Is bartering making a comeback?

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.

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

The trend of “Power to the People” continues

Observation:  One mega-trend we’ve been talking about for years is something we refer to as “Consumer Control.”  Essentially, it is the acceptance that consumers dictate the terms of the relationship, whether you work in products, services, retail or wholesale.  Pervasive Technology has empowered the consumer to make decisions that they once left to a vendor or service provider.  This, combined with increased competition in the wake of the Great Recession, has contributed to a power shift, in which the consumer wields tremendous control.

This trend was reinforced by an article in this week’s Iconoculture newsletter.  Click here to see it. 

Implications:   Do you serve customers?  Or collaborate with them?  Do your customers want to be call the shots, or do they hope to receive full service... or both?

[Note: For more stories about Consumer Control dating back to April 2008, click here.  For stories from the Elm Street Economics consumer trends blog that are related to Pervasive Technology, a contributor to the trend of Consumer Control, click here.]

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

How mobile phone owners are using their device in the shopping process

Observation:   Today’s IAB newsletter linked to a worthwhile e-Marketer story about the ways consumers are using their mobile devices, ranging from pre-shopping research to surfing for more information while in-store… ranging from additional product information to competitive pricing.  The article is based on information from Leo Shapiro and Associates, and you can click here to see the full story.

Implications:   This story is strong because it doesn’t just tell us what people are doing (using their mobile device as they shop), it sheds some light on how they are doing it.  That’s important, because I doubt mobile devices will be leaving the shopper’s toolbox anytime soon.

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

UPDATE: Do consumers prefer online or in-store?

Observation:  A Research Brief story this morning asserts that consumers prefer online over in-store shopping.  Click here to see it.

Implications:   I fear that the data cited in the RB story does not go far enough; or perhaps it gives a right answer to the wrong question.  As I’ve been discussing in recent posts, the consumer does not necessarily want to choose between online or in-store.  They want multiple channels available to them, and they want to use the channel that suits them best at any given moment.  If the purchase is a no-brainer, they want to get it done fast.  If the item is one of complexity, they want to hold the product in their hand, and perhaps talk to someone knowledgeable about that product.

Blanket statements can get you into trouble.  Consumers purchase preference are likely to depend on the personality of the buyer, the personality of the product, and the circumstances which bring the two together.

[For more on this matter, see “Target:  Showrooming” from 4/5/12, or “Showrooming” from 3/2/12.]

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

Degrees of success compel retailers to make changes in self-service checkouts

Observation:   A story from USA Today indicates that several retailers are making changes to their self-service check-out strategy.  Some report significantly higher shop-lifting in the lanes, and are either installing more sophisticated systems to help thwart that shrinkage, and others are removing the lanes entirely.  Click here to see the story.

Implications:   How do you feel about the self-service line?  Some folks are delighted to have a lane that is often faster… but I’ve talked to others that think they’re doing some of the store’s work without being compensated with higher savings for the lower degree of service.

More importantly… how do your customers feel about the balance of service, swiftness and convenience that you offer?

It can be impossible to please everyone all the time, but the more options you offer, the  more people you will please.  And if you must make compromises, focus on pleasing those people who buy lots of what you sell; the heavy-user target consumer that makes or breaks your business.

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

Target: Showrooming

Observation:   About a month ago, I published a post on the practice of Showrooming, where consumers shop at a bricks-and-mortar store but then make the purchase online (see “Showrooming,” March 3).

This morning, friend and colleague Matt Sunshine shared an article from the Harvard Business Review blog that explains the position that retailer Target is taking on the practice.  Click here to see that story.

Implications:   The HBR blog post is very good… but I’m thinking the comments section that follow the story are even better, as consumers and business people alike suggest ways that Target might combat online competitors who sell for less (due to lower overhead). 

