Tag Archives: IKEA

Is Frugality and Efficicency the New Status Quo in Consumer Behavior?

Frugality: I am powerful, yet I am frugal
The DIY (do it yourself) culture is a phenomenon that has
overtaken the ready-to-order and ready-to-purchase behavior. While we used to
prefer having things made and sent to us, somewhere along the lines the stamped
on labor cost has begun to bother us. This, along with the need to express
creative freedom and feel a sense of accomplishment after having completed a
manual task has driven individuals to do things themselves. The success of IKEA stores is simply one example, but the
flattening frequency of house help in metropolitan cities of third world
countries shows how people are looking more towards their own powers and
natures to completing given tasks. Frugality can be the other explanation for
this, too, as individuals get slightly more sure of what they want, and how
they want it. Businesses beware of the increasing know-how of consumers, and
the increased pickiness, which unfortunately correlates with the increasing
options that consumers face for every product they wish to purchase.
Efficiency: Factors overriding the Experience Element
For some reason, we have lost the ability to enjoy various
elements of life on a standalone basis. Efficiency has caught on like a buzzing
bug. Why, if you can have a phone that handles email, text messaging, entails a
GPS, can play movies and stream television channels, why have a laptop, a
mobile phone, a portable GPS, a Blu-ray player and a television? It is the efficiency
of one product versus many more, at a reasonable cost advantage and convenience,
perhaps. But does it replace the joy of cuddling up in a couch in front of a
television with a bowl of popcorn? I’m not saying efficiency is a bad thing, I
mean the swiftness of checking in on an airplane (lets ignore the other
associated hassles of traveling these days), or the practicality of an all-inclusive
printer/scanner/copier are definitely a sign of creative minds at relevant
work. However, I think product managers, alongside consumers, have been taking
the efficiency element too much out of reach from the human element.
Frugality again may be the cause here. Why buy six things
when one can perform the same task? From an economic standpoint, it’s probably
true. From a convenience one, depending on your adaptability to the sensitive
touch screen phones, the response will vary. And we all ignore the satisfaction
element of it. For when you have a 60 second microwavable meal, not only does
the taste and nutrition compromise itself, but one also loses out on the joys
of cooking and concocting an ingredient specific dish. Apt brand
positioning
is thus a requirement.

Sourabh Sharma, Senior Manager
and Communication & Social Media Research Expert at SKIM, a boutique marketing
research consultancy, has a background in engineering, marketing and finance
from the University of Pennsylvania, and the Wharton School and Rotterdam
School of Management. Having worked in marketing and product development at
L’Oreal, followed by a stint in management consulting, he now passionately
enjoys the world of social media, and can be found on every platform with his
alias sssourabh. He is a food critic and a fashion writer, and documents these
alongside strategy on his blog called 3FS.
He may be reached at s.sharma@skimgroup.com.
Follow him on @sssourabh.

Live from #TMRE14: How To Be a Standout Brand in a Crowd. Really.

Youngme Moon

Harvard Business School Professor and Senior Associate
Dean for Strategy and Innovation Youngme Moon helped us unpack what it means to be truly different’and burst a lot of
bubbles when she told us that despite what we may think, most of us are
unremarkable.

According to Moon, author of ‘Different:Escaping the Competitive Herd,’ while 99% of business leaders she talks to earnestly
believe that their brand is unique in its competitive set, in truth the vast
majority of brands are indistinguishable to the average consumer.

‘Think of yourselves as wine
connoisseurs for your category,’ said Moon. ‘You may be able to easily see the differences, but for the average person looking at a hundred labels in
a wine shop, it’s all just wine.’
Moon said the problem of “sameness” is pervasive
because we have so many choices. As the selection set in a category grows, the consumer
starts seeing ‘same’ and tunes out.
It is possible to stand out in such
an environment, Moon said, but it’s exceedingly rare.
Her research found standout brands do
so by ‘flipping the fundamental”they upend a fundamental assumption about
their category.
She provided examples’Ikea, Twitter,
MINI Cooper’of brands who differentiated themselves in a big way because they
defied the instinctive urge to ‘stay close to the competition’ and inverted a
value proposition. Often, this involves taking a presumed negative, putting it
front and center and turning it into a positive.
Moon also noted most brands struggle with appreciable differentiation because:
1.       In a really competitive industry it’s almost impossible to resist the
pressure to match the competition (this leads to the ‘flocking birds’ effect).
2.       Game-changing ideas don’t typically survive in most company cultures
because they tend to look a lot like crazy ideas and they’re scary.

