Yogurt’s a mainstay in our household – a regularly purchased product – and we’ve had a fair amount of brand loyalty over the years. Originally a local brand in New England, Stonyfield Organic went over well when there were small kids in my house, since it could be sweet, smooth, and without artificial ingredients. It wasn’t my kind of yogurt – not tart enough and a bit too gelatinous – but it’s better than a lot of what is available in your average grocery store. Recently, yogurt brands have been expanding out again (beyond the unfortunate direction of looking too much like a bad version of dessert, from the turn-your-tongue-green and sell me a cartoon character to the what-is-that-crunchy-chocolate-crap anyway) now there’s a renewed interest in yogurt as an actual health food --- priobiotics are one of the best selling functional foods out there. And greek yogurt –the “real” stuff with a richer texture --- has gone mainstream, too. I’m still buying the Stonyfield and a greek active culture yogurt for our regular use, but I’ve stood over the “probiotic” ones for a while, contemplating a taste. So far I’d resisted because they only come in the tiny packs and I'm suspicious that the benefits have been inflated. But the ad campaigns are definitely wearing me down, as I see Jaime Lee Curtis hawking the stuff with a big smile. The clincher was when I was offered some at a hotel breakfast bar this weekend, which I happily ate, especially when it had the words “ALL NATURAL” written across the top.
In the retail food and beverage market, natural and functional seem to be steady sales and growth areas. Although “natural” has a vague and watered down meaning, it’s clearly become more meaningful to consumers than “fortified,” “low-calorie,” and “low-fat.” According to the Mintel Global New Products Database, "Food and drink manufacturers today realize that natural and pure have become healthy eating ideals, as people look for holistic, genuine nutrition they can trust." Functional foods also have that edge – they have the tinge of science and nature all in one (Kraft has a LiveActive Chewy Granola Bar that smacks of healthy snacking while providing the consumer with all the fiber and probiotic culture you simply can’t find in potato chips). Ethical (eco) foods are also still a growing concern among consumers, so add that in to the mix.
I’m not Gen Y by a long shot – my kids and students are, though – and their food preferences match up with the trends described above. The Center for Culinary Development and Packaged Facts did some qualitative studies and found “their penchant for customizing foods through adds-ons or mix-ins (the reason they love fajitas and other "build-it-yourself" foods); their dedication to local, organic, fair trade and vegetarian/vegan foods (reflecting their belief that food choices can make a positive difference in the world at large); and their firm belief in the value of health/wellness and functional (including anti-aging) foods and beverages."
Sure enough, I looked around the classroom the other day and saw three women eating the same yogurt I’d had at the hotel – and the ones I bought for myself are mysteriously disappearing from the fridge awfully fast…. Honestly, the one I actually tasted was good, but until the science catches up with the marketing (or I magically become Gen Y), I think I'll probably go back to my regular brand.
image and an excellent analysis of the yogurt health claims from the great science magazine Inkling's Inky Circus Blog.
Friday, January 30, 2009
Back to Natural: Focusing on Functional and Generating Generational Sales
Thursday, January 29, 2009
Do You Think “What You See” Influences “What You Get”?
We know the statistics: Wal-Mart's in-store TV network is now the 5th largest broadcast network in the US, after NBC, ABC, CBS and Fox. We know that YouTube and social video sites are at the top of the pack in terms of traffic, loyalty and "stickyness." And we know that "kids these days", say anyone under 35, are tuning in to video sources on their cellphones and PDAs while on the bus or train, in class, and at work. While all of this distraction might have kept people busy, and thus not spending money, interestingly, “among the benefits of videos touted by web retailers are a lower
number of abandoned shopping carts, reduced return rates and higher
sales,” said Jeffrey Grau, eMarketer senior analyst. Further:
The question I have is whether there's a causal relationship between video viewing habits and purchase intent (or brand perception, or any other goal/measurement of success). Are video watchers naturally inclined to be more accepting, hence their attitude toward watching the video in the first place? Or are we simply seeing the self-selecting dynamic play out (as Evan notes himself)? Or maybe it's novelty. I guess I'm wondering how much selling the video itself is doing, and how much is coincidence.[I]t’s clear retailers are just beginning to understand
the sales power of in-store videos, which is nice, because consumers
are just starting to understand the informational power—and, yes, the
convenience—that well-done videos can offer. Will these two trains
meet? And I do not mean in a Gomez Addams model train set kind of way.The economy may also play a role. I’m hesitant to say that, because columnists, marketers and politicians (how’s that
for a trustworthy group?) today seem to find in the weak economy the
magic answers that will explain everything. (”Traditionally, Brussels
sprouts are not big sellers in school lunch programs, but with the way
the economy is headed, that’s going to change.”)
