April 19th, 2012
Catch my appearance on CNBC’s “The Costco Craze” which profiles this discount retailer for customers who don’t need discounts
Recently, I was asked to be a part of a CNBC special called “The Costco Craze: Inside the Warehouse Giant,” premiering April 26th at 9 p.m. On the show I took correspondent Carl Quintanilla through a Costco store to share the tips and tricks that Costco uses to make their retail magic. The CNBC special is a timely one, because Costco can serve as a model for other retailers targeting the affluent consumers who nonetheless love a bargain.
Costco is the world’s largest membership warehouse chain, and it is one of the nation’s top three retailers overall, and this success is not by accident. The special examines the many reasons that Costco is thriving in a post-recession economy.
Get Inspired >> The Discounter for Customers Who Don’t Need Discounts
In Unity Marketing’s research, we find that Costco is consistently the only discount retailer that attracts more ultra-affluent consumers (HHI > $250K) than lower-income shoppers (HHI $100k-$249.9k), and part of it is due to Costco’s “treasure hunt” environment. These affluent consumers are excited by the hunt for name-brand bargains. They will put up with long checkout lines and the big-box format in order to get access to such a wide variety of quality items at deeply-discounted prices.
The fact is the affluent customers that Costco attracts are about the only ones in this economy that can afford to invest in a six-month supply of paper towels or toilet paper. Households on tight budgets can’t afford to tie up so much cash in stockpiling supplies. In addition Costco stocks many name brands and gourmet foods that appeal strongly to the wealthy.
Costco’s shoppers are absolutely addicted to the Costco experience – They shop regularly and often in order to see what’s new, what’s on sale, what’s special
When it comes to attracting the affluent shoppers, it is all about the “80/20 Rule of Luxury Retail,” which holds that 80 percent of retail success is in the experience, with only 20 percent coming from product. Costco understands the experience its target shoppers crave. Their customer base is absolutely addicted to the Costco experience and they shop regularly and often to see what’s new.
Costco knows that its affluent consumers are likely to be small business owners who are acutely attuned to the mark-up that typically comes at high-end stores. Costco consciously strips away the frills that mean extra expense to these consumers and offers a bare-bones environment that says “savings.” The large format of the store also offers the ultimate in recreational shopping – no one goes to Costco to get just one thing, and often they walk out with a cart full of bargains.
Take Action>> Make Your Shop Pop!
Every retailer can’t become a discount Mecca like Costco, but every retailer can become a “shop that pops.” Costco fulfills all seven of the points in my retailer’s ”Pop Equation:”
- Customer involvement and interaction - Costco shopping is a social experience. Nobody is a stranger in a Costco; you can stop another shopper in the store and they’ll be glad to tell you where they found something in their cart. And the hot dog stand is a great place to meet new friends.
- Curiosity – You can’t follow the race track when you shop at Costco; you have to go down this aisle, up the next and always browse the middle to see what’s on sale. Plus you’ve got to come back week-in, week-out to see what’s new and different.
- Contagious, electric quality – Have you ever seen an empty Costco parking lot? Costco is an attraction for shoppers in any local community.
- Convergence between atmosphere, store design, and merchandise – No frills mean no extra markup, so prices can be at their lowest.
- Authentic Concept – Costco really understands its customers and delivers an authentic experience. They have a well-publicized policy of never marking up products more than 15 percent. And they stand behind all their products with a iron-clad guarantee.
- Value Pricing – Enough said!
- Accessible environment – Costco is non-exclusive, even if they charge an annual fee to enjoy the experience. The fee of $55 is neither too high, nor too low either.
You can learn more about how to make some of the Costco magic work for you:
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April 4th, 2012
“The Beach Is My Backyard”
In-depth interviews take marketers inside the homes and minds of their high-net-worth customers
Joe and Julie appear to have it all. This high-net-worth couple have a beautiful ocean-front home, with floor-to-ceiling windows that show the every-changing panorama of the water just outside. “It’s the biggest swimming pool you’re ever going to see,” laughs Joe. “Waking up and hearing the water crash onto the beach is soothing in the morning. It makes you feel like you’re on vacation, not at home.”
Julie was delighted to find that Joe shared her passion for living around – and in – the water. “When he wanted to live near the water and we both liked to play in the water, I’m like, ‘yes, of course!’” They use their Jet Skis to get out on the water, but they also enjoy the quiet pleasures of tying their rafts together and basking in the sun as they float on the waves. And they are sharing this love of the ocean with their five-year-old son, Sam, who already enjoys throwing rocks into the waves. “It gives him a lot more experiences. It gives him a lot of things that other kids don’t have. He wants to go fishing all the time, and we take him,” says Joe. “All you do is go out the back door.”
For a peek into the life and point of view of Joe and Julie and other luxury customers, click on this link: http://filmedresearch.com/luxury/
Get Inspired>> In-Depth Interviews Invite Marketers Into the Customer’s Homes
I learned about Joe and Julie through watching an in-depth interview (IDI), an interview that was captured on video in their home by Jo Anne De Vargas and her team of researchers with Filmed Research group. By watching this video, I could see Julie’s eyes light up when she talked about the simple pleasures that living on the ocean allows, and I could tell that both parents were passionate about sharing their preferred lifestyle with Sam. I learned so much more about them from this brief clip than I ever could have from administering a survey or even from asking them to take part in a focus group.
