Unity Marketing Update
Christmas Gifting Season to be Strongest in Years (December, 2003)
Christmas 2003 will be one of the strongest gift-giving seasons in recent memory, according to new research on "gifting" from Unity Marketing. "Gift shopping is the ultimate in 'emotional consumerism,' since gift giving is about emotionally connecting gift givers and gift recipients," said Pam Danziger, Unity president.
"There's a flood of survey reports about what consumers plan to spend this holiday season, but the Unity Marketing study takes a totally different tactic," explains Pam Danziger, author of Why People Buy Things They Don't Need. "Ask shoppers how much they plan to spend gift shopping for Christmas 2003 and the majority will tell you about the same or less than last year, because that is the' rational, left-brained answer."
"An examination of gift-giving behavior, which is emotionally based, shows that 87 percent have spent more (32 percent) or the same (55 percent) on gifts over the past year. Combine this finding with the fact that 85 percent bought more or the same number of gifts in the past year, and 89% percent are giving gifts to more or the same number of people, and the coming Christmas gift shopping season bodes to be the best in years," Danziger predicts. "We could see sales increase from 5 to10 percent in November and December, with only the potential for rampant discounting moderating results."
"Gifting prospects for 2004 also appear strong. The trend driving the growing gifting market is consumers' need to connect in meaningful, emotional ways with those they care about. After spending the past 20 years at home in their 'cocoons,' consumers are like butterflies emerging to seek to reconnect with the outside world. They find new meaning in relationships that are often expressed through gifting," Danziger explains.
Methodology Gift Buying Throughout the Year
Based upon a survey of 950 'serious' gift-givers, (people who spent $250 or more buying gifts in the past year), the Unity Report is the first to examine gift-giving and shopping behavior throughout the year.
Major findings include:
Gifting is a $253 billion market and represents about 10 percent of the consumer economy Buying gifts for family and friends accounts for roughly 10 percent of the nation's $2.7 trillion consumer economy. The trend will continue as more spending is directed toward things to give away, rather than things that fill their own homes.
Gifting is major reason to shop throughout the year. With an average annual gift budget of $2,062, gift-giving represents an important reason for consumers to shop, not just for the holiday season but also throughout the year. Christmas gift-giving accounts for about 40 percent of the serious gifters annual budget, or $843.
Birthdays with an average annual budget of $349 represent 16 percent of the total. Overall all holiday spending, i.e. Valentine's Day, Mother's Day, Easter, Father's Day, etc., totals $1,089 (53 percent of annual budget) and gifting occasions, including anniversaries, weddings, friendship, new baby, housewarming, etc., accounts for 47 percent of spending or $973.
Majority of gifters shop for regularly in discount department stores, but traditional department stores are relied on next for gifts Discount department stores, including mass merchants, warehouse clubs and dollar stores, are used regularly by 50 percent of gifters, who turn next to traditional department stores. About one-third of gift buyers regularly shop traditional department stores, while 47 percent occasionally shop there.
Finding good gifts at good prices is top criteria when selecting stores for gift shopping Good prices are the number one criteria for 65 percent of the gift shoppers in selecting a store to shop for gifts. The next most important criteria rated as "very important" are ability to find things easily (54 percent); offers a wide selection of gifts (49 percent); convenience (49 percent); and ease of return (47 percent).
Gifters shop to find gift inspiration
When shopping, gifters look for something the recipient will like, as well as one priced right. But they also want to find something that recipients will not likely buy for themselves. They value emotion in the gifting equation and want a gift that carries a surprise factor, as well as emotional meaning. The serious gifter is always on the lookout for a good gift. They are not last minute shoppers, but buy things when they see it and store them to give at a later date. The way the gift is presented is also very important so they buy cards and wrap the gift to make a good impression. They often go to the store without a specific idea in mind, but look for inspiration from the displays, often shopping in several stores to find the right item.
Buying luxury brands on sale gives an experiential thrill. When affluent consumers go shopping for luxury items, the majority seek, and find, bargains, according to new research from Unity Marketing.
"Affluent shoppers, those who can afford to pay full price, choose to buy Manolo Blahnik shoes at Bluefly.com or Issac Mizrahi at Target not because they need to save money," explains luxury marketing expert Pam Danziger, president of Unity Marketing and author of Why People Buy Things They Don't Need. "They do it for the psychological reward of being a smart shopper."
"They seek luxury products on sale because they get a thrill from beating the shopping establishment at its' own game. In effect, the shopper wins as the retailer loses. Shopping for luxury bargains is about the excitement of discount shopping," Danziger says.
