Thursday, July 31, 2008

Libby dusts off an old standby, the Family Meal

One of my main interests is people’s eating habits. The late writer Laurie Colwin once summed it up well:

I’m not very curious about what people had out. I’m interested in what people have in, because I’m very interested in people’s domestic lives. I used to think I was fretting away my time, but the fact is, what is more interesting than how people live? I personally can’t think of anything. Maybe war or death or something, but not to me.”
I’ve spent a lot of time asking people who they eat with, what their daily meals are like, and how often they eat together as a family. So, I couldn’t help but comment on Libby’s new campaign to get families to eat more dinners together – and of course, to include Libby foods in those meals.
Parents and kids who visit the promotion's site will also find the "Top 5 Reasons to Get Back to the Table" (better grades, nutrition, confidence levels, etc. for kids); a database of easy, low-cost recipes featuring Libby's vegetables; and tips on planning meals and saving time and money at the grocery store - some from "Total Mom" author/TV personality Hannah Keeley.
Indeed, there’s definitely a new science that tries to support those claims. A recent University of Minnesota study found that adolescent girls who ate with their families at least five times a week during middle school were much less likely to drink, smoke or use marijuana five years later. The same, alas, did not hold true for boys. Even the researchers are not really sure what that means, so forgive me if I’m not quick to jump on the Return of the Family Meal Bandwagon. Most of the data shows that people do make an effort to eat family meals, perhaps not every night, but in a regular and sustained pattern. So why is Libby marketing nostalgia for something that isn’t really gone?

History shows that worries about family dinners come back like the tide whenever there’s certain kinds of social upheaval – let’s see which ones apply today: war (got that), economic downturns (got that), changes in men’s and women’s work and home roles (got that, too) and, oh yeah, rising food prices (got that, too!).

It’s really not surprising: concerns about the family are part of the social and economic concerns of the broader society. What even historians tend to forget is the role of advertising in helping to fuel those concerns, especially around the dinner table. In the early ages of advertising, the food industry tried to convince women that their performance as mothers and wives depended on choosing the best brand of canned foods for the family. Laura Shapiro, author of Something from the Oven convincingly demonstrates how into the 1950s, food ads were unusual in just how many kinds of insecurities they manipulated. After all, you need to be a Total Mom to be able to work 40 hours a week, deal with a budget, and come home and make dinner every night. That’s why advertising has always tied women’s maternal adequacy with a mix of “add love, but make it more convenient.” (I'd like to be able to say we've progressed enough for them to market this to the "Total Dad," too, but I'm not seeing any signs of that in these campaigns.)

So, Libby’s attempt to promote its canned goods in this manner is a longstanding cultural tradition. What’s different is that the tide has changed: it’s very difficult to sell canned vegetables today when fresh are shipped quickly across the globe, making asparagus available year round. So, tastes – or at least the arbiters of taste -- have moved away from the canned and towards the accessibility of fresh. The movement to get people to eat fresh, local food is gaining ground.

But Libby’s rather unabashed promotion of its canned vegetables flies in the face of so many things. At the same time, it recognizes that sooner or later, the ability to buy fresh and continue to buy whatever produce you want out of season may be more difficult for people under the economic crunch. It’s not surprising that the family meal has returned – articles about comfort food are just around the corner, waiting for the fall weather and heating bill crunch. As Libby rightly knows, smart moms are already thinking about stocking up on canned goods before the recipes start asking for pureed pumpkin. How about some pie?

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The next POPAI Digital Signage 101 webinar is coming up on August 7th

This is pretty much a cut-and-paste from the announcement two months ago, but if you, a client, a partner or some other interested party you know about is starting to explore the exciting world of digital out-of-home media, POPAI's holding another "Digital Signage 101" webinar on August 7th.

Specifically designed to help newcomers see past the industry hype and focus on the projects, business cases and best practices that have been successful in the real world, POPAI's Introduction to Digital Signage webinar is a great way to spend an hour of your time -- and only $50 -- to jump-start your understanding of what works and what doesn't in the digital signage world.

Dale Smith at Peerless will be leading the way, covering topics including:
  • An introduction to the digital signage market with some basic market history and analysis,
  • A look at some of the most common usage scenarios,
  • An explanation of the components used in typical digital signage networks,
  • A discussion of the benefits and drawbacks of using digital signage, and
  • An examination of some of the most common pitfalls and problems that occur, and ways to avoid them in the first place.

So please join us on Thursday, August 7, 2008 at 1:00pm EDT


Monday, July 28, 2008

Mixing it up when marketing to children

Today there’s two interesting bits of news related to kids and marketing, not all of it bad:

First, Packaged Facts presents data that suggests kids may be a driving force behind a family’s decision to "go green" in their purchases. Here’s the scoop:

Quoting data from the Simmons Kids National Consumer Survey, the study says a significant majority of kids express concern for environmental issues, and that nearly three-quarters of them believe in buying recycled paper products.

