Should you be targeting by term of residency?

Trend Observation:  Once upon a time, it was not unusual for an advertiser to target consumers on the basis of an age or gender (i.e., adults 25-54, women 18-49, men 35-64, etc.)  But if you sell home improvements, electronics or furnishings, is that the best method of zooming-in to your target market?

Recently, I spoke at a conference of respected home furnishings professionals at the annual ART conference in New Orleans.  I was able to obtain some interesting research in advance of that talk, courtesy of Scarborough Research in New York.  Specifically, I was provided some data from Scarborough USA+ 2011 Release 2, and here is the information I was looking for:

New to the neighborhood:  28% of adults are living in a home they’ve been in for less than four years.  This is an attractive target group, wouldn’t you agree?  After all, they’ve just moved into a new place, and they’re doing all the things one does to make a new house their home.  Of this “new to the neighborhood” group, 40% are owners.  That means they didn’t just buy a new home… they got a great bargain on it!  After all, they purchased after the real estate bubble burst and home prices fell.  You’ll find a lot of first-time homeowners in this group; folks who likely moved from an apartment with sparse furnishings, who need a lot of goods to fill up their relatively spacious new home.  56% of the people in this group are renters.  While the foreclosure crisis has received a lot of press over the past few years, there is also a tremendous share of this group that could be called habitual renters… people who move around a lot and therefore prefer to rent, rather than own.  This transient lifestyle is also a frequent behavior of young adults who haven’t decided where they want to settle down, or haven’t the financial means to buy just yet.  (By the way, 4% of “New to the Neighborhood” residents could be classified as “other,” neither renters nor owners.)

Burned by the bubble.  20% of adults are living in a home they’ve been in for more than four years but less than eight years.  That means they bought near the peak of the real estate bubble.  But don’t write them off as a marketing target (see the marketing implications below)! Think about it this way:  While the number of foreclosures got a lot of press over the past few years, there are far more people who may have negative equity in their property but are not at risk of losing it because they remain gainfully employed.  When the bottom fell out of the market and their home equity vanished, it is likely these folks went through a period of outright anger.  But at the national level, the recession has been over for more than three years (at this writing).  After what might be called a financial grieving period, many of the folks in this group have decided they can’t stay angry with their home forever; they’re talking about what kinds of improvements might make this a place they can love again. 

Long-term homeowners.   More than half of U.S. adults—52 percent—have been living in their current home for eight years or more.  That means original equipment is starting to require repair or replacement, and original furnishings and features are beginning to look dated.  For the purveyor of home furnishings or home improvement, it’s the perfect storm… and it comes with a target consumer that is more likely than most to still have some equity in their home.

Marketing Implications: 

New to the Neighborhood.  If someone has been living in their home less than four years, they’re doing a lot of home improvements that could be classified as cosmetic and aesthetic.  Think paint, wallpaper, window coverings, rugs; anything that, in terms of décor, makes their new house their home.  If they were previously renters but are now homeowners, they are likely to have a lot of needs, along with plenty of money to spend on those new home furnishings and improvements.  If they were previously homeowners but are now renters, it is likely they had to shed larger furnishings, but are now in a position to re-furnish their new rental with smaller, more mobile goods.  If you’re talking to renters, position home furnishings as “home improvements you can take with you,” because renters seem to re-locate more frequently.

Burned by the Bubble.  If they can’t afford to sell (because they likely owe more than the home is worth) and move into their next dream home, they’re talking about the kinds of things they can do to make this house the home of their dreams.  So this group is an attractive target for what we refer to as experiential home improvements and home furnishings.  Think granite countertops, outdoor kitchens and patio fireplaces, hardwood floors, and home theatres.  Having gone through a financial reconciliation, these folks are living within their means… but that more pragmatic spending style is likely to include investing in a home they know they’ll be spending more time in, enjoying family and entertaining friends.  They now recognize their house as a place to… live.  Can you help them with that?

Long-term Homeowners.  The headline for this group:  Infrastructural Home Improvements.  When you’ve been living in your home for eight years or more, home improvement is more than a new throw rug from Pier One.  Think windows, siding, roofing, HVAC and more; the stuff that stings.  The good news:  These folks are likely to be among your most qualified buyers when it comes to credit-driven, big-ticket purchases.  They might not have as much home equity as they did five years ago, but they still have some value in their home.  If you sell home furnishings or décor, this is a group that is often tired of the overall look, and might still consider buying rooms of furniture at a time.

Summary:  Does your marketing message (from advertising to the way you talk on the sales floor) still target people based on age, gender or income?  It might be smart to talk with your biggest customers, and determine whether term of residency plays a role in the way they set purchase priorities for home furnishings and improvements.

