Generational Economics: Pre-adulthood (Teens and Adolescents)

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.    

Mike Anderson, for The Marketing Mind consumer trends blog, service of The Center for Sales Strategy.  

UPDATE: Emerging adults

Observation:   For quite some time now, we’ve been following a trend that could be classified as multi-generational households, or if you prefer, emerging adulthood (links to some of those stories appear at the bottom of this post).   

Today, another story on the topic was published by Research Brief, and it sheds more light on both the benefits and frustrations associated with adult children who return to their parents’ home, or never left.  Click here to see the story.

Implications:   In a conversation with one of our clients this week, we were talking about the potential that could exist among consumers in this category.  People who have returned home—or never left—might be benefiting from housing at very low rental cost, or at no cost at all.  That means any income they generate is much more discretionary than the money held by someone who rents or owns their own place.

Think about it:  What would you do if you could skip your next five or six mortgage or rental payments?  There would be more money for travel/vacations, restaurants and nightclubs, cars, home and personal electronics (from cell phones to tablets to gaming), and more.  Further, it is likely that this group of twenty-somethings (and some thirty-somethings) will be a part of any future real estate market recovery.

Think twice before you ignore or overlook this potential pool of discretionary income.

[For more on this topic, see “Return-to-nesters” from 11/4/11, “More people under one roof” from 5/5/11, “Multi-generational households” from 4/15/10, and “Emerging adulthood” from 1/5/12.

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

A variety of retailers make adjustments to their pricing strategies

Observation:   An article in today’s New York Times sheds light on the reasons behind pricing shake-ups at stores like JC Penney, Stein Mart and more.  Click here to see the story.

Implications:   Early in the story, this NY Times story righteously focuses on the new sense of control that consumers have over the way business is done.  (Unfortunately, the piece quickly devolves into speculation by pundits about whether the new pricing strategies of various stores will work.  Pundits won’t decide.  Consumers will.)  In an age where competitive shopping can be done before arriving at Store #1, the game has changed.

Of course, there are other ways to attract consumers, beyond price.  (Quality, selection, service, to name a few.)  But the essence of this story is about control:  What customers want and whether you’re delivering it.

Have you sat down for a heart-to-heart with your best customers lately?

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

Men join the recovery in apparel spending

Observation:   A story in yesterday’s New York Times explains that men are spending more than ever on fashion accessories.  But perhaps more importantly, it points out unemployment and other recessionary issues impacted men differently than women.  Click here to see the story.

Implications:   It’s good to see men back spending again, and especially on themselves.  Both male and female heads-of-household delayed personal spending during the recent 2007-2009 recession… opting to support the needs of their family first.  Indulging a little more—or updating one’s wardrobe—might be another indication that the recovery and consumer confidence gaining a little momentum.

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

Open mike night… for cooks?

Observation:  In a world where even The Food Network is deploying a reality TV strategy, it was only a matter of time before actual restaurants gave aspiring chefs the chance to cook for the crowd.  See this story from today's Springwise newsletter (click to link) about a restaurant in Paris that’s giving everyday people the chance to show their stuff. 

Implications:  Love it.  Why not the same approach for a home improvement store?  Stylist?  Fashion designer?  All kinds of retail could take advantage of this approach as a creative way to connect with consumers and connoisseurs alike. 

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

Appearances still a factor in the job search

Observation:  Yesterday’s Iconoculture newsletter had a brief but interesting story about the increasing number of people in Spain who are having tattoos removed.  It seems that in a tight labor market, job hunters don’t want to risk that their former symbols of irreverence or personal expression will be a turn-off to potential employers.  Click here to see the story.

Implications:   A tight labor market can influence a wide variety of business categories.  Job hunters need reliable transportation, and a wardrobe appropriate to the position they would like to hold.  Personal grooming might be taken particularly seriously, as well as office supplies and technology tools that can help secure that next gig… or preserving the career they already have.

Do you sell any products or services that might be particularly attractive to a job-seeking consumer, or people who are being proactive about retaining/growing their current job? 

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

Trade-in value: It's not just for cars anymore

Observation:   Back in October, we shared a posting about “Re-commerce,” where more consumers are trying to sell something they own before buying the replacement for that item (i.e., listing a couch on Craig’s List before spending the money for a new sofa).  Click here to see that Elm Street consumer trends story from October 4, which was based on an article from Trendwatching.com.

In today’s Marketing Daily, there is another story of interest to this trend.  It suggests that more women are considering resale value before they buy a product (and we’re talking about everything from clothing to electronics, no just cars).  Click here to see that story.

76% of the women surveyed indicate that they participate in a site where consumers buy or sell from each other.

Implications:   Should your company consider adding a trade-in policy for the products you sell?  Should it at least start thinking about the long-term resale value of the products you offer, and talking about those attributes with customers?

