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Multi-generational households are on the rise, and we hear a lot about it this time of year with a new crop of college grads opting for living with the ‘rents over paying rent on their own. According to a recent study released from the Pew Research Center, there are now 49 million Americans living in multigenerational households. That’s one in 6 p
eople waking up to breakfast with a grown daughter, brother, dad or grandma! Moreover, there was a 30% increase in households containing three or more generations of family members between 2000 and 2009. That’s 6.6 million households last year! Said another way, as many as 20% of adults 25 to 35 and 20% of adults over 65 are living in multi-generational homes.
It’s a trend that is ripe with opportunity for brands paying attention. Whether a temporary fix or a permanent fixture in American households, this increase leads me to wonder about all of the consumer decisions being affected by this generational cross pollination. Having been a “boomeranger” myself about 10 years ago, I’ve experienced, firsthand, how moving back in with mom and dad can permanently affect brand and buying decisions for everyone. When I moved back home, I’d already been surviving on my own a few years. And I knew I couldn’t keep surviving on staples like Lean Cuisines and takeout, so I paid more attention to moms’ weeknight recipes and brand preferences in everything from pasta to brownie mix. I humored dad by watching Band of Brothers for his 70th, 95th, and 98th viewings, and they humored me by spending Sunday nights with The Sopranos and the ladies of Sex and the City (much to all of our discomfort in certain episodes). And mom got me hooked on CBS Sunday Morning – a weekend ritual I still enjoy. I convinced dad to move up from an ATM card to a Debit card, and he convinced me that calling Wachovia for my balance is not the same as balancing my checkbook. Even my cat became a wet-food snob under the influence of my parents’ pampered cat.
The So What for Marketers:
While those examples might not fit neatly into marketing plans, this shift in households is one worth exploring for your brand. Here are a few thought-starters for finding opportunities within this trend:
Take advantage of shared entertainment: Wii Tennis, anyone? More and more entertainment is catering across generational lines. And multi-generational travel is said to be the fastest growing travel segment. Whether it’s your media plan or a promotion, look for ways to connect to entertainment that crosses the new generational boundaries of households.
Reflect their reality: New shows like Modern Family and Parenthood feature plots that involve three generations, and Parenthood even explores an adult daughter moving back in with her retired parents, but there’s lots of room for advertisers to explore this space. Why is it that the only ad I can think of that reflects this reality is the Folgers father/daughter spot, where the adult daughter living at home announces to her father she is getting married? Complete patriarchal lameness aside, I give Folgers props for recognizing the multi-generational household.
Understand the generational dynamics of your category: Is your brand equally loved across generations or is there growth opportunity among younger or older generations? Who leads and who follows? Can you turn mom, granny or daughter into an influencer to the rest of the family?
Perhaps you heard about the roller coaster in the UK that got stuck upside down a few weeks ago. Fortunately for the passengers, they were “only” left hanging for about 20 minutes (I’m sure it felt longer upside down!).
Without a doubt, the economy over the last two years has felt like a very unpleasant roller coaster, and many people have gotten stuck upside down with their investments. The stock market (which is not a proxy for the economy, though many people use it as such) has been all over the board. The latest news driving a selloff – the crisis in Greece. This, of course, drives us all crazy. We have no control over the market (unless Warren Buffett or George Soros is reading this). I encourage you to think about your brands in this same investment context. The major difference being that you can and do have control over the investment in your brands.
Think of your brand as a long term investment. We’ve all heard to maxim that $5,000 invested in your early 20′s as a lump sum will be worth more upon your retirement than beginning to invest hundreds of dollars a month in your 40′s. That’s the power of compound interest, and the value of not trying to “time the market.” Your brand is a long term investment, and you must invest accordingly. During tumultuous times it’s all too easy to cut the marketing budget, watch those dollars fall directly to the bottom line, and plan to “catch up” when you can. However, that’s the real difference between investing in brands and investing in the stock market. Your investment in your brand is temporal — once the time is gone, it’s gone forever and you can never get it back. You lose your momentum with your consumers and your customers, not to mention any cuts you may have to make internally.