[Editor’s note:  Our thanks to Deirdre McFarland, Haley Dercher, and Scarborough Research for providing the statistics that inform this perspective.  For more information, visit Scarborough.com, or contact them at info@Scarborough.com.]

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

The changing dynamics of the American family

Trend Observation:  Not that long ago—perhaps 40 or 50 years—the stereotypical American family included a father, mother (the two were married), and two or three children.  The unit was celebrated in situation comedies like The Adventures of Ozzie and Harriet, or Leave it to Beaver.  But these days, the idea that all families look like June and Ward Cleaver, Wally and the Beav are far from accurate; things have changed, and not just in wardrobe, vocabulary and parenting styles, but in the composition of the family itself.

Evidence of this shift is difficult to overlook, especially after data started rolling out following the 2010 Census.  (As one example, see this post from the Elm Street Economics consumer trends blog in August, 2010, or the story that it referred to from USA Today.)   But it’s a good idea to check-in, consistently, when information is changing this fast.  So, with help from my respected friends at Scarborough Research, we did just that.   The data set we considered is from Scarborough USA+ 2011 Release 2, and here’s what we found:

Barely one in four U.S. adults describes themselves as “Married with Children.”  Specifically, just 26% of adults describe themselves as being married with one or more children aged 17 or under in the household. 

Just 56% of adults are married, according to the research (without regard to the presence of children in the home), while 85% of adults say they live in a home where two or more adults are present.

In other words, more American adults live in a non-traditional household than in what we used to think of as a traditional family unit.  Just subtract the percent of adults that are married from those who live in a two adult household:  85% - 56% = 29%.   So, more than 29% of adults live in a two-adult household, but are not married… while just 26% are married with children.

Just to be clear, that non-traditional household could be composed of many different relationships.  It could be a male-female couple that is living together but not wedded.  It could be two folks who live together so as to pool their financial resources during difficult economic times.  It could be couples described as gay, lesbian, bi-sexual or transgender.  It could be a single mom with an 18-year-old daughter (in the eyes of the research that is still two adults).  It could be a middle-aged man whose aging mother lives with him.  We don’t know precisely how to define these non-traditional households.   But these estimates make very clear:  Today’s traditional American family doesn’t always look very traditional.

Marketing Implications:  If you sell furniture that’s perfect for the family room… does your message reflect what today’s family really looks like?  If you sell “the perfect family automobile,” does your marketing consider—or even celebrate—the diversity of family styles that are out there today?  Once upon a time, Ozzie and Harriet were presented in black and white.

Today’s family is not.

[Editor’s note:  Our thanks to Deirdre McFarland, Haley Dercher, and Scarborough Research for providing the statistics that inform this perspective.  For more information, visit Scarborough.com, or contact them at info@Scarborough.com.]

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

Asians surpass Hispanics as fastest growing immigrant group

Trend Observation:  Recent research from Pew is getting a lot of coverage this week, as it announces a shift in the origin of Americas greatest immigrant group.  According to the report, that is because of an influx from Asia, but also a decline in Hispanic immigration… which is the result of efforts to slow the flow of illegal immigration along U.S.-Mexico border, as well as the number of immigrants heading back to Mexico in the face of a challenging U.S. economy and employment outlook, as well as more stringent immigration law enforcement.  Click here to see the text of coverage that was provided by CBS News last night, and click here to see a supporting video interview (video pre-roll required).

Marketing Implications:  Whether in terms of net worth, housing status, employment, family composition or ethnic diversity… the face of America is constantly shifting.

Is your neighborhood (customer base) shifting, too?  Are you shifting with it?

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

Shoppers not convinced stores are listening to their feedback

Trend Observation:  Today’s Marketing Daily newsletter included a story about perceptions related to consumer feedback.  While 85% of participants said they’ve given feedback when asked, only 29% believe it does any good.  Click here to see the story, which is informed by research from Empathica out of Toronto.

Marketing Implications:  Do you listen to your customers?  Can you PROVE that you listen to your customers?  In this day and age, a little empathy can go a long way; in a world where few companies seem to be listening to their customers (at least according to this story and study), the company that DOES listen has already distinguished itself.

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

A small number of consumers can be a big factor in product launches

Observation:  Today’s Research Brief offers fascinating insight into the power a select few consumers can have in propelling big sales for new product launches.  Click here to see that story.

Implications:  At CSS, we frequently pontificate about the importance of identifying your true target consumer—the heavy user of the product or service you sell—and super-serving that constituency.

