Instigated by the frenzy of commercials and promotions, shoppers often wonder “am I getting the best deal?” In a tongue-in-cheek campaign, appliance retailer hhgregg captured this anxiety as FOBO (Fear of Better Offers.) Zimmerman, the agency behind the campaign, said the idea came from “research that found millennials currently experience feelings of fear that better options may exist elsewhere.” hhgregg is positioned as the solution:
As we head into the peak shopping season, many consumers are likely to be feeling the effects of FOBO. And despite the positioning of Black Friday as the height of discounts, some reports are finding these “deals” are not deals at all, furthering shoppers’ angst.
Some apps and websites are seeking to help relieve shoppers of these fears. Flipp aggregates retailer flyers and lets consumers pinpoint the local retailer with the best price for items on their shopping list. They’ve even created a new commercial highlighting the app’s applicability for Black Friday gift shopping.
And for those who prefer to shop Cyber Monday? As noted in last week’s NYTimes, new apps like ShopSavvy allow users to compare prices for items in brick & mortar retailers versus Amazon and other online outlets “ all in search of the best deal.”
Some questions for marketers:
*How important is getting the best price for your prime customers?
*How transparent is pricing for your product or service? Is it easy for consumers to choose to buy your brand?
There is growing evidence that consumers are becoming less interested in conspicuous consumption.Â From Millennials, who are (sometimes unwillingly) slow to launch their own independent households to Baby Boomers who are downsizing into smaller, more urban locations to the growing impact of Mari Kondoâ€™s KonMari method of decluttering â€“ living with less is an important new cultural trend.
Coupled with this trend away from consumption of â€œstuffâ€ is the trend toward using our time and money for Experiences. Â You can look to social media â€“ when was the last time a friend shared an image of a new purchase, such as a car or house?Â Yet our newsfeeds are full of pictures of exotic trips, restaurant visits, concerts and sporting events.
The new campaign from Groupon highlights this insight.Â The TV ads compare the â€œHavesâ€ and their mansions full of gaudy stuffy and the â€œHave-Donesâ€ who are engaged in life through experiences like sky-diving, dining out, getting spa treatments or visiting a fun-park. In a press release for the campaign launch,Â Vinayak Hegde, Grouponâ€™s CMO highlighted that this new focus is based on research findings that experiences been scientifically proven to make consumers happier.
Two immediate takeaways from the new campaign:
The â€œHavesâ€, with their collections of gaudy stuff are cast as older and unsociable. â€œHave-Donesâ€ by contrast are youthful and spirited.Â Which portrayal is more aspirational is pretty obvious.
Experiences are shareable â€“ participants are shown enjoying activities with a good friend, a spouse, children And evidence of the experience is shared with the larger group of friends and family â€“ via selfies and social media.
The TV ads close with â€œIf youâ€™re going to own something, own the experience.â€Â Some thoughts for marketers
Are there ways to enhance the experiential qualities of your product/service?
Before deciding to become a Blue Apron subscriber, I was a typical New Yorker—I was an order-in addict. The delivery service from my corner diner was faster than most room service at any five-star hotel. I love the convenience of this mostly urban activity, but I wanted to do better.
For years I tried to get into the whole cooking-from-scratch process, but it was not something I enjoyed. For one, I didn’t trust myself when shopping for ingredients. I always bought too much of one spice or too much of another ingredient, and they would inevitably rot in my refrigerator and need to be discarded. Then, when I did cook, I resorted to simple meals like broiled fish and salad. One thing for sure, my meals were super healthy but very boring. And there I was—back to ordering take out.
About a year ago, a friend introduced me to Blue Apron. Blue Apron is a meal delivery service that provides you with all the ingredients, in exactly the right proportions, that you need to make a delicious meal. It seemed like the perfect solution for me.
From the moment I received my first delivery, I was hooked. It fits my lifestyle to a T and satisfies my need for healthy, appetizing variety. Each Monday I receive my delivery that contains all the fixings and the instructions needed to prepare three delicious recipes. Blue Apron offers several flexible options—you can choose traditional, vegetarian, vegan, or gluten-free menus, two-person or family-size portions, and the delivery day that works best for you.
