Gulf seafood regains “comfort food” status

Observation:   Gulf of Mexico seafood producers were among the hardest hit by the effects of the BP oil spill of 2010.  But a story from Supermarket News suggests that many consumers are once again comfortable with eating goods from the waters of the Gulf coast.  Click here to see the story.

Implications:   If you run a restaurant or a grocery store, this story might lead you to add more Gulf products to your menu… or if you’ve already done that, it might lead you to bring more attention to those offerings.

If you run any other kind of business, it should serve as a reminder that trust lost is not easily regained; the BP oil spill happened almost two years ago, and there has been little bad news on that front since the well was successfully capped.  It has taken all of that time—with little or no bad news coming from the Gulf—before some categories could finally show a comeback.

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

UPDATE: Conventional compacts cut into hybrid sales

Today’s USA Today carried a story which supports and further enlightens our posting from yesterday about hybrid vehicle sales.  Click here to see the story.

Implications:  As I wrote yesterday, conventional cars were already eating into hybrid sales.  But one must wonder how much further hybrid car sales might be impacted by the recent falling gas prices. 

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

Higher gas prices did not compel hybrid consideration as expected

During a symposium talk last Friday, AutoPacific President George Peterson explained that, “Small car and hybrid consideration is not tracking anywhere near the rate of the price of fuel as it did in 2008.”

Earlier this year, some hybrids and other small cars were selling at above list prices, driven by climbing gas prices and the fear that there would be shortages of the hottest cars after Japan’s tsunami disaster.

Click here to read more about Peterson’s remarks from Automotive News (subscription required).  He notes that improvement in the fuel efficiency of larger vehicles is one factor that has led more people to remain comfortable with the idea of holding-on to their larger car ways.

Implications:  I’ve written extensively here about The Fuel Economy, fearing that a sustained increase in the price of petroleum could have a domino-effect on inflation.  But for now, that fear seems to have passed.

At your company, are you seeing a windfall of spending in response to falling gas prices this past month?  Are your customers talking about lower gas prices?

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

Another measure by which to judge (vehicles, and more)

We’ve long been able to compare prices and gas mileage.  But now, consumers can look at the emissions a car puts out, as well as the gas they’ll put in.  Here’s a story from the New York Times that explains (click to link).

Implications:  Watch for many industries and categories to be judged in ever more sophisticated ways by the consumer and your critics.  Paper or plastic?  Lots of people used to favor paper because it was thought to be more bio-degradable.  But depending on manufacturing techniques, paper bags can be just as—or more—harmful than plastic.*

When consumers think “environmentally friendly” or “sustainable,” chances are they won’t be thinking of a single issue (like consumption of fossil fuels).  As people become more educated about the many moving parts involved with manufacturing, consumption and disposal, they are likely to scrutinize a purchase in a variety of ways.

When you consider the life cycle of the product or service you sell… does it compare well to competitive alternatives?  What can you do to improve that product or service, and thus make it more appealing to the consumer’s growing sense (and sophistication) of social responsibility?

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

UPDATE: Making it easy to be green.

Last week, I offered a posting about the importance of making an environmentally-friendly product or service easy to understand.  [See:  Earth Day, 4/22/11.]  

In today’s Marketing Daily, there was a story about a Whole Foods initiative to evaluate—and communicate—the extent to which various cleaning products are, in fact, green.  (Click here to see that story.)

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

UPDATE: The green gap

To follow-up on the Earth Day posting from earlier this morning (immediately below), I’ll share this article from Marketing Daily, which suggests that “the green gap” is widening (click to link).    The story is based on a report called Mainstream Green from Ogilvy, which you can read by clicking here.  The green gap generally refers to the distance between people’s belief or opinion about environmental issues, and their willingness to act on those beliefs.

Implications:   Perhaps your green marketing message should focus less on getting people to believe, and more on the ways you make it easy to act.

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

Happy Earth Day: How are your customers celebrating?

