.) Thus, the circle of popularity and consumer acceptance is only likely to expand.
[Note: Thanks to friend and trend-watcher JoAnne Naganawa for sharing the UPI story!]
Mike Anderson
Tuesday, June 29, 2010
Cashing-on on the oil spill, or doing some genuine good?
I heard an ad for a political candidate recently that said something like, “It’s not enough to clean-up the oil spill. It’s time to clean-up our act.” The message went on to explain how this candidate supported alternative and sustainable energy sources like wind, solar, etc. You’ll understand why I’ve chosen not to name the candidate here.
In another example of tying-in to the environmental tragedy that is happening in the Gulf right now, I read a story last week about Kenneth Cole selling t-shirts to help raise money for clean-up efforts. The company has started a Facebook store to facilitate the project, according to this story from Marketing Daily.
Implications: The ongoing oil spill off the coast of Louisiana has already earned the title of being the biggest environmental catastrophe in U.S. history, so it is understandable (and appreciated) that marketers would want to tie-in to the cause. But proceed with caution, by asking this question: Are you tying-in to benefit communities, lands or wildlife affected by the spill? Or are you tying in for your own benefit? Without doing a lot of the former, I’d be very careful about trying the latter. My hunch is that the line between green and greed seems increasingly apparent to an ever more environmentally-aware population.
By the way… way to go, Kenneth Cole.
It’s okay to do well while doing some good. But doing one without the other is likely to be either unprofitable or in poor taste.
Mike Anderson
In another example of tying-in to the environmental tragedy that is happening in the Gulf right now, I read a story last week about Kenneth Cole selling t-shirts to help raise money for clean-up efforts. The company has started a Facebook store to facilitate the project, according to this story from Marketing Daily.
Implications: The ongoing oil spill off the coast of Louisiana has already earned the title of being the biggest environmental catastrophe in U.S. history, so it is understandable (and appreciated) that marketers would want to tie-in to the cause. But proceed with caution, by asking this question: Are you tying-in to benefit communities, lands or wildlife affected by the spill? Or are you tying in for your own benefit? Without doing a lot of the former, I’d be very careful about trying the latter. My hunch is that the line between green and greed seems increasingly apparent to an ever more environmentally-aware population.
By the way… way to go, Kenneth Cole.
It’s okay to do well while doing some good. But doing one without the other is likely to be either unprofitable or in poor taste.
Mike Anderson
Monday, June 28, 2010
Issues that could level the playing field between foreign and domestic products, prices
In some categories, like automobiles, the distinction between foreign and domestic has been blurry for quite some time. Many components in “domestic” models (Ford, Chevrolet, Chrysler, etc.) come from abroad, and some domestic vehicles are actually assembled in Mexico, Canada, or elsewhere outside the U.S. Meanwhile, many “imports” (Hyundai, Honda, Toyota, Nissan) are assembled in places like Kentucky, Alabama, and Texas. The biggest “difference” between the two seems to have been the legacy costs associated with the Big Three (union wages, pensions, health care, and so on). In the recent reorganization of the domestic auto industry, many of these costs have been made competitive with foreign producers… especially those using U.S. factories.
In some industries, though, the divide between foreign and domestic is still quite vivid. In furniture, for example, many products are now manufactured overseas, with a large share coming from Vietnam and China. And again, it is the difference in labor cost that has given those companies a competitive advantage.
But last week, I had the chance to speak with several executives in the home furnishings industry, as I attended the American Home Furnishings Alliance annual conference to present a modified Elm Street Economics workshop. A few “import” companies expressed at least mild anxiety—and a couple of domestic producers exhibited a corresponding optimism—that the production cost equation could be more balanced, and in the foreseeable future.
This competitive re-set could be influenced by a number of issues:
First, the Gulf oil spill is likely to put more regulatory burden on petroleum exploration and production. More rules generally lead to greater expense. And even without those regulatory concerns over the long term, supply and demand pressures could cause price increases in the short term. So if you’re shipping a sofa across the ocean (rather than part-way across the country), it could become more expensive to deliver your inventory.
Second, labor unrest in China could result in cost increases for manufacturing. When that expense finds its way into the price of a dining room set, some of the advantage for overseas production becomes diluted. (If you haven’t been following that issue, click here to see a story on the matter from the New York Times.)