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

Shopping for apparel online gets one step closer to providing in-store service

Observation:  This morning’s newsletter from Springwise explains that up to 40% of online clothing purchases are returned… and the culprit is often a size issue.  However, one online company is helping clothes buyers obtain a size and shape profile, using only their webcam and a compact disk.  Click here to see the story.

Implications:   It is both scary and exciting to see innovations like this happening all around us, and around the clock.  But the best innovations aren’t as sophisticated as they are consumer-focused, and sometimes very simple.

Is your company innovating its products and services… or finding new ways to satisfy customers?  Sometimes, there is a difference between the two.

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

The impact of those who aren’t leaving the nest… on Mom, Dad, and the economy

Observation:   It turns out that when college grads return home instead of striking off on their own, it’s not just Mom and Dad’s bottom line that feels the effect.  Stalled starts are impacting the overall economy, according to this summary from today’s New York Times (click to link).

Implications:   When it comes to college grads who are returning home, or other adult offspring that never left, or boomerangs who’ve returned to the safety net of their parents after a job loss… what kinds of marketing opportunities might surface? 

From apparel that helps provide confidence for the job interview to the furniture store that can provide smaller furnishings for a more crowded house, or even the bank that can provide a plan to stash-away savings for the day when a son or daughter ultimately moves out on their own…

There are still opportunities in a world where folks don’t move away from home as early as they used to.  The opportunities just look different.  One example:  The new "age of acquisition" consumer might not be 18-34, but instead, the baby boomer, as they increasingly fund the needs of their adult children.  An example of those expenditures is found in this story from Engage:  Boomers (click to link).

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

It’s not a website and a retail store, it’s one relationship with multiple channels

Observation:  Today’s Marketing Daily featured an interesting story about Macy’s today, and specifically, how the retailer is enjoying some success BOTH with their bricks-and-mortar stores and their online presence.  Click here to see it.

Implications:    While some small business owners consider their digital presence a whole different initiative from their physical location… it’s not.  The consumer just knows they love doing business with you.  In-person when the opportunity allows, or online when they don’t have time for a physical visit.

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

Macy’s takes online interaction into the store with QR codes

A recent story from Online Media Daily asks the question, “Are QR codes worth it?” for both the retailer and the consumer.  It’s worthwhile question, and you can read that story by clicking here.

Implications:   Of course, QR codes are just another tool.  And like any piece of equipment, whether it’s effective depends on how you’re planning to use it.  Can consumers “shoot” your QR code to find a landing page with important information about your products, a map to your location, or a coupon that represents value?

One of the stronger uses I’ve seen lately is the way Macy’s has placed QR codes not just in their advertising, but in their stores.  When consumers see the signs—strategically placed throughout each store—they can scan the QR code to hear from designers and celebrities.  It’s like having a virtual sales person point-out the strongest attributes of the featured product.

If you’d like to see the visual explanation, here’s the one Macy’s offered on YouTube (very similar to the television campaign they’ve been running this month to tout this new “service.”)   Note how they emphasize simplicity, and not technology!

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

Trend site recognizes increasing tendency to trade-in and trade-up

Trendwatching.com is a consistently reliable source for trends across a wide scope of business categories.  And the October Trendwatching newsletter holds a series of stories having to do with our desire to trade-in.  Click here to see it.

Implications:   Re-commerce is nothing new; you’ve probably traded-in a car to buy a new one, or sold one house to buy another.  But this story does a good job of pointing-out how consumers are more inclined, lately, to trade-in where a variety of new categories are concerned, and using a variety of tools.  Many local pawn shops are well stocked, Craig’s List is quite populated with goods for sale, and companies advertising that they’d like to buy your unwanted gold and silver are plentiful.  

Is there a way that folks are trading-in as a means of trading-up to your product or service?  How might you facilitate that move?  And besides discounting the price of a new purchase, what other benefits does the consumer receive by trading in?  (Are you messaging about those benefits?)

At our house, I recently enrolled in a class I wanted to take.  But before I did it (it has to do with a hobby of mine), I decided to sell some power tools and sports equipment I hadn’t been using.  It wasn’t just that I didn’t want to take the tuition out of our household budget; I built the goal of de-cluttering into the process… not wanting to go further with one interest until I off-loaded some of the things that had to do with other activities.

Also, respect that this isn't just about consumers who want to turn their possessions into cash; they simply recognize that their property now has a value... if not to them, then perhaps someone else.  I've recently seen furniture store ads asking people to trade-in their mattress, which is then donated to a shelter for the homeless.  And I've seen a department store campaign that invites shoppers to trade in their winter coats; their old coat goes to charity, and the consumer receives the reward of a discount toward their new jacket purchase.  Again... can you apply this principle in your company, and do good as you do well?