This article seems to support that body of thought, and add urgency to the idea of identifying your heavy user very early in the lifecycle of a product or service.

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

Survey research is not getting easier

Observation:  Today’s Research Brief provided a summary of findings from the Pew Research Center about the challenges involved with building truly unbiased public opinion research.  On the list of challenges:  Greater difficulty contacting prospective survey participants, and lower participation rates, overall.  Click here to see the Research Brief, or to see the Pew Research Center report, click here.

Implications:   Granted, this story focuses on public opinion research, but the findings here serve as a canary in the coal mine of consumer research.  One of the reasons survey respondent rates are going down, in my opinion:  Everyone seems to be doing a survey, and many consumers are suffering from research fatigue.  It seems that every time I buy anything or dine anywhere, the cashier circles a website on the receipt where I can take a survey for the chance to win a gift card or the like.

This is important, because it is critical for companies to acquire the input and feedback of the customers they serve.  But as the Research Brief story indicates, it might be more important than ever to have a back-up source (or several) for information, beyond the simple survey.  Shopper intercepts (both in-store and online)?  Simple observation?  Focus groups?  Interviews?  More refined analysis of your sales data?  Secondary (subscription) research?

In what ways might you gain—or retain—the accurate input of your customers, with regard to their preferences, priorities and purchasing motives?  Certainly, this much is true:  When the right chance to conduct research is available to you, do not ask one gratuitous, unimportant question.  Every response matters, so make every question count!

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

Whites represent less than half of births in U.S.

Observation:  It’s official… non-Hispanic white births accounted for less than fifty percent of babies born during the twelve months that ended last July, according to the Census bureau.  The headline was published by the New York Times this morning, and you can click here to see the full story.

Implications:   Multiculturalism is here to stay, a demographic tipping point that has been long-expected in the melting pot known as US.   50.4% of babies born in the most recent recorded year were of Hispanic, Black, Asian, or mixed-race heritage.  Whites still represent a majority of the population as a whole (at 63.4%, according to the story), but an aging Caucasian population means it is only a matter of time until that is no longer the case.

Much coverage will focus on this moment in the coming years.   

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

Millennials: A segment filled with trends and counter-trends

Observation:   Many demographers and trend watchers—me included—have long-held that Baby Boomers are a group too large and diverse to be stereotyped into a single behavioral group.  Likewise, a story in today’s Marketing Daily suggests that there are up to six distinguishable cohorts with the generation we refer to as Millennials.  The article is based on a study by the Boston Consulting Group, and you can click here to see the story.

Implications:   When talking about advertising, some companies will identify their target as Women, Adults 25-54, or some other such over-generalization.  Even narrowing the concept to Boomers, Millennials or another life stage might be too broad.  Often, consumers are defined by a passion, a values system or other criteria.  Putting everyone into a single target group because of the year they were born, exclusively, might not be the best approach.  Age might be coincidental to a group, but it may not always be incidental to a purchase.

What else can you know about the heavy users of the products and services you sell?  Beyond gender, age, or life stage… what matters to them?  What are they worried about?  What gratification would they like to enjoy or what problem would they like to solve through the purchase of what you sell?  Answer those questions, and age will soon become less important. 

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

If families don’t look the same, should your research?

Observation:   Quirk’s is a trade publication for the research world, and today they featured a story about the changing decision dynamics that exist in many families.   It’s worth the read, and you can see the full story by clicking here.

Implications:   This is a fascinating article because it invites the reader to consider decision styles.  Once upon a time, decisions were made by the head-of-household (or heads-of-household).  Today, children often collaborate in the decision process at the invitation of their parents.

But it is not just the generational shift that is important here (the article compares War Baby parents (those who gave birth to the Baby Boomer generation) to Baby Boomer parents (those who gave birth to the Millennials).   It is not just a decision style that makes these cohorts different:  It is the composition of the family, itself.  (See “The changing composition of the American family,” February 20, 2012, or “Welcome to the (non-traditional) family,” from August, 2011.)

Advancements in technology should be reason enough to reconsider your approach to consumer research.  But when you add to that issue the fact that there are more single parents, blended families, un-married co-habitant parents, and multi-generational households… updating your consumer insights strategy becomes imperative.  (Is it good enough to talk to just "Mom" when her children might participate in a significant share of the decision?)  It seems to me that it would be difficult to have a decent conversation with families that have evolved... if you are using a research approach that hasn’t. 

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

The risks of research: Asking too much of your customers

Observation:   A recent story in the New York Times suggests that the frequency with which companies are asking customers for feedback could be approaching a point of no response; the consumer does not have time to answer every questionnaire she is invited to fill-out.  Click here to read the story.