Take control of your brand, and your future. Chart the course for your brand, and keep investing. Those who do will reap the rewards in the long run.
In June of 2009 we reported on the impact the unstable economic environment was having on mom’s relationship with brands. With the economy stabilizing somewhat, we felt it was a good time to review the status of those mom-brand relationships.
In February, a study was fielded to 475 respondents with children under the age of 19 living at home. Among the many subjects on which this study probed was the behavior modifications moms have experienced re: product and retail brands.
Not surprisingly, some key measures of saving behavior actually increased during the period. For example, in the June ’09 study 66% of moms reported being more cognizant of in-store offers. In our most recent study that number has increased to 72%. Similarly, 58% of moms reported using more coupons in June. By February, that figure had increased to 63%. These numbers are hardly shocking. Undoubtedly, given the ebb and flow of the economy, some households that had not previously been impacted have experienced a personal downturn in the last eight months.
Conversely, many families who had felt the economic sting prior to last June have seen their personal situations improve in the interim. Lost jobs have been replaced; salary cuts have been restored, etc. Even more likely, people expecting the worst back in the summer of 2009 never realized it. How have these moms’ behaviors changed?
As a result of these economic realities, we anticipated that a large portion of our sample would have migrated back to their previously established brand relationships. But, while some brand migration is evident, it is nowhere near the levels anticipated.
On the product side, 65% of the respondents reported making substantive changes in the brands they’ve purchased. Of that number, only 9% said that they have returned to many or all of their previously favored brands. Of special interest are the influences on the decision to revert to prior brand behaviors.
In some instances (33%), comfort level with an old brand was identified as a major influence on moms reestablishing their relationship. Other brands benefitted from a lack of performance on the part of the competition. 37% of respondents identified dissatisfaction with their alternative selections as a primary driver of their return to prior purchase patterns. Of equal importance, however, were the steps their original brands took to woo mom back. 34% cited lower pricing and 31% reported more aggressive promotions as major influences on their decision to return to their historic brand relationships.
Retailer loyalties, while significantly impacted by the economy, have not experienced the same degree of migration as product brands have. 54% of moms reported substantial outlet switching. Of these only 8% have returned to most or all of their previously favored retailers.
The reasons for switching back mirror the rationale provided for returning to historic brand behaviors. Comfort with their prior stores was noted as a primary influence by 36% of the moms who’ve reverted to at least some of their old outlets. 30% cited dissatisfaction with the product assortment offered by their alternative choice. And, as was the case with product brands, many retailers had to win customers back with better deals. 36% cited lower prices and 35% noted more aggressive promotions as primary motivators in switching back to their old retail relationships.
The economy, while more stable than it was last summer, remains in flux. As a result, there are continuing pressures on brands’ relationships with moms. The longer this situation continues, the greater the likelihood that the attitudinal and behavioral shifts we have seen will remain permanent. The result will be more cautious and demanding consumers, particularly among those responsible for family. Retailers will continue to go out of business and brands will disappear from the shelves. The winners will be those organizations that understand the true needs and wants of their audiences and can successfully strengthen their customer relationships at every touchpoint.
If you are interested in connecting with moms, email Nicole, our mom team lead.
The state of the economy is clearly going to crimp gift giving plans for most folks this year. However, it appears our pets will continue to make out just fine. A report recently published by MSNBC shows that while 84% of consumers say they are going to cut back on gift giving this year, only 23% are going to do so with their pets. (You can read the full article here: http://www.msnbc.msn.com/id/27582273/from/ET )
This finding certainly comes as no surprise to me. Earlier this year we reported findings from a Trone consumer survey that showed pets to be the last place consumers planned to cut spending, faring better than even our children. (Trone report here: http://www.trone.com/index.php/category/consumer-snapshots/pets/ ). What we know is that for a large percentage of “pet parents” their pets are much more than mere “animals,” they are part of the family. In fact, we have identified 8 distinct segments of dog owners and 6 segments of cat owners. Contained within these segments are 44% of dog owners and 33% of cat owner who are highly bonded with their pets. For these consumers, their relationship with their pet drives spending, and is a much better predictor of how much they’ll spend caring for Fido than any socioeconomic variable.