One suggestion that wasn’t made (until we made it) is blurring the line between a bricks-and-mortar and their online counterpart.  Why not have a set of business card-sized instructions—along with a QR code—that blatantly engages the consumer on the showrooming phenomenon:

“If you need some time to think it over, and you’re considering doing a little online research, please start your search with OurStore.com.  When you enter this promotional code, you’ll get (discount, gift with purchase, free shipping, other incentive).” 

The promotional or QR code would help the company track where the product engagement began, and help them develop an even better bricks-and-mouse relationship.  Versions of the card (or code) could be handed-out by store salespeople, too… so that if the seller is helping drive online sales, they could be rewarded with cash or redeemable points of some kind.  As a retailer, Target should not care whether the purchase is made in-store or online… only that it is made with Target.

Could “showrooming” be impacting your business?  In what ways could you exploit the practice?  (Exploiting can be much more profitable than complaining.) 

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

Ally Bank gets behind financial literacy campaign

Observation:   I was struck by an article in today’s Marketing Daily explaining the elements of a financial literacy effort that’s been launched by Ally Bank.  Click here to see the story.

Implications:   Having had the chance to interview several banking executives over the past few years as part of our Industry Insights initiative, I know that one topic that is forefront to the banking industry is relatively sparse presence of young customers.  Here’s what I mean:

Younger customers, at worst, have learned to live and manage their finances without the (consistent) use of a traditional bank.  Banks are now competing with car dealerships for car loans, home improvement stores for home improvement loans, insurance companies and employers for long-term investment options, and check-cashing services and for those times when folks just want a little cash.  Competition is coming from everywhere.

Many younger customers, at best, have automated their banking relationship to the point where no real “relationship” actually exists.  They use direct deposit to manage their paychecks, automatic or online bill paying instead of writing checks, and ATMs as a place to grab a little cash.   The good news:  Banks have created a very cost-efficient operating model that requires little or no human intervention and overhead.  The bad news:  Banking service has become a commodity, rather than a relationship to be built on.

The reason I bring this up?  The Ally Bank effort must almost certainly be aimed at this millennial- and middle-aged consumer segment.  (At least for now, you’re not targeting seniors if you’re using Twitter.) 

Will the next generation of consumers use your company, products or services in the same way the last generation did?  What adjustments could you start making now, for consumers that have adjusted their habits when buying in your category?

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

From mild distraction to “very Pinteresting”

Observation:   A story from yesterday’s Marketing Daily newsletter explains that Pinterest—a relative newcomer to social sharing—is beginning to play a serious role in the way that consumers are influencing each other… and companies are starting to take notice.  Click here to see the MD story.

Implications:   Word-of-mouth has long been the omnipotent form of endorsement advertising, as one friend tells another about the positive attributes of a product, service or experience.  Through testimonials, many companies have used word-of-mouth even in their paid mass media.  At its root, whether you’re talking about Pinterest, Facebook or any other social site, social marketing is about giving customers something to talk about… in a favorable way.

Also interesting to note:  Pinterest seems to be the most fun when participants are sharing “person-to-person,” rather than when someone pins a business entity to one of their boards.

Pinterest facilitates word-of-mouth.  Have you done the same?  Before you launch a social marketing campaign… ask yourself whether you’ve launched an experience or product that’s worth talking about.  Someone once shared this simple bit of advice on the topic of successful social marketing:  Before it can be marketing, it must be social. 

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

UPDATE: Never anger a reporter. (And we’re all reporters.)

Observation:   Here in the Twin Cities, one of the biggest business news stories of the day is the announcement that Best Buy is closing fifty stores and cutting jobs at its corporate headquarters (see the Star Tribune story by clicking here).

The coverage inspired me to review some of the material I’ve posted about the retailer, including a post about a nasty review in Forbes (see “Never anger a reporter,” 1/5/12).  But when looking for that original Forbes story, I stumbled across a follow-up that I had not seen until now, published by Forbes on January 9 (see “The People vs Best Buy, round two” by clicking here). 

Implications:  Let me start by saying that my heart goes out to anyone who is losing a job in this restructuring… may you swiftly find a new, fulfilling place to apply your trade and prosper.  Nobody likes to see job loss.