3.       We look to customers to tell us how to be different when they can usually
only tell us how to be better.

ABOUT THE AUTHOR 
Marc Dresner is IIR USA’s sr. editor and special communication project lead. He is the former executive editor of Research Business Report, a confidential newsletter for the marketing research and consumer insights industry. He may be reached at mdresner@iirusa.com. Follow him @mdrezz.

Who’s winning the culture wars?

Brands are beginning to question whether knowing their consumer is enough. In a world of constant change, being culturally relevant and future-focussed is increasingly important. Culturally-connected brands can be nimble and operate in real time. When your brand is part of culture, not sitting on the surface, you stand a better chance of being noticed and loved.

But how exactly do you connect with something as amorphous as ‘culture’? And how do you know when you’re doing it right?
 For the last four years we’ve been measuring how successfully brands are connecting with the zeitgeist.
We asked 62,950 people in 10 countries in our Cultural Traction’ 2013 Report. We measured each brand’s VIBE ‘ that’s how Visionary, Inspiring, Bold and Exciting they are ‘ to see how well they’re tapping into cultural trends.

The change in a brand’s VIBE over time is its Cultural Traction’. If traction is decreasing, the brand is falling out of step and faces trouble, if it’s increasing the brand has its finger on the right pulse and may be destined for greater things.

In this year’s Top 10 ‘ somewhat unsurprisingly ‘ tech titans Google and Apple dominate.  Google seems more Inspiring and Exciting, Apple more Visionary and Bold. They’re joined by other industry innovators, Samsung, Microsoft and eBay, as well as BMW and Audi. Surprise entries are IKEA and Coca-Cola, proving you don’t have to make machines to join the cultural conversation.

So what makes a winner? At the heart of our top 10 brands is the belief and opportunity to drive the human race forward. Google gives us access to endless potential and innovates constantly. Apple is the original brand to give us access to the future (although its traction has been slowing over the last two years). Ikea opens our minds to possibilities and approaches the future with real optimism and Coke, well they’re all about optimism. It seems that in tricky times we’re looking for direction, vision, confidence and hope.

And the losers? Lurking at the bottom are booze brands who, despite their size, are losing cultural relevance. How we connect with people has fundamentally changed over the last decade, and alcohol brands need to work harder to keep up.  At the bottom are mainly FMCG brands, but Twitter and Yahoo are also languishing, failing to join other tech brands on the podium.

So, what do brands that are out-of-step with culture have in common?

Brands in the bottom 10 encourage us to live life to the full, but exist only in the moment. They want us to have fun, but are without direction ‘ hedonists with nowhere to go after the party. Brands that connect with culture are visionary, opinionated, give direction and create change. Brands in the bottom are fun without substance.

One thing seems certain ‘ brands who ignore the world around them do so at their peril.

ABOUT THE AUTHOR

Izzy Pugh, Cultural Insight Director, Added Value UK. This blog was originally published in Contagious Magazine. You can learn more about Cultural Insights from Added Value’s North American CEO, Maggie Taylor, as she presents ‘Refresh.  Or perish.  Why Cultural Vibrancy Counts’ at The Market Research Event in Nashville October 21-23 

A Complex Shopping Trip

I feel that it has become increasingly challenging to shop,
contrary to what one may think in a so called modern and effectively efficient
world. For the clich??d fact is true: consumer behavior is changing. In every
company, divisions and individuals are coming up with research and theories and
strategies on how to deal with the evolving consumer prototype.