Finally, quality concerns. Just a few short years ago, many people associated imported goods with the idea of quality. But with numerous toy recalls (many being products produced in China) and the high-profile Toyota recall of earlier this year, I’m not sure the concept of quality is something the consumer automatically assumes, just because an item came from a company on the other side of the globe.
Implications: This blog is not intended to be about manufacturing or the global marketplace. It attempts to be focused on matters that shape consumer sentiment and consumer behavior. That’s the point: These three significant issues are floating around there in the media space—seemingly unrelated for now—but eventually, I have to believe they could converge to create change in the marketplace (and therefore the consumer’s mind).
If you use the word “foreign” or “imported” as if quality and affordability can be taken for granted, I’d stay tuned to these three issues.
Mike Anderson
In some industries, though, the divide between foreign and domestic is still quite vivid. In furniture, for example, many products are now manufactured overseas, with a large share coming from Vietnam and China. And again, it is the difference in labor cost that has given those companies a competitive advantage.
But last week, I had the chance to speak with several executives in the home furnishings industry, as I attended the American Home Furnishings Alliance annual conference to present a modified Elm Street Economics workshop. A few “import” companies expressed at least mild anxiety—and a couple of domestic producers exhibited a corresponding optimism—that the production cost equation could be more balanced, and in the foreseeable future.
This competitive re-set could be influenced by a number of issues:
First, the Gulf oil spill is likely to put more regulatory burden on petroleum exploration and production. More rules generally lead to greater expense. And even without those regulatory concerns over the long term, supply and demand pressures could cause price increases in the short term. So if you’re shipping a sofa across the ocean (rather than part-way across the country), it could become more expensive to deliver your inventory.
Second, labor unrest in China could result in cost increases for manufacturing. When that expense finds its way into the price of a dining room set, some of the advantage for overseas production becomes diluted. (If you haven’t been following that issue, click here to see a story on the matter from the New York Times.)
Finally, quality concerns. Just a few short years ago, many people associated imported goods with the idea of quality. But with numerous toy recalls (many being products produced in China) and the high-profile Toyota recall of earlier this year, I’m not sure the concept of quality is something the consumer automatically assumes, just because an item came from a company on the other side of the globe.
Implications: This blog is not intended to be about manufacturing or the global marketplace. It attempts to be focused on matters that shape consumer sentiment and consumer behavior. That’s the point: These three significant issues are floating around there in the media space—seemingly unrelated for now—but eventually, I have to believe they could converge to create change in the marketplace (and therefore the consumer’s mind).
If you use the word “foreign” or “imported” as if quality and affordability can be taken for granted, I’d stay tuned to these three issues.
Mike Anderson
Friday, June 25, 2010
But wait… I have a (reason to) coupon
In the Research Brief that was published this morning, an Online Shopper Intelligence survey indicates that in addition to being a good deal for the consumer, online coupons can provide more than one form of benefit from the retailer, too.
People who used a coupon code during their online transaction indicated that they were more satisfied with their purchase than folks who did not use a coupon. Further, 57% of coupon users said they would not have purchased an item if they had not had the coupon. And finally, coupon users spent more, overall, than people who were not using a coupon.
Click here to see the Research Brief story.
Implications: Does it make sense for your company to consider offering coupons at your website (or elsewhere on the web)? Among other things, this piece of research suggests that people would not have “made the purchase anyway.” So companies who use online coupons aren’t necessarily giving away margins they would have had, anyway. (Although, I’m sure that possibility varies greatly by category and company.)
Mike Anderson
People who used a coupon code during their online transaction indicated that they were more satisfied with their purchase than folks who did not use a coupon. Further, 57% of coupon users said they would not have purchased an item if they had not had the coupon. And finally, coupon users spent more, overall, than people who were not using a coupon.
Click here to see the Research Brief story.
Implications: Does it make sense for your company to consider offering coupons at your website (or elsewhere on the web)? Among other things, this piece of research suggests that people would not have “made the purchase anyway.” So companies who use online coupons aren’t necessarily giving away margins they would have had, anyway. (Although, I’m sure that possibility varies greatly by category and company.)
Mike Anderson
Another take on "the new consumer"
By now, phrases like “the new normal” or “this new frugality could stick” have become cliché (to a point that has become annoying, in my opinion). Instead of more over-generalizations, I want to know what this “new frugality” looks like. I want to understand the values and motives that might influence spending differently today than they did five years ago. So, I’m always on the lookout for events, evidence and articles that might replace confusion with clarity.
