Upside of cautious economy: Lower gas prices

Trend Observation:  A story in today’s edition of USA Today suggests that gasoline prices could stay low—or fall even lower—between now and fall.  That’s a far cry from what we were hearing last winter, when there were concerns about stability in the Middle East and problems with major refineries.  Click here to see the story.

Marketing Implications:  Some businesses might profit from going after this “commuter’s dividend” of lower gas prices.  Many drivers anticipated the kind of peak gas prices we saw in the summer of 2008, when the average price per gallon hit $4.11.  With each commute costing less, the consumer might feel as if they have a windfall of found money in their pocket at the end of each week or month.

Any ideas about what they should spend it on?

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

Vacations, re-defined (or just re-labeled)

Observation:  Two stories from today’s Marketing Daily suggest that family vacations look different than tradition might suggest.   The first article focuses on the now-cliché stay-cation, caused by higher gas prices and airfares.  The second story gives us a new term to consider, the near-cay. 

Implications:   Whether you call them stay-cations, day-cations, or near-cays, the point is essentially the same; consumers would rather spend money on experiences than on getting to those experiences.  They’d rather find attractions that are close-to-home, and then put their money into activities and entertainment instead of gas pumps and airlines.

No new terminology needed, as the old word works well:  Value.  And this is a great example of where the word “Value” doesn’t necessarily mean “lower cost,” it just means more enjoyment received.

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

About two-thirds expect a tax refund, and more folks intend to "save" it

Observation:   A recent story from Marketing Daily indicates more than 66% of respondents to a BigInsight survey expect a check from the government this tax season, and 43.8% say they plan to save it.  Click here to see the story.

Implications:   My question is, “Save it for what?”  Are they saving it for retirement?  Or are they simply planning to spend it more strategically on one of many big-ticket needs that has gone un-sated over the past several years?  They could be saving it until May when they buy a new car, or until Fall when they buy a new suite of appliances.  To many folks, “saving” money might just mean not squandering it immediately, instead spending it thoughtfully on something they might be able to afford with a regular paycheck.

What is your company doing to convince consumers that your product or service is worth their investment, whether it be using their regular income… or the extra boost their tax return often feels like?

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

More warnings of rising fuel prices

Observation:  Several news organizations are reporting that gas prices are projected to rise significantly this spring and summer, to as high as $4 per gallon or more.  Here’s one example of the coverage, from USA Today (click to link).

Implications:   The last time gas prices spiked like this was the summer of 2008, aggravating an already painful recession.  This time around, it seems as if we’re getting more warning; I’m not sure that will make prices at the pump less painful, but perhaps at least they will be less shocking.

If it happens, and consumers restrain spending in other areas to fund their commute, what kinds of messaging could you do to make sure your product or service avoids the chopping block?  In what ways does your product or service add value to the consumer’s life?  Is that value substantial?  Are you explaining it effectively? 

For more on the volatile price of energy, see other stories related to The Fuel Economy by clicking here.

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

Generational Economics: New Age Seniors

Marketing Observation:  Once upon a time, you might have referred to people age 60-69  as “upper demos.”  But that is an outdated notion, one that has not kept up with the changing face of demography, at least in the industrialized parts of the world. Here’s why I say that:

Fifty or sixty years ago, life expectancies were different than they are now.  People often retired from their careers at 62 to 65 years old… and then enjoyed life for a few years before their health began to deteriorate (or they just plain tipped over).  Now, life expectancies are much, much longer—approaching eighty years old—and of course many people are living into and through their 90s and beyond.  These longer lifespans are having a dramatic effect on how we’re living life, especially after age sixty.

Retirement savings have to last a lot longer.  So we’re finding that “retirement” rarely means, “the end of employment.”  For folks in their 60s, it often means quitting the job they’ve always had to have—for economic reasons—so they can take the job they’ve always wanted to have.  Someone who has worked in a confined space for a lot of years might decide to find a job where they can get out and meet people.  Others take a position that lets them fulfill a passionate interest or hobby.  In fact, the concept of “retirement” is making way for the idea of “re-hirement.”  And to the New Age Senior, that return to the workforce serves two purposes.  First, it can be an important supplement to a retirement savings plan that simply has to last longer than it might have, say, fifty or sixty years ago (retirement will last longer than it did back in the fifties for most people). 

