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.  

What can we learn from the electronics category?

Trend Observation:  I live in Minneapolis, the home-base to retail giants like Target and Best Buy.  So I take no pleasure in sharing a story from today’s New York Times about the shake-up in the retail category of electronics, which focuses particularly on Best Buy.  Click here to see it.

Marketing Implications:  In part, Best Buy’s success was in using their massive size to create a price advantage; their sheer scale and buying power let them out-price competitors (remember Circuit City, or other smaller retailers who are long gone?).  In a way, Amazon and Walmart are doing some of the same things.  Amazon skips the expense of a physical store and staff by selling online, and can thus sell cheaper.  And while Walmart might offer a more limited variety of electronics, it can sell those products cheaper, again, due to scale.  It might seem that a couple of big competitors are doing unto Best Buy what Best Buy did unto others only a few years ago.

While they don’t disclose revenue in the story, Best Buy competitor Abt Electronics is attracting customers with experiences.  Target is also less enchanted with the price strategy, opting to begin carrying more Apple products. 

What is your competitive advantage?  Could it be used against you, in months or years from now?  Is your competitive advantage as relevant as it once was, or should you be considering new approaches?  All of these are questions, of course, that are best answered by involving your best customers and target consumers.  After all… they’re the ones who will decide whether or not someone is “best.”

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

How to respond to trends and opportunities

Observation:  This week’s Springwise.com newsletter delivers on their reputation for reliable business ideas.  In this case, there are three examples of business ideas which respond well to emerging or important trends.  The first is a smartphone that detects radiation, which comes out of Japan in response to greater anxiety about that issue in the aftermath of the tsunami and resulting nuclear tragedy of last year.   Capitalizing on peoples need to know now, the Tim Horton chain in the United Arab Emerates prints the most recent headlines on the sleeve that insulates a customer’s coffee cup.   Respecting the more diligent behavior of today’s consumers, a hotel in London working with a furniture partner to facilitate a “try before you buy” campaign.  You can own the furniture in your hotel room.  Click on any headline to see that particular story, or click here to see the most recent Springwise.com newsletter for yourself.

Implications:  It’s not enough to be a trend watcher.  One must ask how emerging trends can be exploited for the happiness of your customers and the profit of your company.

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

Abandoning the in-store shopping cart: Smartphones intercepting retail purchases

Observation:  Fifty-three percent of mobile commerce users say they have halted an in-store purchase because of an offer or information they found online, while in the store.  That’s according to research from the Internet Advertising Bureau as published today at MobileCommerceDaily.com.   Among mobile device owners, 73% have used their smartphone in-store.  Click here to see the full story.

Implications:   We’ve written about “Showrooming” in this space before (see the series by clicking here), but it seems new data is constantly arriving to illustrate just how pervasive the practice might be.

If you have a physical location—and I’ve suggested this before—wouldn’t it be smart to have a strategy where small business-card-sized brochures could be placed near the price on each shelf, containing the URL to your store’s website (and perhaps an offer that would incentivize the use of your site)?  If consumers are going to take the shopping experience online, at least they stand a better chance of continuing to do that shopping with you.  

[Note:  Thanks to friend and colleague Matt Sunshine for passing along the MobileCommerceDaily.com story along!]

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

Showrooming strikes again. But this time, Target strikes back.

Observation:  Target has decided to stop selling Kindle e-readers, according to a story from USA Today.  The article suggests that part of the reason might be what is called showrooming; when people take a hands-on look at a product in store, but then go online (either at home or from their phone) to buy the item at a cheaper price from an Internet vendor.  The story indicates that another motive might be the Apple mini-stores that are scheduled for launch in a number of Target locations (Apple’s iPad would be considered a direct competitor to Amazon’s Kindle).   Click here to see the story.

Implications:   One way to beat “showrooming” is to offer a product enhancement, service, or sales experience that online vendors can’t deliver.  It seems to me that Target has decided to do just that… but just not with Kindles.

[To see our prior stories on Showrooming, click here.]

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.

Insights into the (r)etail (r)evolution

Observation:  The May newsletter from Trendwatcher.com focuses on how the consumer is finding value in their online (and often mobile) shopping and spending.  The series is broken into four distinct segments (click on any of them to see the corresponding material):  E is for everywhere,  (M)Etail, E(asy) Commerce, and Oh What a Wonderful Web.

Implications:   There is no shortage of innovation on the web, and it sometimes seems we’re drowning in new digital tools and ways we could be using the web and mobile devices to reach and serve consumers.  Trendwatcher.com is a great source for ideas like these… but it can start to feel overwhelming.