Plus IDIs are virtually the only way to successfully reach high-net-worth consumers like Joe and Julie who so many luxury brands need to understand better. HNW consumers are unlikely to respond to invitations to focus groups and are a challenge to keep engaged in surveys. But they often are very willing to open up their homes to researchers like Jo Anne who has a unique knack for bonding with respondents and experience discreetly capturing respondent comments that produce deep insights.
This powerful tool captures the qualitative side of research that marketers need, in a way that allows a sneak peek into the customers’ lives. For Joe and Julie, a future IDI could include a walk around their home: Did their love for the ocean and desire to live near it impact their decorating choices? How does this luxurious property affect their style when entertaining? A peek in their closet could divulge a wealth of information for marketers about how their luxury lifestyle plays out in their clothing choices. And, of course, a visit to Sam’s room would tell us more about how Joe and Julie are passing their values down, as we look at everything from décor to picture books to favorite toys.
Take Action>> IDIs Give Marketers a Wealth of Information in a Memorable Way
Marketers dream of getting a look into the homes, hearts, and minds of their luxury customers, and an IDI give us just that. Joe and Julie make hundreds of buying decisions every year, and they represent a coveted HNW luxury customer market segment. Quantitative surveys can capture the “what” and “how much” metrics, but the IDI allows marketers to see the couple’s eyes light up and hear the passion in their voices when they talk about choices and purchases that really match their values.
Most importantly, IDIs take place in the customer’s home, where they are comfortable, and where looking at treasured objects will spark memories and connections that are impossible to gather in a traditional focus group setting. Because these intimate conversations are captured on video, they can be reexamined and included in client presentations as well.
If you’d like to learn more about putting the power of video to work for your business needs, you can call me at Unity Marketing 717.336.1600 or reach out to Jo Anne De Vargas directly at 262.595.0091 or jo@filmedresearch.com
Tags: High-Net-Worth, HNW, IDIs, In-Depth Interviews, Market Research, Video
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March 29th, 2012
‘Cheap and chic” retailer may become part of trend of mass brands targeting affluent customers
Swedish retailer H&M – long considered one of the top destinations for fashionable apparel at bargain prices — may be joining the trend of mass market brands competing for the luxury consumer dollar. According to Women’s Wear Daily, H&M may be planning a new luxury line, complete with a more “luxury” price tag.
I’m not surprised to hear these rumors surface, as H&M has played on the fringes of the luxury market through their partnerships with luxury designer brands like Marni, Versace and Karl Lagerfeld. Also, we are seeing a trend of other retailers — J.C. Penney immediately comes to mind — eyeing the high-end, luxury segments of the market to pursue growth. It is a direct result of the recent recession.
Get Inspired >>
As the recession recedes, the affluent are the only ones left standing with cash to spend on things they don’t need
Mass marketers have typically relied on middle class customers as their primary market, but these customers are coming out of the recession with greatly reduced spending power. Affluent consumers, however, make up 20 percent of the overall population but are responsible for 40 percent of consumer spending, making them a sought-after target across the entire retail spectrum from discount to high-end. I expect to see more marketers and brands moving upstream in the future.
But this move is not without its dangers. If everyone positions their brand as “luxury,” then the whole idea of luxury loses its luster — if luxury is something everyone can have, it ceases to be special or something people aspire to own.
The danger in moving upscale for H&M in particular and other mass brands in general is confusing their customers. H&M has built their brand around being fast, affordable, fun fashion. If they lose their focus on this unique selling proposition in an effort to associate themselves with luxury, they may lose their core market. At the same time, they are taking a risk by perhaps positioning themselves as something they are not — a destination for true luxe items and brands.
On the other hand, heritage luxury brands have something to fear by the movement of what they perceive as their “inferiors” moving into their exalted luxury space. These upstart luxury brands don’t have any of the baggage of the historic luxury brands, and they don’t have any self-imposed restrictions on what they can and can’t do. If we are going to see true change and innovation in the luxury marketplace, it is likely to come from an “upstart” like H&M rather than a heritage luxury brand.
With this move, H&M has little to lose and much to win if they succeed. The remainder of the luxury marketplace needs to get ready for the changes that might come from these unexpected entrants into the luxury game.
Take Action >>>
Learn more about the changing luxury landscape
To take your first step to understanding the challenges faced by luxury marketers today as they confront an all-new luxury marketplace, read my book, Putting the Luxe Back in Luxury: How New Consumer Values Are Redefining the Way We Market Luxury.
In it you will find out have the recent global recession drained a lot of luxe right out of luxury. While the market for luxury brands has changed, but it still offers many opportunities for those who understand their customers’ changing priorities. In the past Baby Boomers were the drivers of this market and they are still important to it, but GenX and Millennials are growing in importance as they reach their peak earning years and Boomers begin their retirement life stage.