But also, the right job can be a source of stimulation and self-actualization for the New Age Senior.  Just realize that their motives for wanting to work might be different now than they were during an earlier career.  Changing jobs can actually be seen as a way of, “giving back.”

Marketing Implications:  Whether you want to sell financial products and services to people who are re-thinking what retirement means, or goods to help people get established in “Career 2.0,” there is a tremendous amount of opportunity in targeting consumers in their 60s.  They still want to travel, spoil grandkids, and play golf.  But they’re looking for ways of fitting all those activities (and more) into a lifestyle that is busier than generations before them at this age.  They’re very health-conscious, eager to stay active, and more technologically savvy, too.

Is this a group of consumers you’d be smart to reconsider, or consider in new ways?

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

UPDATE: Opportunities hiding within state budget cuts

Last week, I suggested that some companies could become an important alternative when state and local governments cut back on spending and services (see “When states cut, can you gain” from June 2). 

In today’s New York Times, there is an article that explains the impact of spending cuts on state parks (click here to see the story).  If you operate a private campground, theme park, or other affordable, family-friendly, vacation destination, perhaps this Times story will help spark more ideas.

If you operate a sporting goods store that sells camping equipment, fishing tackle, paddle sports gear or hiking equipment, perhaps this story will foster ideas about making regional or state parks in your area the beneficiary of a cause marketing campaign.

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

One third of consumers say vacation plans impacted by finances, fuel prices

Not long ago, I pointed to a Research Brief indicating that many consumers were defying the high price of gas, and taking their vacations as planned (see “UPDATE:  Gas Pains,” May 23, 2011).  Today, another survey seems to contradict that assertion, as published by BIG Research.  Click here to see the release.

Implications:  This is a good reminder that trend observations are not unilateral; for every trend, there is a countertrend.  While some folks have “had it” with the recession and are pressing on with their travel plans, there are still plenty of households where caution reigns. 

Do you cater to the cavalier or the constrained consumer?  There is room to profit either way.  Perhaps the family that declines travel this year will instead install a small pool or deck in their back yard, or purchase patio furniture or interior home furnishings… as a means of enjoying a little entertaining, down-time or family fun, without leaving home.

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

UPDATE: Gas pains won't prohibit vacation

This morning’s Research Brief suggests that while consumers are bothered by rising fuel prices, they plan to forge ahead with summer vacation plans.  Click here to read the brief for yourself.

Implications:  With falling crude oil prices lately, we’re all hoping that the price at the pump will fall soon, too.  But only 39% of survey participants said their vacation plans will be altered if gas prices stay high.

That begs the question… where will the money that people spend on gasoline come from?

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

UPDATE: Another take on the effects of higher gas prices

The Fuel Economy has been a frequent subject of the Elm Street Economics consumer trends blog (click here to see posts tagged in that group), and it is likely to remain a hot topic. This morning, Colleague Jim Hopes pointed out a story that appeared today in Advertising Age, which explains how different companies and industry categories are preparing for the possibility of higher gas prices. Click here to read the story.

Implications: This article wisely points-out that for each increase in the price of gasoline, the amount of money that remains “discretionary” in a household goes down, causing families to sort their purchase priorities differently.

Another important take-away: Both companies and consumers went through a spike in energy costs back in 2008. If fuel prices climb appreciably, there is less likely to be “price panic,” as we all have the clarity of hindsight to our advantage. That was less the case three years ago.

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

New attitudes toward generosity and gifting

My wife recently encouraged me to buy an expensive D-SLR camera, to replace one that I had irreparably damaged on a kayak trip last fall. I agreed, under the condition that she might go easy on my birthday and Christmas gifts this year (the camera would do the job).

Not long after that, I encouraged my wife to purchase a painting that she fell in love with while we were on vacation. She consented, under the condition that the trip and the painting would be considered her holiday present.

I thought that our behavior might be unique, but within an article in Saturday’s New York Times I found evidence that we might simply be part of a growing trend… where gifting has moved toward giving someone permission to spend on a themselves, to fulfill an expensive hobby or passion. It was a fascinating story, and you can read it by clicking here.