Furthermore, more than half of 6- to-8-year-olds encourage their parents to buy green products--with Hispanic children leading other demographics by a wide margin. The Hispanic kids' environmentalism, in turn, may be the reason why the Pacific region--with its large Hispanic population--leads all other areas in numbers of kids pushing their parent to go green. Also, Hispanic families were found more likely than other American families to seek out organic and fresh foods when they shop. These attitudes toward food may spill over into other environmental issues, according to Packaged Facts.
What’s also interesting is that they found kids as young as 3 were aware of environmental issues. This strikes home for two reasons: one is the niche market angle. If Latino and African American adults use media and shop in different ways than other racial groups, it’s not only important to market goods for their needs, it’s important to consider their kids, too. Latinos are a particularly diverse group with a variety of cultural and economic backgrounds, so it’s interesting to see cohesion around environmentalism. Marketers tend to think of upper middle class whites as the classic organic food consumer, mostly because they are looking at consumption in regular and organic supermarkets, which is not necessarily where Latinos are getting their pesticide-free produce.

The second is that shaping the consumer mind starts early. I’m not sure that’s good news for parents, but in this case, it’s good to note that consumption is tied with a positive social and moral message rather than whether or not Bugs Bunny is dancing on the box of your healthy kid meal.

Second, here’s a marketing issue that may be taking things a bit too far (although I’m not sure in which direction…). The Center for Science in the Public Interest, a decent watchdog group, has recently denounced the Girl Scouts for lending the name of their most famous cookies – Thin Mints – to a Dairy Queen drink that contains more than 1,000 calories. So, you ask, why is this different from any other tie-in? Ben and Jerry’s names its ice creams after all sorts of celebrities and cultural icons and we’re not reading the nutrition panel in dismay, are we? Here’s the rub, according to CSPI:
The large, which weighs more than a pound, has more than 1,000 calories, 31 teaspoons of sugars, and provides more than a day’s saturated fat. It’s like drinking two Big Macs, according to CSPI. Selling cookies door to door is one thing,” said CSPI executive director Michael F. Jacobson. “But renting out its nonprofit brand name to a junk-food chain is a major badge of shame for the Girl Scouts. It runs counter to the Girl Scouts’ mission, and this product and its marketing campaign deliver a very unhealthful message to young girls and others. If you were designing a product with the intent of promoting obesity and type-2 diabetes in girls, it would look exactly like the Thin Mint Blizzard.”
While weight issues among young adults are not trivial (note the recent news about young adults and prescription medication for weight-related health issues), should we really be up in arms about the Girl Scouts promoting fatness and ill health? And are they even promoting those things? After all, a major part of the teachings promoted by the Girl Scouts (and Boy Scouts) is self discipline and personal responsibility -- so it's okay to get a Thin Mint Blizzard once in a rare while, just not all the time. Saying otherwise would lets both the food industry (who developed the product in the first place) and the consumers (who are really over-consumers a lot of the time) completely off the hook. Aside from my personal skepticism about how to address the so-called obesity epidemic, I’m pretty sure that if the food industry, government policies, the school system, and parents aren’t already under the gun, it’s not going to help much to blame an organization for 7 to 12 year olds. My recollection is that you have to earn merit badges in physical activity as well as cooking and cookie selling.

Isn't it also a misunderstanding as to to whom the Thin Mint Blizzard is being marketed? After all, it’s not Girl Scouts who are buying all the cookies. Ask any Scout parent who takes to the street with their budding entrepreneur: it’s adults who shell out like crazy for Samoas, Trefoils, or Tagalongs. Will buying a Thin Mint Blizzard make you feel more like a Girl Scout? Or can you make it six more months until the doorbell rings and it’s time to order Lemon Chalets?

Friday, July 25, 2008

A new kind of retail shrinkage hits consumers instead of retailers

In a classic Seinfeld episode, Jerry and friends are staying at a beach house with people they don’t know well. George is changing his clothes and a woman walks in on him, looks down at his crotch, bursts into laughter, and runs from the room, with George yelling after her, "I was in the cold water! It’s shrinkage!"

While "retail shrinkage", the technical term for inventory loss occurring inside the store, is a universal problem, another kind of shrinkage stands to harm brands more than retailers... Like a dose of cold water on consumer pockets, another new trend in retail survival is package "shrinkage." A number of grocery products have been "outed" recently for the less-than-overt practice of making the contents slightly smaller and charging the same price, counting on the fact that consumers won’t really notice why the cereal or ice cream is running out a little faster than it used to. The amount is often slight -- a few ounces here, a few grams there -- but almost all the manufacturers have been very quiet about these changes. (Honestly, not that we expect them to brag about making things smaller when the trend has always been Bigger is Better. But it'd still be nice to know!) For the most part, it’s a lot easier to do this quietly rather than announce to consumers that prices are going up. And inevitably in the food industry, they are going up.