But there are two reasons I revisited this story and feature it again here.  First, in reading the follow-up story in Forbes—“The People vs Best Buy, round 2”—one discovers just how powerful the fallout can be from negative publicity.  In the digital age, consumers have infinite ways to pile on, and add their own two-cents about a shopping experience.  The original Forbes article was forwarded via email, LinkedIn and other means with stunning frequency.  That speaks to the viral nature of the consumer community.

Secondly, the Star Tribune story explains that Best Buy lost $1.7 billion in their fourth quarter, compared to a profit of $651 million for the same period in the prior year.  In other words, the further we moved away from the recession, the worse things got for Best Buy’s bottom line.   That issue dramatizes just how selective an economic downturn or upswing can be:  Like the recession, the ongoing economic recovery will not be an equal-opportunity event.

How is your recovery progressing?

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.

A dramatic sign of our digital times

Observation:   If you want to know just how wired we have become, you can look it up in an encyclopedia… but soon, the only up-to-date version of that information source will be online.  Encyclopaedia Britannica has announced that it will discontinue its printed version, according to this story from the New York Times (click to link).

Implications:   The company has been publishing these impressive volumes for 244 years.  Wisely, they’ve also been publishing on the web for many years, and seem to be focused on staying current with mobile devices.   What remains to be seen is whether their business model can prosper in a world where information has become so eager to be free, through sources like Wikipedia and a seemingly infinite list of other web resources.

Once upon a time, buying air travel used to be a complicated ordeal, often requiring the intervention of a travel agent to interpret the numerous options and seemingly foreign language of the airlines.  That process was ultimately simplified, and information once controlled by experts was released to the general public; we can now shop for and purchase plane tickets from the miniature screen of our smartphones.  (For that matter, I find the best time to plan my travel is when I’m sitting at 30,000 feet using GoGo.)

What information does your business control?  Could your business actually grow if you figured out a way to relinquish that control to the consumer?  Could your company suffer is someone else figures it out first?

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

This time, it’s different: Wells Fargo to end free checking (for some)

Observation:   Last week, a report from the Associated Press explained that Wells Fargo will roll-out a $7 monthly fee for checking accounts that were previously free… unless customers maintain a $1,500 minimum balance, or direct deposit at least $500 per month.  Click here to see the story as it appeared in Crain’s New York.

The fees will roll-out gradually beginning in May, and beginning with six states, according to this story from KSTP News in Minneapolis. 

Eventually, the rate will be in place in each of the 39 states that Wells Fargo serves.

Implications:   So why has Wells Fargo avoided the outcry of unfairness that was cast on Bank of America a few months back when they tried the same move?  I suspect it’s because Wells Fargo did a better job of explaining that the move would not affect customers across-the-board, but that it would impact folks who don’t do much business with the bank anyway.  It seems to me that Wells Fargo is thinning the customer herd.

In the story, one critic complain that the bank is being unfair to folks who are unemployed or on low fixed incomes, but I’m not sure they’re being any less fair than any business that expects to be paid for products received or services rendered.  (Most companies target consumers with incomes.)  Another critic warns that Wells Fargo will lose much more in the way of customers who walk away than from the income these new fees will generate.  I’m betting the folks at Wells Fargo have calculated that trade-off, and are at peace with their decision.

Many companies focus on customers they wish they could have.  But have you thought about those customers that could actually be costing you more than they are likely to be worth, in terms of economic return?  

In the face of rising energy and commodity costs, is it likely that you will have to raise prices on some products or services in the next few months or years?  What can you learn from the way that Wells Fargo has introduced—essentially—a price hike?

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

Showrooming: A name for the consumer’s practice of shopping in-store and then buying online

Observation:   A study from NPD was summarized in today’s Marketing Daily, and focuses on the consumer’s new tendency to shop in a variety of channels (small retail, big-box, department and warehouse stores), and then buy the item online.   Click here to see the story.