A story from Marketing Daily this week led me to a recently-released white paper from Euro RSCG Worldwide on the topic of, “The New Consumer in an era of mindful spending.” The Marketing Daily story provided a nice overview, but I strongly suggest you read the complete white paper. (Click here to see a PDF copy of the full white paper.) Warning: The paper is an instrument to promote an upcoming book, “Consumed,” to be released in July. But a shameless plug is fair trade for having access to the white paper.
In our man-on-the-street interviews conducted for use in the Elm Street Economics workshop, several participants said, essentially, “I was beginning to change the way I spend already… I wouldn’t say my cutbacks were in response to the recession, necessarily.” It would appear that this study is, in many ways, consistent with that consumer sentiment.
One fascinating note from the Euro RSCG Worldwide survey: “56% of respondents said the recession served as a reminder of what’s really important in life… and that that’s a good thing.”
Implications: Many of the conclusions in the Euro RSCG paper (and presumably, in the upcoming book) are broad generalizations, driven by global research. The local business owner, manager or marketer will have to decide what is useful and what is not. This isn’t the first post-recession article or book to focus on long-term change, and it won’t be the last.
But when someone or something causes me to think, or look at the world from another perspective, I consider it time and thought well spent.
A story from Marketing Daily this week led me to a recently-released white paper from Euro RSCG Worldwide on the topic of, “The New Consumer in an era of mindful spending.” The Marketing Daily story provided a nice overview, but I strongly suggest you read the complete white paper. (Click here to see a PDF copy of the full white paper.) Warning: The paper is an instrument to promote an upcoming book, “Consumed,” to be released in July. But a shameless plug is fair trade for having access to the white paper.
In our man-on-the-street interviews conducted for use in the Elm Street Economics workshop, several participants said, essentially, “I was beginning to change the way I spend already… I wouldn’t say my cutbacks were in response to the recession, necessarily.” It would appear that this study is, in many ways, consistent with that consumer sentiment.
One fascinating note from the Euro RSCG Worldwide survey: “56% of respondents said the recession served as a reminder of what’s really important in life… and that that’s a good thing.”
Implications: Many of the conclusions in the Euro RSCG paper (and presumably, in the upcoming book) are broad generalizations, driven by global research. The local business owner, manager or marketer will have to decide what is useful and what is not. This isn’t the first post-recession article or book to focus on long-term change, and it won’t be the last.
But when someone or something causes me to think, or look at the world from another perspective, I consider it time and thought well spent.
For another overview of the Euro RSCG research, visit this version at PR Newswire.
Mike Anderson
UPDATE: Comparison shopping from the floor of your store
You’ve seen a few different stories about consumers using smart phones as retail shopping tools (click here to see a couple of them), but here’s another one.
A story from Media Post Marketing Daily this week suggests that Kia plans to place great focus on mobile and online marketing. The reason: 39% of the people who visit Cars.com generally did so through mobile devices… from dealership lots. (Click here to see the Marketing Daily story.)
Implication: More than ever before, it's important to be thinking about your unique selling proposition. If price alone is the only comparison, you might be facing a world of competition... both virtually, and literally.
Mike Anderson
A story from Media Post Marketing Daily this week suggests that Kia plans to place great focus on mobile and online marketing. The reason: 39% of the people who visit Cars.com generally did so through mobile devices… from dealership lots. (Click here to see the Marketing Daily story.)
Implication: More than ever before, it's important to be thinking about your unique selling proposition. If price alone is the only comparison, you might be facing a world of competition... both virtually, and literally.
Mike Anderson
Thursday, June 24, 2010
One person's trash is another person's... revenue stream
Another gem from Springwise this week: A company in Utah is gathering food waste from restaurants and grocery stores, and then composting the goods into premium soil that is sold to nurseries and greenhouses. (Click here to see the story.)
Implications: In a word where consumers increasingly think anything that’s too good to be true is probably false… I love the way this business model shows a clear connection between garbage-in and sustainability-out. The company, Eco-Scraps, has put itself in a position to not just claim—but demonstrate—their environmentally-friendly actions. And in an example of greatness-by-association, any restaurant or grocer who provides waste, or any nursery that buys the soil produced, can also lay verifiable claim to being green.
The consumer has been surrounded by reasons to suspect many companies and the claims they make. Are your claims supported by this kind of simplicity and transparency?
