Transcript 21st Century Tools for 21st Century Trends

Silver Linings…
Ten consumer trends that will help you create
new Housewares business in the next 12 months
Robin Albing
Albing International Marketing
March 23, 2008
BACKGROUND
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Consultants to consumer products companies for
over 20 years
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Specialize in home furnishings products
(furniture, housewares, appliances, home textiles, floor coverings, tabletop/gift,
lighting, kitchen/bath cabinets/fixture, home office, home electronics)
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Also, clients in fashion, jewelry, food
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Planning, research, implementation, development
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AIM’s Research is increasingly a hybrid approach on
all levels
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And a lot of it these days is online…
Ten consumer trends that will help you
create new housewares business in the
next 12 months…”
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Parsimony is Chic
Treasure Troving
Go Green, but
Make Me Smart, Please
Hope Floats
We Are All In The Same Boat
Alternative Altruism
Mining Local Resources
Ethics Skeptics
Creative Innovation
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At AIM, we are long-range thinkers, but
these times are different…
Our clients need answers to help them fast
So we conducted some major research
very fast to provide them with some
“shovel ready” answers
At the same time, when we make specific
recommendations to clients on a
proprietary basis, they include long term
implications
What do some of the current big
names think?
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Tom Friedman – Use recession to re-tool
economy and environment
Steven Levitt
Malcolm Gladwell
Daniel Pink – Entering a new age moving
from Information Age to Conceptual Age
Scott Anthony – Business model
innovation
“The Great Disruption”
All are essentially optimists
What are Consumers really
thinking about spending in 2009?
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Online Surveys – Jan, Feb, Mar 2009
• Survey samples of 900 – 2000 each
• National distribution (geographic, ethnic, age,
primarily female)
• Focused on middle class
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Online Focus Groups
• Two groups conducted each month
• National distribution
• Focused on middle class
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Kitchen Island – March 2009
• National participation
• Limited international input
Online Survey
With hybrid research design, a
quantitative survey provides
context...
•Focus group screener question for floor care - must own cat and/or dog
•Return to look at pet owners v. non- pet owners
Online Focus Groups
...while online
qualitative research
provides depth on how
and why.
Why did you choose
Store 1 or 2 over the other?
love variety
store 1 is more neat less cluttered than store 2
I chose store 1 because everything is neat and in place
kid friendly I always have my son with me!
I choose 1 because 2 looked expensive
I choose store 1 because it does not look too cluttered
I love glassware you can never have too much
Williams Sonoma carries excellent cookware from Mexico
and Spain
something that never goes out of style
I choose store 1 because it look cleaner and more elegant
Store 2 to me seems more of a festive environment,
rather than a chore. It invokes a feeling of
creativity to me.
and Italy
Online Focus Groups
BEHIND THE VIRTUAL MIRROR
IN FRONT OF THE VIRTUAL MIRROR
Virtual
Mirror
Secondary Client
Washington
Texas
Minnesota
California
Primary Client
AIM Moderator
Iowa
New York
Virginia
Florida
AIM Staff
Setup/Help
Atlanta
Colorado
Kitchen Island
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Bi-monthly consumer panel to discuss current
projects and implications
Originally physically sitting around a kitchen
island
Limited by time and place
Single physical location
Need to be flexible and responsive to client needs
Kitchen Island
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Evolved from audio conferencing to video conferencing to
Skype to discussion group software to real-time
Now, we sit around the virtual table with consumers from
all over the world
Can obtain instant feedback during product/program
development process
And can get info on several projects at once
Parsimony is Chic
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Frugality is the new ostentation in a cash
strapped world
• Eye-popping expense accounts, showy jewelry,
McMansions—are out and frugality is back in fashion…
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“Undercover Rewards”
• Can’t be obvious – women are rewarding themselves in
small treats that are not obvious to others – fabulous
face/hand/foot creams, luxurious underwear, facial
treatments
• Expensive designer handbags are out,
oversize colorful plastic handbags are
popping up at very high end events
• OK to treat yourself, if you find
a truly stunning deal – which can be
found with the deep discounts out there
Parsimony is Chic
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Pleasure that requires big cash outlay
back burner in many households
• Dream trips to Tuscany, big fishing boat, big screen TV =
delayed big-ticket items
• For some, this recession may put those dreams on hold
permanently
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But, “I still want to feel good even if it’s not the
same way as before…”
“Small things that make me feel good are OK.”