Post-recession luxury brand customers turned away from materialism in favor of luxury experiences and increased charitable giving. Previously indulgent affluents learned to say no to the allure of luxury brands. As a luxury marketer, you need to attract your recession-ravaged customers back to your fold. This book gives luxury marketers vital insights and strategies to assure success in the new luxury market through 2020. Marketers need a new understanding of their customers, their needs, desires, and aspirations in order to find the segments where their greatest opportunities lie.
Click this link to order your copy today. Also available for your Kindle reader.
Tags: H&M, J.C. Penney's, Karl Lagerfeld, Luxury Brands, Marni, Mass Market, Putting the Luxe Back in Luxury, Upscale, Versace
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March 19th, 2012
In-depth interviews allow marketers to understand their customer’s buying process in a whole new way
I’ll never forget meeting Amy and Mark. Like most young engaged couples, they are eager to share the details of their upcoming wedding. They dream of a beach wedding, which they will hold in Key West rather than Cabo for the convenience of their friends and family. “It is the most beautiful venue. We will be getting married on their terrace overlooking the Gulf of Mexico,” Amy says.
But while the couple will wed in a casual beach town – with Mark happily clad in linen pants and sandals – the couple still wants traditional elements in their wedding. “I’ve decided to go with the traditional wedding dress,” Amy says. And like their wedding, Amy’s engagement ring is a blend of the traditional and the modern. “I really liked the design, and it looks antique or vintage, but it’s not,” says Amy. “It’s a brand new piece.”
Amy and Mark are not personal friends of mine. They are a couple I met through a filmed interview conducted by Jo Anne De Vargas and her Filmed Research group. The interview was recorded in the couple’s home to gain in-depth insights into consumer behavior. And because we captured this interview on video, I can share Amy and Mark’s journey to the altar – with all the plans and purchases that entails – with the marketers who most want to understand them. You can meet them too here: http://filmedresearch.com/luxury/
Data Are the Facts; Video Brings Personal Understanding
Quantitative surveys have always been the backbone of marketing research, and I don’t think that will change. It is important to understand overall trends and statistics about consumer behavior, and quantitative data captures that.
However, no customer can be adequately described through percentages and averages. Take Amy as an example. A wedding planner, dress maker, or hotel might look at data on destination weddings and assume that a bride who chooses a beachfront location, as Amy has done, is looking for a casual, informal affair. They would miss the nuance that Amy still wants her fairy tale wedding gown and loves her vintage-look engagement ring.
Marketers certainly must look at the data to learn about their customers. But to understand Amy, they have to meet her.
In-Depth Interviews Go a Step Beyond Focus Groups
Qualitative research helps you get a deeper, closer, more personal understanding of the customer: what motivates them, what they value, what really makes a difference to them. A traditional approach for qualitative research is focus groups, and while they offer many upsides, they also have downsides. Specifically, they take the customer out of his or her personal realm and into an unnatural setting where they may posture more and act unnaturally.
For example, I often warn clients about the ‘halo’ effect you sometimes see in groups where people who come in and are paid for their attendance feel the need to say good things about whatever you are discussing, so they hold back any real reservations or concerns that the client needs to really understand. Plus in focus groups you are always dealing with a group dynamic and thus constrained how deeply you can delve into one subject’s perspective.
But IDIs (in-depth interviews) conducted in the customer’s own home or personal environment overcome those challenges and capture the research subject where they feel most comfortable. At home, we can observe and probe behaviors, possessions and passions that might otherwise be unknown, or overly embellished. This approach gives us the chance to gain more insights, more revelation, more truth. Plus – and this is a very big plus for clients that need to share the consumer insights – if interviews are filmed, portions of the video that can be incorporated into a presentation. There is nothing more memorable and powerful than customers showing and telling your story in their own words.
Take Action>> Put Power of In-Depth Interviews Recorded on Video to Work
“You’ve got to shoot it to share it” — Jo Anne De Vargas, Filmed Research group
I am pleased to be working with Jo Anne De Vargas and her team of skilled researchers and videographers to help my clients gain deeper more actionable customer insights by conducting studies of affluent consumer’s living their every lives. Depending upon your needs, customers can be studied in their home, at or on their way to work, while they shop, while they dine or check into a hotel, or when they are relaxing and having fun. Think of the powerful insights that can arise when you study consumers ‘in situ,’ not in an artificial research setting.
And these days, few respondents are shy in front of a video camera, though a crowd of observers in their home feels awkward. The average American household video records EVERYTHING (kids, weddings, pets, you name it). Yet, in business, and especially in market research, video is perceived as a dispensable “luxury” that may not fit into the project budget. More often than not, professional research video is actually a cost savings over the cost of traveling to observe. Furthermore, when edited down to key insights, video provides content and context that can be appreciated in a spare few minutes via the web.
Of course the moral is, to share findings and capitalize on the BIG THOUGHTS you have to take the first step and put video-recorded IDIs into your research plan. Or as Jo Anne says, “You’ve got to shoot it to share it!”
