Mixed race and the effect on marketing

DISCUSSION TOPIC:  How should mixed race affect target marketing plans?

TOPIC SUMMARY:

A recent article in the New York Times entitled Who Are We? New Dialogue on Mixed Race discusses a consumer segment that we don’t hear about much: people who don’t neatly fit into the five racial buckets now being used by the U.S. Census.

According to the article, “The old categories are weakening … as immigration and the advancing age of marriage in the United States fuel a steady rise in the number of interracial marriages. The 2000 Census counted 3.1 million interracial couples, or about 6 percent of married couples. For the first time, the Census that year allowed respondents to identify themselves as being two or more races, a category that now includes 7.3 million Americans, or about 3 percent of the population.”

It’s not yet a big segment, but it’s one that’s growing in terms of visibility and identity, in part fueled by the mixed race heritage of Senator Barack Obama.

Though some choose a multiple race identity, others tend to stick to a one-race label; the decision of choosing a racial identity is often a deeply personal one. According to the article, racial identification “is influenced by how and where they were reared, how others perceive them, what they look like and how they themselves come to embrace their identity.”

Discussion questions:  Have the old racial categories become irrelevant? What are the implications for those companies that are specifically targeting specific racial groups with a marketing campaign?

My post:

From my observations and experience, issues surrounding race tend to diminish with higher education and income levels.  The more people understand others people and feel comfortable about their own financial status, the less likely they are to seek labels to insulate themselves against “others”, based on race or other definitions.

I believe the rich dialogue brought on by both Senator Obama’s and Senator Clinton’s candidacies is beneficial toward getting our country to move beyond race and gender stereotypes.  I am optimistic that we are on the right track in this regard.

The marketing question will, in turn, become moot as cultures mix together both via interracial marriages and simply through proximity.  The focus should always be on listening to what the customer is saying and observing what they are doing.  That is always the recipe for marketing success.

Mike Osorio, your Dare to be Contagious! ^TM strategist

http://www.osoriogroup.com/

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Go to the full discussion at RetailWire.com:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12862    

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The “Lipstick Indicator”

DISCUSSION TOPIC: Times are tough, so women are shopping – for lipstick

TOPIC SUMMARY:

In an article on the Australian site The Age they report:

Interest rates might be rising and food and fuel prices soaring, but it is going to take much more than that to wrest a woman away from her favourite lipstick.

Industry experts, including Steve Ogden-Barnes of the Australian Centre for Retail Studies at Monash University, say cosmetics is one category that is “recession-proof”.

“When things get tight, people might put off buying the new plasma or the new sofa, but there is no way a woman is going to leave the house without her make-up on,” he says.

In fact, there is a widely held belief that when times get tough cosmetic sales not only survive but thrive. They call it the “lipstick indicator”.

Originated by Leonard Lauder, chairman of the Estee Lauder Group, in the wake of the 9/11 attacks when lipstick sales in the US doubled, the theory goes that when things get tough women seek comfort in feel-good items. And while they may not be able to afford a $3000 handbag, they will fork out up to $30 for a lipstick.

Discussion questions:  Do you believe in the “lipstick indicator”?  Is it or will it hold true in America as in Australia?

My post:

My own unofficial polling of cosmetic industry professionals indicates that the “lipstick indicator” has largely held up over the years.  However, today’s economic issues have made even cosmetics businesses less than robust. The Aussies have the benefit of their commodities-based economy (somewhat similar to Canada in this regard) to bolster weaker areas and offset price hikes.  The US is suffering worse than most of the overseas economies and this is causing slackening business even in the cosmetics world, although not as severely as in other product categories.  In this way, the “lipstick indicator” continues to hold true.

Mike Osorio, your Dare to be Contagious! ^TM strategist

http://www.osoriogroup.com/

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Go to the full article at TheAge.com:
http://www.theage.com.au/news/national/times-are-tough-so-women-are-shopping-151-for-lipstick/2008/03/29/1206207499094.html   

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Boomers return to hippie values of their youth

DISCUSSION TOPIC:  Study: Boomer Shoppers to Become Pragmatic with Age

TOPIC SUMMARY:

According to a survey of 1,100 Baby Boomers, 86 percent plan to be more practical and pragmatic in their purchases when they reach the age of 70, and much less concerned about trendiness and indulgences.

The study providers, FH Boom and the National Marketing Institute, believe the turn to the pragmatic is highly correlated to the fact that only 41 percent of Boomers state they have a secure, financially sound plan for retirement. After paying their basic living expenses, Boomers anticipated that they will have on average 22 percent of their income left to spend on discretionary purchases.