Any thoughts?
The Web as The Source: Consumers, Information, and Trust
As we’re poised to watch a whole slew of expensive Super Bowl ads, undoubtedly focused on entertaining and emotionally enticing viewers, it’s worth stepping back a moment and considering that as fun as these ads might be, lately most people are making purchasing decisions using their brains and not their feelings.
Whether you consider this a new insight or a basic tenet of human consumption in the market era, consumers are becoming more focused on gathering information about products and brands. To me, it’s no surprise, but the accessibility of knowledge via the internet and social networks makes this a whole new ballgame for marketers and retail sales. Certainly there’s a glut of information out there -- and people struggle to decide what counts as an authoritative voice to guide them through purchases. (You can even see the Madoff debacle as an extreme example of how easy it is for the unbelievable to appear ordinary). One result of the current economic situation is that discernment is rising to the top of desirable skills for consumers. No one wants to make mistakes when they’re on a tight budget.
In a recent survey of consumer micro-trends, Penn, Schoen, and Berland Associates find that consumers no longer trust television ads or news as a means of gauging a product – and they’re more likely to trust online sources than store clerks for information. Again, no surprise when most retail outlets don’t work to create the sense that their sales force is there for the consumer rather than the company line. As I’ve pointed out in prior posts, those that do (Apple, for instance) are more apt to generate consumer loyalty. Blogs that provide retail insights (like this one, we hope!) are also a growing influence. Not that we have a buyer’s revolution on our hands, but it’s about time advertisers jettisoned their outdated notion of what consumers are really like.
Just to keep things in perspective, keep in mind that the micro-trends survey finds that most people are spending less than half an hour in product research online. That’s not a huge amount, but it also probably depends on the item in question. It also appears that it actually works when companies don’t presume that consumers are ignorant of technical information. Penn et al explain:
“Information-seeking is not just an activity, it's a way of looking at the world. New info shoppers are proud of the progress they have made in putting facts over pablum. More companies should treat their customers as Dyson did and let them in on the secrets of their unique success. And they should invest more than ever in helping form their consumers into citizen corps, arming them with PCs, cameras and even asking them to use the phone's new video cameras to document their product usage and put them online.”The biggest obstacle in advancing a new approach seems to be the antiquated notion that an informed consumer is an unwilling consumer. Trust, it seems, is a two-way street.
Image source: Smart Shoppers in the 1940s, The National Archives.
Wednesday, January 14, 2009
Marketing Up the Scale: Foodies as Economic Indicator
As a writer and a market analyst, I am working hard to avoid using the word “recession” or even the less ominous phrase “current economic climate” when describing what’s happening in the retail world. Perhaps until things change, we can just reach a mutual understanding that this is the context in which we’re all working?
That said, there are some interesting marketing trends reaching for two segments of the market – those who are somewhat insulated from current conditions and those who are affected more directly by a “fear of falling.” In this case, I’ll focus on the upscale side.
Food purchases are some of the best indicators of people’s attitudes about spending. Certainly restaurant-going is way down and there’s a fair amount of concern in the hospitality industry about who – or what – will survive the...well, you know the phrase. The new President’s economic stimulus plan (here it is in full detail) has retail and hospitality high on the list of industries that ideally will receive some help. But general food expenditures, outside of restaurants, remain robust in some sections of the market.