Consumers love an environmentally-friendly offer.  But with a nasty recession very fresh in their memories (and with gasoline at roughly $4 per gallon), the cost of going “green” is making consumers feel conflicted.  That’s the essence of this story from today’s New York Times (click to link).

Implications:   Some interesting points are made by this story.  One of them, which I wish could have been explored further:  Companies (like Proctor and Gamble) who simply layered-on an additional “green” product offering (like Green Works) were not having as much success as those niche players whose product line is “green.”  Could that be because—just like consumers—corporations cut back during the recession, spending less to market their environmental upstarts than they did on their more mature, core product line?  While that was happening, could it be that those companies who have only an environmental story tend to stay true to course, and tell that story better?

But that wasn’t the only take-away from the NY Times article.

As an avid, hands-on conservationist, I love it when companies employ sustainable practices or launch eco-friendly products.  But passion, alone, is not enough; while any of us would love to save the planet, we would also like to make ends meet until the next paycheck comes in.  Sometimes, needs that are urgent displace matters of importance. 

It can be hard for the consumer to justify paying a premium when the product rationale can seem more ethereal than tangible.  A high-mileage car is saving the planet because it uses less gas, but it also saves the consumer money on their commute; they can see, feel and understand the environmental benefit.  For the typical consumer, connecting the dots on a specially formulated cleaning product might not be so easy. 

The bar has been raised since the first Earth Day was celebrated.  For as long as household economies are feeling strained, green products will have to provide more than the “novelty” of being environmentally friendly.  They will also have to be competitive in terms of dollar-for-dollar value delivered, and their environmental benefit must be made easier for the consumer to understand and appreciate.

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

On being Green

A couple of stories from Marketing Daily this week have me thinking about how much opportunity there is—or isn’t—for companies who focus on the space of environmentally-friendly products and services.  Certainly, a lot of consumers and companies will be reflecting on this issue, too, as Earth Day approaches.

Today's Marketing Daily shares research indicating 68% of consumers feel that it’s worthwhile to spend more for environmentally-friendly products.  Click here to see that posting.

Another recent story comes from Research Brief, and provides Gallup polling data about the environmental issues that consumers worry about most.  Click here to see that posting.  The findings hint that people see environmental protection as one casualty of government cost-cutting.  But it also suggests that people worry less about some issues than they did ten years ago.

Implications:   Like any other trend (and this one is significant), this one must be considered in context.  People have suffered through some pretty big financial traumas over the past few years; could that have consumers less pre-occupied with being green? With the price of gas putting additional pressure on the family budget, could it be harder to rationalize spending more for green products/services?

I believe, firmly, that a lot of folks are concerned about matters environmental.  Does your company, product or service do anything to help consumers act on those concerns, without having it be too difficult?  Are you already providing options that might resonate as a “green,” but overlooking the chance to maximize them as such?  

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

If you want to be green, you had better be authentic

A recent story from Marketing Daily serves as a reminder… that an environmentally-friendly campaign is not enough; the consumer expects truthfulness and transparency when companies lay claim to being green. Click here to see the story.

[By the way, a similar story ran last week on the Supermarket Guru blog, but focusing on cause marketing rather than green initiatives. Click here to see that story.]

Implications: I enjoyed the way this story clarified consumer sentiment toward “green” marketing. Few consumers expect any company to have a spotless track record, with regard to environmental issues. But they expect companies to be honest. The consumer can forgive a mistake… but they are less likely to forgive a cover-up or a false claim.

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

Will these global trends impact your local market?

McKinsey’s newsletter is one of the best I subscribe to, and this week it contained an invitation to consider five global trends that are likely to impact business and society for the foreseeable future. The list includes

1) The rise of emerging markets

2) The pressure on developed markets to increase productivity

3) Expanding global networks

4) The friction between increased consumption and the need for sustainability

5) The greater role of governments as a business regulator and partner

You are invited to consider these trends in the form of a video from McKinsey (watch it by clicking on the video box below), or, you can read the commentary by downloading a PDF draft (click here). To visit the site where I found these links, just click here.