So, if you’re in the market for a Shark Attack Hoodie, you’d better hurry. There are only 17 shopping days till Christmas and it looks like demand for doggie gifts will be at an all-time high!
Lonnie and Kara here, tasked once again with critiquing a new advertising campaign that we really feel passionate about. Here’s the problem: there aren’t many right now. This is the time of year when local car guys try to sell you a clunker and marketers hold their dollars back for when American Idol returns to the screen.
So for this post we picked a campaign that has been around for a while. But these babies are still cranking out an ad here and there. See the latest E*trade baby commercials.
What do we think?
Kara: They’re freaking hilarious! E*trade took a subject that’s been making everybody cringe—the stock market—and made me laugh. I mean, how can you not laugh at a baby calling an old guy in a sweater vest “Shankapotamus” or saying he wants to “punch the economy in the face”?
Lonnie: Really? Talking babies? Sure, I will admit that this was funny, 2 years ago! They got their money’s worth from this campaign. Time to evolve or move on. No wonder the economy is in such bad shape, you have babies working the market. What stocks do babies trade, Toys R Us? Did the Wiggles go public?
Kara: Maybe they’re trading diapers. I don’t care. What I care about is the fact that the makers are brilliant. They get away with using the lowest quality video available, on purpose. And when the baby spits up, instead of yelling cut, they just crack a joke about how the economy makes him sick. Oh, and by the way, it did evolve. He now has baby friends!
Lonnie: Babies shouldn’t be trading diapers, they should be filling them. We are living in a recession. We need hope and confidence. We need a Sam Waterston as a spokesperson, not the Gerber baby with a credit line. Your money is no laughing matter and if I caught my toddler on a “playdate” with my 401k, I would definitely put her in time out. Bad Baby, NO!
Kara: You and your living in a recession crap! You sound like my dad. Stop watching the five o’clock news and turn on some Family Guy. Laugh a little. 4.4 million other people took five minutes out of their recession-driven lives to watch the latest Baby Outtakes video. And I must say, it cracked me up.
Lonnie: If I were your dad, I would send you to your room with no dinner. That’s part of the problem, too many people have changed the channel from the news to Family Guy. I would suggest that those 4.4 million viewers need to get off of YouTube and spend more time on Monster.com looking for a job. Plus, talking babies just creep me out. It’s not natural.
Kara: Hey, I have a job. Oh, by the way, who is Sam Waterston?
Lonnie: You know, The Great Gatsby, The Killing Fields, Mindwalk?
Kara: Wait a minute…wasn’t he on Family Guy?
Lonnie: Nevermind.
We traditionally think of consumer behavior during a recession as largely driven by rational motivations. We shop for more private label groceries, clip more coupons and shop more discount apparel stores. So perhaps the best strategy for brands to survive this recession is by using rational tactics likes sales, deals, and promotions.
But consider these three brands that are perceived as cost savings brands. It’s no surprise they’re doing well, or at least better than their competition. What is surprising is that all three are positioning themselves as “better life” brands, not just “better deal” brands. By making emotionally relevant connections now, they are profiting in the short-term while positioning for the long-term.
Hyundai - Struck with the fear and anxiety of losing their jobs, many Americans have postponed major purchases like automobiles. But Hyundai posted their highest market share ever in the first 6 months of 2009. And it’s not just because they sell cheaper cars. It’s that their Assurance Program helped put consumer fear in the backseat. While many others have launched similar programs since, Hyundai was the first to win the hearts of consumers.
Home Depot – In this recession many homeowners are putting off fixing that leaky faucet or painting the living room. But when that to-do list piles up, it weighs on us like a heavy burden. While Lowe’s has been promoting their every day low prices, Home Depot has translated their own savings message into an emotional payoff – “More Saving. More Doing.” The results? In the first 6 months of 2009 their stock outperformed Lowe’s by over 15%. Home Depot gets it. When consumers feel paralyzed to do even the small things, a message of practical empowerment is the emotional antidote they’re seeking.
Walmart – In an interesting counter trend, Walmart is trying to become a house of brands while Target is pushing their private label “up & up.” To support their massive makeover, Walmart has revamped everything from logo and advertising to store formats, replete with fresh signage and hardwood floors.