Despite a very recent spike in Baby Boomer savings, Packaged Facts reports that spending is still high among “foodies” (a term that I hate almost as much as I bet the foodies do). Natural Specialty Foods Memo also points to good sales at UK premium grocer Waitrose and other natural upscale food stores over the holidays.
Chocolate, on the other hand, seems to be benefiting from its association with good things in many of those foodie categories. Again, Packaged Facts finds that sales of premium chocolates remain high: from spicy (high end chocolates infused with chilis) to gourmet (premium microbatch bars) to natural (fair trade organic) to healthy (dark chocolate’s purported antioxidant properties).
The point for retail marketers to take home: Well, we can’t all survive on wine and chocolate, but many people, despite a desire to save and scrimp a bit, would prefer not to do without it. Marketing consumables as both a savings and a luxury is where it’s at.
Tuesday, January 13, 2009
Department Store Dreams: Fantasizing the Future from the Past
Le Bon Marche and the interior of the old Samaritaine in Paris
In their heyday, department stores were “palaces of consumption,” originally modeled on the great World Exposition of 1900 in Paris. Huge, turn-of-the-century fairs and expos helped usher in the consumer revolution, beginning an era of merchandising centered on fulfilling people’s fantasies through purchases made in a dream-like atmosphere. The rise of the department store from the mid 1850s to the end of 19th century was nothing short of a major revolution, not only for business but also for all of society. In Au Bonheur des Dames, writer Emile Zola skillfully describes these exotic and new places, bursting with fabrics, furs, and frills, with Oriental carpets and curtains recreating a harem-like setting where people were drawn in by awe and amazement. To many, the department store was the home of the democratization of luxury and the fantasy of wealth.
But more than a hundred years later, things have changed and some are wondering about the possibility that department stores are at the end of their lifespan. Both the experience of shopping as a form of entertainment and the availability of affordable beauty have diffused to different sites. Even prior to the current economic downturn, hints that the department store was not fulfilling people’s fantasies abounded. Specialty stores in cities and suburbs have increased their size and scope, whether it’s books, electronics, or high-end fashion. Malls, on the other hand, which are the traditional mooring station for the department store, are working hard to stay afloat. The malls that survive are often smaller, more focused on being entertainment and recreation centers, and provide more leisure rather than shopping activities (restaurants, cinemas, fitness centers, play areas, and day spas all do well, whereas specialty fashion stores and the big anchor box stores do not).
While many critics will point to Wal-Mart as a key factor in department store decline, it seems more likely that the experience of shopping as a leisure and pleasure activity has changed. When the original department stores opened, there was nothing else on the landscape that offered the same kind of variety, exoticism, and glitz in one potentially affordable site. People went to see the window displays and merchandise much in the same way one might go to a museum or show. La Samaritaine in Paris, one of the original department stores full of the latest fashions, was unable to stay out of the red and now awaits transformation into luxury condos. Today malls must add musical fountains, interactive game centers, and IMAX theaters to draw in traffic, none of which is enough to encourage wary shoppers to come out and spend money. What remains of the dream world of consumer fantasy?: Retail shopping in urban centers; Online inspiration provides almost instant gratification (and the collective experience via social media; Speciality stores really do specialize (not a bad thing). Frankly, the world is more densely populated with opportunities for consumption.
The department store, like the mall, may be at a particularly difficult point in its life cycle, occurring at an unfortunate moment in economic and social history. It will take some innovative thinking – and some real awareness of the long-term needs of people and their communities – to resuscitate these retail icons. Whether the new palaces of consumption are real, virtual, or some exciting combination, the story is far from over.
Thursday, January 08, 2009
Are you a cart puller?
No, not in the pack mule sense of the phrase, but rather in the "move down the checkout aisle pulling your shopping cart behind you" sense. If so, you may be missing a big chunk of marketing messages trying to get you to make a few last impulse purchases before you pay.That's what boutique market research firm Relevation Research concluded (and AdAge reports) after studying shoppers moving down the checkout aisle. While "pullers" as they're called (and you can count me among them) account for about 74% of shoppers, remarkably most marketing materials and POP around the checkout aisle are designed for pushers -- those folks who push their cart down the checkout aisle (why they do that I'll never know. But then, I'm a puller). The critical takeaway ias that, "The front of the store is a department, accounting for 1% of sales or more." That's according to Nan Martin, a co-founder of Relevation, who continued, "It's designed for consumers to make impulse purchases as they push through. If you're pulling, your back is to the merchandise most of that time."