Implications: The value of trend watching is simple. Awareness of a trend can help you profit from it; lack of awareness can make you a victim of it. The sand is always shifting, and it would be impossible to tune-in to every grain of it… but I enjoy sharing these kinds of overviews, as they can help you notice when the dunes, themselves, are beginning to move.

Mike Anderson

UPDATE: Companies cleaning-up, continued

Earlier this month, I offered a posting about the sustainability efforts at P&G [see “Companies like this could clean up,” October 4, 2010]. Today, Marketing Daily offered another story about corporate sustainability efforts, this time from Walmart. Click here to read the story.

Implications: This seems like another example of a company that is fixing the inside of its operation before telling it’s “sustainability” story to the outside world.

Smart.

Mike Anderson

Benevolence is nice, but benefits are even better

In case you missed it, there was an interesting story in the New York Times last week explaining all the perks received by early-adopters of the Nissan Leaf electric vehicle. Click here to read the story.

Implications: On a personal level, I would describe myself—personally—as a little more environmentally aware and active than most. Even so, my “green” pursuits know a limit. I do not have solar panels on my roof, nor a wind turbine in my back yard.

Nissan has demonstrated an understanding that “green” is not a black and white issue. There are shades of green… that might help illustrate the degree to which different people consider themselves, “environmentalists.”

Do we all want to save the planet? Of course. But it helps if there is a consumer benefit or payoff that is more immediately gratifying. Few families consider themselves non-profit organizations.

As you plan your next environmentally-friendly campaign... it might be a good idea to include very specific ideas about why the product or service offering is also "consumer-friendly."

Mike Anderson

Naturally, I'm watching trends impacting "green marketing"

Yesterday, there was a story in the New York Times about a campaign for corks. No, really. The Portuguese cork industry is going to try bottle-up the idea that plastic or metal bottle caps are a good idea, by focusing on the sustainable nature of cork production. (Click here to read the story.)

I found this story in the Marketing Daily newsletter about a new campaign from Timberline, focusing on “environmental heroism.” (Click here to see the Tuesday story.)

Today in the Marketing Daily newsletter, there is a story about a partnership between IBM and The Nature Conservancy, which has to do with mapping the health of rivers in the U.S. (Click here to see the story.)

Implications: Obviously, the campaigns mentioned above have been in the works for some time, and their proximity (in terms of timing) to the Gulf oil spill this summer are purely coincidental. But as the next few months unfold, I would expect to see a number of additional environmentally-friendly campaigns roll-out; smart marketers know that many consumers have a heightened sense of environmental awareness right now, a reaction to the catastrophe and massive coverage given to the Deepwater Horizon incident.

According to a breaking news alert from the New York Times this morning, BP has issued a statement about the complex set of decisions and equipment failures—involving a wide variety of companies—that contributed to the disaster. (Click here to read that story… or click here to see the statement from BP.) To date, BP has largely been the focal point, if not the poster child, for this tragedy. It will be interesting to see whether their attempt to broaden the blame to other companies is another early sign that they’d like to draw a line in the sand, with regard to liability. (I wrote about the same idea back on September 3; click here to see the Elm Street blog posting “UPDATE: Oil industry incidents and implications.”)

More interesting still: The possibility that all of this could increase the sophistication of consumers... both in regard to their ecological savvy, and in terms of the way they decide to trust large companies and their marketing and PR departments. (Or not.)

Mike Anderson

UPDATE: Another oil rig explosion in the Gulf

My email in-bin looks like a news desk right now, as alerts pour in about another oil rig explosion in the Gulf of Mexico, off the Louisiana shore. (Click here to see the Washington Post news flash. Click here to see the alert from the New York Times.)

Implications: On more than a few occasions, I’ve written about the likelihood of this summer’s (first) Gulf oil spill to elevate environmental awareness or action among consumers… and the inevitable scrutiny the oil industry will face, in terms of safety policies and procedures.