Consumer watchdog Mouse Print points out the Kellogg’s cereal has shrunk the box and reduced the calories on Apple Jacks, Corn Pops, and Fruit Loops, among other cereals. At least Kellogg’s is honest, including a little box on the side explaining why:

"This package change is considered a price increase, in that box size is smaller. The reason for the price increase is the rising costs of ingredients and transportation."
Ice cream has been a big culprit – dairy prices are way up and transportation and refrigeration depend on energy costs. Mayfield Dairy decided to tie the package shrinkage to their premium line of “select” flavors.
"With the price increases we are seeing in cocoa, nuts and dairy ingredients, we are facing a substantial price increase," said Scottie Mayfield, president of Mayfield Dairy. "Instead of raising our price, we have chosen to reduce the package size by 8 ounces."
Here’s another one: Earlier this year, Dial Soap shrank from 4.5 to 4 ounces. Who would expect tallow (cattle fat) to get more expensive, too? In this case, the new size was marketed as streamlined packaging (getting a grip on Dial for Men).

Although consumer watchdog groups and blogs have been commenting on the package shrinking issue for a while now, there’s not much industry tracking of the effect on consumers and spending. The Nielson Co. has information for their clients, but they’re not sharing it with the rest of us. One estimate was as many as 30% of packaged goods have gone to smaller sizes in the last year, but that data doesn’t tell us whether the price went up, down, or stayed the same.

The solution, unfortunately, for consumers, is to check the unit cost (price per ounce) on the things they buy. One analyst even recommends saving your cash register receipts and comparing them over months --- to use the point-of-sale data yourself rather than let the industry have all the fun. But that’s time consuming, and let’s face it, I'm not sure consumers want to extend the duration of their "retail experience" just to find out that they're paying more for everything anyway.

At the same time, I’m wary of encouraging marketing folks to give this a positive spin – like George and the laughing woman, it may be a futile exercise in damage control. Or worse, tied to questionable tactics: I can just see the tie-in to anti-obesity campaigns (shouldn’t we all be eating less anyway?) or environmental concerns (smaller packages mean less waste!). It’s hard to convince people things are better for them if they’re paying more for it, especially when we’re talking about staples like groceries. Americans in particular are used to spending a very small percentage of their income on food in comparison to people in the rest of the world. Like higher gas prices, higher food prices will require some adjustments from everyone, from the farmer to the producer to the retailer all the way to the consumer. I don’t particularly like paying more to keep the pantry full, but it’s one of the last things I’m going to sacrifice in my budget-trimming. I’m already buying the less expensive brand of shampoo, the generic household cleaners, and clothes on sale. And if I’m buying less at the grocery store, I’m still buying the things I think are essential, delicious, and part of our regular meal patterns. Isn’t that a kind of brand loyalty?

So here’s a novel idea for package shrinkage: be honest.

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Monday, July 21, 2008

Wii wipes out recession blues

I’m opinionated – how else could I write these columns? But I’m also pretty open to changing my mind, admitting I’m wrong, or re-thinking the whole enchilada.

From some of my past posts you might think I’m not a big fan of the Wii, but I just came back from dinner with friends and their 13 year old (who's a serious athlete AND gamer), who gave me a detailed description of why I should re-consider the Wii Fit as a fun challenge.

I’m not an uninformed critic – I’ve put in some time with the Wii , Guitar Hero, and Garage Band. All of it for the sake of research, mind you. (And now I'm itching to try the Wii Fit, despite my preference for real yoga). But as a person and, more importantly, a parent, I’m still pushing for the real over the virtual. I expect my kids to play outside, play sports, and be active in the world as much as possible. At the same time though, we’re movie hounds. We’ll watch a downloaded episode of one of our favorite shows over breakfast if it’s a quiet morning. We all check our email a lot. I mean a lot. We all work on blogs (even my 9 year old has one about ecology and rescuing worms on rainy days). And there’s a big amusement and water park about a half hour’s ride from here. We’ve gone to events in Boston (two hour’s drive), plays in the Berkshires (another two hours), and concerts nearby. We’re planning one or two beach trips, but I have to start budgeting for those. After all, it’s expensive just to buy groceries right now, let alone drive to the shore, buy lunch and dinner, and stay overnight.

I’m not the only one who feels the pinch in my leisure and family life. Marketplace recently an a great segment about the way families are relying on at-home media for summer entertainment when they can’t afford vacations. Here’s what they found in talking to the Dorn-Wallerstein family:
They've been taking more walks, dealing more hands of Go Fish and playing a whole lot more Super Smash Brothers on the Wii console they bought six months ago….The Dorn-Wallensteins apparently aren't alone. Retail industry researcher NPD Group reports Nintendo sold twice as many Wiis last May than it did in May 2007. And this year, overall video game sales are expected to reach a record $21 billion.