However, I do
not think that the change is at all alarming. It is a natural, evolutionary
change. In the same way that the earth has become warmer over time, our years
start with the digit 2 instead of 1, and will sequentially continue with 3, 4,
etc., in the same way that writing letters has evolved from slow snail mail to
instantaneous email, or acceptable skirt lengths have gone from ankle length to
barely there, a change in consumer behavior is simply evolutionary.

Here is a vicious circle I have created which encompasses of a handful of elements that are
changing a consumer’s shopping and product selection experience. This is not an
all encompassing list, but still gives a few tips and interesting learnings for
entrepreneurs and businesses, from the perspective of both a consumer and a
producer, to put it bluntly.
Frugality: I am powerful, yet I am frugal

The DIY (do it yourself) culture is a phenomenon that has
overtaken the ready-to-order and ready-to-purchase behavior. While we used to
prefer having things made and sent to us, somewhere along the lines the stamped
on labor cost has begun to bother us. This, along with the need to express
creative freedom and feel a sense of accomplishment after having completed a
manual task has driven individuals to do things themselves.

The success of IKEA
stores is simply one example, but the flattening frequency of house help in
metropolitan cities of third world countries shows how people are looking more
towards their own powers and natures to completing given tasks. Frugality can
be the other explanation for this, too, as individuals get slightly more sure
of what they want, and how they want it. Businesses beware of the increasing
know-how of consumers, and the increased pickiness, which unfortunately
correlates with the increasing options that consumers face for every product
they wish to purchase.

Efficiency: Factors overriding the Experience Element

For some reason, we have lost the ability to enjoy various
elements of life on a standalone basis. Efficiency has caught on like a buzzing
bug. Why, if you can have a phone that handles email, text messaging, entails a
GPS, can play movies and stream television channels, why have a laptop, a
mobile phone, a portable GPS, a Blu-ray player and a television? It is the
efficiency of one product versus many more, at a reasonable cost advantage and
convenience, perhaps. But does it replace the joy of cuddling up in a couch in
front of a television with a bowl of popcorn? I’m not saying efficiency is a
bad thing, I mean the swiftness of checking in on an airplane (lets ignore the
other associated hassles of traveling these days), or the practicality of an
all inclusive printer/scanner/copier are definitely a sign of creative minds at
relevant work.

However, I think product managers, alongside consumers, have
been taking the efficiency element too much out of reach from the human element. Frugality
again may be the cause here. Why buy six things when one can perform the same
task? From an economic standpoint, it’s probably true. From a convenience one,
depending on your adaptability to the sensitive touch screen phones, the
response will vary. 

Consumer Skepticism: Aim, Aim, Aim, Fire

Every brand management course teaches us that consumers are
vulnerable and, plainly put, stupid. But no more. Consumers are much more in
control with what they wish to purchase. They re-evaluate choices much more
accurately, counting the calories and checking the sugar and carb count on food
items, reading the order of ingredients to ensure they aren’t being carried
away; since when ingredients in cosmetics are laid out in order of most to
least, it doesn’t give a strong feeling if water is the first one.  

Skepticism has begun to creep into the frame,
with consumers challenging claims and promises that are made by products.
Perhaps this may lead to a rise in third party data and research, in addition
to a consumer’s own swim through the murk. Frugality, DIY, efficiency all feed
into this element of the cycle. Branded products thus must be offering a viable
and sustainable value proposition that is well differentiated from the others
in the flock. Fluffy, unvalidated, unrequired and questionable claims will thus
need to make an exit.

Product Origins: Made with Care

Part of the skepticism comes from the origins, or
processing, of consumer products. Blame it on the paparazzi, who like to
sensationalize any flaw in a manufacturing process, such as the Tylenol recall
due to moldy scents or trace chemicals, or the publicity around manufacturing
of airplane food in infested areas. Or perhaps, blame it on ourselves, as we
have caught on to the anti-bacterial bug, and constantly wash our hands with
anti-bac soap, place a tissue before opening a public restroom door knob or
faucet, or apply alcohol wipes to clean surfaces, or on our hands after  a public transit adventure.