There are few details about what happened in this morning’s explosion. But it will certainly amplify sensitivity to the issues mentioned above... among consumers, as well as folks who are campaigning for elected office right now.

Stay tuned...

Mike Anderson

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

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

Far more than an eyesore: Potential outcomes of the BP spill

The Deepwater Horizon tragedy cost eleven lives on the day it began (April 20, 2010). To state the obvious, the impact of this incident on the wildlife, the waterway and adjacent communities will be far-reaching. (The catastrophe is now recognized as the biggest environmental disaster in U.S. history.) But considered from the context of consumer trends, what are some of the plausible outcomes of the BP oil spill?

There is a fine line between being a trend watcher and being a futurist. And while I usually avoid crossing that line, I decided to give this question a little thought over the weekend. So, as we look out over the next months or years, what kinds of things might we see that could impact consumer behavior? (I encourage you to think about this, too, in terms of the way these issues could impact consumers in your category. If you come up with anything you’d like to share, just send me a note by email.) What I offer here are not predictions, but a range of possibilities.

Regional frustration. In a post-Katrina world, everyone seems more sensitive to the lapse that occurs between a catastrophe and an effective response. One form of regional friction will likely come from the delay, again, that the Gulf region has endured in terms of response time. But that is not the only form of regional friction to watch for.

In Florida, the temptation to generate revenue through off-shore drilling has long been resisted; one reason is the threat a possible spill might pose to the immense tourism industry. Now, Florida residents and public officials are increasingly upset that they stand to suffer environmental consequences regardless of their disciplined approach to offshore oil. For more on this angle, see this story from the New York Times.

Accelerating the pursuit of alternatives. There’s a good chance that the BP oil spill could speed-up the move toward more environmentally responsible energy choices. As the intense barrage of media coverage continues, consumers are more likely to realize that the cost of energy is greater than the price we pay at the pump. Also, consumers are more likely to make the connection between their personal energy consumption habits and consideration of how that energy is created and where it comes from. Another story in the New York Times offers thoughts on this topic, as does this op-ed piece from Thomas Friedman.

Increased scrutiny and regulation of the petroleum industry. It will be politically popular to write legislation that provides for greater protections and more strict performance expectations within the petroleum industry. On a flight to Denver last week, I sat next to a gentleman from the nuclear energy industry. During out chat, he said, “This is the oil industry’s Three Mile Island” (get background on that disaster by clicking here). The implication, of course, was that the accident at Three Mile Island served as a wake-up call for the nuclear industry, which saw a plethora of new rules and protocols after that 1979 incident. (The gentleman also offered that the entire nuclear industry became safer as a result of that accident.)

After a delay, increased prices. The oil industry (and I mean beyond BP) certainly doesn’t need any more ill-will these days. For a time, I would anticipate most producers will make every effort to avoid price increases. But when clean-up costs are tallied by BP, when new preventive measures can be expressed in terms of their expense to the petroleum industry (see previous paragraph), and if the moratorium on deep-water drilling should affect supplies, those price increases are inevitable. Of course, those prices will hit drivers at the gas pump… but they could also be felt in the cost of goods that are shipped from anywhere to anywhere.

Supply & demand implications. From tourism to seafood, prices are likely to mirror demand, whether that demand is high or low. And even in cases where spilled crude has not tainted the tourism or seafood industry, much of the press coverage has. Watch for more marketing campaigns to support industries which are not as bad off as the consumer might assume.

Implications: I apologize if the thoughts I have expressed here seem, in any way, impersonal or removed. The BP oil spill has been a terrible tragedy that has touched—and will touch—many people deeply. But my goal for this conversation was to place the effects of this environmental disaster into the context of consumer trends.

Don’t think of the list above as a set of answers. Think of it as a set of questions… or a simple range of possibilities.

