By Tony DeMasi, editor
With no change of President, Americans are feeling more financially
secure and confident than they have for at least a year.
The near-future economic picture looks positive… but don't get
too overjoyed. While Americans might feel good psychologically,
the financial picture isn't quite so rosy. Federal tax cuts are being off set by
rising fuel prices and increases in local taxes and fees. The red-hot real estate
market is on the brink of cooling down and the job market isn't exactly jumping.
Couple all of that with the fact that consumers are very price conscious - even
those who are looking for luxury items. Thanks to the “Wal-Marting of
America,” customers in all social economic brackets will still be looking for the
best deals. So, forget about taking your usual mark-ups. Shop suppliers for bargains
and price accordingly. Customers want convenience and quality at the
best price. This penchant for convenience will fuel e-tailing in every possible
product category. Although the prices may not look the lowest per se, when you
factor in the amount of time and gas saved, customers will opt for the “postage
and handling fees.”
Many market watchers predict that the enclosed mall is on the verge of being
a dinosaur. Don't believe it. Mall owners are too savvy to let their investments
go sour. Watch malls be transformed into town centers, offering services as well
as products that consumers will use. Empty department stores are being renovated
to house supermarkets, schools and offices. Empty store fronts will be
filled by doctors, dentists, realtors, lawyers and other service providers consumers
need.
So, instead of being a mishmash of shoe and card stores, along with a food
court, enclosed malls will be all-in-one shopping-services-working-learning centers
that overall will save the shopper time and money.
“New” will be an important word, especially to male customers. They're the
main target for gadgets and such, especially electronics. Men also make up one
of the biggest trendy customer bases.
Here are more details on men and other trends I see in the overall market for
2005. They appear in random order:
Increased Espanola. The Hispanic market will grow and marketers will woo
it more than ever. Look for more Hispanic influence in all media, fashion, food,
entertainment and overall culture.
South of the border manufacturing/north of the border marketing.
Manufacturing jobs that were once in the USA then transferred to Asia are coming
back to North America - but staying in Mexico. Any increase in non-Asian
manufacturing costs will be offset with savings in shipping and time. On the
other hand, brands and products established in Mexico will find increasing markets
in the USA, even among non-Hispanic consumers. Food products will lead
this category.
Old time baseball greats will make comebacks as marketers. Since it's getting
to be darn near impossible to find a sports star that is a genuine role model
(especially now that even Michael Phelps has a drunken driving/underage
drinking crime report), look for the clean “heroes” of the past pop up in commercials and licensed products. Cal Ripkin, Jr. is
expected to be one of the top commodities in this category.
On the flip side, contemporary female athletes
will be front and center as pitchwomen for products.
Expect super soccer star Mia Hamm to score.
A plethora of personal shoppers. Saving time will
be more important than saving money for many shoppers.
To capture their dollars, many more stores will
offer “personal shoppers” service. The customer contacts
the store via phone, fax or Internet, and tells the
store's shopper what is wanted and when. The shopper
does the rest. It's a win/win/win situation.
Young shoppers with plenty of style and money.
Apparel stores for years have been successfully courting
young (pre-teen and teen) shoppers. Now gift and
home accessories shops will mirror those efforts. More
manufacturers and retailers are rushing to take advantage
of what has become a $17 billion market for room
furnishings meant to appeal directly to young people
from third grade through high school.
Consumers rage. “Road rage” will become “store
rage” as shoppers become more demanding of excellent
service - in all kinds of shops, no matter what the
product or price range. Failing to rectify a complaint
to a customer's satisfaction can lead to lost business,
according to a new report that found 73 percent of
customers surveyed who had a complaint with a company
experienced “customer rage,” thanks to the way
the situation was handled. The report indicates that
customers either want their problem solved or at the
very least explained.
Tube foods. Americans are embracing food tubing,
with products including yogurt, peanut butter and
ketchup available in some form of a tubed package.
Tubing is widely accepted in Europe, where 50 percent
of all tubed products are food.
Cell mates. Cell phones will be replacing many
landline phones as the only phones consumers use.
8.1 percent of U.S. households do not have landline
telephones, up from just 4.2 percent in the spring of
2000. 68.9 percent of households have at least one cell
phone, up from 63.8 percent in spring 2003. Most
households (63.1 percent) have both a cell phone and
a landline, and only 28.6 percent of households are
using landlines exclusively.
Low cal candies. Diet candy sales are on the rise, jumping 60 percent in the last year. “Confectionery
products that capitalize on positive health attributes will
provide the most growth,” according to research from
Mintel. The editor-in-chief of Professional Candy Buyer,
a trade publication, says new technologies are enabling
confectioners to broaden the appeal of diet candy.
Olive oil. What Europeans have known for centuries
is crossing across America: Olive oil is a wonder substance.
It's great for cooking and reduces the risk of
coronary disease, great as a soap base, great as a butter
replacement, etc.
