I hope you've been having good weather like we are here... To say that it's long overdue is stating the obvious. Nevertheless, it's long overdue.
I'd like to tell you about two women I know, M and R. They are two very successful women with high exposure and high level jobs who, all things considered, have survived this economic collapse personally touched by what has happened but otherwise secure. There was never a risk of "job elimination" so they have it much better than many others (of which they are very aware and thankful).
The thing you'd might expect of two women who have been relatively untouched by this quagmire is that their spending habits would be roughly the same as before. For M and R, that meant enjoying their lives, going out with friends, making larger purchases when needed but knowing their limits. The funny thing about these friends and colleagues (frolleagues?) is that they've scaled back considerably.
Actually, they've scaled back so much that they regularly purchase clothing at Costco and race to the phone to tell one another about it. The unspoken rule is to wear it as soon as possible, gracefully accept the compliment and then drop the ridiculously low price on the other or whomever else is in vicinity. I've seen and heard about it so many times that I can sense it coming, especially from R. The latest was M's very proud boast of having purchased Vera Wang accessories at Kohl's for a steal. Hey, I'd boast too if I bought something for that little. As they say, "Don't Hate, Appreciate!"
I caught a video the other day thanks to My Private Brand's daily emails. Our friends at Tesco, a UK grocer/retailer, just launched a couture fashion line with price points starting at about $60. Let's take a look at the show that took place during London Fashion Week(!):
F. Terry Green, Tesco's UK clothing chief, said "This signifies a new era for supermarket fashion. It's a high fashion-led range which will enable us to meet the increased desire for affordable yet high quality clothing, and we're so confident that the range will be a success that work has already begun on the autumn/winter range."
Wow. My first thought was about how nimble Tesco was to be in step with consumer sentiment and trends. Proof: I didn't even blink when I saw the words supermarket and fashion together which means that all of the research we've seen lately about recessionary consumer spending shifts being cemented must be true! People have accepted and absorbed what "value for money" means to them so for people like M and R, it means that it's okay to outfit yourself, your fridge, your car and your home... and picking up a pizza... at Costco. Hey, maybe you can pick up a tux at Home Depot some day!
Just today J. Walker Smith, Executive Vice Chairman of The Futures Company, tweeted some really interesting research which I'd like to share with you. The premise is that we are in the Consequences Era and therefore assess shopping with a sharper eye then before. We're not necessarily economizing as much as the Recessionary Era and we don't mind dipping our toes in the shopping pool but how we make purchase decisions has changed. Also, the criteria we use to make decisions have become multivariate and complex. This new Consequences Era rests upon five foundations: Responsibility, Vigilance, Resourcefulness, Prioritization and Networks. I'll spell them out briefly (you really should read the white paper and/or executive summary) and apply them to the Tesco example.
- Responsibility is exactly what you'd think it to be: we take time to consider what we gain (or don't gain) by making a purchase with a byproduct being understanding what waste means. One could say that this whole "Green" and "Sustainable" thing is correlated to accepting more responsibility. So, Tesco has made it okay and even fashionable to be a penny pinching consumer. Genius.
- Vigilance is critical to this new era to avoid the mistakes we made before. You could also say that this is renewed discipline and staying focused and out of (financial) trouble. It's nice to go to Starbucks daily but do you need to go daily? Tesco is saying, "Hey ladies, you have a right to look smashing... but you don't have to be spendthrift about it either."
- Resourcefulness is about doing things efficiently with an eye towards practicality and reducing waste. This would also be known as "making your (resource) dollar go farther" or similar. Tesco is turning fashion on its head and forcing it to come to real life terms with real life customers who do think they can have great looking clothes at fair prices.
- Prioritization is really just a constant Cost Benefit Analysis. What tradeoffs will consumers have to make to maximize their chances of happiness? Tesco shoppers may be "trading down" but its only the price and not the style. Before, we used to hide the purchases we made at discount shops. Now, M and R are shouting it from the rooftops.
- Networks are a byproduct of user generated content and social communities. Though we don't always trust what our peers say, there's comfort in knowing that we're all in this together and we're just trying to make the best decisions possible. When will we see a Tesco Couture Facebook Fan Page a la the Nine West or Rachel Roy pages we talked about earlier (here)?
To me, it's uncanny that Tesco has pretty much hit the mark of this post recessionary consumer profile. The implications for marketers going forward is huge and we would do well to think very carefully about how we position our products and brands going forward given some of the behaviors/attitudes outlined in the research. Share your thoughts with me... Let's have a conversation!
Until Next Time,
Until Next Time,