Wedbush Morgan Securities analyst Michael Pachter tracks the video game industry. He predicts sales will remain strong as more people stay home to save money. “I think that consumers really are going to make a trade-off between very high-cost entertainment activities and they're going to shift in favor of lower-cost forms of entertainment. The Wii is going to draw families together and I think you're going to see a big shift.”
The argument is that the Wii is a better investment for fun and leisure than movie tickets or a summer’s pass to the water park. I like the idea that new technology can be a boon in difficult times, rather than an expensive or resource-draining way of distinguishing the Haves from the Have Nots. Usually most of the “how we’re changing our lives” recession news is all about retrenchment. I’m sure the articles about comfort food and cooking at home are being primed for fall publication. There’s definitely been an increase in home gardening and other do-it-yourself activities. But can it be more than pre-industrial amusement? This home entertainment approach at least considers how to incorporate the new and interesting products into a less expansive life. Moderation, adaptation, and fun are much more appealing than deprivation, aren’t they? Can there be a positive side to financial struggle? And does this mean the Wii Fit is better than my yoga class? That I’ll have to learn to like gaming?

Honestly, I’m still more of a fan of the great outdoors. But if it takes gasoline to get there, perhaps I should have bought that Wii when it was on sale. For now, we’ll just have to run across the street to the neighbors and hope they don’t get wise to our penny-pinching approach to fun! I hope they're going to get the Wii Fit attachment soon.

Thursday, July 17, 2008

Safeway's plan to target kids has parents asking "What's up, Doc?"

When my kids were young, we used to have a yearly event called Bad Food Weekend. One of us would take the kids to the supermarket and buy all the foods we saw advertised on television in between and blended in to the Saturday morning cartoons. We’d sample everything from fruit snacks that spurted out blue goo to cereals whose main ingredients were sugar and chemicals (with a vague reference to grains), to curly cheese doodles that turn your hands orange for a day. Usually by Saturday afternoon the girls had decided that 90% of the stuff was disgusting and one parent or the other was asked to make “a real meal.” Unfortunately, one year some nieces and nephews participated in the event, never reached the same gross-out point, and continued to ask for Sugar Coated Marshmallow Goodness in a Box for months afterward. My sister never forgave me -- I’m sure she’s sending her now-in-college son care packages full of carrots and whole wheat muffins just to counteract any lingering effects of that weekend long ago.

It’s easy to alarm parents (especially mothers) about getting kids to eat healthy foods. No surprise, as there’s more than a hundred years of "expert" advice – from the government, social service agencies, scientists, nutritionists, politicians, and of course, food companies --- telling women how to feed their families. And now, with fears of a fat nation starting in kindergarten, salmonella in your tomatoes, and Ronald McDonald as an exercise guru, the level of anxiety that must go into every meal is profound. Food vigilance is an around-the-clock job. In the last ten years, the obesity epidemic rhetoric has gotten fierce, starting with scientists at the Centers for Disease Control showing color coded maps of a creeping wave of fatness across the USA to Morgan Spurlock’s Supersize Me for kids. Whether you blame sedentary lifestyles, an out-of-control food industry, a lack of grocery stores and fresh produce in poor urban and rural areas, or parents (moms, really) who don’t make home cooked meals, it’s hard to ignore the statistics about type 2 diabetes in American children. Whether any of this warrants the label “epidemic,” there’s no question that the food industry knows it needs to start selling as much function as fun in their product lines.

So, it’s no surprise that Safeway, which like many supermarkets, food companies, and fast food chains, has launched a health kids set of meals and food products designed to ease parental guilt. Not a bad thing, you think, especially since one major complaint is that families do need guidance as to what counts as nutritional and healthy food. But unwilling to leave well enough alone, the new line will be packaged with Bugs Bunny and the rest of the Warner Brothers cartoon gang. According to Promo Magazine,

Warner Bros. chairman-CEO Barry Meyer said the deal is a way to turn its well-known cartoon characters into "ambassadors of health and fitness." He said the partnership "allows us to utilize the Looney Tunes characters' enduring popularity with kids and teens to promote a lifestyle choice that's healthier for them."
I wish I’d come across this story when I was writing the post about unbelievably bad marketing strategies, because it tops all the ones I’d mentioned. Like Sears hooking up with LL Cool J, there are some retail identities and pop culture items that really should be kept in separate rooms, locked away from one another. Otherwise we’ll end up with some crazy public service ads with the round green hero Shrek, (who’s been a fast food toy at least twice) promoting exercise. Oh wait, it’s been done.