With Blue Apron I did a mental turnaround — I gave up my take-out addiction and I have become a fan of cooking. Every time I think of my attitude shift, I remember the recipe book, The Joy of Cooking. With Blue Apron, I can actually connect joy, cooking, and myself in a sentence. This service transformed my feelings of inadequacy in the kitchen to feelings of confidence—I’ve even begun to experiment a bit and consider myself to be a chef-in-the-making! Now I look forward to cooking!
Using Blue Apron is like being in my own personal cooking class where I feel totally set up for success. The prep and cooking process are so simple and easy to follow and the meals are absolutely delicious. Most of all, preparing meals for myself using the quality ingredients that Blue Apron delivers each week makes me feel good about myself. In addition to saving money, I now have the peace of mind that I’m taking care of myself.
While the practical benefits of Blue Apron are undeniable, especially to a novice like myself, the brand’s long-term value is clearly enhanced by the promise I keep to myself each time I prepare a meal—my commitment to improving the quality of my life.
In this time of near double-digit unemployment, rampant underemployment, sky-rocketing home foreclosures and other adverse economic factors, the emergence of the tightfisted consumer was totally predictable. What was spawned from necessity does not appear to be a short-term strategy. Rather, it is becoming a way of life for a majority of Americans.
Harris Interactive reports that American consumers continue to hold the line on spending, with 63% purchasing more generic (private label) branded products. This behavior is consistent across generations.
A recent study from Decitica, “Marketing to the Post-Recession Consumers“ posits that consumer spending patterns have been profoundly altered by the current recession and we are now entering a period of “new normal.” Decitica has identified four distinct consumer segments – Steadfast Frugalists, Involuntary Penny-Pinchers, Pragmatic Spenders, and Apathetic Materialists.
While consumers’ commitment and focus on finding the lowest prices vary, it’s clear that price-related value is no longer a competitive advantage. Rather, it has become an expected attribute for many purchasers.
The traditional retail “fix” of offering discounts is no longer (or is fast becoming) like email SPAM. In other words, buyers are applying their own mental filters to these offers, going for the lowest price point across many product categories. But, this approach has resulted in store brands in some categories becoming category leaders – suggesting that lower pricing as a strategy is a form of value that brand marketers cannot sustain.
Given these conditions, it is clear that the days of price discounts as the sole expression of value are over.
As consumers navigate the new economic world order, more than ever, they want to feel they are getting the best value for their money. Marketers will need to be more inventive in their offers and create products as well as marketing messaging that imbue brands with discernible value. So the question is this:
In what ways might marketers re-create brand value in today’s environment?
It begins with looking at value through an entirely new lens.
A New View of Value
In recent years, companies have begun to enhance brand value with what might be described as product-driven, functional value strategies.
Some brands, many in the Procter & Gamble stable, are combining well-recognized attributes of premium brands such as Dawn Hand Renewal with Olay Beauty, Mr. Clean with Febreze Freshness, Tide with a Touch of Downy to offer consumers an assurance of product performance and desirable attributes. This brand-combining strategy has enabled P&G to maintain its premium priced edge.
In the current new campaign for 1800 Tequila, the commercial’s protagonist points to the functionality of the cap as a point-of-difference with Patron.
Clearly, if there are product elements that can be leveraged as these examples demonstrate, marketers should naturally capitalize on these product advantages. But, there is also a consumer-driven factor that is likely to strengthen this trend towards a new value paradigm and we believe this is an attitude of responsibility. Specifically, people are becoming more responsible when it comes to the ‘stuff’ they acquire.
When you layer on facts like declining disposable income or postponing retirement out of financial necessity, it is inevitable that the purchase decision process will be more conscious, even introspective as buyers weigh their choices. And, the factors weighed are likely to reflect factors that might not have considered in the past. With these shifting attitudes, we believe there are new value areas to be mined-areas that people will resonate to more deeply-a higher order level of value.
As we look to redefine value in this new era, it is important to look at areas that are likely to have an enduring impact on consumers’ purchase decision process. We believe these reflect what used to be incidental benefits but now are more at the forefront that ever before. By tapping into these avenues of opportunity, brand perceptions will be enhanced and companies will have a chance to make a new impression in the marketplace.
In subsequent posts, we will feature the New Value opportunities. Stay tuned to our first discussion – the Green Value opportunity.