Their new tagline “Save Money. Live Better.” gets to the heart of the matter. The brands that will win in the long run are the brands who position themselves with consumer’s hearts, not with their wallets.
Sometimes it takes an outside perspective to see if you’re going the right way, or the wrong way. When you’re driving your own car, or brand, dealing with your day-to-day challenges and battling for resources it can be hard to take the long view. It’s all too easy to say, as John Candy does in Planes, Trains and Automobiles, “how do they know where we’re going?” I’ve got bad news for you – they know exactly where you’re going.
If you’re cutting your investment in marketing today you are going the wrong way.
In spite of study after study, when the economy turns south marketers cut spending. Empirical evidence tells us all it’s the wrong thing do, but how can we resist? (For some ideas, here’s a great article from Harvard Business School professor John Quelch. http://hbswk.hbs.edu/item/5878.html )
For most companies, their marketing spend, while large in absolute terms, isn’t a huge line item on the corporate ledger (direct sellers like Temperpedic and The Snuggie are exceptions), so why does it get cut? The answer is quite simple: because it’s easy. Marketing dollars, particularly advertising dollars, when cut fall directly and immediately to the bottom line. No one has to be laid off. Other difficult decisions can be avoided. And since too many CEO’s view marketing as an expense rather than an investment, it’s the first thing to go. The reality is that CEO’s need to look at marketing as more of a balance sheet item than income statement item.
”…some of the biggest names in branding (including Procter and Gamble who survived the crash of the 1930s) are suggesting marketers at all levels do just the opposite [of cutting budgets] and are even going as far as encouraging companies to stay on track, but use dollars carefully.” From “market onward, market stronger” – positions shared at recent annual Association of National Advertisers Conference.
”It is incredibly important to be risk-takers in the economic climate we’re in. People have the tendency to pull back. In economic times like these, you don’t hunker down and go in the bunker.” Hewlett-Packard VP and CMO Michael Mendenhall
Those brave souls who can fight, and it is a fight right now, to invest in their brand will see their investments deliver meaningful dividends.
Do you know where you’re going?
This one is a downer. Just call me the harbinger of doom.
All businesses should have a solid and explicit plan for how they are going to keep running in the event of a disaster. This is part of developing a Business Continuity Plan. Who do we call first? How do we make sure everyone is OK? What actions do we take to restore “business as usual” as quickly as possible?
All good and important questions. And ones that should be answered on a personal level as well.
What’s that? You already have the family fire drill, speed dials to public servants and a rope ladder that will get your kids from their bedroom window to within jumping distance from the ground? Excellent! Sounds like the safety of the most important things are covered.
What about all your digital assets?
They’re all in the cloud?
Uh-oh.
It is my suspicion that, during the next year or so, many companies that have sprung up with Web 2.0/cloud (yes, I know they’re not the same, but that’s not what I’m covering here) applications that are low or no cost will end up having to discontinue services. I trust their motives, and all of their simple down-to-earth language on their sites and in their agreements, but I’m not so sure that they will have the resources available to allow everyone to “get” all of their assets from them.
I’m not talking about companies like Google (gmail, picasa, etc.) or Apple (MobileMe)…they will probably just continue to take a loss (if it comes to that) or increase costs. But, if you have a significant portion of your life (online financial software, to-do lists, family wikis/contacts) and memories (pictures, videos, etc.) with some of the smaller application providers, I would recommend an audit of sorts:
- Figure out what data in the cloud you can’t afford to lose.
- Peruse their service agreements to see what level of service you should expect.
- Even if they make strong promises related to service, figure out a way to download that data to your computer locally.
- Consistently make sure that backup solution you implemented last year (right?) still works…actually try to restore a file now and then.
This is a good practice even if you only store data with the big guys, too.
Sometimes it is just necessary to go old school.
By old school I mean buying two external hard drives, keeping one attached to your computer and backed up and another one off-site (trade with a friend you trust, safety deposit box, etc.). Swap and restart backups as often as you can afford to lose the information.
