the new domestic economy
DESCRIPTION
How Marketing to Moms and At-Home Millennials Can Help Retailers Thrive During a Recession Price reductions have been retailers’ primary response to the recession, but consumers’ responses are far more varied, particularly across cohorts. While Americans have demonstrably tempered their conspicuous consumption, other purchase factors such as brand affinities, social conformity and the need to be on-trend haven’t disappeared altogether.Younger millennials must balance their families’ new frugality with peer pressure to have and wear what’s in. Hear new consumer research into the millennial cohort and their Moms with whom they share the shopping process. Learn innovative ways marketers can use the online channel to drive purchases while providing better decision support, emotional reward and budget-sensitive options for the recession-rewired.TRANSCRIPT
THE NEW DOMESTIC ECONOMY: How Marketing to Moms and At-Home Millennials Can Help Retailers Thrive During a Recession
KELLY MOONEYPresident and CXO, Resource Interactive and co-author of The Open Brand
PRESENTED BY: SPONSORED BY: SPONSORED BY:
RECESSIONOBSESSION
DEPRESSION
DEPRESSION
THE LOST DECADE?Median household income in 2008
slipped to $50,303 from $51,295in 1998.Source: U.S. Census Bureau, 2009
Abercrombie & Fitch
Percent Change Same Store Sales August 2009 vs. August 2008
Aeropostale
American Eagle
Buckle Gap, Inc.
Hot Topic
JCPenney
Kohl's Limited Brands
Neiman Marcus
Costco
Target
TJX Companies
Source: Retail Forward, November 2009
Saks
Real Personal Consumption per Capita vs. Savings
YE
AR
OV
ER
YE
AR
CH
AN
GE
/ P
ER
CE
NT
Source: EconomPic Data, June 2009
Shifting gears...
CONSUMPTION
SAVINGS
Sales at Goodwill stores open at least a year rose 7.1% in the first three months of 2009 over the same period a year earlier. Source: NYT, June 10, 2009
90% of the U.S. respondents said that their households had reduced spending as a result of the recession. 45% of those who reduced spending did so by
necessity, 55% by choiceMcKinsey Quarterly, March 2009
CONSPICUOUSCONSUMPTION
CONSPICUOUS CURTAILING
CONSPICUOUSCONSUMPTION
CONSPICUOUS CURTAILING
After completing a shopping
5.3% felt guilty and 20% said they were
WWD, April 2009
Jupiter: US Online Retail Forecast, 2007 - 2012
the web is projected to influence 50% of offline sales by 2012
TO
TA
L S
AL
ES
(m
illi
on
s)
2007
50%
2008 2009 2010 2011 2012
48%47%45%
42%38%
Offline Sales
Offline Sales Influenced by Online
Online Sales
Total Online Impact
Q.How has the consumer changed?
Will the changes be enduring?
Is there untapped opportunity in this crisis for online retailers?
Remember the 1990s?
basement but kids, it turned out, were still willing to pay up to fit in
Source: No Logo, Naomi Klein
GEN Y:The prematurely affluent generation
1st wave feel recession is unfair
My generation is being dealt an unfair blow because of this recession
The current situation with housing prices actually makes me feel optimistic about
buying a home
All of the online resources for jobs searches and networking make me feel less
anxious about losing/finding a job
If the employment situation worsens, I may have to move back in with my parents
Most of the people my age that I know are not that worried about the recession
My friends are doing interesting entrepreneurial things to make more money
start my own business
% who agree
Among young adults 18-29
Besides fear, how do most Millennials feel about the recession? A narcissistic sense of being unfairly burdened. Yet some optimism emerges as well.
NO FAIR!
Source: JWT, 2009
Thrift is an alien virtue
OU
R M
ET
HO
DO
LOG
Y
hief nfluencing fficer
SECONDARY SYNTHESIS
150+ articles, Forrester, Nielsen, McKinsey, ExactTarget, JWT, Gen Buy
+PRIMARY RESEARCH
• 20 in-person interviews
• 50 online participants in a 10-day forum discussion with Harris Interactive
• Tested 3 RI visual prototypes
• Conducted survey with BIGResearch
• Partnered with ExpoTV
• Tapped RI Trendwatching practice
hief urchasing fficer
DIGITAL TEEN•Age 13-18, mix of race, income-earning/non-income-earning
•Shops online, regular internet and email user, use of social networking and SMS and owns cell phone.
