New Year's resolutions, consumers and business

Showing how your product can assist prospective customers achieve a desired state in their lives makes sense. So much sense, in fact, that it is surprising it is not done more often and overtly by incorporating "resolutions" into advertising at a time when many people formulate New Year's resolutions.

In 2007, New Year's resolution promotions included:

• Home Depot with a tv commercial for those wishing to keep their home better organized in 2008 by purchasing storage solutions. This was in conjunction with a webpage (above right) and newspaper inserts for "The Ultimate Storage Event" sale.


• Valerie Bertinelli's video blog (with related tv commercial) as celebrity spokesperson for the Jenny Craig weight loss program. This includes an interesting twist on the New Year's resolution theme.


• A university's adult degree completion program which featured an ad in the local newspaper with the heading "New Year's Resolution No. 1: It's My Time. Time to do something for my career, my future... Time to finish my education"

Does your product or service lend itself to assisting consumers to reach a goal (i.e. helping them reach a desired outcome)? If so, consider how and when to communicate with that audience. Perhaps resolutions brought on by a new year are opportunities to do so.

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It must be remembered that to build and maintain long-term relationships with them, customers must feel like your product actually helped them (or at least provided them with the chance) to reach their goal.

Gift card sales key... think tactics thru carefully

ad #1
(actual size = 2 x 2.5 inches)

ad #2
(actual size = 2.25 x 2.5)

The news accounts that retailers are banking on the combination of heavily discounted prices and purchases made via gift cards to make the holiday retail season successful is not new for 2007. While gift cards have become increasingly important to post-Christmas sales over the last few years, post-holiday discounting to boost profits and reduce inventories have become traditional staples of retailing.

Since gift cards play such an important role, many retailers are attempting to get the word out that their store is where to use the gift card (if it is a generic gift card like those from Visa and MasterCard) or now is the time to use the gift card to a particular store (since sales from gift cards are not put on the books until the cards are redeemed).

Here are two interesting promotional items regarding gift cards – both in today’s (12-28-07) newspaper.

1. Advertisements to promote the purchase of gift cards have been often seen on television, radio, newspapers, etc. during the 2007 holiday shopping season. It is easy to understand why since consumers have bought gift cards in huge (and perhaps record) numbers. However, the ad (see ad #1 above) in a twelve page insert the 12-28-07 newspaper seemed a bit late – and quite small. Promoting gift cards would seem to be more of a pre-holiday item.

2. Businesses also seek to give consumers reason to redeem gift cards soon after Christmas by using the cards at post-holiday sales. An advertisement (see ad #2 above) in an eight-page newspaper insert (on 12-28-07) told shoppers to “make your JCPenney gift card go further” by using it with the bonus coupons in the insert. It was interesting to note that this tiny notice was located on the bottom left corner of the last page of the insert… which gave key information to the consumer very late – if they saw it at all. This might have been page one material.

The upward trend for gift cards shows no indication of slowing. The properly timed implementation of carefully developed tactics related to gift cards can improve a business’ bottom line.

2007 Holiday Marketing Results... Something to Consider for 2008

The pre-Christmas article titled "Stores frustrated as shoppers' holiday procrastination gets worse " is an example that shows many businesses do not readily see the effects of their actions on the behavior of consumers. In the article, retailers bemoan the recent trend of more consumers waiting longer to do or complete their holiday shopping. In response to this, some retailers feel forced to increase the use of pre-Christmas sales and other incentives to attempt to entice shoppers to buy soon (if not now!) and from them. This impacts profit margins but businesses think this is better than fewer purchases.

Businesses blink first
Although external forces (such as consumer confidence, perceptions on the strength or weakness of the economy, etc.) impact spending, businesses need to understand that they have played a significant role in "teaching" holiday shoppers to delay purchases later in the holiday shopping cycle by actually rewarding them for waiting to shop. Consumers have learned that businesses will offer incentives to buy (sales, coupons, free shipping, increased store hours, gifts for purchasing, etc.) and they just need to outwait retailers. Shoppers have learned that the retailers will blink first.

Now that shoppers have learned this, it will be difficult (but not impossible) for businesses to alter consumer expectations.

What can be learned for 2008?
There are two routes businesses can follow: (1) continue the current trend to battle for consumer spending predominately via incentives; or (2) attract buyers by offering truly distinctive products and services that are more immune to price/incentive-based buying.

A downside to shopper incentives is that to be effective they must continually be bigger and bigger. Otherwise, today's incentives are beat by competitors who increased their incentives to increase their sales. It is a ruthless cycle.

The second option is not easy (or even possible for some business models)... but the rewards are significant. Some examples of distinctive brands/products that have weathered the price/incentive onslaught of the 2007 holiday shopping season include Nintendo's Wii and Apple iPods. This was accomplished by having products that were uniquely different from competitive offerings that were not over-inventoried (Wii) and by redefining consumer expectations of design and style (Apple iPods). However, this option is not just for big businesses. A local bookstore minimized the use of incentives by offering superior customer service (in this case an extremely knowledgeable, well-read sales staff) that attracts and retains buyers.

The question to ask is how can your store, product and/or brand start making your offerings more special in the eyes of customers and, therefore, less subject to the mandatory incentives cycle.

It is not easy or quick, but the results are worth it. The time to start for the 2008 holiday shopping season is now.

p.s.
Although this entry focuses on the holiday shopping season, the issue of the over reliance on incentives to stimulate sales is year-round.

Stopping consumers in their tracks

Macy's Union Square
Level 3 window

The Apple Store

Level 2 window

The Levi's Store

Level 1 window

The holiday shopping season was in full swing during a recent trip to San Francisco as retailers vie for the estimated $474.4 billion in 2007 holiday spending.

Walking around the shopping district surrounding Union Square, the levels of use (and non-use) of holiday window displays was plain to see and broke into four distinct groupings:


Level 0 - Window displays as usual... no attempt to "holiday-ize".

Level 1 - A slight bit of "winterization" (giant snow flakes, red & green foil, etc.).

Level 2 - Holiday themed window displays.

Level 3 - Destination windows... windows that not only made people stop but also were places they came to see.


What's the verdict?

• Level 0 and 1 windows did not draw consumer glances nor slow them down.
• Level 2 (themed) window displays drew glances but did not often slow consumers down.
• Level 3 window displays not only drew glances... shoppers actually stopped, looked and paid attention.... giving the store the opportunity to have a prolonged brand interaction with consumers.