In what ways might higher oil prices, if they happen, impact your company or your consumers? Are there things your organization could do, in particular, to serve people in the affected regions? If jobs are seriously impacted in the region, what new industries might sprout, tapping an eager workforce whose lifestyle and livelihood has been altered, perhaps long-term? If your company strives to practice sustainable energy and operating policies, will consumers give you more credit in the future than they have in the past?

Mike Anderson

Is your marketing a monologue or a dialogue?

Is the conversation authentic?

A story in today’s Media Post Marketing Daily suggests that many consumers are less than impressed with the level of engagement companies provide. The essence of the article is that consumers want to be heard, not just marketed to, especially with regard to this like product and service development, and social or environmental initiatives. Click here to read the story.

Implications: While the basis of this Media Post story was a survey from Cone, Inc.—a communications agency, of sorts, that apparently sells engagement-related services—the premise is difficult to argue: There is room for improvement in the way many companies communicate with their customers.

In a world where two-way communications are possible (using the web and other feedback tools), it seems reasonable to me that customers are no longer satisfied with one-way messaging.

Another issue surfaces in the MP article: The consumer’s hunger for authenticity. As one example, consider how easy it is for almost any company to make some sort of claim related to their environmentally-friendly products, services, or policies; statements without substance led consumer’s to coin the term “green-washing.” But the need for authenticity reaches far beyond ecological issues. “Making a statement” or explaining what you stand for is no longer enough to satisfy the cause-driven consumer. Consumers don’t just want to see your logo on the t-shirts that are worn during a walk-a-thon. They want to know what you have actually done or what you are doing to help solve a problem.

Mike Anderson

From "re-greeting" cards to boxes that go back to their roots

The latest edition of the Springwise.com newsletter had a couple of innovative ways that some companies are serving consumers’ sustainable appetite. First, greeting cards that are intended to be used more than once. (Hey, most people have heard of re-gifting… why not re-greeting?) I also liked the box that is laced with the seeds of trees, and intended to be planted after using, rather than simply being discarded. Appropriately, it’s called “Lifebox.”

To read the whole Springwise newsletter for May, click here.

Implications: Springwise does a consistently good job of taking-in new business ideas from around the globe, and sharing them with their readers. Often, the concepts cqn be a bit trite. But each month, it contains at least one or two concepts that make one stop and think.

If someone from “the outside” were to explore your company… what kinds of creative, meaningful ideas would they find? Are there any concepts at work that are being overlooked, and thus not living up to their full profit potential? Are you doing anything to actively foster creativity within your company?

Mike Anderson

Passing Judgment: Consumers can see through a lack of transparency

As the Washington Post announced that BP had capped one of the three sources of oil spilling into the gulf this morning, I caught myself reflecting about the way this environmental tragedy has unfolded. The tragic explosion happened on April 20th, and the burning rig sank on the 22nd. According to a timeline published by the Wall Street Journal, the initial reports of a leak—reported to be 1,000 barrels a day—came on April 24th. The number is later revised to suggest that 5,000 barrels are spilling daily.

While the current estimate is that 210,000 gallons per day are spilling into the gulf, according to this story from the New York Times, in a closed-door meeting with members of Congress yesterday the company conceded that the outflow could go up to as many as 60,000 barrels of day (quoting yet another NY Times article).


Implications: A seemingly infinite number of articles have already been published about the damage this oil spill has done to the reputation and brand of BP. (Here’s one example… from Media Post Marketing Daily.) But I’m not here to pile-on. I’m just thinking about how any local company might benefit and learn from BP’s tragic experience. It seems to me that the best damage control is a full frontal admission of the problem; “I guess we over-reacted” is preferable to telling the world, “I guess we under-estimated the problem.”

Case in point: The most recent Tylenol recall. Did it hurt sales? Of course. But in responding to the issue as soon as it was discovered—proactively, rather than reactively—Johnson and Johnson preserved the integrity of its Tylenol and other OTC brands, according to this story from Marketing Daily.

Public relations is not just about "the spin" you put on a situation. It's about the relationship you have with your public. And the best relationships are built on a foundation of truth.

Mike Anderson