Turning to the Internet for Luxury Shopping
"As luxury marketers, we have been trained to think that discounting luxury goods devalues the brand. But research among luxury consumers does not support that assumption. The luxury shopper is savvy and knows where to find the best prices. And, increasingly she is turning to the Internet as the fastest, easiest and most convenient way to search out top luxe brands on sale," Danziger notes.
Unity Marketing's research found that buying luxury products on sale or at discount dominates the luxury consumer marketplace. In the latest survey among luxury shoppers a majority of affluent consumers made their last luxury purchase on sale or at a discount in 13 of the 14 product categories tracked. The lone exception was fragrance and beauty products, where about two-thirds of luxury shoppers report making their last purchase at full price.
Accounting for more full-priced spending was the fact that this was the only consumable product included in the survey. Danziger explains, "When you run out of your favorite lipstick or skin care lotion you can hardly wait for it to go on sale. But in every other luxury category, from art and antiques, automobiles, electronics, fabrics, wall and window coverings, fashion, furniture and floor coverings, garden and garden products, jewelry and watches, kitchenware, cookware and housewares, kitchen appliances and bath, linens and bedding and tabletop, discount shopping predominates."
The market research report, Luxury Market Report 2003: Who Buys Luxury, What They Buy, Why They Buy, delves into the buying behavior and shopping habits of the luxury consumer. It is based upon integrated qualitative and quantitative research, conducted in association with House & Garden magazine, among moderate affluent (incomes of $50k-$99.9k) and super-affluent consumers ($100k and above). It analyzes consumers' purchase behavior in 14 categories of luxury products and seven luxury services in the past year. This 200+ page report is available from Unity Marketing. For more information visit www.unitymarketingonline.com .
As the days grow shorter and the leaves begin to turn, shoppers look to their favorite stores for new seasonal decorations. Consumer purchases of Christmas and seasonal decorations have risen sharply since 2000, according to a new research report, Gifts & Decorative Accents Report, 2003: The Market, The Competitors, Future Trends, from Unity Marketing. Over 60 percent of consumers reported buying Christmas or seasonal decorations in 2002, up from 50 percent of U.S. households in 2000.
"In the fall of 2001 the consumer psychology of holiday decorating changed dramatically," says luxury-marketing-expert Pam Danziger, president of Unity Marketing and author of Why People Buy Things They Don't Need. "After 9-11 we saw how powerful decorations can be in communicating personal values and feelings. Today more and more households are creating new decorating traditions. For example, Halloween decorating has shifted from the ghostly and ghoulish to life-affirming harvest-home themes, which also extends the decorating season right through Thanksgiving. Then Christmas and Chanukah decorating begins."
"In uncertain times, consumers seek to connect with family traditions from their past and to bring those into the present. When they unpack treasured decorations, and the new ones they will add to their collections this season, they re-connect with their past and project the tradition into the future," Danziger says.
Retail sales of decorations rise 6.2% in 2002
Sales of Christmas and other seasonal decorations totalled $4.65 billion at retail in 2002, up over six percent from the $4.37 billion spent the previous year. While Christmas accounts for nearly two-thirds of consumer spending, harvest-home and Thanksgiving decorations are the fastest growing categories in seasonal decorations. With sales just shy of $600 million, harvest-homes sales grew 42 percent over the previous year while sales of Halloween-themed decorations dropped 22 percent to $458 million.
In the Christmas category, more expensive collectible ornaments, designed for consumers to keep and add year-after-year to their collection, posted strongest growth, up 17 percent to $834 million at retail. "Outdoor Christmas decorations are also gaining in popularity as manufacturers introduce lighted wire sculptures with movement. Kids young and old are fascinated by these animated light sculptures," Danziger says.
Shoppers turn to discount department stores for decorations
Many Wal-Mart stores have started to put out Christmas merchandise. "It's a good thing too," explains Danziger, "since discount deparment stores are the first choice of shoppers for seasonal decorations. These stores are especially favored by consumers ages 35 to 54 years-old and families with children, the exact demographic profile of the prime market for decorations." Traditional department stores, specialty retailers, such as gift stores, home improvement and garden centers, follow as leading sources of decorations.
"An important new source for decorations is non-store retailers, such as the Internet, television shopping and catalog/mail order. More than 10 percent of consumers reported they shopped for decorations in the past year with non-store retailers. The demographics of the non-store buyer skews toward the luxury market, consumers ages 45 to 54 with incomes of $75,000 plus."