Mike Anderson
Implications: In a word where consumers increasingly think anything that’s too good to be true is probably false… I love the way this business model shows a clear connection between garbage-in and sustainability-out. The company, Eco-Scraps, has put itself in a position to not just claim—but demonstrate—their environmentally-friendly actions. And in an example of greatness-by-association, any restaurant or grocer who provides waste, or any nursery that buys the soil produced, can also lay verifiable claim to being green.
The consumer has been surrounded by reasons to suspect many companies and the claims they make. Are your claims supported by this kind of simplicity and transparency?
Mike Anderson
Shock value: Should restaurants prepare now for impending nutrition labeling requirements?
The restaurant business is facing a new, updated menu… featuring caloric and nutritional information about items offered on the menu, just as packaged goods companies are required to provide.
A story published this week by Marketing Daily suggested that smart restaurateurs won’t wait for these new regulations to go into effect in 2011; foresighted operators will begin to modify the ingredients of menu selections now, or begin a gradual reduction in portion sizes (to make the per-serving nutritional information more favorable). The article featured research from Mintel (click here to read the story).
You can visit Restaurant.org to learn more about these new regulations (or click here for a pdf summary), as well as other issues of concern to the restaurant business. (It is important to note that only restaurant companies with twenty or more stores will face this new requirement.) That having been said, it’s not just the federal government that is taking action on nutrition for out-of-home meals. A number of states are looking at the issue, too, according to these articles from Nation’s Restaurant News.
Implications: If I’m an independent restaurateur, right now I am probably wondering whether it will matter that I’m not required to post nutritional information on/with my menu. It this new practice resonates with a more health-conscious consumer, it might not be a federal or state government that requires me to take the action… it could be consumer demand, as customers could expect the same transparency from a stand-alone that they're getting from the franchise restaurant.
Regardless of the business you’re in, here’s an important question: When new rules are inevitable, is there a reason to delay your compliance? Or are the interests of both your company and your customers best served by voluntary transparency… and solving any issues now that such transparency could reveal?
Mike Anderson
A story published this week by Marketing Daily suggested that smart restaurateurs won’t wait for these new regulations to go into effect in 2011; foresighted operators will begin to modify the ingredients of menu selections now, or begin a gradual reduction in portion sizes (to make the per-serving nutritional information more favorable). The article featured research from Mintel (click here to read the story).
You can visit Restaurant.org to learn more about these new regulations (or click here for a pdf summary), as well as other issues of concern to the restaurant business. (It is important to note that only restaurant companies with twenty or more stores will face this new requirement.) That having been said, it’s not just the federal government that is taking action on nutrition for out-of-home meals. A number of states are looking at the issue, too, according to these articles from Nation’s Restaurant News.
Implications: If I’m an independent restaurateur, right now I am probably wondering whether it will matter that I’m not required to post nutritional information on/with my menu. It this new practice resonates with a more health-conscious consumer, it might not be a federal or state government that requires me to take the action… it could be consumer demand, as customers could expect the same transparency from a stand-alone that they're getting from the franchise restaurant.
Regardless of the business you’re in, here’s an important question: When new rules are inevitable, is there a reason to delay your compliance? Or are the interests of both your company and your customers best served by voluntary transparency… and solving any issues now that such transparency could reveal?
Mike Anderson
Simple problem, digital solution
My wife and I were walking through a department store at Mall of America last week. Oddly, if you go in at the main entrance, you have to walk through the cosmetics and fragrance department (primarily aimed at women) to get to the men’s department on the same level.
As is typical on a Saturday afternoon, the store was offering a free make-over, giving consumers a chance to try-before-they-buy, and giving the store greater odds at making a sale. I asked my wife if she wanted to indulge while I shopped for the items I was looking for.
“No way,” she said. “You never know what some of those brushes and applicators have come into contact with.” Being an ignorant male, I hadn’t thought of that. (I don’t use make-up, so how would I know?) Turns out plenty of women have the same concerns. (And many are uncomfortable with having anything to do with make-up done in public.)
Out of sheer coincidence, a cool new product demonstration device was featured in this week’s issue of Springwise. It’s a mirror designed to be used at the cosmetic counter, which takes a digital photo of the customer, which can then be treated—virtually and hygienically—with samples of the make-up the store is selling. (To see the story about EZ Face, click here.) Trendwatching refers to this as a digital form of "Tryvertising."
Implications: Where do people come up with great ideas like this? By listening to people like my wife (or whomever they consider to be their target consumer).