12 years ago, Faith Popcorn called them
“small indulgences,” but today
they’re different
• Even impulse purchases must provide value
• Can’t be frivolous
Parsimony is Chic
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Successful small indulgences in
housewares might be products that offer a
fashion “pick me up” or they might be that
very special item consumers save up for
or buy in increments…
• “I just bought some beautiful cloth napkins at
Williams Sonoma…make my everyday dishes
look classy…”
• “I am saving up for the $350 food processor”
• “I want a set of really good knives, but I am
going to buy them one at a time, about every
six months.”
Treasure Troving
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Discounts and deals are
everywhere, you just
have to look
People are bragging
about the deals
Treasure hunts are fun! But is it
habit forming or just a fad?
• “I will NEVER pay full retail again.”
• “My friends and I love the dollar stores…there’s a lot
of junk, but you can find some good stuff there, too.”
Treasure Troving
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It’s a channel story – consumers seek out where
the treasure hunts are taking place
• Using social media to engage influential fashion bloggers
and customers alike
• Presence on Twitter, blogs – instant update on deals
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Any TJ Maxx/Home Goods shopper knows things
are going to be scattered and disorganized that's the name of the game
Re-sale is way up (Craigslist, tag sales, flea
markets) and upscale thrift shops are cropping
up even in small towns
Smart upscale antique dealers and interior
designers are sprinkling bargains among the high
ticket items and offers – a growing channel for
home goods if the owner understands the mind
of the consumer
Treasure Troving
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Couponing websites – people who never
bothered about coupons and affinity programs
are now using them
• “I used to be too busy to worry about saving a few
dollars, but now I can see that it really adds up. I
use my grocery card, my Borders card, my Best Buy
Rewards card, everything…”
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Soon will be able to apply coupons to grocery
cards, now limited
• Websites cover promotions 24/7,
• Average time spent at one site 88 seconds, average
savings $16
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More than just bargain hunting
• “I feel stupid if I pay full price.”
• “I don’t feel guilty if I discover that deal.”
Treasure Troving
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It’s also a mindset…people are getting beyond
the snobbery of the high end retailers
Even spoiled teens are discovering
bargain hunting
• Turning to thrift shops and bargains
at Target and Forever 21
• If there's a luxury item they just can't live without,
they're trolling the Internet for the best possible deals,
and waiting for the price to drop until it falls within a
budget they've set for themselves
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Real treasure hunts
• Increase in lottery and sweepstakes participation
• Gold parties in Orange County
• Treasure hunting DVDs (get out your metal detectors)
Make Me Smart, Please
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People want to act smart, but they are
feeling stupid these days
• “I thought I was a smart investor, but look at
my 401K…please make me feel smart again.”
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And it’s stupidity combined with fear
They are also distrustful
• “Why are those guys who lost my
money getting million dollar bonuses?”
• “Why can’t they build a car that people
want to buy?”
Make Me Smart, Please
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Depression Era thinking…what worked then?
• Recession Gardens – home gardening is thriving
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Burpee Seeds sales expected to increase 20 to 30% this
year
• Food made from scratch may take longer, but it always
tastes better than store-bought (taste trumps health)
• Neglected domestic arts like knitting, quilting, sewing
and embroidery are being eagerly embraced, especially
by the young
• Self-reliance – “why pay someone to do what I can do
myself”? (cutting the grass, preparing the taxes,
designing my interior)
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There are instructions for everything on the web, but “I do
need help/clear instructions”
“Help me to do it myself…”
Make Me Smart, Please
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Provide consumers with a way to accomplish a
task in a superior fashion
• Cook a phenomenal gourmet meal
• Create the most incredibly well designed kitchen
• Clean the bathroom better than any cleaning service in
half the time
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Create systems for doing things better and
persuade the consumer that it really works
• Associate with credible resources
(Remember the Good Housekeeping Seal?)
• And consider spokespeople that make us
feel warm and fuzzy (Martha Stewart, Oprah)
Make Me Smart, Please
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Making do with what we have and getting things
in order
• 57% of consumers plan to organize their homes in the
next 12 months (next closest activity was update
kitchen cosmetically at 18%, only 8% have completely
stopped spending)
• A lot of paring back and throwing out
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More considered purchases (investments) and
less on impulse
Also, this is an era where customer service and
empathy with consumers’ issues will pay off in
brand loyalty
• “I stick with the brands I know even if it costs a little
more because I know I won’t get ripped off.”
