Summit Report
| Category: Surveys and Statistics | Date: 2001-03-16 |
While the summit of two politically wounded leaders was taking place in Moscow, a summit of 200 very vital marketers was taking place in Chicago. On September first and second, industry leaders -- from automobile to dishwasher to walkman marketers -- gathered at the Polk Summit to discuss the latest trends in consumer marketing.
This year's discussion went far beyond just rehashing the basics of relationship marketing, which we have all heard in the past. Consumer behaviors, and the reasons for them, were the topics of discussion. What was most stimulating was the fact that the speakers, and many in the audience, heartily disagreed on what makes today's consumer tick.
There were several things that were agreed upon by all speakers:
1) Two high growth demographic groups are emerging - the wealthy and the poor. Even though the middle income group is still a large majority of consumers, the fastest-growing segments are at the end of the spectrum. This trend is evidenced by the retail success at the high and low end of the retail channels - Saks Fifth Avenue and Target.
2) We are redefining our concept of time and paying almost any amount of money to get more of it. While the definition used to be "Work and Leisure", the new definition is "Work, Obligated Time, and Leisure." And none of us have enough leisure time, thanks to technology and home offices. Work, or "paid time," is still considered to be about 8 hours per day. Obligated time (including sleep, which is considered an obligation) is now consuming 10 hours. That leaves just 6 hours for whatever else we choose to do.
To address the time crunch, "polychronic" products - those that allow us to do 2 things at once - are winning the race. Cell phones let us work while we drive. Email lets us talk and type at the same time. More products will be coming out that are convergent - multi-functional to do more stuff for us. An example - Clarion is working on an in-dash device that will play a CD, give us directions, get our email, act as a cell phone, and receive a fax.
3) Our age mix is changing radically. This is certainly not new information, but marketers need to remember that products do not live and die by the 25-44 market anymore. Every 7 seconds a Baby Boomer is turning 50. And, as in the past, this group can make a brand boom or bust. To put this in perspective, the growth of the 55+ age segments between 1995 and 2025 is projected to be 66%. All age categories less than 34 years are projected to decline, with the exception of 20-24 which increases only 1%.
4) Baby boomers will change the marketing world as we know it. Past generations have been fairly predictive, following the patterns that their parents have followed before them. Not so with those turning 50 today. An increased life expectancy puts the baby boomers squarely in middle age. Labeled the "young again" market, Boomers are buying products typically targeted at X'ers.
People in their 50s today are far more active than 50 year olds in the past. The baby boomers are highly motivated to succeed, highly educated in consumer decisions, and idealistic in their views. Boomers have a large amount of discretionary income, and will spend large amounts on high ticket items, if they are passionate about it.
The consensus is that these upscale, passionate consumers are largely unpredictable. The only prediction is that they will spend a large amount of money on whatever they want, whenever they want to. The implication is that customer databases will have to rely on information collected from the customer, and must track preferences one customer at a time.
5) Women as a group have changed the landscape more than ever. Radical changes in women's education and income over the past 20 years have created a powerful decision-maker or influencer in the females in our households. Marketers of durable goods products - automakers being the first group mentioned - have not yet embraced this reality. Many marketers are addressing this vocal group of the population superficially, and that must change in order to satisfy the demands of the new female. Women are sophisticated and vocal, and marketers who don't significantly recognize that will miss this group with huge buying power.
6) Y-Generation kids - those between 6 and 19 - are already the savviest consumers ever. When we were 16, did we know how to "www." to every manufacturer's web site to research the coolest blades ever made? This truly technological generation will demand that information be at their fingertips. And if it's not, they won't bother to buy.
7) Those who reach the market with the best information delivery and the most consumer-convenient product delivery will win. Like the Y generation, consumers are getting more information before they head into a store to buy something. Information, combined with the desire for increased time, is a consumer need that will drive marketing success or failure. Consider the success of Ikea. The shopping experience becomes easy for the consumer - measurements available, yard sticks to take home. Flat packages that fit in a car. Instructions that work - often in pictures. All the screws in the package. Gets the job done for the customer, and gets them finished with furniture building and on with their life.
8) Inter-generational marketing is more challenging than ever:
- Consider the problems of restaurant design for both Boomer and Xer dining. The Boomers dine in pairs - cozy booths and comfy tables for 4. Xers don't date - they run in packs. Large tables, groups growing and shrinking during a meal.
- Older consumers are more price sensitive on low-ticket items, younger consumers are most cost-conscious on high-ticket items.