Implications: The great recession taught us to avoid waste. The trend that his hinted at by this story takes the pressure—and the risk of potential waste—off of those who toil and stew about what the perfect gift might be for someone they love. Instead of trying to be mind-readers—knowing what the absolute perfect give might be—we are becoming facilitators… encouraging our spouse or significant other to fulfill a dream or desire (and not feel guilty about it).

Is your product or service too complex for someone to give as a gift? (Julie may have been intimidated to know what kind of lens capability, speed, storage and connectivity I would look for in a camera… and I don’t have a clue when it comes to choosing a painting or any other decorative decision.) Perhaps the solution is not to market your product or service as a gift that someone gives, but as a dream to be encouraged.

In this scenario, I can imagine a whole new range of things (aspirations) that begin to compete for the gift dollar. Travel? Higher education? Anything which, purchased for oneself, might feel selfish… but when purchased with the encouragement of a loved one, could be the most generous gift of all.

PS: It’s Valentine’s Day. Still need a great, last-minute gift idea?

[Note: For a counter trend to this posting, see the story that follows—Financial Infidelity—immediately above.]

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

Disney reaches out to kids... on arrival

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

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

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

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

The consumer might not be who you think

Back in September, 2009, I offered some thoughts about how the unemployment issues of the Great Recession were impacting men in different ways that women [see “Déjà Vu, Women in the Workforce”]. It simply asserted that companies did not just fire people during the downturn, they fired paychecks… seeking not to reduce headcount, but to dramatically cut payroll. This put a target on the backs of a lot of men in management and in the C-suite. Also, the recession was particularly tough on people whose jobs were tied to manufacturing and construction.

Yesterday, Advertising Age offered a story that explains one of the possible implications of that shift, explaining that more men are in control of the household’s grocery shopping chores. Click here for the full story.

Implications: It’s not enough for a company to understand who their target consumers are. They must understand, also, how their target consumer groups are changing over time. And this isn’t just about groceries and packaged goods. Who’s taking the kids to the doctor? Who’s more likely to have a commute (and thus, decide on the next vehicle the household will purchase and the gas station/convenience store/coffee shop to stop at)? Who’s more likely to purchase business apparel, and who’s more likely to plan the next family vacation? Who will balance the checkbook and pay the household’s bills?

Who will drive the decision about the product or service you sell?

Mike Anderson

A new twist on "Experiential Philanthropy?"

Over the past several years, I have noted frequent examples of something we refer to as Experiential Philanthropy: When someone gives of their time or talents, rather than (or in addition to) making a financial donation to a worthy charity.

In this week’s Springwise.com newsletter, I saw what might be another example of this hands-on contact with worthwhile causes: Tours of London… conducted by the homeless. Click here to see the complete article.

Implications: Move over, tourist attractions. People’s move toward authenticity in response to the recent recession could have an impact on destinations from Big Ben to Mickey Mouse.
Consumers are increasingly in touch with reality.

Are you?

Can you contribute to the realism consumers are increasingly after?

Mike Anderson

My opinion: A smart use of email marketing

Last night, I was flying from Atlanta to Minneapolis, and learned of a special “holiday gift” from Delta Airlines, Google Chrome, and GoGo in-flight internet service: Free Wi-Fi on this flight. So I fired-up the laptop and started working… free, except that I had to give GoGo my email address during the registration process.

Today, I received a very simple email from GoGo, with “Receipt” in the subject line of the message. It showed a table like this:

$12.95 for In-flight Internet Service
-12.95 for promotional discount
0.00 Sales Tax
-------------------------------------
$0.00 Total Cost (Happy Holidays!)

Implications: This was a smart way for GoGo to get me (and thousands of others, I will assume) to try in-flight Wi-Fi. Some people will pay to use the service in the future, some people will not. But I loved the way GoGo didn’t just give me value. They reminded me that they gave me value! (No harm in that, is there!?)

Next time I need to get some work done when I'm in the air, will I remember how easy logging-on to the plane's Wi-Fi system was? Absolutely.

Mike Anderson

I wonder if this just-in-time marketing idea will fly

In the Springwise newsletter that arrived yesterday, one article featured a new approach to dining-on the-fly while waiting for your flight from JFK or LaGuardia airports in New York Airport.