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Store brands are getting second looks, especially
in food category, due to price
Hope Floats
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People want to hope
Consider the success of Slumdog Millionaire
around the world
• “the perfect kind of creation to survive in the world’s
increasingly cross-pollinated cultural landscape”
• Not Horatio Alger story, was a story about luck
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In India it is very, very hard to move beyond the
slums…”a dream”
Real hope in slums of Mumbai = commerce
Dharavi – 1 million people people living there
(BBC), produce goods worth over $650m a year
• 15,000 single room factories
• Exports goods all over the world
Hope Floats
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In early March 2009, confidence that the
US economy is "headed in the right
direction" jumped 15 points to 41%
But it’s a lot like floating in the Perfect
Storm and people are really hoping that
the boat doesn’t sink
Offshore clients are looking to the US for
leadership out (turnaround from 6 months
ago)
Hope Floats
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Tap into rays of hope and optimism…create
“happy” products that boost moods
• “I want something to make me feel better…sunny
colors, whimsical themes, personal care products
that make me feel younger, etc.”
• “It’s a gray time of year. I am looking forward to
spring – spring cleaning and a little sprucing up in
my home”
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When stock market ticks up, there is an
instantaneous uplift in attitude
• Every little bit of good news affects our moods
• When there is sustained good news, there will be
pent up demand…GET READY
Hope Floats
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Geographical differences in levels of hope
and the type of hope
Middle America = affected later and
deeper, but more underlying optimism
• In January, 63 % of small business owners
expected conditions to get a lot or a little
better (versus 37% in November)
• Don’t expect a quick turnaround, but 60+% do
expect economy to regain former strength
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Coastal angst - “who me?” – reactionary/
cynical
• Not going to lead us out
Which statement best applies to your outlook for 2009?
We Are All In The Same
Boat
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Means that we need to cooperate in
order to succeed
“We can’t afford being isolationist or
economically selfish.” The world
financial crisis is a “perfect storm.”
“We are all in the same boat.”
Community is key
We Are All In The Same
Boat
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Negative side
Schadenfreude
• A lot of this right now, but Americans are not
vengeful over the long term
• “While I love to see bankers suffer, actually my
brother is one, so I'm pretty torn."
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Basically optimistic/hopeful (want to see
the economy back on track)
We Are All In The Same
Boat
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Reaching out to friends via internet
• Started with the Presidential election
campaign, then recession commiseration
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Party Plan – fulfills social need (spending
time together), provides income and value
(low overhead)
Boomers will be working longer, but we’ll
work together (keep us young?)
Millennials can take risks (can’t get a job
anyway)
We Are All In The Same
Boat
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Dinner and a Movie
Netflix and cooking together
If there is food, they will come – community
events, home entertaining, covered dish suppers,
gourmet clubs, etc.
Business owners - Before You Can Multiply, You
Must First Learn to Divide
• Partner with others and give away a piece of the equity
pie
• Work as partner with suppliers and distribution channels
• Pool resources, share information, abandon adversarial
attitudes
Go Green, but…
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“Green has to be green”
(eco-green has to deliver money-green)
Most consumers would like to be ecoconscious, but perception is that green
products are 20% more costly
• “If the products are more friendly to the
environment, I will buy them, but not if they
cost more than regular products.”
• “I always re-cycle, but I just can’t afford the
organic vegetables anymore.”
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Slide back into old habits because of cost
Have to see ROI sooner, rather than later
Go Green, but…
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Not just words or gimmicks, but strategies
Make it a part of everyday life, not a
marketing ploy
Great ideas are emerging (and they’re
simple) – insulated grocery bags, not just
recyclable, but functional
Would like to fix things – not just throw
them away – desire to get away from the
disposable society
“Give me a real tool kit and
instructions. I want to fix things.”
Go Green, but…
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Provide an opportunity
to turn in old items
for new replacements
• Responsible re-cycling
• Re-invention of “razor blade” sales theory
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Energy use reductions – carry energy star
concept down to smaller items
Battery responsibility
Dramatic shift from print journalism to
online.
• Newspapers are still #1 landfill item
Go Green, but…
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How to get message to consumers
without use of print??
• WOM is still best – generational
exchange is huge among
Millennials/Boomers – reach one,
you’ve reached the other
• Social networking – be careful FaceBook is passé, Twitter was never a
young thing, Linked In?
• What’s new on the net?