But the buying pragmatism may also reflect Boomers readapting more hippie-like values held in their younger days.

“The key is to think of boomers at 70 not so much as revolutionaries, but as ‘retrolutionaries,’” says Dr. Carol Orsborn, co-chair of FH Boom. “By this definition, retrolutionaries are the vast majority of Boomer-aged consumers who are aiming to get their monetary expenditures in better alignment with values formed at earlier stages in their lives. Think the 2016 version of Birkenstocks and VW in the 60s and 70s: living affordably, but with style.”

Discussion questions:  Do you also expect Boomer spending tendencies to become more “more practical and pragmatic” as they reach the age of 70 and older? Why or why not? What credence do you give to the theory that Boomer spending habits might be reshaped by a return to hippie attitudes?

My post:

I always find it amusing when studies attempt to categorize and describe the tendencies of the Boomers.  The generation is simply to large and spread over too many years to neatly label and predict.  However, some of the observations are likely to be true:  Boomers will continue to avoid “getting old” and will spend on products and experiences that keep them feeling, if not looking, young.  Also, Boomers will remain connected to current happenings via technology and continued linking with Gens X & Y.  Therefore, they will always adopt those new products, services and experiences that feel “cool” and contribute to the desire to remain forever young.  For example, I regularly share on-line music with my college-age sons both because it is a shared interest, but also because I genuinely like much of the new music.  I expect this will continue well into my 70’s and beyond!

Mike Osorio, your Dare to be Contagious! ^TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12853  

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IKEA irritates the Danes

DISCUSSION TOPIC:  Translating Retail Success Across National Borders

TOPIC SUMMARY:

There is yet another potential impact of importing and exporting that retailers are now starting to consider. Boasting 273 stores attracting some 583 million customers each year, IKEA, for example, needs to be aware of what people think and feel.

Both The Independent and The Daily Telegraph in the UK reported that Danish customers of the Swedish shop are less than happy with what’s being offered for sale or at least with what the products are called.

IKEA’s products tend to have names rather than numbers, a situation that has recently caused complaints from customers in Denmark, historically a rival of IKEA’s Swedish-based empire. According to The Independent, complaints have been made about some of the names chosen. Apparently those with Danish derivation are used for some of the retailer’s less salubrious, or lowly, products such as doormats, rug linings and toilet seats, for example.

Discussion questions:  Is the IKEA Danish experience unusual in the arena of global marketing? Where do retailers go to acquire the cultural education required to open without incident in new international markets? Is there are retail company or brand that you think best epitomizes how to go about expanding globally?

My post:

International expansion of brands and retailers always creates the potential for cultural missteps.  IKEA did not purposely named their products with names that would offend Danes.  Using names for their products vs. numbers requires them to either use different names in different countries, or choose to not care if one country has an issue with a name that is fine everywhere else.  

When a retailer or brand expands into a different country (or even a different state) it is incumbent upon them to do some due diligence in the new location, particularly regarding marketing and branding methods.  It would not have been a significant issue to rename a few of the IKEA products for the Danish market if indeed some of the names are offensive.

Examples of brands and retailers who have expanded globally effectively include McDonalds and DFS Galleria.  McDonalds offers key products like the Big Mac worldwide, but then adds menu items that relate to the local populace.  DFS Galleria, the Hong Kong-based purveyor of luxury brands in gallerias and airport duty-free locations throughout the Asia Pacific region, pays close attention to how each nationality communicates and shops.  In-store signage, associate language skills, and marketing efforts all support this.

Mike Osorio, your Dare to be Contagious! ^TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12829  

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Warehouse clubs thrive

DISCUSSION TOPIC:  Consumers Stocking Up in Warehouse Clubs

TOPIC SUMMARY:

There’s no doubt that many American consumers and businesses are going through a rough patch at the moment. For warehouse clubs, however, the weak economy has proven to be something of a boon as savings minded consumers look for the low unit prices that come with buying in bulk.

Costco, Sam’s Club and BJ’s all reported strong sales and profit results this week. Costco saw same-store sales climb seven percent last month while BJ’s experienced a 5.9 percent increase. Sam’s same-store sales were up 2.8 percent.

Discussion questions: Do you expect that warehouse clubs will continue to perform well should the economic conditions stay the same or worsen? Will consumers continue to shift their dollars to warehouse clubs after the economy has rebounded? What do you see as the relative strengths/weaknesses of the three warehouse club chains during a down economy?

