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1
The Consumer Of Today
What Are They Possibly Thinking?
Billiard Congress of America
Lynn Switanowski July 14, 2011
“The Future Has A Way Of Arriving Unannounced”
~George Will
“We PLAN for your PROFITS” www.cbc-group.net
The Trauma Of Change
2
“Sometimes In Our Confusion, We See Not The World
As It Is, But Through Eyes Blurred By The Mind.”-unknown
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The Pace Of Change Is Accelerating Every Year
•25+ Years Retail Industry Experience
•Fortune 100 Senior Sales and
Marketing Executive
•Small Business Strategist
•Helping Independent Retailers Create
Profitable Strategy, Inventory and
Marketing Programs Since 2004
Why Listen To Me?
3
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•What Motivates Each Generation to Spend Money
•Understand Consumer Shopping Habits- Today and in the Future
•Learn How to Anticipate Consumer’s
Needs
Seminar Objectives
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Consumers Are Buying Premium Or Value With The Mid-Tier Being Squeezed
• The US Is Becoming An “Hourglass Economy”
• Manufacturers And Retailers Are Trying To Capture This Fickle Consumer With A Wider Range Of Products
Premium
Value
• Highly Targeted• High Experience• Higher Prices
• Low Price• Mass, Dollar• Private Label
Mainstream Products
Marginalized
Source: Market Research
4
Seek An Immersive Retail Shopping
Experience
� Stores Need To Be Destinations,
Not Just Product Showcases
� Stores Should Motivate
Consumers Through Education,
Experience And Trust
Desire To Belong To A Community
� Consumers Want To Interact With Products, And Partner In The Retail Experience
� Brands Need To Evoke A Sense Of Purpose And Inspiration
� Consumers Need To Emotionally Feel Switching Costs When Leaving Community
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To Survive – And Thrive - Businesses Must Meet Emerging Consumer Trends
“We PLAN for your PROFITS” www.cbc-group.net
Let’s Explore Consumer Change Drivers
• Changing Demographics of Large Market Segments
– Boomers Rule
– Y - Now
– X – Tra Special
• Additional Demographic Trends
– Household Size
– Shifting Income
– Service Sector Explosion
– Culture Clamor
– Boomers Rule
– Y - Now
– X – Tra Special
• Changing Behavioral Trends
– Interconnected And Involved
– Personally Speaking
• Other Factors
– Supplying The Answers
– Resources Rock
5
“We PLAN for your PROFITS” www.cbc-group.net
Let’s Explore Consumer Change Drivers
• Changing Demographics of Large Market Segments
– Boomers Rule
– Y - Now
– X – Tra Special
• Additional Demographic Trends
– Household Size
– Shifting Income
– Service Sector Explosion
– Culture Clamor
– Boomers Rule
– Y - Now
– X – Tra Special
• Changing Behavioral Trends
– Interconnected And Involved
– Personally Speaking
• Other Factors
– Supplying The Answers
– Resources Rock
“We PLAN for your PROFITS” www.cbc-group.net
Boelter + Lincoln - May 2008
Baby BoomersBorn Between
1946-196579 Million
Generation XBorn Between
1965-197748 Million
Generation YBorn Between
1977-199470 Million
Who Are We Talking About?
6
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Boomers Rule; Boomers Rule; Boomers Rule; Boomers Rule; More Money, Time And Choices
• Highly Educated, More Economically Empowered And More Self-focused
• First Wave Of Successful Female Boomers With The Money And Resources
• View Themselves As Younger Than They Really Are (By 20 Years); 50 is the new 30
• Healthier And Active; Expected To Outlive Prior Generations
• New Desires: Experiential Engagements, Quality Of Life Improvements From Products And Services
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Gen X Gen X Gen X Gen X ---- er’s; er’s; er’s; er’s; Connected And Practically Minded
• First Latchkey Children
•Maintain A Cautious Economic
Outlook
• Prefer Products Based On
Practicality
• Heavy Users Of Communication
Tools To Stay In Touch Better
•Will Be Primary Buyers Of Most
Goods By 2012
• Maintain Balance Between Work
And Leisure
•May Choose To Remain Living At
Home With Parents Longer
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• Spending Habits Emulate Boomer Parents
• Everything Is Interconnected,
Anything Goes, Everything Is
Available And Nothing Is Private
• Lack Of Loyalty To Products/Services
• Interested In Peer To Peer Experiences
• Socially Conscious• Savvy Shoppers; Place A High
Degree Of Importance On
Individualism, Self-fulfillment And
Personal Involvement In The
Creation Process
Gen Y;Gen Y;Gen Y;Gen Y; Let’s Talk About Me, Right Now
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Millenials; Text Me To Connect With MeMillenials; Text Me To Connect With MeMillenials; Text Me To Connect With MeMillenials; Text Me To Connect With Me
8
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Let’s Explore Consumer Change Drivers
• Changing Demographics of Large Market Segments
– Boomers Rule
– Y - Now
– X – Tra Special
• Beyond Market Segment Trends
– Household Size
– Shifting Income
– Service Sector Explosion
– Culture Clamor
• Changing Behavioral TrendsChanging Behavioral TrendsChanging Behavioral TrendsChanging Behavioral Trends– Interconnected And
Involved– Personally Speaking
• Other FactorsOther FactorsOther FactorsOther Factors– Supplying The Answers– Resources Rock
“We PLAN for your PROFITS” www.cbc-group.net
Household Size ReductionsHousehold Size ReductionsHousehold Size ReductionsHousehold Size Reductions; Smaller Households With Fewer Married Heads Leads The Trend
Smaller Households Create Opportunities For More Personalized
Products And For Experiences That Are Fun For One
9