DIGITAL MOM•Age 30-55, mix of married/single, income, and race
•Shops and purchases online; frequent email user; some use of blogs, social networks, and/or Twitter, online reviews and texting.
UNDERSTAND THE REWIRING
BRANDSHOPPING
DIGITAL
RECESSION
RECESSION
BRANDSHOPPING
DIGITAL
Forced to grow up fasterTypical teen egocentric worries displaced.
Reconciled yet feeling fortunateChance to reset family values, become more resourceful, prepare for the future.
DIG
ITA
L T
EE
NS
DIG
ITA
L M
OM
S
generations who over-
consumed. So I hope we can learn from their mistakes and be the
generation that lives within
81% of household heads say
that kids are aware of the recession and the
impact it is having on household budgets.
Source: Ad Age, April 2009
Alicia, 18
Recession-related issues have replaced more typical teenage ego-centric worries as their top concerns. (Among teenagers 13-19)
2nd wave facing recession head-on
If there will be good jobs when I graduate
things I like because of the recession
How my parents are doing money-wise
The condition of planet Earth that will be left to my generation
How attractive I am to others
Which college I/my family can afford
Source: JWT, 2009
Which college will accept me
How many friends I have
How popular I am at school
Keeping up with what other kids my age haveBase = 100
293
251
249
221
201
180
151
143
92
78
75
73
parentsgrandparents, aunts & uncles
jobs (babysitting, dog walking, etc.)
eBay, Craigslist
allowance
Teens have become more enterprising, unemployment at record high 26%
recession can come on and how long it can take to get
out of one.
set a good example for my children and
teach them to be smarter
lesson in how to live within
your means and separatewants from needs.
Pamela, 47
Alanna, 34
BRANDSHOPPING
DIGITAL
RECESSION
Savvier about financing their purchasesHave discovered online research, coupons, clearance racks, selling and swapping.
Smarter, prouder about living with lessDistinguishing between needs vs. wants, relying on codes and coupons, shopping clearance first.
DIG
ITA
L T
EE
NS
DIG
ITA
L M
OM
S
actually save my money before I make a purchase.
business as a young man
69% of young people now
research all purchases before they buy anything.
Source: OTX, May 2009
John, 16
Luke, 13
Over the next five years,moms of teens plan to:
57% consider purchases carefully57% be more price conscious55% stick to a budget57% dine out less
Source: BIGResearch, July 2009
habits will not change back once the recession is over. We are not lacking for the basics and still have a wonderful life. Less is more
Coupon sites have been
the second-most-visited category on the Internetbehind job sites for about a year.
Source: eMarketer, May 2009
Blanca, 43
BRANDSHOPPING
DIGITAL
RECESSION
Holding outDeferring purchases and selectively trading down or changing channels
Trading WAY down
before their own; rethinking luxury
DIG
ITA
L T
EE
ND
IGIT
AL
MO
M
Brand loyalty is increasingly important among 13-21 year
olds, as 73% now shop at a fixed group of stores.
to give up. I notice the difference in quality so I usually compromise by
buying good brands on sale.
Source: Euro RSCG Discovery survey, May, 2009
any brands. I maybe
but I still buy the same
Alicia, 18
David, 17
Favorite Brands During the Recession, Resource Interactive and Harris Interactive, 2009
SHOPPING
DIGITAL MOMS Favorite Brands During the Recession, Resource Interactive and Harris Interactive, 2009
specific brands anymore. I
realized that
a $300 purse as much as my kids need clothes and
Target shopping going now ....previously it was
43% are buying store brands instead of national or high-end brands.
Source: TNS Retail Forward, August 2008
Keri-Anne, 32
Sheryl, 49
BRANDSHOPPING
DIGITAL
RECESSION
Seeking independence from adults through digital devices
more ways to experience freedom
Seeking control and connectionA means of getting answers and more value, monitoring kids, finding social fulfillment
DIG
ITA
L T
EE
NS
DIG
ITA
L M
OM
S
-generation gap between under-twenty and over-
progression of technology in the
GenBuY, October 8, 2009
% N
ET C
HA
NG
E IN
USA
GE
Net Change in Communication Usage by 15-17 year olds in last 6 months
Source: Exact Target, July 2009
Text SocialNetwork
Instant Message
% more often - % less often
• Texting, social networking grow at IM's expense
• Email usage rising slightly, significantly more among smartphone owners (25% of teens)
44
25
4
(7)
Reliance on texting and SNing
focused on communication
that iPhones are the new jean.
