Greetings!
We marketers earn our paychecks during recessions by getting back to basics, validating customer concerns and fully engaging them. A couple of well known companies have done that well in the teeth of tough times!
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Consumers still retrenching on expenses, but not completely giving up splurges |
 Consumers are still reining in their
extravagances in response to tough times. A recent Harris Poll reported:-
Almost two-thirds of U.S. adults (63%) say they have
purchased more generic brands in the past six months to save money
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Almost half (45%) say they are brown bagging lunch instead
of purchasing it
A recent American Express Spending and Saving Tracker release noted:
"Consumers are setting specific goals
and the vast majority (83%) have a defined strategy in place to help reach that
number. On average, the general population would like to save $14,000 this year
and over the next 30 days plans to sock away $1,200."
A Profit Shocker
In the face of all this thriftiness, upscale
supermarket Whole Foods posted nice profits, and issued a rosy forecast,
the opposite of what you would expect. Why? They got back to engaging their
customers:
"The company responded to the downturn with a campaign to
emphasize lower prices - including installing "value gurus" in stores
to direct customers to the best deals - and by expanding organic offerings."
Whole Foods can bank on the fact that they are an
affordable treat. The stay-cation (vacation at home) trend picked up
during the recession, and people are bound and determined to eat out less
often. Bringing interesting food home makes that parsimony a bit more palatable!
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Gourmet Coffee Rebounds, Too.
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Sticking with counterintuitive topics, how about the turnaround at Starbucks, which posted a nice $242 million profit last quarter? The
same Harris poll noted above reported 21% of Americans have stopped purchasing
coffee in the morning. So how did Starbucks "buck" that trend? According to
AdAge, the success was due to smart marketing, especially their productive use
of social media, to keep their core customers fully engaged. It is clear that
the threat from the cheaper (and admittedly not bad!) coffee from Dunkin'
Donuts and McDonalds has been blunted. For many the extra buck or two
to have a hot latte in warm, cozy place is still worth the splurge.
Bottom line:
How are you keeping your core customers fully engaged with
you?
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