Go Green, but…
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Also, effectiveness issue – green products
do not always work as well
• “I had a waste basket made out of recycled
plastic…it was kind of cool, but then it fell
apart…never again.”
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If it costs the same (or only slightly more)
and it works, people WILL buy the green
product!! It doesn’t even have to look as
good.
Alternate Altruism
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No resurgence of organized religion as during
Great Depression
• Altruism has replaced religion for those who need to give
and who need to get
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Tough market in terms of cash contributions to
NPOs
• Over half of charities in a
recent survey reported a
decline in income
• One fifth of charities are seeing
an increase in demand
for their services
Alternate Altruism
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People are looking for creative ways to maintain
support for pet NPOs
• “We are pooling our resources with our parents and
siblings for great impact in our charitable giving.”
• “I have to decide what I can afford most – a week in the
Dominican Republic on a work project or a
contribution…it’s a tradeoff and probably they would
prefer I just give the money, but it’s not as satisfying.”
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Power and influence more important than money
for women
• Bodes well for NPOs in terms of staffing talent
• “My local hospital (where I volunteer) has asked me to
consider being head of fund raising…it’s less pay, but I
won’t be going back to Wall St. soon.”
Alternate Altruism
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Altruistic minded people donating time
and talent instead of cash
• Parents and alums are volunteering for colleges and
private schools instead of writing checks
• Increased numbers of bankers are offering their
professional expertise to charities on a voluntary basis
because of insecurity in the financial world
• Lawyers are doing Pro Bono work either on loan or
because they are laid off
• Young couples are volunteering together for a cheap
date
• Soup kitchens have a need; people are
reaching out with food donations as well as
volunteer time
Alternate Altruism
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Good Samaritans
• 56% of consumers would like to do more for others
• 45% are attracted to products and programs that help
others
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Alternative Gift Fairs have replaced Mistletoe
Markets, Craft Fairs and Rummage Sales at
churches and hospitals
Consumers especially like things that are simple
and low denomination (donate $1 at cash
register, % of profits offered for charities)
• “I like things that stay close to home. I feel bad about
what is going on in Darfur, but I can see homeless
people right here and I would like to do something to
help.”
Mining Local Resources
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Dozens of “buy local” campaigns
across the United States banding
together to encourage consumers
to shop nearby independents
Independent retailers in cities with
buy-local campaigns saw holiday sales
fall 3.2% from the prior year, while
those in cities with no such movements
recorded a 5.6% drop
“Grow local” and “buy local” food programs
have environmental and health benefits
Mining Local Resources
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Movie attendance is up (Broadway way
down – too costly)
Attendance up at local science
centers/museums/arts centers
• Taking advantage of free nights at museums
• Attending more special events at museums
and performing arts centers
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Local sports events (colleges, high school
games)
Weekend getaways instead of offshore
trips
Mining Local Resources
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Stealth channels – below
the radar screen
Go where the people are
(Borders, Starbucks, Panera,
Knitting Store)
Connecting at new places – knitting shops,
libraries (reserving books online), diners
Consider benefits of producing or assembling
in the US
• State and local governments are providing incentives for
bringing work home and creating jobs
• Lower transportation costs
Ethics Skeptics
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This is very important to people, but they feel
helpless…
Populist outrage – Enron/WorldCom/Madoff/AIG
Where are the ethical business leaders who can
get US businesses back on track?
Trickling down to everything we buy…people want
to support ethical leadership
Danger of using ethics as marketing tool, but if it
is genuine - if you really follow through on ethical
behavior (no cover ups) - people will reward you
(remember Tylenol?)
• Came up in every focus group (1982)
• “Companies have to do the right thing and let us know,
but don’t advertise it…it’s different.”
Ethics Skeptics
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The percentage of students who admit to cheating, which
had risen from about 20 percent in the mid-1900s to top
50 percent in 2002, has dropped about 10 percentage
points. Why?
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Definition broadening (internet = not cheating)
Technology harder to fool
Probably not more ethical
“I keep hearing about kids cheating at my kids’ school. I
wish there were something we could do.”
People of all ages are concerned about Ethics
• Students are opting for Ethics courses over religion courses
at universities. Seen as comparable.
• Ethics courses have been added/emphasized at business
schools
• On the spiritual side, applications to seminaries and divinity
schools are predicted to be up in ’09 (historical)
Ethics Skeptics
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New perspective on money/profits emerging
(forced)
• “Craigslist,”an analyst wrote, “does not fully monetize its
traffic or services. Wall Street doesn’t get the concept of
serving customers first, and worrying about revenues
later, if at all (and never mind profits).”
