Retail Customer Experience: ISME 09 – Seven Tips for Marketing to Families During a Recession
By James Bickers,
Editor
Through
a special arrangement, presented here for discussion is a summary of
a current article from Retail
Customer Experience,
a daily news portal devoted to helping retailers differentiate the
shopping experience.
In a Wednesday
afternoon session at the 2009 In-Store Marketing Expo, retail consultant
Elizabeth Harris of consultancy Rivet laid out a wealth of statistics
on how the recession has changed the spending habits of the typical modern
family, along with a practical list of seven questions to ask when planning
a marketing initiative.
“People are
really questioning the essentials of the American dream,” she said. “We’re
seeing a loss of confidence.”
That may seem
self-evident, but the numbers she went on to share from a new survey
reveal the depth of the situation – and the differences between how men
and women perceive what the recession is doing to them. Fifty-three percent
of women surveyed said their situation is worse than a year before –
while only 38 of men agreed. And 73 percent of women say the recession
has fundamentally changed the way they think about money, a change that
will likely endure once the good times return.
For retailers
and marketers, getting women to feel good about their spending is especially
crucial, since 80 percent of family purchasing decisions are made by
women, a role Ms. Harris calls the “Chief Purchasing Officer” of the
home.
Ms. Harris
said we have moved from a “consumption economy” to a “considered economy,” and
that women are getting creative for all purchasing decisions above and
beyond the essentials (health care, food, shelter). That means clothing
and magazine swaps with friends, buying in bulk, and putting off buying
non-essentials longer than before. More than two-thirds reported that
they were eating out less, and half were buying fewer prepared/convenience
foods.
“When the economy
is bad, women don’t stop shopping,” she said. “They shop differently.”
What’s different?
A drastic uptick in private label brand usage, more coupon clipping,
and more online research of purchases before getting in the car to head
to the store.
Ms. Harris
wrapped up her presentation with a wonderfully practical list of “Seven
things to ask yourself when planning a new marketing campaign.” The language
assumes that you are marketing to women, but the ideas are universal:
- How can you help her have
fun with her family and mind her budget? - Can your product or service
allow her to do more with less? - How can you take advantage
of rituals they are having to forego? - How can you take the risk
out of the purchase decision? - How does this new landscape
change your competitive frame? (i.e. has the recession given you new
competitive opportunities – bundles of low-cost personal care products,
merchandised and marketed as an alternative to going to a spa, for
instance.) - How can you turn a “want” into
a “need”? - How can you merchandise
around solutions? (Hasbro’s “Family Game Night” initiative is a good
example of this.)
Discussion Questions:
Of the seven tips for marketing to families during a recession mentioned
in the article, which ones are most important? What considerations
might be missing?
The item on the list that resonates the loudest to me is, “Can your product or service allow her to do more with less?” There is no doubt that consumers are managing more closely to a budget than in the past and questioning the need for every purchase.
At the same time, the aspirational mindset of shoppers didn’t disappear overnight. So the challenge of “more for less” is a good one for marketers and retailers: How to convince the female shopper in particular that she is getting more for her money, and maintaining her family’s lifestyle to the best of her ability. The genius of Walmart’s tagline for the past couple of years (“Save Money. Live Better.”) is that it speaks to both of these goals.
Going through the weekly grocery circulars, I have noticed that many (if not all) grocery chains have some sort of ‘Feed a family for under $XX’ special promotion. Walmart has televisions commercials touting the fact that you can take lunch to work for under $5 a day and save about $500 in a year.
The value proposition is a now a critical component to the customer experience. Hasbro’s Family Game Night tugs at the heart strings and now that the consumer is even more vulnerable emotionally, this campaign hits the proverbial nail on the head.
Got it. World’s changed forever. Americans to forgo American dream and settle by making do. Retailers who chart this course can feel “smart” even though I think all the anecdotal information from such surveys is going to have limited upside. Retailers still have to SELL the American Dream if they hope to stand out and be profitable.
Helping people do more with less, taking the risk out of purchasing and changing a competitive set are the 3 things that retailers, particularly in food, can do to stay abreast of the changing consumer.
More with less can include bundling meal ideas in with your weekly specials, delivering recipes on less expensive cuts of meat and stocking family size or bulk items for consumers.
Sampling your Store Brand items frequently can help take the risk out of moving consumers to your products as well as standing behind those products with advertised guarantees.
Changing the competitive set will involve an analysis of your competition and looking for the niche that sets you apart. This may need to be a multi-faceted and fluid strategy that can change as the market and the competitors move.
All seven are good advice in any economy, but number six is the most powerful. When someone perceives something as a need rather than a want, that trumps most everything else.
The author points out that women are feeling more negative about their situation versus men. Feeling negative equals little or no discretionary spending. When you add that to the fact that women make the buying decisions a majority of the time, getting them to spend becomes a matter of survival for many retailers.
But, how do you convince a woman that a $300 purse is a necessity? Now that’s a challenge.
Great article. It highlights a number of important insights into consumer thought patterns and spending habits. Of the seven points, I think that the first two are the most important. Every mom wants her family to have fun, regardless of the economy. If your product or service can do that within the constraints of her budget, you have something valuable to offer.
The one item I would offer is: does your product or service bring the family together? With so many families being stressed by economic circumstances, it’s important to bring the family together, both physically and emotionally.