My advice is to keep it simple.  It would be virtually impossible to know everything there is to know about all of your digital options.  So focus, instead, on your customers, and how they’re using their online and mobile devices.  Don’t aspire to serve technology.  Let technology serve you and your most important customers and prospects.

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

Study compares generational differences in online behaviors

Observation:  Time, Inc. has released a report about how digital natives (people who’ve never known a world without the web) and digital immigrants (those of us who grew up without but have adopted online technology) differ in their approach to web and device usage.  Click here to see the full release.

Implications:  Not all computer, smartphone, or web users are created equally.  It’s important to grasp how your customers (and those consumers you aspire to serve) are embracing the technology that surrounds them.

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

Using digital to offer the right thing at the right time

Observation:  The Springwise.com newsletter is frequently a source of consumer-focused innovation, and this week’s issue did not disappoint.  It featured a story about one bookseller in Spain, who is offering a free sample—the first chapter of a book—via a QR code on in-train advertising.  Click here to see the story.

Implications:   Effective marketing focuses on a consumer with the motive, the means and the opportunity to commit a purchase.  In this case, the motive might be boredom during a train ride, and because most folks on a train are commuting we can assume they have the means (money) to spend on a book.  And opportunity is facilitated by the use of QR codes, which most smart phones are capable of reading with the download of a simple app. 

Think about your product or service.  What would be the best possible timing for you to deliver your message or invitation to a consumer?  Are you doing it?

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

Talking less but communicating more: How are your consumers using their smartphones?

Observation:  An interview with Ewan Duncan from McKinsey appeared in yesterday’s Marketing Daily, exploring the distinct ways that younger consumers are using their smartphone devices.  Duncan refers to the devices as “digital Swiss Army Knives,” and reminds us that talking on the phone is just a small part of the tool’s value.  Click here to see the story.

Implications:   Duncan’s remarks remind us that digital marketing is not a one-size-fits-all-demographics proposition.  The digital divide is alive and well, not just among those consumers who have or do not have access to computers, iPads or smartphones, but also in the way that different cohorts might use those devices.

Considering the way your most important customers (or prospects) are using their digital devices, is your web presence optimized to fit their technological comfort level?

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

Cutting the cord… at the legislative level

Observation:  More and more consumers are living in a wireless-only household, with no land-line phone coming into the home.  According to a story in yesterday’s USA Today, many states have passed or are considering bills that relieve phone companies of the requirement to offer land-line service in all residential areas.  Click here to see the story.

Implications:   If not immediately, it looks as if—eventually—the home phone line will join the ranks of the payphone as historical artifacts.  Phone numbers have evolved from residential to personal items.  And why not?  I can do lots of things from my smartphone, including check sports score, do my banking, see if my couch sold on Craig’s List… and even ask my voice-controlled assistant to find a nearby restaurant for me. 

In comparison, my home phone is stupid.  And fired. 

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.

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.

“Hold it… I think my phone has a coupon for that”

Observation:   Today’s Research Brief includes a story suggesting that people who use digital coupons spend both more time and more money when shopping.  Click here to see the story.

Implications:   Couponing used to be thought of as the activity of people who have more time than money.  This Research Brief story—based on findings from GfK and Coupons.com—reminds us that people who have money (enough to buy computers, iPads and smartphones, anyway) still like to save money.

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

Price still an important thing, but it’s not the only thing at drug and grocery

Observation:   That’s according to this story from Drug Store News, citing research from SymphonyIRI (click to link).

Implications:   “Value” isn’t always about price.  Consider, instead, how the product or service you sell—or the way you sell it—adds value to the consumer’s life.  I’m banking on more and more digital interaction (especially mobile), concern about The Fuel Economy, and increasing Time Sensitivity as issues that drive consumer trends in the next few years. 

What are you anticipating?

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

UPDATE: Another casualty of the digital age

Observation:   Last week, I posted an article noting the end of the printed edition Encyclopaedia Britannica.  Over the weekend, a story in the Los Angeles Times pointed to another casualty of the Internet age:  The printed business card.  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.

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.

How tech savvy is your city?

Observation:   Today’s Marketing Daily offers a story about the how varied the pace of new technology adoption might be from one city to the next.  The article focuses on Apple, primarily, but touches on the idea that people are faster to embrace technology in some places than others.  Click here to see the story.

Implications: How is the pace where you live?  And does your online or mobile presence match the acumen of the consumers you sell to?  That’s a highly worthwhile thing to research among your most important customers.

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