Besides the fact
that we are consistently drying our hands out of essential oils and moisture
(and of course, in this marketing driven world, there are products targeted
specifically for drying hands and tearing cuticles), this just cements the fact
that we are taking extra care in what we do, touch, breathe, eat, and overall,
do consciously. Companies and brands are under immense scrutiny from
story-lusting spies to mainstream consumers, who want multiple guarantees as to
why things are made cleanly, clearly, and transparently. It is no longer an
assumption, but a claim that requires repeated validation. So, businesses,
watch out, for even the air particles carry microscopic cameras.

New standards: A Paradigm Shift in Shopping

Now the important element of purchasing power: price.
Discounting is everywhere. Every day our eyes are reading the four letter words
that have become synonymous with shopping: s-a-l-e. It’s no wonder that the
upcoming generations are swift at mathematics, what with the varying
percentages off of full price, with extra percentages off with using specific
cards, or the buy several and get several more free offers, it’s almost like
it’s become a standard of shopping. And that in itself is a risk. Consumers often
enjoy seeing the new trends and designs on models, stars, everywhere, but are
willing to wait until they’re on sale. The sale price has become the new value.
It is a self fulfilling prophecy of a downward spiral. Not to mention a
competitive threat to mainstream retailers. It may not affect the retailers who
support their ‘low prices ‘ always’ claim, but those opting for fashion and
lifestyle do not attend the big box stores either.

It may not affect the
premium brands, who claim exorbitant amounts simply for a small embroidered
logo or metal placket on the edge of a pretty ordinary looking item. But these
cater to a very niche market, less than one percent of the world. What this
paradigm shift in shopping standards is bound to do is affect the mainstream
consumers, the bulging and growing bulk of the world. This is the concern,
which is leading to unnecessarily strange behavior. Is an item really on sale,
could be one reaction, when a simple item seems exorbitantly priced even at 50%
off. Inflated initial prices with sales prices that reflect what a retailer
would actually want, for instance. Which again forms a circular loop of
suspicion as a consumer wonders how an item that is marked $80 can possibly
sell for $5, and starts to wonder about consumption habits and the ethics of a
branded product. Fishy times lay ahead, and brands must stay alert.

Social Media: Lets Tweet!

And when consumers are comparing prices, options,
promotions, another factor that comes into play is the rise of social media.
There are too many elements in a product-consumer interface now. The human
element has blended itself into the gap, and people are closer than ever to
their celebrity endorsers and brand managers, reading their tweets instantly,
which relays a message that these are no longer larger than life perfectly
airbrushed bodies on multi story billboards; these are real people, with real
thoughts, real problems, and real grammatical mishaps that occur when they
type. Whilst this may excite many users, who get to know of what their brands
are conspiring on a daily basis, it poses a risk towards the legitimacy and
efficacy of branded products. Are businesses really getting closer to their
consumers, or are they tweeting a different and perhaps misleading tune?

Moreover, social media is difficult to sustain, definitely not cost effective, and while it
is buzzing around professional circles, its not entirely too new. Combine this
with the frugal consumer and the consumer skepticism, and you have an ongoing
cycle of thoughts glistening with question marks. And while social media isn’t going away, we have always been oblivious to the bubbles of the economy until
they burst.

Sourabh Sharma,
Communication & Social Media Research Expert at SKIM, an international
consultancy and marketing research agency, has a background in engineering,
marketing and finance from the University of Pennsylvania, and the Wharton
School and Rotterdam School of Management. Having worked in marketing and
product development at L’Oreal, followed by a stint in management consulting,
he now passionately enjoys the world of social media, and can be found on every
platform with his alias sssourabh. He is a food critic and a fashion writer,
and documents these alongside strategy on his blog called
3FS. He may be reached at s.sharma@skimgroup.com.
Follow him on
@sssourabh.

Responding with Retailer Strategy

Having understood the emotions that drive purchase for frequent
shoppers, its logical to examine how retailers react and position
themselves to the very same shopper needs. The role of a retailer is to
persuade purchase. In financially troubled times like the wake of the
meltdown of 2008, persuasion is more necessary from a value perspective.