(So do you think they'll use Porky Pig to promote the Soy Bacon Lettuce and Tomato Sandwich?)

To distinguish this campaign from the last thirty years of cartoon characters splashed across every imaginable kind of junk food, Bugs and his buddies are now exclusively featured on the Eating Right Kids line of food. Because Daffy, Taz, and Bugs are free of all that crass commercialism. Right?

Th-th-th-th-that’s all Folks….

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Monday, July 14, 2008

Sell me a ticket for the retail rollercoaster?

Today my daughters and I had an hour to find a light colored shirt and dark pants or skirt for each of them to wear for an orchestra performance. Amazingly (and especially after my recent complaints about the Gap chains), we found three out of four items in the Old Navy sale rack in half an hour. For under $20! So far this summer I’ve split my time almost evenly between big retailers and local merchants and it’d take a crystal ball to predict when or where I’ll end up on any given day.

Some of the most insightful comments about retail behavior links consumption patterns to the suddenly shifting waters of socioeconomic stability, creating what, to others, might look like chaos. Paco Underhill is one such commentator. Here is his version of what's coming (summarized in C B. Whitmore’s blog):

+ One third of the American population lives from one paycheck to another, with little savings [note this includes middle to upper income households]. For them, " is going to come to a standstill. Forget the organic produce at Whole Foods; they will buy food at ALDI, Trader Joe's and Wal-Mart."

+ Another third "is not at immediate risk, but they are scared... This group of Americans is taking pride in spending their money well..." They are the ones doing tons of research on the Internet, asking questions and making sure that anything they purchase captures the full bundle of value that they expect.

+ The last third is financially secure with mortgages paid off, retirements plans fulfilled. "The recession will have limited effect on them.... They'll go to Trader Joe's because they like it, and to the department store whenever they want."

Paco predicts that "the world of shopping is on the edge of a new form of chaos." Why? Because despair from one-third will mean little to no shopping; frantic bargain hunting from the middle third means a lot of channel churning, and from the last third you can expect disinterest because they essentially have all of the stuff they need.

He says "It will get ugly."
As we’ve been pointing out, it’s ugly already. Retailers are scrambling to scale back over-ambitious expansion plans (Starbucks), propose marketing strategies aimed at demographics that still seem willing to spend (Old Navy), reconsider plans to merge with too-similar competition (Sears), and try to re-make notions of value and necessity (Wal-Mart). Not all of it is working, especially since none of these strategies addresses any of its respective retailer's market segments squarely – and there’s movement between them. As someone who frequently moves back and forth between at least two of those categories, I’m sure my own shopping patterns look like a roller coaster ride through the retail amusement park – and like a lot of purported thrill rides we don’t choose to be on, not all of it is fun.

Underhill goes on in DDI to make a bunch of suggestions about how retailers might address this more appropriately. I have two favorites: one is supply chain management. Rather than focus on constantly upgrading or tweaking products that don’t need it, make sure the ones people want are in stock, available, and well designed enough to last. There are very few stores, even ones that capture my loyalty, that I can truly count on for a dependable product.

The other suggestion is about bringing decision-making closer to the retail floor. One lesson I’ve learned in the last three years is that not all chain locations are alike. In my new Pittsburgh suburb, the Panera is extraordinarily clean and always has at least two or three big sample trays heaping with bread or pastries, which the extremely solicitous workers encourage customers to take by the handful. It’s almost always packed with different sets of regulars throughout the day. Although the Panera here in Massachusetts is equally spotless, the workers are more of the bored college student variety and the sample trays are always empty. There’s the usual wireless crowd, but the real camaraderie takes place at the local coffee shops downtown.

Getting it right with customers at the local level is certainly a skill worth honing whether it’s bust or boom times. Implicit in Underhill’s message is the idea that retailers shouldn’t sacrifice creativity and innovation, but channel it in new directions. After all, I’d be much more willing to get back on the roller coaster if I was sure that after all the ups and downs, it was going to be good clean (maybe even safe?) fun.

Wednesday, July 09, 2008

Starbucks: closer to the end of Its universe?

Of all the stories about Starbucks, the best is comedian Lewis Black’s segment on the end of the universe, where he describes walking out of one Starbucks in Houston, only to see another across the street. Who, he wonders, would need two Starbucks within two steps of each other? After careful thought, he concludes that the only group would be people with Alzheimer’s. As Black says, “When you build a Starbucks across the street from another Starbucks, that’s it. Game over.”

