Time-out

For years retailers have been trying to get a jump on the others for the first to the rafters with wreaths and red elves. This year, this sign at Nordstroms has been making the rounds of social media to great response.

Interpreting customer sentiment and positioning yourself uniquely as the 'anti-', as branding experts would say. The anti-Christmas retailer.

Well done, Nordstroms. You're all on Santa's good list this year.

The New, New Frugality.

Once again, an opinion in an earlier blog entry was reinforced through research from Booz, Allen and Company. In this report, Booz suggests that the age of frugality in America is a permanent state, much like I suggested here. The reason I bring this up is because, frankly, I like to be right. I also bring it up because I am in the middle of a project for a client who has historically marketed their products on the promise of more for less.

Besides the suggestions I laid out in the earlier post on frugality among consumers, the latest Booz report reminds me that as more marketers get on the bandwagon of frugality, marketing messages and product development, even merchandising and certainly pricing strategy will again equivocate as all marketers take such positioning and make it so much table stakes. So for my client and others like them who applied a value message as a key brand value, it becomes less and less of an effective differentiator.

Note that the New Frugality doesn't mean that everyone is looking for the lowest price, or even the best value. What it does mean is that consumers - including businesses - are looking for reasons to defend the purchases they do make, whether to colleagues, bosses... or themselves.

As marketers, that's the job New Frugality requires of us. Defending our brand and its market positioning. Just like the good ol' days. Again.

Fear and the American Consumer

In a recent article in his newsletter Drum Beat News, my colleague Jack Howe writes of the death of 'conspicuous consumption':

"Luxury buying is off in a major way - reports from Neiman's, Saks, and all top brand name retails report the same cut back from their consumers. So the company that must survive is making sure they offer solid business cases with every offer. Understanding the consequence of how the CEO, at the business your selling to, gets paid can pay off for you, the seller. As consumers, we are still spending, just not in the ways we were before. It is highly unlikely, given the cost of bailing us out of our current economic situation, that we will in our life time, see a return to what we knew as conspicuous consumption."

Interesting also is his observation in the same article that the increasing homogeneity of automobile design also points to the idea that 'standing out' is 'out'.

Whether or not I agree that recent poor auto design is a sign of a larger cultural shift, the apparent death of 'conspicuous consumption' is an interesting argument and worth evaluating from a marketing perspective. Given rising national and personal debt, a worldwide credit crisis, inflationary pressures on energy and food stuffs, plus the impact of environmental awareness and regulation, comfort with high levels of consumption no longer looks - or feels- 'right'. There are even anecdotal stories of monied customers foregoing store-branded shopping bags in order to keep a lower profile on their ill-timed retail therapy.

For years many marketers have relied primarily on brand prestige (associating personal attributes onto or from a product) and constancy (that is, 'I know what I'm getting', aka 'no one ever got fired for buying IBM') to maintain market share and margins. With the new normal of a slower consumer engine on the economy, we must re-evaluate what motivates customers now. I see these four are among the leading motivators:

Value: The rise of the big box discount chains, while suspect themselves in this era of the 'new normal', provide insight into consumers desire to buy in bulk, reduce packaging, and generally 'stock up' in what is perceived to be a very volatile period in our history.

Necessity: Discretionary spending is off, minimalism is in. Name your own example: Even here in truck-crazy Texas, Hummers are criticized, while the sparse Prius hybrid is envied. Vacations are out, staycations are in.

Savings: Once arguably in negative territory, personal savings in the United States has turned to a pace not seen in years, some estimates now as high as 4%. Anti-debt radio personality Dave Ramsey has a slogan that says it best: "...the paid off home mortgage has taken the place of the BMW as the status symbol of choice."

Fear: Arguably the previous three motivators are a result of fear to one degree or another. But this is a non-specific, generalized fear of a quickly shifting geo-political and economic landscape. Remember what happened to action movies after the Berlin Wall fell in 1989? Stallone had to find new enemies because the Ruskies were our pals. It was easy in an earlier era when Russians were the bad guys and we had a collective target for our enmity. But the new political environment, unnamed terrorists have exacted far more damage to our lives and psyches in the last decade than the Russians did in the prior fifty years.

Once, leveraging FUD (fear, uncertainty, and doubt) was the last refuge of marketers unable to sell a product or solution on merits. Today, it seems to be the self-imposed primary motivation of consumers. And in a world where banks are bankrupt, car manufacturers are nationalized, real estate is no longer an inflation hedge, terrorists have us disrobing to get on an airplane, and the national debt clock needs more light bulbs, who could blame them?

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How much green is there in green?

In a recent price sensitivity analysis conducted by Rockbridge Research, it was discovered that most consumers would purchase a product indicated as 'green' (environmentally friendly) over a 'regular' product of the same type, but only if they were the same price. The study concluded that overall, "...as the green product’s price increases, consumers’ inclination towards it decreases."

Not surprisingly, specific audience categories offering unique attitudes toward the 'green movement' differ in the value they place on such products. Six distinct consumer groups within the overall adult consumer population were identified, with “Green Tech Leaders” willing to pay far more for a green certified product, while “Anti-Greens” are not willing to pay much more at all. That alone is interesting as it still indicates a willingness to perhaps consider the positive social implications of buying green even to those who do not value it themselves. This indicates that green product attributes are valuable, but not widespread enough to accommodate anything but a modest price adjustment.