Implications:   Few things are more precious to a company than the input of its customers.  Their feedback tells you what you’re doing right, what you could do better, and it might even reveal services or products you could provide that you haven’t even thought of yet.

Keep in touch with your customers, but don’t take their attention for granted.  With each survey you write and every question you ask, scrutinize whether you are likely to harvest information that is actually useful.  The response of your consumer is not something to take for granted.  And you don’t want to burn them out with pointless research that presents nothing more than patronizing answers to softball questions.

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

Insights about how and why to do consumer research

Observation:   Today’s Marketing Daily featured a story about consumer research, and was based on research from Cintas.   Among the findings:  How people feel about being asked for their opinion, the tendency of people to do business with those who ask their opinion, and which channels of contact are preferred for research initiatives.  Click her to see the story.

Implications:   The author of the MD story chose an unfortunate headline—even if he was only being facetious—but the article does a good job of reminding us that people appreciate being asked for input if they believe that input will be appreciated, rewarded, and acted upon.   

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

A new life stage term: Emerging adulthood

Observation:   During years of both advertiser analysis and in-field workshops for media companies and marketers, I’ve referred to a set of fluid life stages which help organizations anticipate consumer behaviors of the people in those groups.  Life stages make you think beyond simple age-based demographics, and focus more on the experiences that are shaping behavior during those years.  Generally speaking, the main life stages we cover are Teens (12-17), Age of Acquisition (18-34), Age of Upgrades (35-49), Age of Increased Equity (45-59), New Age Seniors (60-69), and Matures (70+).

But in the newsletter I received yesterday, Iconoculture has a new, thought-provoking life stage for all of us to consider.  It is a subset of the Age of Acquisition that they call “Emerging Adulthood” (18-25).  Click here to see the story.

Implications:   The economy, the labor market, and willing Boomer parents have colluded to create a population of young adults who are more likely to live with mom and dad for a longer period of time, rather than striking out to create their own household. 

Does that make this an unattractive market to reach for?  On the contrary, this life stage is often composed of people who are stashing-away cash until they can do it big.  In the meantime, they’re living in a place with low or no rent, so more of their income could be considered discretionary.  To be sure, some folks in this life stage and living arrangement could be examples of a “failure to launch.”  But this group also includes people who are fueling-up… so that when they leave, they can reach for the sky.

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

Research is not a game, but this gaming device is delivering research

Observation:   A story in today’s Springwise newsletter explains how Microsoft’s Kinect device is being used for in-store research about how consumers interact with products on the shelf.  Click here to see the story at Springwise.com.  To watch a video demonstration of the process on Vimeo, click use the player below.

Shopperception: tracking real world conversions like web analytics from Administrator Agile Route on Vimeo.

Implications:   As technology evolves, expect the way you can observe and serve customers to continue evolving!

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

Bank of America drops debit card fee

Observation:  Over the past few weeks, I’ve written on a couple of occasions about the banking industry’s effort to recoup revenues that were lost because of the new regulations that followed the financial meltdown of 2007-2009.  (See “Is your bank worth $5 a month” from 10/14, and “Banks prepare for a showdown” from 10/31.)  Well, a funny thing happened on my way to the airport this morning:  My smartphone flashed with a news release that gives the story a new twist.

According to a breaking news report from the Washington Post (released just moments ago), Bank of America will drop their policy of a $5 service fee for using the bank’s debit card services.  Click here to see the story.

Implications:   From banking to Netflix to New Coke.  Sometimes, the best way to prove the value of consumer research is to not do it... or not do it well.

Planning any changes?  Have you received input from your most valuable stakeholders? 


I wonder if these more customer-friendly positions will gain favor and forgiveness from consumers... or whether this will simply whet the appetite and aid the momentum of consumers (not just those behind Occupy Wall Street and similar groups).  Is the opportunity for smaller, local/regional banks and credit unions thwarted by this move... or simply dramatized by it?

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

A potpourri of stats about the holiday shopping season

Colleague and friend Kim Peek recently shared this post from the blog by HubSpot (click to link).  If you have an insatiable appetite for statistics and holiday retailing, you’ll love it!

 

Implications:   One of the stats that caught my eye was the notion that 40% of consumers will start their holiday shopping in November (aka, “Tomorrow”).  The time for smart messaging is right now!  Another:  57.7% of consumers say they’d like to receive a gift card this season.  After several years of stagnant performance or even decline, it looks like gift cards could make a comeback this year (that’s the highest anticipated demand on record, according to the post.