Apparently the marketing and expansion plans for Starbucks must have been organized by folks who believe that people with memory loss are a growing segment of the population, since there are now hundreds of Starbucks within less than a mile of another. (There's even a great website with examples from around the country.) Even so, we still might be able to avert the end of the universe: today’s news is that Starbucks is planning on closing 600 stores across the U.S. Most of them are newer stores, (one analyst claims it’s about 20% of the stores opened in the last two years. While that affects approximately 12,000 workers, it’s not clear how many jobs will be lost overall, since some of these baristas may simply be transferred to the surviving store across the street.)   According to the Associated Press,

Starbucks estimated $8 million in severance costs. In total, the company forecasts up to $348 million in charges related to the closures, $200 million to be booked in the fiscal third quarter ended June 30... The locations were not profitable or were not expected to be profitable in the foreseeable future, and the majority had been opened near an existing company-operated Starbucks.
Two other bits of news signal a re-thinking of the “blanket the world with coffee” expansion strategies that have gotten Starbucks into trouble. One is that they are cutting back on their attempts to be a cultural marketplace, firing executives in the entertainment division and removing the large cd racks from the main store floor in order to concentrate on a few featured titles near registers. The second issue is with the coffee itself: the newer, mellower beans featured in Pike Place Blend have also been a source of controversy – not so good, say the majority of loyal Starbucks drinkers who prefer the more heavily caffeinated and “bolder” dark roasts that dominate the daily choices.

It’s no accident that Starbucks introduced this milder coffee at a time when both McDonald’s and Dunkin Donuts have explicitly challenged the coffee king with robust blends, cappuccinos, and lattes to go. Still, CEO Howard Schultz claims that Starbucks is holding its own ("we control our own destiny," he asserts) since he believes their coffee is better, more authentic, and fresher than the fast food competitors. But when you have the hubris to expand hundreds of stores directly across the street from yourself, perhaps it’s time to re-consider destiny and pull back before you're consumed by the black hole looming at the galaxy's edge. Here's a hint: it's not coffee.

Game over?

Image (inspired by Escher's Relativity) created by Alien Loves Predator.

Monday, July 07, 2008

Rethinking the concept of consumer intent

Back in 2005, we did an article over on the WireSpring blog about calculating the ROI for digital signs, and started out by describing an "awareness funnel" that took walked through a shopper's first moment of truth with an item -- from becoming aware that the product existed to actually purchasing it. It looked like this:
              / \
/ \ <- SALES
/ \ <- RECALL

As I was reviewing some old blog articles from Advertising Age recently, I came across another description of the same concept, this time from the perspective of consumer intent. As the article's author Troy Young notes, "Intention is one or two steps before purchase and far removed from 'unaware.' Brand advertisers love intention, naturally, but the real magic is the part before intention -- moving a consumer from being 'unaware' to being 'predisposed'.... What the data show is this: In creating value for brands, we need to look beyond 'intent to buy' and toward 'intent to engage' with a brand message." Consequently, his funnel looks roughly like this:

              / \
/ \ <- SALES
/ \ <- ??
/ \ <- ?
/ \ <- AWARE
/ \ <- UNAWARE

While Young states that "the real magic is the part before intention", from where I'm standing, I'd say the real magic is in fact after it, when you complete the 2-stage process, whatever it is, that converts a mere shopper into an actual buyer. Of course, Young notes that such a process will only happen when the purchase actually demands a decision - nobody's going through 6 or 7 steps to buy a can of soda or a pack of gum. But I guess that's the difference between a brand-focused guy like Young and a sales-focused guy like me: for the brand-centric, building the consumer psyche to the point where there's real intent to buy is the biggest challenge, and thus garners the lion's share of ad funds. That's why we see so many commercials for stuff, and none of them actually say "look, just buy me already!" We're instead finessed into wanting, desiring whatever it is -- a car, the latest clothes, a new computer. But very few actually take the direct route and say "buy me now." I suppose it's because unless the viewer has an immediate need for the product, the message is lost and there's no "residual" value. With a brand-centric message, on the other hand, each commercial, print ad, banner on the 'net or other marketing device builds on previous messages, essentially assuming in advance that the viewer doesn't want to make the purchase right now, but might need to in the future.

My funnel, on the other hand, is more heavily weighted towards the top. I assume that, being a good brand marketer, the product's already going to be in the hearts and minds of my viewers. My job is to figure out how to turn all of that goodwill and built-up brand recognition into an actual sale of the product. That's one of the reasons I like digital signage so much - it's hard to find a more direct route to shoppers, or a better place to put a message like "hey you! buy me right now!" -- in as elegant and beautiful a way as possible, of course.

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Sunday, July 06, 2008

Don't cry over spilled milk, even if it's green

Milk is one of those products at the heart of American consumption. Most people purchase milk on a regular basis. We can gauge rising food costs by the price of a gallon of milk from one week to the next. There are many arguments about how milk can be advertised: is it hormone-free? What counts as a hormone? Is organic better than local or local better than organic? Who’s left drinking whole milk in the midst of an obesity panic? Should people drink so much milk?