From a share prospective, a green alternative may move the needle. From a margin perspective, this study indicates that their isn't yet much green in being green.

To learn more about Rockbridge’s Green Technology Segmentation, click here.

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Because Results Matter

Because Results Matter. I own that phrase as a domain. It is the Strategy180 slogan, and more than that, its the way we approach clients and projects. It is also the way that I think that all agencies - and their marketer clients - should view their relationships.

But they don't, and in the process, lower the bar of expectations and underestimate the value and influence of marketing.

And now the King himself - the Burger King - must understand that 'visibility' and 'mindshare', even 'frequency' and 'reach' are tools and metrics, not goals. This article in Ad Age indicates that the award-winning Burger King campaign is failing to gain ground - even cedeing it - to that ubiquitous clown and his league of banal but effective advertising and market positioning. When the much-lauded ROMI (Return on Marketing Investment) is in negative territory, even today's stock market looks like a better bet.

Because Results, after all, Matter.

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...dogs and cats living together - mass hysteria!

Along with this post's title, one of my favorite movie quips, offered in deadpan delivery by Howard Ramis in Ghostbusters, is "Sorry, Venkman, I'm terrified beyond the capacity for rational thought."

Yet this is a lot of what we've been hearing lately from colleagues and pundits. But this isn't the End Of Days brought about by the Sta-Puft marshmallow man, but rather it is a long overdue reminder to focus, work hard, live within our means, and reprioritize.

While things will change over the next days and weeks, and some of it may perhaps eventually change my tone in this post, right now I'm not seeing a lot of bad news so much as a lot of fear and uncertainty, and opportunity always arrives with uncertainty. Buy into the fear and sell into the optimism. It's Warren Buffett's approach for the markets and should be all marketers' as well. Our response to a difficult situation changes our ability to handle it.

No doubt, things are going to stink in the near term, because marketers have by and large never properly positioned themselves or the function for the key role it should assume during a market slowdown, opting instead to stammer defensively and nervously paint lambs blood above our office doors. Still, a ten trillion dollar debt should worry us. The potential for a nuclear Iran is disurbing. Climate change has me checking under the bed for the bogeyman and Al Gore.

But this? Nothing that a little ingenuity and informed strategic thinking can't overcome. Now is not the time for marketers to be running for the exits. Companies that spend this time looking for greater efficiencies and new approaches will maintain in a slowdown and position themselves for exceptional share growth when the money starts flowing again.

There are a number of studies to support this. Download a few. Discover specific ideas. Seek knowledgeable advice. Recalibrate.

Smile.

The Antique Selectric

A recent back-to-school shopping trip with my pre-teen son did plenty to remind me of the widening generation gap between us. Navigating through brands I'd never heard of and styles that will, one day, define the cultural lowlight of his generation (just as parachute pants defined mine) – helped me acknowledge that the pigment had indeed left my hair, never to return.

An annual report called the Beloit College Mindset List – you may recognize it as common fodder for chatty 'lite rock' morning radio hosts – reminds us all not only of the generation gap and differences in our cultural context, but the pace of change in today's world. This year's study calls out sixty points of reference that the typical 18-year-old, born in 1990, takes for granted. These include:

• Universal Studios has always offered an alternative to Disneyland in Orlando.
• The Tonight Show has always been hosted by Jay Leno.
• Caller ID has always been available on phones.
• IBM has never made typewriters.

Had the Beloit study existed when I entered college, my elders would have likely been reminded that I never knew the country without a space program, had never listened to radio for anything but music, and automobiles always had air conditioning. In turn, upon turning 18, my son will have never known mobile phones without cameras, grasp the concept of a paper map, or have enjoyed music on anything larger than an iPod.

And forget the iconic Selectric… he won't even know IBM as a consumer brand.

The first time as tragedy, the second time as farce

This, from the New York Times:

"...nearby was Anton Zimin, 26, an advertising copywriter, who said he was quite familiar with (a recently deceased novelist, radical, and historian) but doubted that others in his generation were. He said people his age have lost touch with the struggles of their parents and grandparents.

"The problem is that now, it's all about consumption - this spirit that has engulfed everybody," Mr. Zimin said. "People prefer to consume everything, the simplest things, and the faster, the better."

The radical author to which the 26 year old refers is Solzhenitsyn. The consumerism he laments is not American, as the young copywriter is Russian. He speaks of the consumerism of Russia.

In this age of instant gratification and the global village of modern communication, what it took America to bring upon itself in 50 years of mass consumerism, Russia has done in half the time. In the dog years that technology offers, I figure they'll be mirroring our insurmountable national debt, credit crisis and housing crunch by next May. Sarcasm aside, there have always been those who looked to burgeoning economies abroad and spoke of the opportunities to be had there - and these still exist. Moreover, so do opportunities to do it better this time, correct old mistakes, and find new solutions. Unfortunately, between China's dismal environmental record and Russia's corruption, this opportunity may already passed for those countries' leaders, but not yet for the companies looking to build a better world there, and back here at home.