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

Net result: Netflix should have listened more closely to their consumers

There have been plenty of post-operative comments on last summer’s price increase and fall-out from their recent attempt to split their online and mail-in services.  But now, the impact can be clearly understood:  Netflix reported 800,000 fewer customers this quarter than they had last quarter, according to a story in today’s New York Times.  Click here to read it.

Implications:   Several paragraphs into this story, the Times report indicates that Netflix’ chief executive assumed the service split “had been presented to a focus group,” but also indicated that he “did not recall what those focus groups had said about the plan,” according to the article.

Perhaps that provides a good lesson for anyone in business, when it comes to research:  Don’t just do the focus group or take the survey.  Take it seriously.

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

The psychology of fast food

A friend sent me this recent story from Psychology Today, explaining the psychological—and some physiological—reasons that consumers gravitate to the Golden Arches.  Click here to see the story.

Implications:   Humans are fascinating people.

Can you identify the reasons people shop with you?  What the most common traffic patterns are that lead-up to their arrival at your place of business?  How about the motives that most often spark their visit?

Those compelling points should be a part of your messaging strategy, if they’re not already.

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

New Coke for the video age: Netflix un-changes its formula

Today’s New York Times contained a blog post that nicely summarizes the about-face taken by the Netflix after trying to spin-off its traditional DVD rental business.  Click here to see the story.

Implications:   In recent days, some of my colleagues and I have pondered the limitations of research.  Specifically, we reflected on the iPod, iPhone and iPad, and how so much of that innovation originated on the gut feeling and intuition of Steve Jobs and the company he created.  Many of those innovations come in spite of research, as much as they are born because of research.  A century ago, Henry Ford is credited with saying, “If I had asked people what they wanted, they’d have told me ‘a faster horse’.”

Research has its limitations, but so does running a business without sufficient research, as learned the hard way by Netflix in recent weeks.  (Or, I supposed you could say that research has now been done… in a manner more expensive than simply canvasing their customers and prospects.)

Is your company moving too fast?  Too slow?  Have you asked your customers?  Or, are you safe in contemplating a new product or service launch that is so good... your customers might not have even realized they might want it?

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

Home improvement retailer rethinks the consumer

A story from today’s Marketing Daily offers a one-on-one with the SVP for marketing and advertising from Lowe’s.  Modifications in the company’s online presence and media messaging are a reflection of recent research, and discoveries about how the consumer is looking at home improvement.  Click here to see the story.

Implications:   If you’ve been considering how recent shifts in the economy and the real estate market might be impacting consumer attitudes, you’re not alone.  Some of America’s major retailers are watching the consumer more closely than ever.   

Are you selling to the same consumer you did five years ago?  Do they buy for the same reasons they used to?  What questions could you ask—and in what form—to find out what their latest hot buttons are?

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

Welcome to the (non-traditional) family!

During hundreds of Audience DNA workshops throughout the U.S. and Canada, I’ve had the chance to help media companies understand what kinds of people consume their radio, television or newspaper content.  There’s one very basic set of numbers that never fails to amaze the folks in the room, and that’s the percentage of folks who are living in a traditional family household, compared to those in a non-traditional family.

This week, I’m preparing to speak at a national conference for executives involved with the home furnishings industry.  So I wondered whether the numbers would stand at the national level.  Deirdre McFarland from Scarborough Research in New York was happy to oblige, and provided me with the following information:

26.8% of adults in the U.S. say they are married and have one or more children under the age of 18 living in the household.

56.9% of adults say are simply “married” (with or without children living in the home).

84.7% of adults say they are living in a two-adult household.  Now, that could mean a lot of different things.  These could be couples who are in a committed relationship but not married.  It could be two folks who are simply sharing a residence for economic or convenience reasons.  It could be a 40-something mom with a 19-year old child living at home; in the eyes of the Scarborough Research, that would still be a two-adult household.  Or, it could be a 40-something man with an elderly parent living in his home.  By “two adult household,” we’re looking at a big range of possibilities.  But here’s why it’s important…

Subtract married couples (56.9% of adults) from that group of people who say they live in a two-adult household (84.7%), and you learn that 27.8% of adults are living in a non-traditional family setting.  That means there are more adults living in a non-traditional family household than are living in a traditional, married-with-children household.

Implications:    Just a little simple math can help turn basic data into a valuable insight… and illustrate the extent to which families in the U.S. are changing.

If your marketing is designed to target traditional heads-of-household (those adults who are “Married with Children”), you are technically marketing to a group that is now out-numbered by non-traditional families.   

Data source:  Scarborough USA+ 2011 Release 1 (February 2010 - March 2011).  For more information about Scarborough Research, visit www.Scarborough.com.

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