For a peek into the life and point of view of Amy and Mark and other luxury customers, click on this link: http://filmedresearch.com/luxury/
I am excited about bringing the power of video to luxury marketers by partnering with Filmed Research group, qualitative research supplier specializing in delivering findings supported by high def edited video. Their knack for bonding with respondents and discreetly shooting uncovers deep insights. Their proprietary approach to editing quickly creates Voice of the Customer Video that is memorable and easy to share with your staff, management, agency and buyers.
If you’d like to learn more about putting the power of video to work for your business needs, you can call me at Unity Marketing or reach out to Jo Anne De Vargus, FRg directly at 262.595.0091 or jo@filmedresearch.com
Tags: Destination weddings, IDI, In-depth inverviews, Qualitative market research, videos, Weddings
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February 14th, 2012
Danish company leads a paradigm shift as traditional jewelers ignore them at their peril
Luxury jewelry marketers: What does your business have to fear from PANDORA, the Danish company specializing in customizable charm bracelets, rings, earrings, and necklaces?
If you answered anything other than “plenty,” you may want to take a second look.
In Unity Marketing’s latest Luxury Tracking survey conducted in January 2012, PANDORA emerged as the second-ranked luxury jewelry brand, trailing only traditional luxury jeweler, Tiffany. This fits right in with the company’s stated goal to become “the world’s most recognized jewelry brand.”
But at a recent conference I attended, a panel of jewelry designers all said they felt no impact of PANDORA on their businesses. They may want to put their ears a little closer to the ground, because PANDORA is gaining on them and is poised to be a game-changer in the luxury jewelry industry.
Get Inspired>>
PANDORA’s design-your-own approach is custom-tailored for the modern luxury consumer
PANDORA is a paradigm-shifting jewelry brand, giving customers the ability to design their own jewelry pieces with each additional charm added to represent moments and memories in the person’s life. This approach dovetails nicely with the current economic climate and luxury consumer behavior in two ways:
- First, luxury consumers consistently report valuing experiences over physical possessions when they make a purchase of luxury. The PANDORA jewelry fits right in by allowing luxury consumers to pick pieces with meaning for them to commemorate a special experience. Plus they get the experiential thrill of designing their own unique jewelry piece.
- Second, the unique nature of the pieces means that it is highly unlikely an affluent consumer will see her jewelry expression on the arm of another. This is critical in this time of increasing class warfare and backlash against the rich, when an identifiable piece of luxury jewelry that obviously comes from an expensive brand may make a tone-deaf statement in a climate of continued economic uncertainty. PANDORA jewelry allows the personality of the wearer to be more important than the branding message.
The rise of PANDORA is not unique. In the luxury market, competition is coming from unexpected places. Just because your brand is “luxury” doesn’t give it immunity from non-luxury players or a guarantee of keeping your affluent customers. Mass brands – like L’Oreal Paris, JC Penney’s, Ann Taylor, and Amazon.com — are all getting more than their fair share of sales among luxury-leaning affluent consumers. Today’s luxury marketplace must compete for affluent consumers not only among luxury brands but from savvy high-quality mass brands as well. (You all remember seeing Michelle Obama recently looking stunning in her melon coat from Ann Taylor.)
Take Action>>
Take heed of PANDORA’s example and customize your own jewelry brand
PANDORA saw its sales double between 2009 and 2010, a dramatic result of its core strategy. CEO Mikkel Olesen writes, “We believe that providing our customers with high-quality, hand-finished, modern jewelry – made from genuine materials and at prices they can afford – is the soundest way to ensure our customers stay with us.”
PANDORA clearly understands its target consumers, and every luxury brand must do so in order to be truly competitive in a world in which being an identifiably affluent-oriented brand can be as much a liability as a benefit. To help you navigate this new terrain, you can take a number of steps:
- Read my book, Putting the Luxe Back in Luxury. This is a great start to understanding the changing behaviors of the affluent consumer and to finding inspiration among some of the most successful luxury brands which are thriving in the changed economic environment.
- Order The Jewelry Report 2011. This report will help you delve deeper into the jewelry marketplace to understand what jewelry consumers want and how you can provide it. This concise and cost-conscious report is written specifically for jewelry retailers and marketers that want the most up-to-date and salient facts to help them understand the trends in the current market for jewelry, including jewelry buyers’ shopping preferences, behaviors and attitudes. This report will help jewelry marketers challenge their old strategies and create new designs at new price points to be sold in new ways.
- Subscribe to Unity Marketing’s Luxury Tracking study to keep your finger on the pulse of the luxury consumer market. Every three months Unity Marketing conducts a survey of 1,250+ luxury consumers across the entire luxury market to give you a top level view of consumer behavior in regards to 22 different categories of luxury goods and services, including luxury jewelry and watches. Plus every quarter it digs deep into preferred brands, favorite store types, and how affluent consumers are spending their money. This is the most in-depth report for the marketer who really wants to gain the competitive advantage by understanding the entire marketplace.