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Shifting IncomeShifting IncomeShifting IncomeShifting Income; Lifestyle Spending Shifts And Declines As Consumers Age
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Service Sector Explodes; Service Sector Explodes; Service Sector Explodes; Service Sector Explodes; More Help, Integrated Offerings• Spending On Goods Will
Continue To Lose Ground To Spending On Services
• Older Generations Becoming More Service Oriented
– Do It Yourself Is Gone
– Do It For Me Is Next• Younger Generations Seek To
Integrate Good, Services And Experiences
To Satisfy Consumer Needs; Best In Class Retailers Will
Incorporate Services And Experiences Into Their Concepts
10
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Culture ClamorCulture ClamorCulture ClamorCulture Clamor: An Increasingly Diverse Population; Hispanic Demographic Shows Highest Growth
White
65% Hispanic
16%
African American
13%
Asian American
6%
Source: US Census Bureau
Percentage Of US Population
By Race/Ethnicity 2012
“We PLAN for your PROFITS” www.cbc-group.net
Let’s Explore Consumer Change Drivers
• Changing Demographics of Large Market Segments
– Boomers Rule
– Y - Now
– X – Tra Special
• Additional Demographic Trends
– Household Size
– Shifting Income
– Service Sector Explosion
– Culture Clamor
• Changing Behavioral Trends
– Interconnected And Involved
– Personally Speaking
• Other Factors
– Supplying The Answers
– Resources Rock
11
“We PLAN for your PROFITS” www.cbc-group.net
Interconnected and InvolvedInterconnected and InvolvedInterconnected and InvolvedInterconnected and Involved; Social Status Is About Who You’re Connected To
It’s Not Who You Know, It’s Who Knows You
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Personally SpeakingPersonally SpeakingPersonally SpeakingPersonally Speaking; Customized Solutions
Power Shifts From Retailer/Manufacturer To Consumer
• Value Proposition Guiding Purchases Changes– Heightened Emphasis
On Personalization– Product And Service
Solutions Designed For One Person At A Time
• Consumers Demand Niche Products, Experiences And Services Uniquely Suited To Their Tastes, Interests And Aspirations.
12
“We PLAN for your PROFITS” www.cbc-group.net
Let’s Explore Consumer Change Drivers
• Changing Demographics of Large Market Segments
– Boomers Rule
– Y - Now
– X – Tra Special
• Additional Demographic Trends
– Household Size
– Shifting Income
– Service Sector Explosion
– Culture Clamor
• Changing Behavioral Trends
– Interconnected And Involved
– Personally Speaking
• Other Factors
– Supplying The Answers
– Resources Rock
“We PLAN for your PROFITS” www.cbc-group.net
• Individual Interactions Between Retailers And Suppliers
• Retail Evolving Toward True Demand; Not Shelf Space
• Value Chain Becomes More Intimate; Consumers Share Information; Expect Value In Return
• Extreme Consumers Seek Out Opportunities For Involvement That Brings Product To Market
Supplying The AnswersSupplying The AnswersSupplying The AnswersSupplying The Answers; Consumers Have Hand In Creating End User Products
Consumer Shift To Products And Services That Fill Exact Need
– Better & Quicker
13
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• Consumer Of 2012 Won’t Be Taking Resources For Granted
• Corporate Social Responsibility And Product Sustainability Will Become More Important Factors In Purchase Decisions
• Consumers Will Employ Triple Bottom Line Scorecard; Performance Will Be Measured On
– Environmental
– Social
– Financial Scales
Resources RockResources RockResources RockResources Rock; Sustainability Rules The Day
Companies Will Be Measured Based on How They Deliver To
The Planet, The People And A Profit
“We PLAN for your PROFITS” www.cbc-group.net
Business Value Curve Today
Innovation
• Features
• Functions
• Fashion
• Customization
• Personalization
• Self-expression
Production
• Speed
• Quality
• Consistency
Accessibility
• Effort
• Selection
• Price
Experience
• Shopping
• Buying
• Using
• Emotional
connections
Value added
by the right
product to the
right customer
at the right
time5
5at the right
place at the
right price
Traditionally, Consumers Found Value In Production And Accessibility Aspects Of Value Curve
14
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Business Value Curve in 2012
Innovation
• Features
• Functions
• Fashion
• Customization
• Personalization
• Self-expression
Production
• Speed
• Quality
• Consistency
Accessibility
• Effort
• Selection
• Price
Experience
• Shopping
• Buying
• Using
• Emotional
connections
Value Added
By Innovating
To Increase
Relevancy5
..Improving
Shopping And
End Use
Experience
And
Connections
Going Forward Consumers Will Seek Value in Innovation and Experience Aspects Of Value Curve
Deliver Breakthrough Products/Services• Work With Consumers To Create New Innovative Products
• Develop Open Source Like Communities To Create Breakthrough
Ideas
Marketers Must Evolve From A Transactional Mindset To A
Relationship Approach• Establish A Customized Relationship With Every Customer To
Increase Customer Retention;
• Create “Stickiness” Through Electronic Marketing
Retailers Can Garner A Larger “Share Of Wallet” From Each
And Every Customer To Drive Sales Growth•Shift From What Moves Product To What Moves People
•Drive Short Term Incremental Profitability With Existing Customers
Rather Than By Attempting To Attract New Customers
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Successful Businesses Must Focus on Innovation and Deliver an “Experience”
15
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Is Your Business Ready For the Future?
“We PLAN for your PROFITS” www.cbc-group.net
Is Your Business Ready For the Future?
16
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