Lots of “guilt” going around on the shopping trips. The great comedians have always said it right–“leave ’em laughing.” Smart retailers can take a tip from this thinking, as they can still help their customers save, emphasize the “need” benefit, and support their household–by helping them smile.
While I don’t dispute the observations in the presentation, I would question how they addresses the marketing opportunities. For example, “changing a want to a need” smacks of the kind of manipulation all consumers are wary of.
Instead, I’d suggest getting further into the consumers’ heads and better understanding their wants and needs and addressing them directly. There are enough products out there (retailers want to reduce skus) to position in ways that resonate with shoppers.
New products have a chance to align themselves with how consumers view their world. For those products which try to position the shopper, rather than the brand, the struggle is going to be uphill at the least.
With access to blogs, twitter and press coverage, I’d counsel for developing a course of action that focuses on what people want and how they want it; a message that is relevant to them in a medium where you can reach them.
The fundamental shift in consumer spending is the definition of need and want. Many items have been moved from the need category to the want category. Even as short as the American consumers’ attention span is, it will be years before these new wants become needs again. This will be especially true for the Baby Boomers which are our largest spending group. On the list of 7, the first in importance is adjusting a retailer’s product mix to the new reality. This is where the competition has been going and a retailer can be left out in the cold by just standing still.
In the long run, the dream will not go away, it is just going to be different. We are all still human beings and we have wants and needs. But just as in life, values change. We are now in a cycle of changing values.
The only comment I would make is that I think marketers would be mistaken in viewing these female consumer needs as recessionary only. There’s significant evidence to suggest that that’s not the case.
In fact, a 2008 study by the Boston Consulting Group (tinyurl.com/yhbywga) of 12,000 women in over 40 countries suggested that women are generally concerned about their financial well-being and stability. The majority feel that they lack enough savings for retirement. Furthermore, they take on the lion’s share of responsibility for decisions inside the home, while juggling their careers, adding to the overall stress.
Consequently, most of the research I’ve seen indicates that women generally gravitate to brands, stores, and even salespeople, who they feel have their best interests in mind. They want to deal with companies that can help them make financially responsible decisions. In other words, trust and support figures prominently in the purchase decision.
These are consumer needs that companies should be attentive to on an ongoing basis–not simply when times are tough.
The research was interesting. I found some additional research that I thought everyone would also find useful.
68% of US households used a coupon in the first six months of 2009: Source – Nielsen’s “Manufacturer Coupon Sourcing” study.
In 1992, coupon redemption peaked at 7.9 billion coupons. There was a decline since then until the first half of 2009 when it rebounded 23%: Source – Inmar Industry Trends
75% of respondents stated coupons had at least some influence on their decision to purchase a new product: Source – FMI “2009 US Grocery Shopper Trends”
Affluent households tend to be heaver coupon users: Source – Nielsen’s “Manufacturer Coupon Sourcing” study.
Buying store brands (Private Label) or lower-priced brands instead of national brands is up over the last year: Source – FMI “2009 US Grocery Shopper Trends”
So what could be a possible conclusion? Retailers and manufacturers have a unique challenge and opportunity in 2010. By working together, they can create programs that incorporate coupons, merchandising, and even a retailer’s private label to create a win-win-win.
Retailers, get ready for a whole new dynamic. Consumers’ addiction to credit, and the fees that come with it, is abating, and the article makes interesting points about the changing nature of the shopping experience.
The lessons here aren’t just for luxuries, but for every format. My mother says that visiting the meat counter at the grocery store is like visiting the Smithsonian–you can look at it, but you can’t take it home. Watch retailers prepare a new shopping experience that results in affordable purchases.
There is no doubt that consumers are recalibrating. While this article focuses on the search for enhanced shopper and consumer value, there is a similar recalibration happening when it comes to values. For some, over consumption no longer equates with success. While frugality is the buzzword, so are the renewed concerns for health and the desire to spend quality time with family and friends.
Marketers need to address both “V” aspects of consumer recalibration (value and values), plus a third V: being valued. Successful marketers will be those who become/stay more relevant than their competitors. The 3 Vs of relevancy will include the two noted, namely, delivering value (discussed in this article) and demonstrating the organization’s values, as well as showing customers that their business is valued. This economic crisis provides many opportunities to the marketer who never lets a good crisis go to waste.
I agree that “Doing more with less” is the call to action here for marketers. “Having fun with your family” seems a bit of over promise for many brands. Sure, it’s easy to see how many would fit in with family activities/togetherness. But those programs could probably benefit from real people testimonials about their lives, with the brand being “placed” in the story.
It’s the experience. Making it fun while offering value covers all the rest of the suggestions. There is enough negative to go around. If any retailer can create a positive, fun environment today while creating value, they will find a fit for all the others.
It’s sort of like leaving a restaurant thinking only about the great meal and service while less about the tab.
Today, folks need to feel good and want to feel good about something. All the forces surrounding them suggest the negative. They are looking for opportunities that make them feel good about who they are and what they are doing and less about all the issues that take away from it.
Give them something fun that they feel good about–you’ll be doing what few others are doing for them. You’ll win them–if not instantly–quickly.
Hard to pick one of those (as you can tell by the scattered response), but it seems there’s a big one missing: maintaining brand integrity. In other words, don’t just drop prices across the board to prove that you’re nothing more than a commodity. Be selective, and keep your product assortment in the classic triangle, with some products that surprise and delight the down-trodden consumer. In the end, proving that your brand has more value than your competitor’s in ways OTHER than price (service! environment!) will be the most valuable goal you can have.