Implications:   This is a genie that’s going to be hard to put back in the bottle.  So the question becomes, what can you do about it?

Is there any incentive you can offer that encourages the consumer to buy “right then and there?”  Why not offer little notecards or notepads and pencils to consumers who might want to write down details of the product on your shelf… and make sure those note-taking tools have an incentive to check your site first?  (And your URL, of course.)

This all sounds very simple, doesn’t it?  And yet, not too long ago, my wife and I were shopping for a new set of appliances.  I wanted to get the dimensions for the microwave we were planning to install (I was working on the cabinetry), so I ran to our nearest Best Buy to check it out.  When I was going to shoot the price/information tag with my cell phone camera, the department manager came and ripped it out of the display and scolded, “You can’t do that!  It’s not allowed.”  So I went home, got online and checked the details at a competitor’s website (which I should thought to do in the first place).  We ended up buying at the competitor’s store (not just the microwave, but the whole kitchen suite).   Instead of preventing me from getting product and price information, the behavior of the Best Buy associate had the effect of sending me directly into the arms of a competitor.

People will go online for product and price information.  Instead of trying to block it, why not harness that power, and make sure they hit your site first?

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

Almost 1 in 10 changed banks last year

Observation:   A recent story from USA Today suggests that 9.6% of consumers opened an account elsewhere in response to a rate increase from their current bank.  The article is based on a J.D. Power report, and you can see the full story by clicking here.

Implications:   Lots of banks are trying to figure out how to regain some of the revenue they lost during the banking reform era that walked lock-step with the Great Recession.  Many are taking flight to smaller institutions, but that begs the question: When will smaller banks be forced to make some of the very same moves?

This is an important study in marketing communication.  I’ve interviewed hundreds of consumers over the past few years, and a significant number—when prompted—admitted that an ATM card, online banking, and other services are well worth paying a few bucks for the value received.  The challenge, I’m guessing, is that too many banks simply imposed the fees, without properly explaining why they were necessary and why the relationship still represented a good value for the consumer.

Every company if faced with the need to raise prices at one time or another.  The importance of good listening is an important lessons to learn now, lest we (like the big banks) be forced to learn the hard way.

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

Are consumers talking about you behind your back (but in clear view, online)?

Observation:   Over the past few years, I’ve had dozens of conversations about the increasing influence of consumers in a transaction… before, during and after the purchase.  Today’s Minneapolis Star Tribune features a story about the extent to which consumers are using their technology tools to manage their consumer relationships.  Click here to see the story.

Implications:   Never has the consumer’s Word of Mouth been so loudly and immediately amplified into the marketing message as it is today.  It might be impossible to control what people are saying about your company, product or service on Facebook or Twitter… you still have tremendous control over the experience someone enjoys when they do business with you.

When a customers walks into your business (whether on foot, online or over the phone), assume they have the power to broadcast their experience to the world.

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

Google/IPSOS study: Mobile devices gaining strength as purchasing influence

Observation:  This morning, I had the privilege of speaking to members of the Chamber of the Palm Beaches in West Palm Beach, Florida.  The essence of our conversation was that it is increasingly difficult to keep up with all the changes in technology and digital media… but that life becomes easier when you focus instead on how your consumers are using those tools, and why.

A recent article from Online Media Daily supports this premise and cites research from Google and IPSOS suggesting that people use their different devices for different kinds of shopping research.  Click here to see the story.

UPDATE:  Today's Marketing Daily also had a story about the retailers are flocking to e-commerce as a revenue stream.  Click here to read that article.

Implications:   In the room of 200+ participants this morning, I almost sensed a collective sigh of relief; focus on your consumer and how they’re using technology, rather than trying to know everything about everything. 

Do you have a way of gaining insight or feedback from your most important customers, with regard to what they want from your business in the digital space?  If you don’t know what customers like, it will be a challenge getting those folks to “Like” you on Facebook, or anywhere else.


