Every consumer group from the middle class down is getting squeezed from all sides and priorities are changing. Our economy will continue to suffer through this downturn for a minimum of 24-36 months regardless of changes in Washington.
Gasoline and other commodities continue to cannibalize an ever-larger portion of the consumers’ shrinking available dollars. Consumers have been forced to make compromises that were unthinkable five years ago. Numerous studies show they’re paying less attention to advertising and branding in a search for value. Those of you who specialize in private label will testify to the double-digit growth this category is experiencing as a result.
Consumers today are smarter than ever. They seek information in an effort to make informed decisions often through non-traditional sources such as the Internet, phone apps, YouTube, word of mouth and customer reviews. A simple click of a button can help them find anything from the best gasoline price in town to a great restaurant. Consumer reports, reviews and much more are readily available to the eager purchaser who is on the fence about a purchase.
Furthermore, permanent demographic changes are in the process of taking place that will affect consumer buying patterns going forward. Aging Baby Boomers were remiss in creating personal savings. In addition they are also facing job loss and retirement.
By contrast, the Millennials (Generation Y) demand instant gratification. They used to tolerate driving to the video store to rent a DVD. Now, if they can't stream it instantly, it’s dead to them. Need to know what everyone thinks about anything relating to their personal life? Post to Facebook or Twitter. Refresh & repeat as necessary. They are the most self-centered, impatient generation the present-day world has known. What’s more, this is becoming a global cultural phenomenon.
Traditions such as cooking from scratch will decline dramatically. Convenience packaging and home meal solutions will be more important than ever, because traditional shoppers are still time-challenged.
The purchasing patterns of the new generations here in the U.S. are completely different. They are more like Europeans, shopping 4-5 times per week versus the 1.9 trips a week made by traditional U.S. shoppers. Sales of fresh products will rise, and small packages will thrive. More two-person households will also influence habits and buying trends. They are smarter, more inquisitive and more skeptical of everything. Get ready to serve them or lose your business.
Our social media-infused environment isn’t driving sales as predictably as traditional advertising did. Due to the 200-plus cable channels now widely available and DVR fragmenting commercial viewing, TV costs per impression are up dramatically, and effectiveness is down.
Even Fortune 100 marketing companies with large digital budgets are struggling to find an effective, repeatable strategy. Facebook advertisers finds themselves mired in an ongoing debate about whether marketing on Facebook is effective. When you try to extend traditional marketing logic into the world of social media, it doesn't work the same. There's a lot of speculation about what will replace the old model.
Finding a new way for the new wave
Creating a buzz these days is certainly effective. Word of mouth is effective, but word of mouth no longer refers to actual spoken words. Social media is huge, and all it takes is one Facebook post or YouTube video to cause a change in perspective. One does not have to say something repeatedly to their friends, but instead only say it once to a multi-friend media. This can be a good thing in the case of positive comments, but it can create huge challenges in the event of negative comments.
Find your brand evangelists and cultivate them … and give them something great to talk about! Get your brand evangelists involved in the solution you provide. This requires a new concept of customer value.
Advocates of this new community-oriented marketing need to rethink their customer value proposition for these evangelists. Used properly, social media will accelerate a trend toward community marketing, approximating the experience of buying in the local communities. They will be asking neighbors, friends and their peer network for more information.
Companies should position their social-media efforts to replicate as much as possible this community-oriented buying experience. In turn, social-media firms, such as Facebook, should become expert at enabling this. They can do this by expanding the buyer’s network of peers who can provide trustworthy information and advice based on their own experience with the product or service.
Although traditional marketing has changed forever, marketing itself in NOT dead.
The need for forward-thinking marketing is stronger than ever. The new possibilities of peer-influenced, community-oriented marketing holds greater promise for creating sustained growth through authentic customer relationships.
Companies that embrace these new techniques properly will prosper, while those that turn their back on the prevailing trends will see challenges in the future.
Like it or not, the Internet and social media are permanently weaved into our daily lives.