What commonly-available tools could be modified slightly to create an extreme advantage for your company?
Mike Anderson
As is typical on a Saturday afternoon, the store was offering a free make-over, giving consumers a chance to try-before-they-buy, and giving the store greater odds at making a sale. I asked my wife if she wanted to indulge while I shopped for the items I was looking for.
“No way,” she said. “You never know what some of those brushes and applicators have come into contact with.” Being an ignorant male, I hadn’t thought of that. (I don’t use make-up, so how would I know?) Turns out plenty of women have the same concerns. (And many are uncomfortable with having anything to do with make-up done in public.)
Out of sheer coincidence, a cool new product demonstration device was featured in this week’s issue of Springwise. It’s a mirror designed to be used at the cosmetic counter, which takes a digital photo of the customer, which can then be treated—virtually and hygienically—with samples of the make-up the store is selling. (To see the story about EZ Face, click here.) Trendwatching refers to this as a digital form of "Tryvertising."
Implications: Where do people come up with great ideas like this? By listening to people like my wife (or whomever they consider to be their target consumer).
What commonly-available tools could be modified slightly to create an extreme advantage for your company?
Mike Anderson
Thursday, June 17, 2010
The pendulum of housing keeps on swinging
When sub-prime mortgages were re-setting in 2006 and 2007, buyers called the shots while sellers with few options took whatever they could get for their homes. Then, as more buyers jumped into the mix, real estate sellers became good at generating “bidding wars” on for-sale houses, often turning the deal-of-a-lifetime into a purchase that was more expensive than expected for the winning party.
As incentives ran out in April, it seems that May brought the pendulum of bargaining power back to the buyer, according to this story in the New York Times, which suggests that many “deals” fell apart at the last minute last month. That’s important to the housing market. But it creates a ripple effect that is felt throughout the greater economy, as moving into a new home can be the precipitating factor that causes the consumer to spend on home improvement, home furnishings, and a host of other items.
Such dramatic swings in the real estate market can even restrain the progress of the apparent recovery. As a story from today’s Wall Street Journal indicates, the industrial sector seems to be trying to lead the economy into positive territory… but under the drag of a housing market that seems unready to cooperate. (The inset graph from the WSJ story is particularly telling.)
Implications: I’m thinking about a couple of things this morning, in response to these housing issues.
First, when people move, they are moved to a variety of purchasing actions. If yours is a business that indirectly relies on relocation as a stimulus for buying, have you maximized your marketing with the folks who have already moved within the past three years or so? (Lots of people bought when there were first-time homebuyer incentives, but I don’t think I ever saw a furniture or appliance store create their own “First time home furnishings buyer” stimulus plan. It might make for a good sale, at least among those people expecting a rebate after purchasing their home.)
Second, I believe home ownership is still the great American dream. But buyers are going into the process fully awake… and ready to hold off until sellers meet their expectations.
Regardless of what you sell, do you know, for sure, what the expectations of your buyers are?
Mike Anderson
As incentives ran out in April, it seems that May brought the pendulum of bargaining power back to the buyer, according to this story in the New York Times, which suggests that many “deals” fell apart at the last minute last month. That’s important to the housing market. But it creates a ripple effect that is felt throughout the greater economy, as moving into a new home can be the precipitating factor that causes the consumer to spend on home improvement, home furnishings, and a host of other items.
Such dramatic swings in the real estate market can even restrain the progress of the apparent recovery. As a story from today’s Wall Street Journal indicates, the industrial sector seems to be trying to lead the economy into positive territory… but under the drag of a housing market that seems unready to cooperate. (The inset graph from the WSJ story is particularly telling.)
Implications: I’m thinking about a couple of things this morning, in response to these housing issues.
First, when people move, they are moved to a variety of purchasing actions. If yours is a business that indirectly relies on relocation as a stimulus for buying, have you maximized your marketing with the folks who have already moved within the past three years or so? (Lots of people bought when there were first-time homebuyer incentives, but I don’t think I ever saw a furniture or appliance store create their own “First time home furnishings buyer” stimulus plan. It might make for a good sale, at least among those people expecting a rebate after purchasing their home.)
Second, I believe home ownership is still the great American dream. But buyers are going into the process fully awake… and ready to hold off until sellers meet their expectations.
Regardless of what you sell, do you know, for sure, what the expectations of your buyers are?
Mike Anderson
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