My post:

This is a perfect time for Costco and BJ’s to strengthen their positioning.  Costco will do particularly well, as they have developed the reputation as a place for the affluent to shop with no embarrassment.  They will shift dollars away from categories that aren’t experiencing strong demand, to more basics, but otherwise I expect them to thrive during this period and even after a recovery sets in.

Mike Osorio, your Dare to be Contagious! ^TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12806

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Would you lick a magazine ad?

 DISCUSSION TOPIC:  Lickable Ads Arrive

TOPIC SUMMARY:

Welch’s has introduced what’s believed to be the first-ever consumer ad in a magazine enabling readers to sample a product by licking the ad. While scent technology — scratch-and-sniff ads or fragrant ink — is commonplace in magazines, lickable ads are still in the experimental stage.

Discussion question: What do you think of the marketing potential around lickable ads in magazines?

My post:

Lickable ads are a bad idea.  Even though a person can tell if the strip has been opened already, this does not stop a child or an adult with poor decision-making skills from “re-licking.”  It is definitely a lawsuit waiting to happen when the first child gets sick after licking an ad that their classmate or sibling with the flu already licked.

Plus, the very idea of licking a magazine is not appealing.  I would not want my brand associated with this practice.  True sampling is the way to get the flavor of a product into a customers’ mouth.

Mike Osorio, your Dare to be Contagious! ^TM strategist

http://www.osoriogroup.com/

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GO TO THE FULL DISCUSSION AT RETAILWIRE.COM:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12807

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Do you buy your pumps at Neiman’s or Payless?

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RETAILWIRE DISCUSSION TOPIC

Payless Goes High Fashion on the Cheap– 2/7/08
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TOPIC SUMMARY:

High fashion for the masses, at least in footwear, has been on display up and down catwalks during New York Fashion Week as models have strutted their stuff wearing shoes from top designers that are Payless ShoeSource exclusives.“Payless’ vision is to democratize fashion,” said Matt Rubel, chief executive officer and president of Payless. “Our philosophy has been to find the young emerging talent, then bring it to our customer at affordable prices.”

Discussion questions: Will we see an increase in the number of high fashion designers who sign agreements with retailers serving the mass market? With the economy slowing, do you expect to see more luxury consumers trading down to designer clothing, footwear and accessories sold in outlets such as Payless?

My post:

New, fresh designer talents have many choices to consider today for their product placement.  No longer is high-fashion reserved for Neiman’s and Saks.  Target and Payless ShoeSource have rewritten the designer playbook by successfully signing exclusive designers and then doing a reasonable job a taking care of and nurturing these brands within an otherwise discount-oriented environment.  The lower end of the luxury goods consumer group already shops in department stores and discounters.  The slowing economy will increase the percentage of designer fashion purchased outside of the traditional luxury channels.  But the truly wealthy will not be lured by Alice + Olivia at Payless.  They’re not giving up their Christian Lacroix pumps or their Manolo Blahnik slingbacks.

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

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GO TO THE FULL STORY AND DISCUSSION:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12743

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Will Retailer Cutbacks Continue?

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RETAILWIRE DISCUSSION TOPIC

Everybody’s Doing It: Cutting Jobs, Closing Stores, etc. – 2/1/08
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TOPIC SUMMARY:

Retailers are in pull back mode. Ann Taylor, Eddie Bauer, Home Depot, J.C. Penney, Sears, Starbucks and Wal-Mart are among the companies that have recently announced that they’d be taking a variety of actions to deal with what each sees as a challenging retailing environment in the months to come.

Discussion questions: Does it seem to you that many retailers misjudged the degree to which consumers would pull back on spending? Do you think we will be seeing many more announcements about layoffs, store closings, etc. from retailers? Generally speaking, are the retailers cutting back now going to be in a better or worse competitive position as a result of their actions when the economy picks up again?

My post:

I don’t think anyone can honestly say they foresaw the severity of the pullback in consumer spending.  The current spending slowdown is likely to continue for the next few months at least.  I do think we will hear of more layoffs, closings, etc.  The weaker retailers will likely fold, or be bought.  But even the stronger retailers will use this time as an opportunity for “pruning” their structure.  This can mean a desired restructuring that would be difficult to explain to internal and external stakeholders during rosier times.  It can and should include trimming poor performing locations from the real estate portfolio or at least renegotiating rents.  The JC Penney example is a good one, where Ullman is making prudent structural changes that will strengthen their competitive position as the economy improves.

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

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GO TO THE FULL STORY AND DISCUSSION:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12728   

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Customers are Talking. Are Retail Execs Listening?

