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

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

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

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

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

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

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.

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.

Consumers accelerate car sales in response to higher gas prices

Observation:   Once upon a time, the high price of gas contributed to a slowdown in vehicle sales.  This time around, it seems, higher gasoline prices are prompting consumers to trade in their older vehicles for something newer and more fuel-efficient.  That’s according to a story in this morning’s USA Today.  Click here to see it.

Implications:   We’ve been anticipating the effects of higher gas prices for a long time, now.  A more expensive commute could cause some consumer to spend less in some discretionary categories (like entertainment, out-of-home dining, etc.), but more in others (automobile sales and service, energy-saving home improvements, etc.) 

How are higher fuel prices impacting consumers when it comes to your product or service?   How will you message to the consumer so that a purchase with you is one of the last things they delay or defer?  Is there a way you can position your offering as a higher priority, when compared to other discretionary purchases?

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

UPDATE: Emerging adults

Observation:   For quite some time now, we’ve been following a trend that could be classified as multi-generational households, or if you prefer, emerging adulthood (links to some of those stories appear at the bottom of this post).   

Today, another story on the topic was published by Research Brief, and it sheds more light on both the benefits and frustrations associated with adult children who return to their parents’ home, or never left.  Click here to see the story.

Implications:   In a conversation with one of our clients this week, we were talking about the potential that could exist among consumers in this category.  People who have returned home—or never left—might be benefiting from housing at very low rental cost, or at no cost at all.  That means any income they generate is much more discretionary than the money held by someone who rents or owns their own place.

Think about it:  What would you do if you could skip your next five or six mortgage or rental payments?  There would be more money for travel/vacations, restaurants and nightclubs, cars, home and personal electronics (from cell phones to tablets to gaming), and more.  Further, it is likely that this group of twenty-somethings (and some thirty-somethings) will be a part of any future real estate market recovery.

Think twice before you ignore or overlook this potential pool of discretionary income.

[For more on this topic, see “Return-to-nesters” from 11/4/11, “More people under one roof” from 5/5/11, “Multi-generational households” from 4/15/10, and “Emerging adulthood” from 1/5/12.

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.

UPDATE: GM re-thinking their approach to millennials

Back in March, we offered a post about how millennial consumers think differently toward automobile ownership than earlier generations.  It was based on a story in the New York Times (See ESE “Letting younger consumers drive,” March 26.)

Additional coverage on the topic was given by today’s Marketing Daily; 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.

Recovery, now 33 months old, continues to have strong points and soft spots

Observation:   An article in today’s New York Times reminds us that just as the recession did not treat everyone equally, the economic recovery has both favorites and underdogs… driven by employment, geography, and industry category.  Click here to see that story.

Implications:   If you’re a business owner, manager or marketer, it remains critically important to tune-in to the customers you serve and aspire to serve—locally—more so than you focus on the national headlines of the day.  Just as the headlines out of Wall Street and Washington tended to be overly gloomy as we entered recession back in late 2007, the national news can be misleading during the recovery; while the country, as a whole, is gaining economic momentum, there are parts of the U.S. that are not feeling the upswing as much.  Further, because we are approaching an election, candidates are extremely critical of the current economic climate, and incumbents tend to be extremely positive about it.  Reality often lies somewhere in between.

In what ways can you determine how your local customers are feeling about their future prospects?  Could it be as simple as walking around the store, lobby or dealership… and asking folks how they’re doing?  Or might you pay closer attention to products and services you sell that are related—either directly or indirectly—to things like employment, the price of gas, or other household spending influences?  Could it be that a little primary research is in order?

Consumers can be a great source of information.  And they’re a source that’s very close to your cash register.

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.

The problem with pleasing customers

Observation:   According to a recent report by Forrester, when you exceed a consumer’s expectations, that level of satisfaction becomes the new minimum expectation.  That’s according to an article in today’s Marketing Daily newsletter.  Megan Burns of Forrester is quoted as saying, “People get used to a level of service very quickly, so you’re constantly shooting at a moving target.”  Click here to see the story.

Implications:   In this day and age, standing still is the new falling behind.

This story suggests that companies should constantly be asking (consumers) how they can do even better.  And as a collection of service or satisfaction improvements is developed, it might be wise to roll them out incrementally, so that the consumer notices.  If you bring a huge collection of improvements to market all at once, it might leave the consumer asking “what have you done for me, lately” just a few months down the road.

Are you innovating to the point where you have something new to offer and talk about frequently… as the customer expects?

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