The New York Times came out with a great milk story recently which dovetails nicely with my recent re-consideration of big box superstores like Wal-Mart. Costco, Wal-Mart, and Sam’s Clubs are all switching to a re-designed milk carton that’s square and flat on top. The new jugs are not only cheaper to produce, but they cut energy, transportation, and storage costs. The more familiar shaped gallon container is a pain to store and stack. They require plastic crates for shipping, which add weight and return costs to trucking operations. The new jugs fit together like puzzle pieces and can be packed together with a single layer of cardboard in between and shrink -wrapped, four layers high. There’s also less water use (no crates to wash) and the store can fit three times as many gallons of milk in store coolers than it did before. One other surprising result:

The whole operation is so much more efficient that milk coming out of a cow in the morning winds up at a Sam’s Club store by that afternoon, compared with several hours later or the next morning by the old method. “That’s our idea of fresh milk,” Greg Soehnlen, a vice president at Creative Edge, said.
The new plastic jug seems to be recyclable in most areas, but Costco has shifted towards using plastic shrink-wrap to encourage consumers to buy two gallons at a time. The plastic wrap, which is more and more ubiquitous at these stores (as a means of encouraging buying in bulk), definitely ends up in the landfill.

For consumers, the store-driven innovation is a mixed bag (or jug?). In Sam’s Club, the new carton sells for less than a “traditional” plastic gallon, but the company also has in-store demonstrations on how to pour from the new container because it’s easy to spill. The sales clerk recommends a “tilt” rather than a “lift” when filling a glass. Even with training and a reduced price, some people were still complaining about how easy it is to spill the milk, a problem that might, in another scenario, be considered a design-flaw. In this case, because these companies dominate the grocery market and have a commitment to lowering production costs and energy use, their design needs trump those of the consumer. It will be interesting to see how and when consumers adapt. I don’t see a mass rejection, a Costco Milk Revolt a la the Boston Tea Party, because the change translates into some savings at the checkout counter.

I’m going to get a few containers and see how they work, but for now, I’m sticking to a really old-fashioned approach: for the summer, we rely on a local dairy that delivers milk in glass bottles. We’ll have to wait until September to see how long it takes us to learn not to spill.

Thursday, July 03, 2008

Channeling the thrifty Puritan

It’s no surprise that recent retail news has focused on marketing to the budget-conscious consumer. In Marketing Daily, Sarah Mahoney asks, "Will women embrace their new role as Chief Thrift Officer?" In an attempt at positive spin, she suggests that women might be "enjoying" shopping for bargains in stores and online. This would be interesting news, were it based on some actual data.

Without a doubt, every woman I talk to (whether for research or in casual conversation) complains about rising food prices and the extra effort it takes to make economical choices, find bargains, and stock the pantry without huge sacrifices. Shoppers are definitely buying less and sticking to the necessities, but it’s not a source of pleasure. Things are not dire for everyone yet: the local farm markets are packed on weekends, people still talk about inviting friends over for barbecues, and the aisles of Whole Foods are still filled with those who can afford it. But is there a shift in sensibilities for the women who do the majority of this shopping?

"Women like feeling smart and efficient," and enjoy things like finding more ways to save money with "shopping on the way" strategies, says Marti Barletta, president and CEO of TrendSight, a Winnetka, Ill.-based firm specializing in marketing to women. And in many ways, she says, this economic funk presents more appealing ways to save money. "First, unlike past downturns and recessions that have been driven by job loss, this one is largely centered on gas prices," she says. "So no one feels singled out. Everybody gets a sharp reminder every single time they gas up their car, and no one is immune from this kind of sticker shock."
Despite TrendSight’s emphasis on market research about women, their conclusions about pleasure and control seem imposed rather than discovered. No one I spoke to mentioned enjoying cutbacks or budgeting for a household. In the everyday world of providing for a family, it’s important not to confuse responsibility with control. Research has definitely shown that women are not the “gatekeepers” to what is purchased: they may have some decision-making power, but their decisions are shaped mightily by family preferences, particularly men’s likes and dislikes. And even if there was some sea change in women's responsibilities, control over a shrinking pie is definitely not the same as having control over a whole pie. One is definitely more fun.

That’s not to say that a subset of the current population doesn’t embrace a do-it-yourself ethos. Given today's circumstances, we could certainly benefit from a popularization of ideas about Slow Food, “green” living, and local lifestyles. It's an attitude that can travel across economic lines. But these approaches require more cultivation if they are to become mainstream, so that combining pleasure with thriftiness is a general value. We can’t fault TrendSight for wishful thinking. But while there’s potential for wealthier women consumers to practice comparative shopping, it’s important not to gloss over the real sacrifices and hardships that some people are already facing. So what practices can take both into account?