[Personal note:  My thanks to the Chamber of the Palm Beaches and the Palm Beach Post... it's always fun to brainstorm with people who are eager to explore and embrace what's next.]

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.

The anxiety of transparency (auto industry adjusts to new web influences, and vice-versa)

Observation:   A recent story from the New York Times takes an interesting look at how the automobile sales industry is changing, thanks to companies like TrueCar.com, which aggregate data from all over to show consumers the kind of price they should reasonably expect on their next car.  Click here to see the story.

Implications:  I found this story interesting because of the way some stakeholders would discourage greater transparency in the car-buying process. 

Hasn’t that train already left the station?

The Internet has empowered information to flow where consumers want it to be.  (And if that hasn’t happened in some situations, it’s only a matter of time.)

Are you on the leading edge of bringing transparency to your industry category?  Or is your company among those who might try delay the age of more candid commerce?  Can the latter possibly succeed, in an age where information is so difficult to keep in its cage?

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

Consumers take increasing control by aiming their smartphone

Observation:  This month’s Trendwatching.com update summarizes what they refer to as “Point-Know-Buy,” the tendency of consumers to take increasing control of shopping and purchase experiences through technology.  It’s an awesome update, and you can click here to see it.

Implications:   Is your company, product or service ready for a more empowered consumer?  Are you ready to sate their hunger for knowledge about your offering (aka “Info-lust”)?  It is an exciting time to be a consumer... and to serve them.

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

Generational Economics: The Age of Upgrades

Marketing Observation:  To fully appreciate why people age 35 to 49 behave the way they do, we have to reflect on the type of spending that was going on when they were younger (age 18-34, or “the Age of Acquisition”; see immediately above).

Think about all those belongings the typical consumer acquires in their 20s and early 30s, which they usually did not own when they turned 18:  New cars, homes, furnishings, appliances, educations, spouses (or partners), children and more.  How did we acquire all of these things while earning what amounts to the median salary of a 26 year-old?

First, we had to make choices.  Compromises.  While we were buying almost everything, we could not afford to buy the BEST of everything.  So, we purchased a lot of entry-level goods.  From cars to starter homes to knock-down furniture… you know the routine.  Secondly, we racked up a lot of consumer debt.  There’s a reason credit card companies so often target young adults and teenagers.  A lot of people use credit cards to feed their insatiable consumer appetite during the age of acquisition.  And finally, we got help from the Bank of Mom and Dad.  Plenty of middle-age and older parents can tell you how expensive it can be to help their adult children get up-and-running.

But, lets get back to the Age of Upgrades.  By the time we turn 30, 35, or 40 years old, our purchasing priorities change a bit.  By now, most folks have their career well established, and a family underway.  And since you already own much of what you need, you shift from simple need-based purchasing to more want-based purchasing. You already have a (home, car, furniture), but now you’re ready for a nicer (home, car, furniture).   You decide it is time to jettison the knock-down furniture, and replace it with a solid oak wall unit.  Out with the entry-level domestic hatch back, in with the imported SUV. 

Note that for the Age of Upgrades, I’ve arbitrarily drawn the line at 35 to 49.  You might draw the line differently for different categories of products and services.  But either way, it is that life stage where low cost is replaced by quality as a purchase priority.  You’re often after products that are thought of as premium, rather than famous for being low-priced.

Marketing Implications:  A good word for people in their Age of Upgrades is “momentum.”  Their careers are moving forward, their children are growing, and life is moving at a very fast pace.  It’s a lot of work… and this group has every right to start feeling like they deserve a taste of the finer things (which is a relative term). 

What does your company sell that might be seen as a small reward or a well-deserved indulgence?  Does your marketing talk about the value-added services that might make this group feel like a pampered guest?  What do you offer that might be particularly active to their pride and joy (their children)?  Does your company, product or service help solve the time-sensitivity issues that can exist in households where people are juggling the demands of their career with the needs of their family?    

The Age of Upgrades is ready… to spend with companies that have upped their game.

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