I really don’t want to think that the economic times we are in will force those high quality small companies to stop providing services, but, if they do, you are the one responsible for securing your data.
Here’s to hoping I’m wrong.
Moms modify purchasing behavior more than any other customer group.
The economy. It’s become a daily reason for not buying, not going, not doing and not splurging. And it’s affecting everyone. But no one quite so much as Mom.
Trone recently polled 1,140 mothers with children still at home to find out how the waning economy was impacting their lives and routines. We then compared their answers to those of the 2,181 other respondents and noted some clear distinctions.
Stress levels are up.
It’s not extremely surprising. But it is disturbing. Our panel of moms indicated many more sources of stress than other respondents. They’re frustrated that there’s never enough time to get everything done. They’re concerned about their relationships with their spouses. And most importantly, they’re worried about how the current economy will affect their families and their children. Moms were actually 26% more likely than other participants to say that the long-term implications of the economy are contributing to their stress level. The difference jumped to 29% when asked about short-term financial issues.
Spending is down.
Moms are doing everything they can to plan for their family’s financial future—including reducing spending on everything from health and beauty aids to home furnishings. They’re spending less on the things they need and deferring purchases of the things they want until a later date.
Across the board, moms are being more aggressive than other segments of the population to pursue savings opportunities. Coupons are becoming more important and family entertainment and vacation allowances are being cut.
Even the woes of the automobile industry are partially attributable to the recent behaviors of families with children at home. Moms are 25% more likely than others to defer a planned automobile purchase this year. And, among those that must buy, most are more likely to purchase a smaller or used car to save money.
Brand relationships are at risk.
Here’s the big one. Moms’ economy-driven behaviors are affecting brand loyalty.
In all packaged goods categories, moms are more willing than others to switch both product and retail brands to lower expenses. Take groceries for example: Among moms looking to reduce spending on groceries, 66% are very or extremely likely to shop at less expensive outlets and 77% will switch to less expensive brands.
The effects don’t stop at packaged goods either. While moms will obviously do their best to protect their children from feeling the impacts of the economy, the same can’t be said for themselves or the family pet. Fifty percent of moms plan to reduce spending on themselves this year by shopping at less expensive outlets (78%) and switching to less expensive brands (73%). Similarly, over 75% of moms that are interested in saving on pet expenses plan to try different retailers or seek cheaper brands.
Brand communications must adapt.
Two things are obvious.
- The economy has changed Mom’s spending behavior.
- Brands must address this new Mom differently.
The tactics that have been used to reach and speak to moms in the past are obsolete. Every message that a brand puts out into the world must now pass through a financial filter. Do I need it? Do I want it? Is it worth it?
In the future, manufacturers and retailers alike will need to consider this financial filter and stay in touch with their customers’ changing needs. Constantly evolving will be the key to keeping their brands relevant in these trying times.
Part of my job at Trone is to continue to evaluate our online toolset to see what is out there that can be used to better serve our clients. Compete.com has an extensive list of tools available to report on site metrics. What’s the cool part? They will allow you to report on site metrics for sites other than your own. They do this by compiling data based on web browser toolbars (yes, those usually report usage back to someone), receiving statistics from internet service providers and other proprietary dark magic. Recently, I went on a quest to entertain myself trying to find correlations between certain domains based on my perception of their success in this economy, times of year for spikes, etc. Here are some fun/interesting results:
Obviously, there are annual events that spike certain site usage during the same time each year:
In light of Obama being sworn in today, this is interesting (nevermind that the October stats for unique visitors are within a half of a percentage point of the electoral vote):
Hummer’s site traffic suffered in close inverse proportion to the increase in site traffic to sites that help consumers find cheap gas. I believe the spike in April was a response to some Feb/March ads before the gas prices started really increasing.
Also interesting this year are the graphs for visitors to popular job hunting sites:
The social networks are battling it out:
My favorite one shows people obviously play hard ramping up to the holidays, work hard in the new year and then get spring fever.
What can we truly deduce from these? Nothing for certain with just this information in a vacuum, but our strategy and research guys can do stuff that makes my head spin. I’m sure they have their own interesting (and almost certainly more accurate) views on the simple data I’ve played with.