9) Internet "factlets"
- 47% of consumers view online ads, up from 37% in '96
- 28% report that they view less tv because of time on the Internet
- 17% report less book reading because of the 'Net
- 70 million are now reportedly accessing the 'Net, 48 million shopping online, 20 million buying online
About the Author
DBMarkets@aol.com
http://www.msdbm.com
This year's discussion went far beyond just rehashing the basics of relationship marketing, which we have all heard in the past. Consumer behaviors, and the reasons for them, were the topics of discussion. What was most stimulating was the fact that the speakers, and many in the audience, heartily disagreed on what makes today's consumer tick.
There were several things that were agreed upon by all speakers:
1) Two high growth demographic groups are emerging - the wealthy and the poor. Even though the middle income group is still a large majority of consumers, the fastest-growing segments are at the end of the spectrum. This trend is evidenced by the retail success at the high and low end of the retail channels - Saks Fifth Avenue and Target.
2) We are redefining our concept of time and paying almost any amount of money to get more of it. While the definition used to be "Work and Leisure", the new definition is "Work, Obligated Time, and Leisure." And none of us have enough leisure time, thanks to technology and home offices. Work, or "paid time," is still considered to be about 8 hours per day. Obligated time (including sleep, which is considered an obligation) is now consuming 10 hours. That leaves just 6 hours for whatever else we choose to do.
To address the time crunch, "polychronic" products - those that allow us to do 2 things at once - are winning the race. Cell phones let us work while we drive. Email lets us talk and type at the same time. More products will be coming out that are convergent - multi-functional to do more stuff for us. An example - Clarion is working on an in-dash device that will play a CD, give us directions, get our email, act as a cell phone, and receive a fax.
3) Our age mix is changing radically. This is certainly not new information, but marketers need to remember that products do not live and die by the 25-44 market anymore. Every 7 seconds a Baby Boomer is turning 50. And, as in the past, this group can make a brand boom or bust. To put this in perspective, the growth of the 55+ age segments between 1995 and 2025 is projected to be 66%. All age categories less than 34 years are projected to decline, with the exception of 20-24 which increases only 1%.
4) Baby boomers will change the marketing world as we know it. Past generations have been fairly predictive, following the patterns that their parents have followed before them. Not so with those turning 50 today. An increased life expectancy puts the baby boomers squarely in middle age. Labeled the "young again" market, Boomers are buying products typically targeted at X'ers.
People in their 50s today are far more active than 50 year olds in the past. The baby boomers are highly motivated to succeed, highly educated in consumer decisions, and idealistic in their views. Boomers have a large amount of discretionary income, and will spend large amounts on high ticket items, if they are passionate about it.
The consensus is that these upscale, passionate consumers are largely unpredictable. The only prediction is that they will spend a large amount of money on whatever they want, whenever they want to. The implication is that customer databases will have to rely on information collected from the customer, and must track preferences one customer at a time.
5) Women as a group have changed the landscape more than ever. Radical changes in women's education and income over the past 20 years have created a powerful decision-maker or influencer in the females in our households. Marketers of durable goods products - automakers being the first group mentioned - have not yet embraced this reality. Many marketers are addressing this vocal group of the population superficially, and that must change in order to satisfy the demands of the new female. Women are sophisticated and vocal, and marketers who don't significantly recognize that will miss this group with huge buying power.
6) Y-Generation kids - those between 6 and 19 - are already the savviest consumers ever. When we were 16, did we know how to "www." to every manufacturer's web site to research the coolest blades ever made? This truly technological generation will demand that information be at their fingertips. And if it's not, they won't bother to buy.
7) Those who reach the market with the best information delivery and the most consumer-convenient product delivery will win. Like the Y generation, consumers are getting more information before they head into a store to buy something. Information, combined with the desire for increased time, is a consumer need that will drive marketing success or failure. Consider the success of Ikea. The shopping experience becomes easy for the consumer - measurements available, yard sticks to take home. Flat packages that fit in a car. Instructions that work - often in pictures. All the screws in the package. Gets the job done for the customer, and gets them finished with furniture building and on with their life.
8) Inter-generational marketing is more challenging than ever:
- Consider the problems of restaurant design for both Boomer and Xer dining. The Boomers dine in pairs - cozy booths and comfy tables for 4. Xers don't date - they run in packs. Large tables, groups growing and shrinking during a meal.
- Older consumers are more price sensitive on low-ticket items, younger consumers are most cost-conscious on high-ticket items.
9) Internet "factlets"
- 47% of consumers view online ads, up from 37% in '96
- 28% report that they view less tv because of time on the Internet
- 17% report less book reading because of the 'Net
- 70 million are now reportedly accessing the 'Net, 48 million shopping online, 20 million buying online
About the Author
DBMarkets@aol.com
http://www.msdbm.com
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