Yet, even in affluent times, persuasion is necessary to hypnotize eager
shoppers to make more than just required and meaningful purchases
(which sometimes result  in shopping blunders when a credit card bill
leaves one wide-mouthed – consumer trends that I have blogged at length about). I believe that in some cases, the type of
shopper emotion seems to dictate the level of persuasion.

Blind Persuasion

For the equivalent of the love emotion,
retailers conjure strategies embodying severe discounts, freebies,
gifts-with-purchase, and the likes. Blinding shoppers with the
hypothetical value they are getting, it is often quite a good deal, but
one that was neither needed, nor wanted in the first place! Retail
management courses have often taught of the layout of grocery stores,
retail stores, etc., whereby enticing items are placed at checkout, or
sale items are kept at the back of the store, as are grocery essentials, so that our unstoppable shopper eyes see much much more than necessary.
The strategy works for retailers since they sell the bulk to
momentarily love-lorn blinded shoppers. All of it.

Pull  persuasion

For the almost emotionless requirement,
the consumers are likely to pull the products towards them due to the
inevitable need for the purchase. It is not necessary to elevate this
need to a want, or to cater to the emotional aspect too much. This is
where retailers can utilize the pull strategy to create singular deals.
As this is a requirement, no extra effort is needed from a retailer
perspective to engage interest, although some knowledge delivery is
necessary. Weekly discounts at stores like Home Depot or IKEA fulfill
this quadrant; consumers there are most likely buying requirement items,
pulling these towards themselves, and singular deals can elevate the
purchase volume.

Push persuasion

 Package deals are pushed towards consumers, either by the pricing
attraction or the physical store placement, thereby enticing shoppers.
Since this arena of products is already something that shoppers crave,
retailers can push the glitzy promotional material towards them. 
Besides a plethora of glossy, attractive and aspirational advertising,
package deals come in handy, as do gifts with purchase (GWP). Getting a
gift card with a purchase, or a host of related freebies, all fall into
satisfying this quadrant. The world of glorified advertising rules the
retailer strategy.

No persuasion

As Oscar Wilde says, you can resist anything but temptation. Indeed,
for that which is high on a desire list, is often not on sale. Although,
sometimes it may be, but is probably in limited quantities. The
scarcity makes the product more valuable, almost masking the need and
want all at once, but enticing shoppers to purchase it. This makes it
more than simply a requirement, more than an itching craving,
transforming it into a burning desire that
drains pockets, trickles time in lines, and sometimes also satisfies.
Think of holiday lines, the rush in stores on peak times, the limited
time Amazon lightening deals or morning-only Black Friday and Boxing Day
ones, and the gratification of getting the good deal on the last item. The retailer wins again!

What is your emotional driver for shopping? Seek your passion for
shopping, and check to see how the retailer is catering to you, giving
you options, but also enticing you to purchase more based on your
emotion. Think about what you are shopping for, particularly during the
holiday season. It has become a cat-mouse game these days, and some label holiday shopping as capitalism!

Controversial for sure, but the truth is that retailers are getting more coy, somewhat more desperate, since the shoppers have become less gullible, more frugal, influenced by social media to investigate the nooks of everything they buy, as I have spoken of in documenting how complex a modern shopping trip has become. Consumers have thus inevitably somewhat smarter.

A smart consumer? It is a retailer’s biggest dilemma. But not to be taken as an impossibility.

Sourabh Sharma,
Communication & Social Media Research Expert at SKIM, an international
consultancy and marketing research agency, has a background in engineering,
marketing and finance from the University of Pennsylvania, and the Wharton
School and Rotterdam School of Management. Having worked in marketing and
product development at L’Oreal, followed by a stint in management consulting,
he now passionately enjoys the world of social media, and can be found on every
platform with his alias sssourabh. He is a food critic and a fashion writer,
and documents these alongside strategy on his blog called
3FS. He may be reached at s.sharma@skimgroup.com.
Follow him on
@sssourabh.