Or, give me a call. I would be happy to help tailor a solution for your business that will give you the kind of advantage you admire in game-changers like PANDORA
Tags: Jewelry Industry, Jewelry Market, Jewelry Report, Luxury Tracking, PANDORA, Putting the Luxe Back in Luxury, Tiffany
Posted in Jewelry Market | 1 Comment »
January 27th, 2012
Some say this signals the return of the luxury market, but it only shows Coach’s understanding of a challenging retail market
Luxury handbag maker Coach has recently released news that its sales increased over the holidays, driving an overall second quarter revenue increase of some 15 percent. Revenues in stores open at least one year increased 8.8 percent in the quarter ending in December, causing speculation that the luxury goods sector may be rebounding in spite of an overall weak economy.
Indeed, this is great news for Coach. But it is dangerous to conclude from this news that the luxury market is back and things will be better for all in the coming quarters. Rather the message is that Coach is becoming a stronger, more formidable competitor. They have taken the right steps to grow business in the current challenging retail environment. What other luxury marketers should learn from Coach is how to use the power of consumer insights to tailor solutions for their own customer base.
Get Inspired>>
Coach’s results only tell you about Coach — You need to get up close and personal with your own customers to find strategies that will produce Coach-like results for your business
Coach is successful because it understands its own brand and its own consumer. Other luxury marketers can’t replicate what Coach has done, because Coach’s solutions will only work for that company. Rather, luxury marketers must learn first-hand — not second-hand — about the luxury consumer, who they are, and how to market successfully to their new value-driven mindset and changed needs.
Coach understand that the recession brought out the value consumer in all of us, regardless of income level, so it launched its Poppy line in 2009. This line of handbags offered a price point about 20 percent lower than the overall Coach average. They also committed to offering half of their bags under the $300 price point.
In addition to rebalancing their prices, Coach took a hard look at how their customers shop. They realized that the typical Coach customer visits a Coach store once a month, so they committed to change the store floor layout and introduce new products on a thirty day cycle. This decision was not driven by a look at what other companies were doing but by their own market research.
Take Action>>
Marketers need to do their due-diligence to understand their customers better in order to drive sales in a challenging market environment
Coach is successful because it understands its own brand and its own consumer. Other luxury marketers can’t replicate what Coach has done, because Coach’s solutions will only work for that company. Rather, luxury marketers must learn first-hand – not second-hand – about the luxury consumer, who they are, and how to market successfully to their new value-driven mindset and needs.
If you want to do with your business what Coach has done, your first step is easy. Pick up my new book, Putting the Luxe Back in Luxury, for a look at the new luxury consumer, who they are, what they want, and why they buy. Then, when you are ready to take the next step into understanding your specific consumer, call me for custom solutions to your needs.
Today’s luxury consumer is looking to maximize their investment when they spend, hoping to get the biggest return on their purchase investment. Coach bags give them that with classic design, high quality leather, and a standout guarantee, plus a shopping experience that they favor.
But other luxury marketers can gain inspiration from Coach, but then they need to find new approaches, new strategies, new ways to build their businesses. Just like a handbag, a marketing solution is a highly individual thing, and you can’t borrow someone else’s. You need the one that works for you.
Posted in Retail, Uncategorized | No Comments »
January 10th, 2012
Why Anna Wintour Is So Last Century
Get Inspired>>
Who needs to read Vogue anymore when there’s social media?
In a recent focus group with Millennial-generation consumers on the road to affluence thanks to high levels of education and equally high career ambitions, one of the young women in the group commented on how printed magazines just don’t cut it anymore. She said, “I don’t buy magazines anymore. I used to, but I don’t anymore.”
Another said, “By the time that magazine is printed and you read it, there’s something else better that you already know about. So now you go to websites or social networks like Twitter and Facebook that give you highlights and updates online.”
These young women’s comments were in mind when I saw a recent column by Forbes contributor Leah Bourne, entitled Is Social Media the New Vogue? Bourne comes to the same conclusion that these young women I met in focus groups have: Printed magazines are ‘old-fashioned.’
Young consumers crave immediate access to information – that’s one big mark against magazines. But even more importantly, web-empowered consumers demand the ability to custom-tailor the news to their interests, not that of the magazine’s editor, publisher or advertisers.
Anna Wintour move over, young women don’t need you anymore
Anna Wintour move over, young women don’t need you anymore. They are the editors of their own virtual fashion magazines and social media provides the unedited news they use to create their own fashion spreads.
Called out in our Millennial focus group was Corporette.com, a fashion blog by Kat Griffin, an ambitious Millennial generation lawyer who learned the hard way that Vogue and the other fashion mags couldn’t help her find professional work-appropriate attire, so she took matters into her own hands and founded Corporette.
This sea change in the way Millennials get their consumer news spells trouble for the magazine industry, which has been suffering for nearly a decade. But the change doesn’t stop there. Marketers and retailers need to realize that the future-affluent, fashion-forward Millennial is no longer hitting the newsstand for her shopping news; instead, she is going online.
Take Action>>
Brands that win in the future will be those that know how to use social media to connect with customers
While it is popular in business circles to give lip service to social media, there are still too many brands standing on the sidelines, taking baby-steps online, but not making the plunge into online marketing and social media. In Leah Bourne’s Forbes article she profiles jewelry designer Carol Brodie who, having paid her dues working with traditional brands such as Harry Winston and De Beers in traditional ways, went out on her on into cyber-space and made a stunning success.