In a recent New York Times piece, Ron Lieber highlights a somewhat upscale small grocery chain in Cleveland, discovering that stores can keep customers loyal by helping them buy quality goods in the most economical fashion. His list of things grocers and shoppers can do is terrific. Key pieces include having knowledgeable sales staff, figuring out how to cut waste, and finding alternative high-end food products at slightly lower costs.

It seems that the important news here is that engaging in thrifty practices without sacrificing high standards and quality products is a job for both retailers and their mostly women customers. But I’m betting most people will do it without the forced optimism and hokey title of Chief Thrift Officer.

Tuesday, July 01, 2008

Re-thinking Wal-Mart

We all have retail biases – stores we prefer, brands that we’d never buy, and products that seem to define our very core. When I analyze retail trends, I don’t try to hide my preferences (Apple anyone?) but I do promise to suspend my likes and dislikes until after I’ve done my homework. Sometimes a bias runs so deep, it’s almost impossible to overcome and it’s best to keep quiet. So far in this medium, I’ve carefully avoided Wal-Mart, except in the most trivial or passing reference, safe from judgment.

Wal-Mart bothers me for a number of reasons. First, I might be a bit of a retail snob now and then. I have plenty of yuppy and professional friends who don’t think twice about getting basic items from Wal-Mart.     I, on the other hand, am turned off by the big yellow smiley face and the "prices slashed," overstuffed aisles of things I don’t really need but am enticed to buy.  This is personal snobbery and I’m not proud of it, so I try to keep it to myself… but boy was I grateful when a new Target opened nearby.

Then, there’s the social consciousness side, where I’ve watched small local stores close, workers lose jobs and then (if they’re lucky) get lower paying ones at Wal-Mart. There are case studies that show how the company manipulates production and can push even a profitable producer over the edge in its demand for items regardless of seasonal or economic rhythms. There are class action suits and anti-union sentiments. There’s the disregard for transparency in the supply chain, meaning that we get cheap goods without knowing the conditions under which they’re produced. And finally, there’s the moral imposition, stocking guns and ammunition, but not certain kinds of "objectionable" music or birth control. All of these issues are particularly important to me as a social scientist who teaches about labor, business, global trade, and human rights. If I couldn’t afford the alternatives or I lived in a more retail-isolated environment, I’d reluctantly go there. But since these matters are at the heart of what I teach about community, I have an obligation to hold up my end of the moral bargain and avoid the place. (And yes, I know other big box retailers like Target are not immune to some of these charges. But it’s the volume of problems and the scale of Wal-Mart’s reach that draws my attention.)

What’s important here is that my biases do in fact, connect to a larger public sentiment. While there are still plenty of people shopping at Wal-Mart, there are significant polls that show even the mid-to-lower income people who frequent the store are disheartened by stories of employee mistreatment and community disruption. Up until recently, the company seemed, at best, indifferent to these complaints.

But then Wal-Mart went and got all environmental on us. First there was the announcement that they would begin offering organic foods and produce in their supermarkets.  Now Wal-Mart has drawn the eye of green groups everywhere by replacing all the lightbulbs in stores, working on overall store energy efficiency, and selling more “green” products. The CEO has explicitly defined Wal-Mart’s role as a "good steward for the environment." Their new long term goals include 100% renewable energy, zero waste, and 20% reduction in greenhouse gas emissions.

The changes are not all about ecological goodness: there’s been a marked increase in the company’s overall charitable donations.   They’ve made some small progress on opening up about their supply chain information.   Partly as a result of the class action suit, they are also committed to hiring more women and people of color at the management level.      Is this enough to change my mind?   Or is it simply, finally, good public relations?   Women’s Wear Daily does an excellent job reviewing some of the pros and cons of Wal-Mart’s new moral face. But, rightly so, the critics are not totally convinced yet:
"Wal-Mart has made some progress, but the progress is not what we should expect from the largest company in the world," said David Nassar, executive director of Wal-Mart Watch. "It gave $298 million to charity. Americans aren't looking for a handout. We work hard and expect to be treated fairly by our employer. Wal-Mart needs to reform. It needs to reduce the amount of energy it's using for every dollar it earns. Producing so much in China increases Wal-Mart's carbon footprint. Wal-Mart heard the criticism and is trying to do something to address it. All the changes it's made so far have passed costs onto someone else, whether it's a health care plan that's increasing costs for workers or environmental initiatives that pass costs on to suppliers."
Whether it’s PR or deep shifts in practice, I’m not sure it matters as long as the changes happen.   So, while I’m still going to drive by the Wal-Mart on my way to the farmer’s market or the local shops in the quaint town where I’m living, I am going to start to pay close attention to what’s going on in the big box.   As the marketing executives in Sam Walton’s company probably know, their latest actions may not make me (and many others) into a new customer, but it might stop me from thinking – and talking – negatively about the low price giant.   And that’s worth just as much.