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

UPDATE: Back to School forecasts

A few days ago (7/21/11) we offered a post about the Back to School shopping, as pundits begin their annual speculation about the revenue potential of this selling season. 

Yesterday’s Advertising Age had another story on the topic, this one suggesting that more parents will delay BTS shopping until the last moment… or even finish some of their shopping after school has started.  (Click here to see the story.)

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

Predictions start rolling in about Back to School season

A couple of stories hit my desk today on the topic of Back to School.  One, from Marketing Daily—and citing research from NPD Group—suggests that consumers will hold the line (click to link).  Another, which I discovered through Len Stein’s newsletter, explores the tendencies and shopping patterns of young men, women, and various ethnic and race groups (click to link).  That piece was published by YPulse.

Implications:    A lot of people are watching—and counting on—the back to school season as the first major shopping rush of 2011.  How are your customers thinking about BTS?  Are they towing the line, or are they going to see this season as a time to catch-up on their kids’ outdated wardrobe after three or so years of restraint? 

Watch, also, for the electronics people spend on this season.  From smartphones to iPads, a lot of people who are “cutting back” will mysteriously find the money to buy devises that didn’t event exist just a few short years ago.

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

Try this on for size (virtually)

Colleague Tina Rice shared a copy of this story from Strategy and Business today:  It explains how technology allows consumers to try on clothes virtually, and use those same tools to “right size” their apparel.  Click here to see the story.

Implications:   Several years ago, Dell computers offered dozens of options in what seems like an infinite range of combinations and iterations.  But automating the selection of those options, Dell brought a “my size fits me” level of customization to buying computers online.

If companies are able to replicate those capabilities—while paying attention to the nuances of an individual human’s physical dimensions—history suggests that consumers will respond favorably. 

Lots of companies are using technology to streamline their contact with the consumer, often to the irritation of that same consumer.  Based on this S+B story, it seems at least a few players in the apparel industry are trying to use technology to enhance the product and shopping experience for consumers. 

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

One size does not fit all

Today’s New York Times features a story about sizing in the apparel industry.  There is no real standardized practice between designers or retailers now, but a move is afoot to change that.  Click here to read the story.

Implications:   My take-away on this story is focused on consumer frustration while clothes shopping.  If you can be a size ten in one line, but go to another store and wear a size 000, one must wonder why this issue has not been addressed before.  (And one might now better understand why many women pick a favorite designer or brand in clothing, and then tend to stick with it.) 

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

Disney reaches out to kids... on arrival

An interesting story in today’s New York Times cites the company’s maternity-ward marketing efforts in suggesting it’s never too soon to approach a new prospect. Click here to see the story.

Implications: Disney knows moms will greatly influence the formative years of their children. Why not build an alliance with that influence… before channel selection and favorite characters are decided by the infant?

Ironically, in their teenage years, it will be these kids who are more likely to influence the purchase behaviors of their moms! (Mobile phones, video games, places visited, etc.)

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

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

What are the benchmarks of customer satisfaction for your business?

Yesterday’s issue of the Lempert Report newsletter led me to rediscover the American Customer Satisfaction Index, published by the Ross School of Business at the University of Michigan. The ACSI is a monthly survey asking how pleased consumers are with various brands in the food, clothing, footwear, and pet food categories. You can click here to open the latest press release, which offers a convenient overview of the thinking behind the study. If details are your delight, click here to see the most recent report card.

Implications: This effort was fascinating to me not because of its relationship to food, clothing, footwear or pet food… but because of the information it extracts from consumers: How satisfied are you, and how has that changed since the last time we talked?

It got me wondering about “degrees of content.” Are you happy to simply be someone’s favorite restaurant (or bank or car dealership or store)? What if consumers rated your operation better than the competition; would that be good enough?

What if the consumer felt most of their usual restaurants were slipping, in terms of service, but yours has slipped less. Would that be good enough for you? Wouldn’t you rather compare the consumer’s opinion of your restaurant this month… to their opinion of you last month?
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The danger of competitive comparison is that when the competition is weak, it can make you weaker, too. When you compete with yourself, as well as the competition, you will see their weakness as your opportunity to strike.

Mike Anderson

Supply and demand could impact clothing types and styles

A story from the New York Times says that cotton prices are going up in response to limited supplies and increasing demand. Click here to review the article.

Implications: People could move to other fabric alternatives in the clothing they choose… when confronted with the prospect of higher prices for cotton garments. That states the obvious. But I’m wondering about other implications…

What impact this might have on clothing as a gift choice this holiday season?

Cotton is one of those rare products that is seldom challenged when referred to as “sustainable.” What other fabrics/clothing could emerge as an environmentally-friendly alternative? (Will people just bite the bullet and pay the higher prices for cotton garments?)

Mike Anderson