Near select gates, there are designated seating areas that are equipped with i-Pad-powered menus. You place an order, and a participating restaurant will deliver the food to your gate within ten minutes. (No more walking away, and risking the loss of your upgrade!) Click here to see the story.

Implications: Yet another example of companies responding to time-sensitive consumers, and exploiting the capabilities of new technology.

Mike Anderson

For Gen Y, perhaps the vehicle they own won't be "automatic"

A story in today’s Media Post Marketing Daily cites KRC Research in suggesting that car ownership is not the priority for Gen Y that it has been for previous generations. Click here to read the full story.

Implications: The more things change, the more things change. Gen Y could be a transitional cohort for whom vehicle ownership is not to be “taken for granted.” Whether out of environmentalism, economics, both, or “other,” it would appear that an increasing number of Millennial consumers are rethinking whether vehicle ownership is an absolute need, or just a want… which can be satisfied through other means.

• It might be smart for manufacturers to start talking about freedom and flexibility (of time, travel, scheduling, etc.), rather than just horsepower and style. How does this pitch sound coming from a dealership?
• Is there room in the market for a vehicle that is “situational?” (A car that one does not drive everywhere, but which is affordable enough to own even though it might be used only few times per month?)

Is your business good? Great! How will it be when the current generation of customers move out, and the next generation moves in? What can you be doing to make sure you remain relevant to that set of consumers?

Mike Anderson

Air fares might seem less fair

In another case of supply and demand economics, the airline industry seems to have turned a corner, in terms of pricing and inventory. That’s according to this recent story in the New York Times. For the past few years, the airlines have collectively cut capacity… which is putting upward pressure on the price of air travel, and pushing profits upward for the industry. Click here to read the story.

Implications: Every product has a tipping point, at which the price takes consumers out of the market. It will be interesting to see if that point is acknowledged first by the airlines, or their passengers. We should know next spring and summer, as the tourism season resumes.

It is not so much the cost of a ticket that matters at this moment... but the cost of a ticket in contrast to their pricing in the depths of the recession, which was not all that long ago. I haven't heard too much about various baggage fees and pillow prices among business travelers... but I've heard a few "non-frequent vacation flyers" that were shocked by the hidden costs of hitting the skies. If that goes on too long (the surprise, I mean), I have to guess people will find alternatives that are closer to home. What do you think?

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

Getting away makes a comeback

As Labor Day weekend approaches, I’ve seen two stories that suggest vacation cutbacks are starting to show signs of relaxing, for a change. The first was in a New York Times story from last week (click here to see it), and another came in yesterday’s Media Post Marketing Daily (here’s the link).

Implications: Whether by cutting the number of attractions, reducing the length of a trip, or by downgrading the hotel a notch or two, consumers are finding ways to get away. In a sense, the consumer seems to be re-considering what’s important about a vacation (what are the essential experiences/outcomes), just as they are re-evaluating many of the other purchases they make. For some, this right-sizing might mean going from foreign to domestic, from a cruise of five days rather than seven (or 3 instead of 5), or from an extravagant adventure to an interesting voyage.

I recently discovered a new canoe shop a few miles from my home, which offers complete outfitting services, including a shuttle to-and-from the beginning or end of your canoeing expedition. They promote the trip as a “day-cation” (a now-popular term for anything that can be used as an alternative to a multi-day vacation).

If your company serves food, fun, or even an hours-long escape… you should consider (and promote) yourself an economic alternative for folks who want fun… and frugality.

Mike Anderson

Consumer research leads to creative, timely, topical (literally) customer service

Gatwick Airport in London did some research with people about anxieties they might have before going on holiday. Turns out, travelers were concerned about showing up at the sun and sand… without a tan. So, their promotional folks worked out a deal with a tanning company to provide pre-boarding “spray-on tans,” right at the airport. For more, click here to see the story in this week’s Springwise, or see how Gatwick positioned it at their event landing page. (Note that this is not the only clever promotion that the airport has done, recently!)

Implications: Often, innovation is less a matter of coming up with something creative, and more a matter of paying attention.

Mike Anderson