Thursday, August 21, 2008

Following consumer trends when there aren't any

It's a bit dizzying trying to follow retail market trends in this economy. One day it looks like Wal-Mart and the other big box discounters are doing well. The next, people are cutting back. Today, Marketing Daily reports on a study by Cramer-Krasselt that basically demonstrates what common sense should tell us without the research expense: under tough economic times, it's hard to predict what consumers will do.

This downturn is like no other in generations," the agency notes in its study, "not because of its severity, but because it has given rise to a new set of consumer beliefs." It isn't just that people are frustrated (as 50% of the survey's 500 respondents are), worried (48%) or annoyed (29%). And it isn't even that the sense of financial security is so weakened, although 61% of the people polled feel less financially stable compared to a few years ago, and only 26% of people feel very secure about their financial future.
Consumers are simply following patterns they've already established, sticking to certain brands in some cases, going with store label and generics in others, and cutting back in places where they can. The lack of predictability is bound to create a bit of frenzy in the retail marketing world: what do you do when you've developed a whole industry around reading behavior that now seems hard to read? At the same time, there's opportunity for creativity. It's useful to note that people are still spending -- and they believe these trends will not go on forever, an important factor in creating brand loyalty. If they can count on a product now, they can count on it later, too. This holds true for luxuries as well as necessities: Despite the complaints about the new 3G iPhone, the Apple stores I visited in three northeastern malls were packed with customers every time I visited. It's a desirable product with some long term viability, especially as new reports suggest greater customer satisfaction with Apple than any other computer products. The Genius Bar was buzzing and appointments were filling up fast. The rest of the malls had a stale quiet air in comparison (admittedly, this was a week or two before the Back to School hype began to kick in. This week, I notice, the parking lots are filling up). NPD reports that consumers are choosing more judiciously from among these offerings, too. Not everyone needs a new backpack this year, despite the endless variety rolled out in all kinds of stores.

Although it may seem contradictory, there are two simple lessons for marketers in this climate: one, stick to what works and two, be creative. Anyone who can master that relationship can stop worrying about where the spending may happen next.

1 comment:

Replenish QR said...

To stay up in the competition, companies must conduct market research in order to maximize its performance. Understanding the latest trend can help companies avoid pitfalls.