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21st Century Tools for 21st Century Trends

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21st Century Tools for 21st Century Trends Powered By Docstoc
					        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

   Consultants to consumer products companies for
    over 20 years

   Specialize in home furnishings products
    (furniture, housewares, appliances, home textiles, floor coverings, tabletop/gift,
    lighting, kitchen/bath cabinets/fixture, home office, home electronics)

   Also, clients in fashion, jewelry, food

   Planning, research, implementation, development

   AIM’s Research is increasingly a hybrid approach on
    all levels

   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…”

1.    Parsimony is Chic
2.    Treasure Troving
3.    Go Green, but
4.    Make Me Smart, Please
5.    Hope Floats
6.    We Are All In The Same Boat
7.    Alternative Altruism
8.    Mining Local Resources
9.    Ethics Skeptics
10.   Creative Innovation
   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?

   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?
   Online Surveys – Jan, Feb, Mar 2009
    • Survey samples of 900 – 2000 each
    • National distribution (geographic, ethnic, age,
      primarily female)
    • Focused on middle class
   Online Focus Groups
    • Two groups conducted each month
    • National distribution
    • Focused on middle class
   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   Why did you choose
                               Store 1 or 2 over the other?

   and why.                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
                                                                       Minnesota
                                                         Texas




                                                                                       California



      Primary Client

                            AIM Moderator
                                                                      Iowa
                                                                                         New York




                                                                                              Virginia
                                                           Florida


       AIM Staff
                                            Setup/Help



                                                                             Atlanta                Colorado
                Kitchen Island
   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
   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
   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…

   “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
   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
   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
   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

   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
   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
   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
   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…”
   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
   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

   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
   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
   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.”
   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

   Depression Era thinking…what worked then?
    • Recession Gardens – home gardening is thriving
          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)
          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
   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
   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
   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
   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.”
   Store brands are getting second looks, especially
    in food category, due to price
                    Hope Floats
   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
   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

   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

   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”
   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

   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
   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

   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

   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."


   Basically optimistic/hopeful (want to see
    the economy back on track)
              We Are All In The Same
                  Boat

   Reaching out to friends via internet
    • Started with the Presidential election
      campaign, then recession commiseration
   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


   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…

   “Green has to be green”
    (eco-green has to deliver money-green)
   Most consumers would like to be eco-
    conscious, 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.”
   Slide back into old habits because of cost
   Have to see ROI sooner, rather than later
            Go Green, but…

   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…

   Provide an opportunity
    to turn in old items
    for new replacements
    • Responsible re-cycling
    • Re-invention of “razor blade” sales theory
   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…

   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…

   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.”


   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
   No resurgence of organized religion as during
    Great Depression
    • Altruism has replaced religion for those who need to give
      and who need to get
   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
   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.”
   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

   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

   Good Samaritans
    • 56% of consumers would like to do more for others
    • 45% are attracted to products and programs that help
      others
   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


   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

   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
   Local sports events (colleges, high school
    games)
   Weekend getaways instead of offshore
    trips
               Mining Local Resources
   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
   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

   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?
    •   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
   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
   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

   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
   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
   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)
   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

   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.”
   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
   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
   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    :Books
   Don’t have to invent something
   Everyone is reading
   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
   “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
   Not all reading material
    is up
    • Print media way down
   Online is hot!
    • Blogs, instructional websites, Wikipedia, research
      product
   Book sales up (2+%) in Continental Europe
   US book sales down 1% in ’08, but
    • Other industries flat or down
    • ’07 Potter Effect
   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?
   Explanation/Education (Remember Make Me
    Smart, Please?)
    • American History
    • How To
    • Cookbooks (especially comfort food and home baking)
   Escape
    • Romance (up 21% so far in ’09)
    • Science Fiction/Fantasy
   Travel and Fitness & Fashion
    are down
             Creative Innovation

How to apply the   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.    Parsimony is Chic
2.    Treasure Troving
3.    Go Green, but
4.    Make Me Smart, Please
5.    Hope Floats
6.    We Are All In The Same
      Boat
7.    Alternative Altruism
8.    Mining Local Resources
9.    Ethics Skeptics
10.   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

				
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