Most of 8-14 year olds report
having online chores including sharing pictures with relatives (38%) and getting driving directions (35%).
Source: GenBuY, October 8, 2009
DIGITAL = Teenage Freedom
Source: AdAge.com, April 2009
almost always check online
Louise, 49
40% of total online spending came from $100K HH consumers, who increased shopping by 17% in Q4, 2008.
Source: comScore, 2009Tracee, 51
Moms with teens said the internet...
46% Helped me save money through access to easier
price comparisons, coupons, and deal alerts.
41% Helped me become a smarter shopper; product
reviews and ratings, blogs, and product information has helped me make more informed purchases.
21% Helped me make money through selling things I
no longer need on sites like Craigslist, eBay, etc.
SHOPPING
DIGITAL MOMS Source: BIGresearch and Resource Interactive, August 2009
UNDERSTAND THE REWIRING
Listen with a new ear let go of truisms!
Seek to understand the clashing value systems
Identify new segments to serve or new ways to deliver value
UNDERSTAND THE REWIRING
DECONSTRUCT THE (CO-) SHOPPING JOURNEY
EVALUATE RATIONALE
NEGOTIATECOORDINATE PURCHASE
OBSERVE & RE-ARM
I WANT I NEED I WANT
DESIRE BUILD THE CASEPRESENT THE CASE
NEGOTIATE ACQUIRESHARE & SWAP
DIFFUSESELF-
EDUCATE
TEENS:
MOMS:
Check Lucky at
Your Service
app
Earmark magazine
ad
Stream fave TV show on
Hulu
Check out comparison shopping
sites
Search past
emails for promo codes
+ brand name
Post Q. on
favorite mom blog
Google item
Poll friends
on Facebook
wall
Check Mobile
SMS
Visit the web site
Text friends about
meeting at mall
Downloadfilm trailer to iPhone Visit
brand/store site and build
wish list
Check
shopping cart
Check her PayPal
Student Account
Check store for clearance
Review items
held in cart
Assign more
chores in exchange
for $
Send phone pix to Mom
from store
Discuss upcoming gift cards
Post outfit on Polyvore
Upload pix to
Facebookfan page
Ratings&
reviews
List new item on
Craigslist
Wear to game &
take snaps
Say yes on Bill
My Parents
DECONSTRUCT THE (CO-) SHOPPING JOURNEY
Create new hooks that support needs-based shopping and teens' fact-finding zeal
Allow moms and teens to shop together without being together
Look for ways to help moms help teens become financially responsible
UNDERSTANDTHE REWIRING
DECONSTRUCT THE (CO-) SHOPPING JOURNEY
INNOVATE YOUR WAY OUT
MOMS want to feel smart
about how they maximize
their shopping because
they have budget limitations.
However,
for impulse.
TEENS are impressively savvy
with their OWN money
because
transaction more fully.
However, they need help
shopping within a budget.
Very receptive overall
Most indicated this saves time and makes it easier (and more fun) to shop within their budget
Some suggested it makes them smarter about money
Very receptive overall
Some questions/concerns
details and in-store pick-up
See the promise for their teens, as it would teach spending within their means; and ideal for holiday shopping
TEENS MOMS
INNOVATE YOUR WAY OUT
Begin with an Insight Formula
Create rapid prototypes
Test, (fail quickly), learn, launch agility is key!
???
Enable social shopping Add Raves to your
Ratings & Reviews
Stretch budgets with collective gift giving
Monetize your Facebook page
Offer convenience through social media
Use messaging to tap into thrift mentality
Make meaningful service changes based on feedback
Use social networks to share shipping codes or offers
Shift the dialogOffer new utility/fun
Get more relevant at the shelf level
Autofill codesand special offers; deal expiration alerts
A crisis is a terrible thing to waste.
Paul Romer, Stanford economist
www.resource.com
by Kit Yarrow and Jayne O'Donnell
Special thanks to our research partners:
Sponsored by:
thank you.FOR MORE INFORMATION ABOUT RESOURCE INTERACTIVE, EMAIL:
www.resource.com