BCA Expo July 2011

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The Consumer Of Today

What Are They Possibly Thinking?

Billiard Congress of America

Lynn Switanowski July 14, 2011

“The Future Has A Way Of Arriving Unannounced”

~George Will

“We PLAN for your PROFITS” www.cbc-group.net

The Trauma Of Change

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“Sometimes In Our Confusion, We See Not The World

As It Is, But Through Eyes Blurred By The Mind.”-unknown


The Pace Of Change Is Accelerating Every Year

•25+ Years Retail Industry Experience

•Fortune 100 Senior Sales and

Marketing Executive

•Small Business Strategist

•Helping Independent Retailers Create

Profitable Strategy, Inventory and

Marketing Programs Since 2004

Why Listen To Me?

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•What Motivates Each Generation to Spend Money

•Understand Consumer Shopping Habits- Today and in the Future

•Learn How to Anticipate Consumer’s

Needs

Seminar Objectives


Consumers Are Buying Premium Or Value With The Mid-Tier Being Squeezed

• The US Is Becoming An “Hourglass Economy”

• Manufacturers And Retailers Are Trying To Capture This Fickle Consumer With A Wider Range Of Products

Premium

Value

• Highly Targeted• High Experience• Higher Prices

• Low Price• Mass, Dollar• Private Label

Mainstream Products

Marginalized

Source: Market Research

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Seek An Immersive Retail Shopping

Experience

� Stores Need To Be Destinations,

Not Just Product Showcases

� Stores Should Motivate

Consumers Through Education,

Experience And Trust

Desire To Belong To A Community

� Consumers Want To Interact With Products, And Partner In The Retail Experience

� Brands Need To Evoke A Sense Of Purpose And Inspiration

� Consumers Need To Emotionally Feel Switching Costs When Leaving Community


To Survive – And Thrive - Businesses Must Meet Emerging Consumer Trends


Let’s Explore Consumer Change Drivers

• Changing Demographics of Large Market Segments

– Boomers Rule

– Y - Now

– X – Tra Special

• Additional Demographic Trends

– Household Size

– Shifting Income

– Service Sector Explosion

– Culture Clamor

– Boomers Rule

– Y - Now


• Changing Behavioral Trends

– Interconnected And Involved

– Personally Speaking

• Other Factors

– Supplying The Answers

– Resources Rock

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– Boomers Rule

– Y - Now



– Household Size

– Shifting Income


– Culture Clamor

– Boomers Rule

– Y - Now





• Other Factors


– Resources Rock


Boelter + Lincoln - May 2008

Baby BoomersBorn Between

1946-196579 Million

Generation XBorn Between

1965-197748 Million

Generation YBorn Between

1977-199470 Million

Who Are We Talking About?

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Boomers Rule; Boomers Rule; Boomers Rule; Boomers Rule; More Money, Time And Choices

• Highly Educated, More Economically Empowered And More Self-focused

• First Wave Of Successful Female Boomers With The Money And Resources

• View Themselves As Younger Than They Really Are (By 20 Years); 50 is the new 30

• Healthier And Active; Expected To Outlive Prior Generations

• New Desires: Experiential Engagements, Quality Of Life Improvements From Products And Services


Gen X Gen X Gen X Gen X ---- er’s; er’s; er’s; er’s; Connected And Practically Minded

• First Latchkey Children

•Maintain A Cautious Economic

Outlook

• Prefer Products Based On

Practicality

• Heavy Users Of Communication

Tools To Stay In Touch Better

•Will Be Primary Buyers Of Most

Goods By 2012

• Maintain Balance Between Work

And Leisure

•May Choose To Remain Living At

Home With Parents Longer

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• Spending Habits Emulate Boomer Parents

• Everything Is Interconnected,

Anything Goes, Everything Is

Available And Nothing Is Private

• Lack Of Loyalty To Products/Services

• Interested In Peer To Peer Experiences

• Socially Conscious• Savvy Shoppers; Place A High

Degree Of Importance On

Individualism, Self-fulfillment And

Personal Involvement In The

Creation Process

Gen Y;Gen Y;Gen Y;Gen Y; Let’s Talk About Me, Right Now


Millenials; Text Me To Connect With MeMillenials; Text Me To Connect With MeMillenials; Text Me To Connect With MeMillenials; Text Me To Connect With Me

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– Boomers Rule

– Y - Now


• Beyond Market Segment Trends

– Household Size

– Shifting Income


– Culture Clamor

• Changing Behavioral TrendsChanging Behavioral TrendsChanging Behavioral TrendsChanging Behavioral Trends– Interconnected And

Involved– Personally Speaking

• Other FactorsOther FactorsOther FactorsOther Factors– Supplying The Answers– Resources Rock


Household Size ReductionsHousehold Size ReductionsHousehold Size ReductionsHousehold Size Reductions; Smaller Households With Fewer Married Heads Leads The Trend