• Will it last, have an overriding effect future mindsets?
• “Cannot return to business as usual…a boom and bust
economy…culture has to change.”
• Greed is good morphs into solid profits are good
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Channel anger into something positive
• Energy of capitalism is good, me first capitalism…not so
much
• “I think companies need to make money so people can
live better lives. Better products for their customers.
Better living for their employees.”
Creative Innovation
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Entrepreneurialism thrives in recessions (Fedex,
CNN, Burger King, Microsoft, Wikipedia…)
Drastic changes create opportunities for those
with vision and grit
• Less competition in downturn (established products
belonging to the same domain will decide to cut the
budget to promote the product and opt for a laid-back
approach)
• Risk taking – what have we got to lose?
• Dare to fail
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But avoid risk excess (recklessness)
Dot com boom/bust led to rediscovery of growing
businesses step-by-step, ushering in smarter
startups
Leapfrog the competition – anticipate the change
Creative Innovation
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During the Depression, companies that continued
advertising and other marketing efforts (Chevy,
Camel) rewarded when country emerged
• Increased brand loyalty and consistency
• People stay home more so they see more media ads (TV,
internet)
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Start with the consumer and move backwards, but do
not ignore the needs of the customer (gatekeeper)…fill
the gap
Problem solving, not just recession problems (solve
the consumer’s pain), but problems of living
• “I have a lot of problems. If someone could just make my life
easier, I would spend money on it.”
Creative Innovation
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Consumers preferred multi-function
kitchen appliances by a margin of 2 to 1.
• This is a huge shift from the past.
• “I will spend more money on a product that
can solve several of my problems at once.”
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Distinguish through graphic design
• Websites that stand out
• Packaging and promotional materials
• “These days I always gravitate to the bright
colorful packages, especially if it’s a gift”
Creative Innovation
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In this recession, there are very
cheap deals for people with cash
• Well established, well known brands are
available for very little money
• Consider joint venture innovation and product
introductions
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Harness technology, but keep it
human
• “I hate calling customer service
and getting a machine. I love my
bank because I always get a real
person…in my own city.”
Creative Innovation
Case Study
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Don’t have to invent something
Everyone is reading
:Books
Success of the Kindle at the same time that
traditional book sales are up
Indicator of fun and entertainment in
smaller packages
• Scuba gear, kite boards and Versace bags are
hitting craigslist, but books are portable
pleasures with a long life and potential aftermarket
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“I want to really understand this recession so I am reading
everything I can on it.”
“I can’t afford to go out, so I am reading a lot more.”
Creative Innovation
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Not all reading material
is up
• Print media way down
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Online is hot!
• Blogs, instructional websites, Wikipedia, research
product
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Book sales up (2+%) in Continental Europe
US book sales down 1% in ’08, but
• Other industries flat or down
• ’07 Potter Effect
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Ebooks and audio books saw double-digit growth in
’08!!
Recycling books is growing – used book stores, books
sales, amazon
Prognosis is good for ’09, even among independent
retailers who remain and are creative
Creative Innovation
What kind of Books are selling?
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Explanation/Education (Remember Make Me
Smart, Please?)
• American History
• How To
• Cookbooks (especially comfort food and home baking)
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Escape
• Romance (up 21% so far in ’09)
• Science Fiction/Fantasy
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Travel and Fitness & Fashion
are down
Creative Innovation
How to apply the
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Books case to Housewares?
Write a book (CEO, create a company personality)
Develop a B2B book (generate biz)
Produce a company book (history)
Sponsor a book (personality)
Invent “how to” mini books
Create a book corner in the store or online
Develop a proprietary bookstore (bricks&mortar or
online)
Sponsor signings or Events (retail or online)
Ten consumer trends that will help you
create new housewares business in the
next 12 months…”
1.
2.
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4.
5.
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7.
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9.
10.
Parsimony is Chic
Treasure Troving
Go Green, but
Make Me Smart, Please
Hope Floats
We Are All In The Same
Boat
Alternative Altruism
Mining Local Resources
Ethics Skeptics
Creative Innovation
Silver Linings…
Ten consumer trends that will help you create
new Housewares business in the next 12 months
Robin Albing
Albing International Marketing
March 23, 2009