Brodie’s secret: She ignored conventional wisdom and introduced her precious and fine jewelry collection exclusively on Home Shopping Network (now called HSN). Who knew you could sell fine jewelry on television? Or that you could launch a top-selling jewelry brand through social media alone?
I find Carol Brodie inspirational because she dared to follow her gut and innovate with new ways to bring product to market and to communicate with the customer. Brodie understands that social media, just like true dialogue with friends, is as much about listening as talking. By listening to the customers, she learns more about her brand and her products and what they mean to the customers, so that she can incorporate their point of view in future product designs and marketing initiatives.
For luxury brands, Brodie believes they have been too slow to the social media space, “I think a lot of brands spend so much time protecting their brand equity that they forget that they need to appeal to a new customer. I see so many brands relying on global expansion in new markets based upon old brand equity. What happens when there is a glut in new markets to penetrate? You have to go back to your established markets that are thriving and growing and remember that old brand equity is only as good as new brand innovation and technology. It’s not just about your product.”
To help luxury marketers evaluate opportunities to use the internet and social media more effectively to reach their affluent customers and potential customers, Unity Marketing has published a special trend report, Affluent Consumers and How They Use the Internet, Social Media and Mobile Devices: An in-depth profile of the online luxury customer. This trend report analyzes the results of a survey among 1,237 affluent consumers with an average income of $308,700 (age 43.9 yrs; 42 percent male/58 percent female) who use the internet, social media, and mobile devices.
This trend report provides answers critical questions about today’s online environment so that luxury marketers can develop their online marketing strategies, including how best to use social media for building their brand and how to tap the rising power of mobile apps to connect with the affluent shopper.
Click this link to learn more about the trend report and to order your copy, now available at a special subscription price of $500 – reduced from $995.
Tags: affluent, blogs, consumers, fashion, luxury, marketing, millennials, social media
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November 29th, 2011
Get Inspired>>
In a survey among retail CEOs, e-commerce is viewed as the most critical strategy for sales growth in the future
With Cyber Monday now getting nearly the same amount of focus and press as Black Friday, one thing is clear: a retailer’s online presence is critical to its success. However, many retailers express confusion at how best to leverage the power of online communication: How should they handle e-commerce? What do mobile devices mean for their ability to reach their target market? How important are Facebook, Twitter, and other social media, and how should they use these tools to market their business and communicate their brand?
For the CEOs of 21 leading U.S. and Canadian specialty retail and department store chains, e-commerce, mobile and social media are named the most important strategies to grow their businesses over the next five years. A recent survey conducted by PwC Canada Retail Consulting Services found that 100 percent of the retail CEOs surveyed said that the priority for retailers today is to reach the consumer across multiple channels including e-commerce, brick-and-mortar, m-commerce and social.
The PwC’s CEO study was conducted to understand how retailers are managing and fueling growth. CEOs were asked to provide insight into five key areas: growth strategies, e-commerce, international sales, industry game changers and economic environment.
Commenting on the results of the study, Antony Karabus, PwC Canada Retail Consulting Leader says, “While we saw a flurry of M&A activity prior to the recession, now retailer growth strategies are being driven by organic opportunities like international expansion and e-commerce.”
“Retailers are increasingly focused on growth strategies that differentiate them and provide new, exclusive, differentiated value, thus providing a compelling proposition to keep customers coming back.” — Antony Karabus, PwC Canada Retail Consulting Leader
Among the top ways these forward-looking CEOs will grow their businesses over the next five years are:
- More e-commerce: 90 percent of CEOs said they will increase their use of e-commerce
- More use of social media to drive website and store traffic: 62 percent will increase their use of social networks
These CEOs have plenty of opportunity to grow their e-commerce business, since the majority said that today e-commerce accounts for less than 5 percent of sales. Some 47 percent of CEOs plan e-commerce sales to account for between 6-10 percent of sales in five years and nearly one-fourth (24 percent) are aiming e-commerce to make up more than 15 percent of total sales.
Unfortunately the study didn’t provide any guidance to their retail colleagues as to the steps these CEOs will take to build their online businesses. The most important question that needs to be answered is how a retailer can take e-commerce sales from less than 5 percent to more than 15 percent of total sales? Fortunately Unity Marketing will provide you with those answers in a webinar on December 13 at noon e.s.t.
Take Action>>
When it comes to their websites, too many retailers suffer from a “Field of Dreams” illusion. They’ve built it and now they expect people to come. Unfortunately that strategy doesn’t work. Unity Marketing can help you learn the strategies to draw people to your website and into your store.
Have you built a website for your store or product line, and now you believe all you have to do is sit back and wait for customers to come? Have you opened Facebook and Twitter accounts, yet have no idea what to do with them to increase customer engagement with your products? If so, you are not alone, but every day you wait is a day of lost sales and neglected relationships you will never get back.
The truth is, maintaining an online and social media presence is not a one-time task. The online environment changes daily, and social media is an even-more-rapidly changing set of tools that can be powerful when used correctly, but frustrating when misunderstood.