Gift cards. Again, younger shoppers are the cause of
this trend. Two-thirds of American teenagers have purchased
one or more gift cards during the last 12
months, with the majority reporting year-round gift
card purchasing; not just during winter holidays, according
to a survey released today of 1,600 college-bound
teens. More than 90 percent of teens have received a gift
card. Teens appear to be generous: almost two-thirds of
teens spend up to 20 percent of their disposable income
on gifts. And they like gift cards. More than 80 percent
saw the cards as a gift of first choice, not a fall-back item
if nothing else could be found. The most popular average
gift card values are between $10 and $24, and $25
to $49.Birthdays are overwhelmingly cited as the most
popular giving occasion for teens, which mirrors adult
gift card purchasing behavior. However, while the second
most popular occasion for adults is the winter holidays,
teens cited anniversaries as the second most popular
occasion to use gift cards. Apparel and music retailers
were the preferred retail categories where teens purchase
gift cards (nearly 70 percent of purchases).
Retailers selling electronics and books, restaurants,
video rental chains and movie theatres were reported as
the second most frequented places for teens to buy gift
cards for friends and family.
Outdoor rooms. Forget the words “patio,” “deck,”
“porch” and “veranda.” The preferred term now is “outdoor
room.” Rather than buying more stuff for the
inside, consumers are turning their decorating passion
outside to the patio, deck, poolside, porch and garden
“rooms.” Gardens are no longer showplaces and gardening
is no longer an expression of a hobby. The garden
today is a focus of outdoor living. People are striving
to fully experience their outdoor areas of the home.
Single servings. The new demographic phenomenon
- there are as many households with one person as there
are with four or more people.
Happy, help-free shopping. Customers and retailers
are finding self-checkout systems useful and more convenient
than conventional cashier stations. Customers
cite faster checkout, shorter lines and choice as the top
benefits, while retailers viewed improved service at
checkout as the key benefit. They also experienced
improved customer loyalty and better customer service
throughout the whole store.
High-priced goods going Internet. Because of time
and security issues, more and more luxury product
consumers are buying strictly over the Internet.
Retailers of such goods like that and are expanding
their Web sites to take care of their high income/low
time/high anxiety customers. Studies show that,
despite initial reservations, luxury buyers are increasingly
making online purchases and retailers must be in
that space. Forrester Research predicts there will be a
39 percent increase in sales to $2.8 billion in jewelry
and luxury goods during 2004. As well, retailers know
busy professionals often lack the time to visit stores or
spend much time comparison shopping. The Web
facilitates this process, even if they end up in a store to
buy their merchandise. Finally, luxury retailers are seeing
the children of their customers beginning to shop
at their stores, and they know Gen Y is the most
online-friendly generation yet, with no reservations
about the products they buy online.
Fat-free diets more than a fad. Americans are showing
signs of finding balance in their eating habits. They
are not snacking more, are not using more restaurant
take-out meals, are becoming more calorie conscious
and are finally getting their weight under control.
Twenty-seven percent of people say they are conscious
of the calories in their meals, the highest level since
1999. In addition, the number of snack meals eaten
per person per year was 250 for the year ending
February 2004, little changed from five years ago when
it was 253. The changing role of women in the workforce
has possible impact on today's eating patterns.
After pouring into the workforce for 50 years, labor
force participation rates among women have leveled off
and are starting to slowly decline. This demographic
shift has had a major influence on our eating patterns.
Nice needlecrafts. In the last few years, knitting and
crocheting have become trendy again, especially
among people in their 20s. Smaller retailers are
increasing sales by catering to the trend.
Courting the older customer. At the peak of their
earnings and spending power, women age 35 and overare a huge and potentially lucrative market for the
nation's apparel merchants. So many major retailers
including Gap Inc. and Gymboree Corp. are trying to
cater to these shoppers, launching new store chains with
clothes that are trendy but not designed for teens. Gap
plans a new store concept in 2005 that will cater to this
group, its first new chain in a decade. And Gymboree,
the children's clothing retailer, is trying out a new chain,
Janeville, with 10 stores. Female customers ages 35 to 54
spent $30.7 billion in the 12 months ended July, up 1.7
percent in the year-ago period. That compares with
$11.85 billion spent by the 13-to-17 age group, a 10.3
percent decline from the previous period. Sales of overall
female apparel rose a meager 0.4 percent to $93.12
billion in the 12-month period ended July.
RFID. Radio-frequency identification chips will
replace price tags. Using wireless technology inside tiny
chips - or smart tags - RFID can track a product from the
factory floor to store checkout. For retailers, the technology
promises lower labor costs, more efficient inventory
management, and the ability to market to individual
shoppers. For customers, it could eventually mean no
standing in checkout lines, no rifling through piles of
clothes just to find your size is gone, no waiting half
dressed in fitting rooms while sales people disappear into
stock rooms, no-hassle returns, and the ability to know
in exacting detail where and how products were made.
Martha Stewart-wannabees, and the real thing. Ms.
Stewart will soon be out of prison and have her own
prime time television show, along with thousands of
other money-making opportunities. Meanwhile, the
market is being flooded by “experts” who think they can
out Martha Martha in crafts, design, entertainment and
weddings - and many are stars of style TV shows who
already have their own followings. Men are especially
making their ways in this market. They crop includes
Colin Cowie at JC Penney and Ty Pennington at Sears.
Wine time. Wine is the beverage to watch, and it's
bringing along a growing need for all the accessories
thereof. Look for a demand for wine glasses, wine
racks, coasters, etc. The only wine-related product
not expected to do wonders is the corkscrew.
Customers are showing preferences for twist off caps
- even with fine wines. Wine connosiers actually
endorse this because it prevents the wine from being
tanted by the cork. The wine industry acknowledges
that 2 to 5 percent of total production may contain
some “cork taint.”
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