I can see this kind of information putting retailers in a bind. It's definitely not intuitive or "pretty" to have POP and other promotional materials face backward. And while many displays are designed to be shopped from 360 degrees, few visual aides are designed to be seen from 360 degrees. And if you decide to simply double up the number of ads in hopes of attracting the attention of both pushers and pullers, it's going to start looking very noisy, very quickly.
On the other hand, one must imagine that retailers are happier knowing what's going on than not, right?
Right?
Tags: shopping, retail marketing
Friday, January 02, 2009
If the shoe fits: spending less, selling more, and doing good
Surprisingly, as I look back over what I’ve written about for In-Store and Retail Media News, I’ve missed one topic very near and dear to my heart: shoes. That’s one that perhaps stereotypes me as a woman shopper (although not of the Carrie “Sex in the City” Jimmy Choo type – I’m more of a Columbia sportswear/Dansko kind of gal). But shoes are a great gauge of retail market sales, so I’m happy to find something to say about them as the year winds to a close.
Brandweek just profiled Zappos.com as an online shoe company that’s done exceedingly well with little to no advertising budget. Indeed, the biggest print ad I’ve ever seen for Zappos was no more than a three-inch sidebar in the New Yorker. Word-of-mouth and excellent customer service are the key factors that make Zappos successful. Indeed, my own retail happiness comes from knowing that I will be treated honestly and decently by whomever I talk to if I call to ask about an order or email a question. I’ve not had the pleasure of a bar sitdown with CEO Tony Hsieh, like some other customers have, but it’s not outside the realm of possibility, whereas the ten things I’d really like to convey to the executives at the Gap, Target, Starbucks, and Apple will probably only ever make it as far as this blog. There’s a lot of hype about social networks and retail sales, but Zappos is one of the few companies where it seems to actually work. Partly it’s the item in question: shoes are deeply personal but highly coveted fashion items that are necessary and ultimately functional (okay, well, for those who have learned the secret to walking in those Manolos, that’s not true). Partly it's good sales strategy that's accessible to even the small scale retail business. If you want to know more about how Zappos manages to do what it does, for a mere $39.99 a month you can subscribe to their new video question and answer service that’s a lot cheaper than a marketing consultant firm.
For another shoe company of more modest means and goals, take a look at Tom’s Shoes. I have been a fan of Tom’s for a long time. They make a single product in a million varieties and have a single important mission: to help shoe the world. Tom’s makes a stylish sustainable shoe (not Jimmy Choo or Dansko stylish – more “I’m a yoga goddess” or “I’m Brad Pitt and I can wear whatever I want” stylish”). Even if you personally don’t love these (and I do), you probably know someone who does and you’ll love the reason why Tom’s wants to shoe the world. For each pair of shoes sold by Tom’s Shoes, the company donates another pair to a child in a less developed country where podocondoitis is common. This disease, transmitted through high levels of silicate in the soil, which travels through the bloodstream to create lymphatic problems, is completely avoidable if people wear shoes. Tom’s has brought thousands of shoes to South Africa and Latin America. If you still haven’t finished your holiday gift giving or if charitable acts are part of your New Year’s resolutions, you can help Tom’s reach its goal of 33,000 shoes sold before the holidays end. Like its big corporate counterpart, Zappos, Tom’s Shoes makes great use of Facebook and MySpace, where fandom helps spread the word and provides excellent social network buzz about these cool shoes. There's a lot of marketing noise about the power of cause-based sales, but Tom's Shoes really walks the walk, as they say, in that the company's existence is centered on the cause as much as on the sales. Starbucks will still go on selling coffee long after their Red marketing foray into ending AIDS in Africa. But Tom's will always have a purpose AND good shoes!
All in all, here’s hoping you stay well heeled and inexpensively marketed for the new year.
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