On Tuesday December 13 at noon e.s.t. Unity Marketing will host a webinar to help specialty retailers learn how to more effectively use the internet, social media, email and other internet tools to build their businesses. In the webinar retailers will learn:
- The top priority for specialty retailers in using the internet to generate growth and sales
- How retailers can use social media to generate ‘buzz’
- How to use email to attract customers to your website and your store
Join me on December 13 at noon e.s.t. to learn how to use internet tools to drive customers to your website and your store
Register here
In the webinar I will review the results of a recent Internet Marketing Needs Analysis study conducted among 133 specialty retailers. Then with the results of the study as my guide, I will help specialty retailers find ways to use internet tools more effectively. You will learn specifically:
- How specialty retailers like you are using the internet and social media, and how effective these efforts are
- Ways to use internet tools to attract visitors to your website and your store
- Where retailers need to focus their time and investment when developing their internet strategies
The webinar will last approximately 45-60 minutes with time for Q&A. Subscription fee for the webinar is $99 and covers an unlimited number of attendees at your site. Subscribers will also receive a copy of the detail slides used in the presentation. The recorded webinar will also be stored for an additional 30 days if you want to hear the talk again or can’t make the scheduled webinar. Finally, your subscription fee can be applied as credit toward the purchase of any Unity Marketing report. Your credit card will not be charged until a day or two before the webinar.
Click to learn more.
Tags: e-commerce, Internet, marketing needs assessment, mobile devices, Retail, retailers, social media, specialty retail, specialty retailers, surveys
Posted in Retail | No Comments »
October 27th, 2011
Get Inspired>>
“Luxury has long been associated with superior quality, design and craftsmanship. But the time is turning with a new breed of consumers who are seeking style with substance. These new consumers desire something more meaningful than just an expensive piece; they want brands to live and breath their values through the way they do business,” — Stephen Lussier, Executive Director, DeBeers Group.
What do mass brands like L’Oreal Paris, J.C. Penney’s, Ann Taylor, Amazon.com, Cost Plus/World Markets have in common? Each of these mass market brands is getting more than their fair share of sales among luxury-leaning affluent consumers. These affluent consumers are the economy’s ‘heavy lifters’ — They account for only 20 percent of total households but more than 40 percent of consumer spending, and they are the prime target customers of most brands, luxury and mass alike.
With the middle class consumers emerging from the most recent recession weakened and their spending power stressed, more mass market brands are going to have to attract the upscale affluent shopper. To do that they have to put more ‘luxe’ into their brand.
Putting more ‘luxe’ into the brand means aligning your brand values with the changing customers’ values. That means delivering high levels of quality and design along with a reasonable price, which is what brands like L’Oreal Paris does in beauty and Ann Taylor and Banana Republic do in fashion.
In my book, Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury, I write:
“People with money will always want the best quality, best workmanship, best style and design, but they want the emphasis on concrete attributes and values that are measurable and defined by fact and figures, not image or status….Luxury is turning inward. It is no longer about an external or outward show of status or wealth, but an inner state of being defined by personal happiness and an outstanding quality of life. The challenge for marketers and retailers that sell luxury goods is to get inside the minds of these new post-materialistic, value-driven, affluent consumers and demonstrate in a measureable way how the things they sell improve customers’ quality of life.”
While some may argue that you can’t get Prada or Gucci quality fashion at the local Ann Taylor boutique — though I think L’Oreal Paris comes pretty close to the high-priced beauty lines — mass brands don’t have to aspire so high. Rather they need to think how to differentiate their brand and their products around the values that matter to the wealthier customer. Let’s face it, people get more happiness when they get more for less and their quality of life is improved when they can get products that perform well without costing a fortune.
It’s the new ‘cheap chic.’ Not long ago ‘cheap chic’ referred to mixing the cheap, say a Gap t-shirt, with the chic, a Chanel jacket. But today ‘cheap chic’ is about how ’chic’ it is to be ‘cheap.’
People who have money didn’t get that way by spending it all; they are careful with their cash and in a persistent search for products that satisfy their high expectations at a reasonable cost. They will certainly pay for luxury quality, but they are no long willing to pay ten times, twenty times, fifty times more than the ordinary mass market price just for the privilege of wearing a luxury brand’s label. They demand more value today in exchange for their hard-earned money.
Take Action>>
“People say Zara and H&M are a detriment to luxury. For me, Zara and H&M have fueled luxury. They copy fashion and sell it at a lower price. That’s made young people realize that fashion is more important than brand. Then, one day the young people will want to buy the original. So Zara and H&M have increased business for luxury brands.” — Patrizio Bertelli, Chairman and owner, Prada
With increasing concentration of income – and resulting spending – toward the affluent segment of the market, the top 20 percent will be not only a desirable target for mass marketers. Attracting their disposable income may be do-or-die for many mass brands and mass retailers in the next decade. So mass marketers must learn to talk the language of ‘luxury’ to these customers.