Smaller Households Create Opportunities For More Personalized

Products And For Experiences That Are Fun For One

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Shifting IncomeShifting IncomeShifting IncomeShifting Income; Lifestyle Spending Shifts And Declines As Consumers Age


Service Sector Explodes; Service Sector Explodes; Service Sector Explodes; Service Sector Explodes; More Help, Integrated Offerings• Spending On Goods Will

Continue To Lose Ground To Spending On Services

• Older Generations Becoming More Service Oriented

– Do It Yourself Is Gone

– Do It For Me Is Next• Younger Generations Seek To

Integrate Good, Services And Experiences

To Satisfy Consumer Needs; Best In Class Retailers Will

Incorporate Services And Experiences Into Their Concepts

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Culture ClamorCulture ClamorCulture ClamorCulture Clamor: An Increasingly Diverse Population; Hispanic Demographic Shows Highest Growth

White

65% Hispanic

16%

African American

13%

Asian American

6%

Source: US Census Bureau

Percentage Of US Population

By Race/Ethnicity 2012




– Boomers Rule

– Y - Now



– Household Size

– Shifting Income


– Culture Clamor




• Other Factors


– Resources Rock

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Interconnected and InvolvedInterconnected and InvolvedInterconnected and InvolvedInterconnected and Involved; Social Status Is About Who You’re Connected To

It’s Not Who You Know, It’s Who Knows You


Personally SpeakingPersonally SpeakingPersonally SpeakingPersonally Speaking; Customized Solutions

Power Shifts From Retailer/Manufacturer To Consumer

• Value Proposition Guiding Purchases Changes– Heightened Emphasis

On Personalization– Product And Service

Solutions Designed For One Person At A Time

• Consumers Demand Niche Products, Experiences And Services Uniquely Suited To Their Tastes, Interests And Aspirations.

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– Boomers Rule

– Y - Now



– Household Size

– Shifting Income


– Culture Clamor




• Other Factors


– Resources Rock


• Individual Interactions Between Retailers And Suppliers

• Retail Evolving Toward True Demand; Not Shelf Space

• Value Chain Becomes More Intimate; Consumers Share Information; Expect Value In Return

• Extreme Consumers Seek Out Opportunities For Involvement That Brings Product To Market

Supplying The AnswersSupplying The AnswersSupplying The AnswersSupplying The Answers; Consumers Have Hand In Creating End User Products

Consumer Shift To Products And Services That Fill Exact Need

– Better & Quicker

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• Consumer Of 2012 Won’t Be Taking Resources For Granted

• Corporate Social Responsibility And Product Sustainability Will Become More Important Factors In Purchase Decisions

• Consumers Will Employ Triple Bottom Line Scorecard; Performance Will Be Measured On

– Environmental

– Social

– Financial Scales

Resources RockResources RockResources RockResources Rock; Sustainability Rules The Day

Companies Will Be Measured Based on How They Deliver To

The Planet, The People And A Profit


Business Value Curve Today

Innovation

• Features

• Functions

• Fashion

• Customization

• Personalization

• Self-expression

Production

• Speed

• Quality

• Consistency

Accessibility

• Effort

• Selection

• Price

Experience

• Shopping

• Buying

• Using

• Emotional

connections

Value added

by the right

product to the

right customer

at the right

time5

5at the right

place at the

right price

Traditionally, Consumers Found Value In Production And Accessibility Aspects Of Value Curve

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Business Value Curve in 2012

Innovation

• Features

• Functions

• Fashion

• Customization

• Personalization

• Self-expression

Production

• Speed

• Quality

• Consistency

Accessibility

• Effort

• Selection

• Price

Experience

• Shopping

• Buying

• Using

• Emotional

connections

Value Added

By Innovating

To Increase

Relevancy5

..Improving

Shopping And

End Use

Experience

And

Connections

Going Forward Consumers Will Seek Value in Innovation and Experience Aspects Of Value Curve

Deliver Breakthrough Products/Services• Work With Consumers To Create New Innovative Products

• Develop Open Source Like Communities To Create Breakthrough

Ideas

Marketers Must Evolve From A Transactional Mindset To A

Relationship Approach• Establish A Customized Relationship With Every Customer To

Increase Customer Retention;

• Create “Stickiness” Through Electronic Marketing

Retailers Can Garner A Larger “Share Of Wallet” From Each

And Every Customer To Drive Sales Growth•Shift From What Moves Product To What Moves People

•Drive Short Term Incremental Profitability With Existing Customers

Rather Than By Attempting To Attract New Customers


Successful Businesses Must Focus on Innovation and Deliver an “Experience”

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Is Your Business Ready For the Future?


Is Your Business Ready For the Future?

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@RetailHelper

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www.linkedin.com/in/lynnswitanowski

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