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RETAILWIRE DISCUSSION TOPIC

Engaging in Digital Consumer Conversations – 1/30/08
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TOPIC SUMMARY:

With countless digital consumer conversations increasingly swaying opinions across the world, the most successful companies will be those that “merge traditional and digital consumer data and integrate them into their everyday operations.” That’s the conclusion of a report by PricewaterhouseCoopers, How consumer conversation will transform business.However, the report also found that although executives recognize the potential of digital consumer conversations, they still have difficulty interpreting and reacting to them.

Discussion question: Do you also find that executives are having “difficulty interpreting and reacting” to the opportunity around digital conversations? How do you think companies should approach exploring the value behind digital conversations?

My post:

Executives in many (most?) companies don’t take the time to fully understand social media – what the conversations mean, their individual and aggregate relevance, the potential ROI from this arena, etc.  They tend to fall back on what they know and interpret social media data through the filter of traditional marketing and consumer data gathering methods.  With social media driving more and more consumer opinion and behavior, executives must engage those with social media expertise.  They need to determine how much weight to give social media in strategic planning and decision making.  It is not too late to attack this, but it soon may be.

 Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

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GO TO THE FULL STORY AND DISCUSSION:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12726   

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Is ‘Martha Fatigue’ Possible at Macy’s?

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Destination: Wedding – Martha Stewart Collection with Wedgwood Launches in Macy’s Stores – 1/29/08
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For those who love all things Martha Stewart, you will be thrilled to know that she has partnered with Macy’s and Wedgwood to bring Martha-branded china, crystal & flatware to a Macy’s near you (and online).  From this morning’s press release:

NEW YORK–(BUSINESS WIRE)–Jan. 29, 2008–Shopping for those special items to last a lifetime will be a little easier for nuptial-bound couples this spring with the launch of the Martha Stewart Collection with Wedgwood exclusively at Macy’s. This new tabletop line, featuring 10 fine bone china patterns, six crystal stemware patterns, and six stainless steel flatware patterns, is now available at Macy’s (NYSE:M) stores, macys.com and macysweddingchannel.com. 

“I have always been an avid collector of fine china, crystal and silver, and my personal collection includes many Wedgwood pieces I am very proud to own. Our line with Wedgwood offers a range of beautiful and timeless pieces that can be collected and enjoyed for years to come,” said Martha Stewart, Founder of MSLO. 

I absolutely applaud Macy’s strategy of negotiating exclusives with mass-appeal designers like Martha Stewart and Tommy Hilfiger, to name just two.  Target has certainly shown us the power of the excusive deals which positioned them as relevant arbiters of trends – even in a discount environment.  Of course, Macy’s is not Target and is supposedly courting an aspirational customer, including those who may now be shopping at Target.

Macy’s is seeking to make department stores relevant again and this is one of many well-considered strategies they are employing, as well as effectively positioning their own brands (INC, Hotel Collection, etc.), improving the store environment, etc.  

Here’s my question:  Will the consumer (particularly the aspirational customer) ever tire of the next great Martha collection?  

I was shopping in my local Macy’s in December.  I was amazed by the percent of the housewares department devoted to the Martha Stewart Collection.  I did think the Collection was quite good – nice product, effective packaging, good value and quality.  I noticed also the nice chunk of real estate in bedding and furniture devoted to the exclusive Martha products.  And now, the table top department will likely carve out an equally impressive space for the Martha/Wedgwood product.  

My concern is that like anything that seems to be working, stores often find a way to beat it to death. In this case by devoting potentially too much space and crowding out and marginalizing other options. 

The whole idea of “exclusive” in aspirational product includes some level of scarcity.  No scarcity here – you and your entire neighborhood can have the same products in your kitchen (and bath and more).  The mass customer doesn’t mind as much, but the aspirational customers (which Macy’s is trying to court) do care.  They want to feel like what they buy for their homes is a signature of their taste and personality.  Make it look too huge, and this customer will look elsewhere for her kitchen gadget, saucepan, bedding, or china.

A second point particular to the housewares product was that the brand image presented here through packaging, signing and presentation clearly screamed “gift”.  This might help explain the size of the presentation in December, but it makes me concerned for February and beyond.  This gift-oriented packaging and presentation will not play well to customers wanting to pick up a new sauce pan for themselves.

Please, Macy’s.  As you score more of these incredible exclusive deals (i.e. the recent Tommy Hilfiger coup), keep your aspirational customer in mind.  We want the products – but we want them to feel special.  Don’t overdo the presentation or the marketing. 

Mike Osorio, your Dare to be Contagious! ™ strategist

www.OsorioGroup.com

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