To help marketers responsible for more popularly priced brands, as well as luxury brand managers who want a refresher course in luxury branding in the new economy, I will host a luxury branding webinar on November 10 at noon e.d.t entitled, Putting the ‘Luxe’ into your Brand. In the webinar you’ll learn:
• How to satisfy the youth passion for luxury indulgence through brand positioning
• How to think beyond features and benefits to “buzz”
• What ten brand attributes that every brand has to have to attain ‘luxury’ status in the consumers’ eye
• The five ‘hot button’ words that translate into quality for luxury goods
• How to think beyond product to deliver branding experiences for your customers
Follow this link to learn more about the upcoming 60 minute webinar or to register to attend.
Posted in Uncategorized | No Comments »
October 14th, 2011
Jewelers Losing Dominance in the Jewelry Market
New research report packed with ideas to help jewelry retailers boost sales this holiday season and beyond
Stevens, PA October 14, 2011 — As if the recession wasn’t bad enough, jewelers and specialty jewelry stores have been hit by a number of additonal factors that have hurt their businesses, according to a new study of the jewelry market published by Unity Marketing. Specifically:
» Jewelers are challenged by the rising cost of precious metals, which has caused consumers to seek out more affordable alternatives, such as new metals like palladium, plated metal, costume jewelry and faux gems like CZs and moissanite to consumers looking for value.
» Jewelry shoppers have turned their back on jewelry stores as their chosen place to shop and have instead favored department stores, internet websites, artisans and art galleries, TV shopping and discounters for new jewelry pieces. Etsy.com is emerging as an online destination for jewelry customers that want that handmade touch.
» With a new value consciousness, today’s jewelry consumer is finding she can pick up a new piece for a great price if she shops smart. That is one reason why the average amount jewelry shoppers spent on their last piece of fine jewelry declined by nearly 60 percent from pre-recession 2007 when the average price was $734 to $466 in the most recent survey.
“Jewelers need new ideas and inspiration that will help them market successfully against these headwinds,” Pam Danziger, president of Unity Marketing and author of the new book, Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury (Paramount Market Publishing, 2011).
“Unity Marketing’s new study of the jewelry market gives marketers the facts and the figures to help them size up the status of the jewelry consumer market. Then it adds value by using the research-based findings as a springboard to provide retailers with creative new ways to market their stores, excite their customers and merchandise their stores to grow their businesses,” Danziger said.
What jewelry customers want has changed and marketers have to change with them
“For example, the research recommends that jewelers stock more pieces made from lower-cost metals, semi-precious stones and materials that might previously have been considered ‘costume.’ This many go against the grain of some traditional jewelers, but if you want to appeal to the jewelry customers of today and tomorrow, you have to change with the times. If you don’t, you risk suffering the same fate Blockbuster, Borders and Circuit City, all once category-killer retailers that were undone by failing to move forward with their customers. The research provides retailers and marketers with a road map to help them avoid the potholes and plan for success in their future,” Danziger continues.
Danziger concludes, “Traditional jewelry stores continue to lose in the game of selling jewelry. They have to work harder and smarter to entice the customers to buy. They need to think of creative ways to touch customers and invite them into their store using all the marketing tools available to them such as social media, local community events, and partnering with other local businesses like bridal shops. This research report will help inspire marketers to take advantage of the opportunities and constructively face down the challenges in the current market.”
If you’d like to hear more from Pam about ways for jewelers to improve sales this Christmas, click this link from an interview conducted at the Rapaport International Diamond Conference/
http://youtu.be/XUXOaKFJl_Q
About the Jewelry Report 2011
The Jewelry Report 2011 is based upon the results of a consumer survey conducted March 31-April 1, 2011 among 553 recent purchasers of jewelry (average income $76,080; average age 45.1 years; 64 percent female/36 percent male) identified from a statistically-representative sample of 1,055 U.S. households. The results of the latest survey were compared with a similar survey conducted in July 2007 among 753 recent jewelry buyers (average income $75,400; 41.6 years; 63 percent female/37 percent male). Further an analysis of the luxury segment of the jewelry market is provided from the results of Unity Marketing’s Luxury Tracking study.
The latest study of the U.S. jewelry market includes:
- Size of the costume and fine jewelry sector of the market
- What’s hot and what’s not in terms of jewelry products, such as rings, necklaces and earrings or for men, tie tacks and cuff links.
- What types of metal jewelry consumers favor today, including gold, sterling silver and platinum as well as various plated metals.
- Where people shop for jewelry, including dramatic shifts away from jewelry stores toward a wider spectrum of shopping destinations including art galleries, department stores, warehouse club outlets and direct-to-consumer channels such as the internet and television shopping.
Further the report presents the latest demographics that describe the jewelry consumer market, and an in-depth look at the luxury sector of the jewelry market, which accounts for more than 50 percent of total industry sales, including which jewelry brands and national retailers the luxury shopper favors.
Click this link to learn more about the new Jewelry Report 2011 and to order a copy.
Tags: bridal jewelry, costume jewelry, fine jewelry, gold jewelry, Jewelry Market, Jewelry Purchases, Luxury Consumer, Market Size, platinum jewelry
Posted in Jewelry Market, Retail | No Comments »
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