Facing a second consecutive year of drooping sales, the gifts and decorative accents industry dropped to $54.3 billion, down one percent from $54.7 billion (2001), according to Unity Marketing's new research report, The Gifts and Decorative Accents Report, 2003: The Market, The Competitors, The Future Trends.
"The giftware market peaked in 2000, but has been on a downward trajectory since," explains luxury marketing expert Pam Danziger, president of Unity Marketing and author of Why People Buy Things They Don't Need. "Giftware is a highly diverse industry, including home decorative accents, collectibles, novelty gifts, seasonal decorations, greeting cards and stationery. The industry's biggest challenge is that many of the products and the way it sells them, primarily through small specialty gift stores, does not connect with consumers.
"Gift shoppers today want convenience and value pricing, so they choose discount department stores, such as Target, Wal-Mart and Kohls, rather than the local Hallmark store. In key giftware categories, candles, aromatherapy, baskets, boxes, and vases, Christmas decorations, greeting cards and stationery, and picture frames, a new survey of 1,000 U.S. households found that shoppers turned first to a discount department store," Danziger says.
Seven Key Trends Predicting Future of Gifts Market
Based on new research among 134 major giftware companies and consumers who buy their goods, the report reveals seven key trends that will forge the future of the gifts market:
The Gifts and Decorative Accents Report, 2003: The Market, The Competitors, The Future Trends uses consumer research to point marketers away from declining categories to those with growth potential. For example, while consumers turn away from figurines, which represent the epitome of a unless dustible, they are buying more vases, urns, pots, baskets and boxes, which functional utility and decorative value.
Personalization and more customization are the key trend, as consumers seek more special and unique gifts. Other "hot" categories include pet gifts, garden decorations, wall decor, aromatherapy, costume and fashion jewelry and picture frames. This in-depth research report is available directly from Unity Marketing http://www.unitymarketingonline.com/reports2/gifts/gifts1.html .
"The business of greeting cards is all about connecting the card giver with the card recipient. The greeting card is a means to express emotions and feelings that otherwise might not be shared," Pam Danziger, president of Unity Marketing and author of Why People Buy Things They Don't Need, said before the Greeting Card Associations 62nd annual convention. "With connecting replacing 'cocooning' as the macro trend motivating consumers today, we'd expect the greeting card business to be booming, but new mediums of connecting and challenges at retail are capturing shoppers' attention.
"Scrapbooking, digital cameras and the Internet are new ways consumers connect emotionally. Young people, in particular, are embracing the concept of scrapbooking, but bringing it into the computer age, out of the traditional craft, scissors and paper mold. And since everything that is old becomes new again, consumers are returning to the hand-written notes on luxury stationery as a way to send greetings from the heart.
"With these new competitive pressures, the greeting card industry is also facing challenges at retail. While the purchase incidence of greeting cards is up, the industry's sales have dropped slightly in 2002 to $14 billion from $14.2 billion in 2001. This decline is largely due to discounting and deflationary pressures as mass merchants and discounters now capture 24% share of the market with discount and off-priced cards and stationery items.
"The key to the future for the greeting card industry is to connect the industry's products to the shopper's and card buyer's needs. Marketers must resist the temptation to be the lowest-price alternative. Rather than bottom-feed, the greatest opportunity in the future lies with the luxury consumer who first and foremost demands a high quality greeting card experience. Trendsetters like New York-based Kate's Paperie prove there is a big business opportunity serving the connecting needs of the luxury and near-luxury consumer," Danziger said. For more information, visit www.unitymarketingonline.com .
What's Hot, What's Not for Gifts this Holiday Season (October, 2003)
As the nation's retailers gear up for an expected blockbuster holiday season, shoppers are drafting their gift lists. Popular holiday gift ideas can be found in the results of a new shoppers survey conducted by Unity Marketing that covers 20 categories.
"Shoppers gifting preferences become clear when we examine the purchase incidence of top gift items since 2000," says luxury marketing expert Pam Danziger, president of Unity Marketing and author of the book Why People Buy Things They Don't Need. "With the giftware industry topping $54 billion in 2002, upward trending categories in gifts reflect today's consumer psychology."
"As the 'connecting' trend replaces 'cocooning', consumers select gifts that express their value system and emotional feelings for others," Danziger explains. "Since 9-11 consumers are reconnecting with the outside world and reaching out to establish true connection with others. Gifts, then, become a means to express one's emotions and feelings."
Top gift ideas for Christmas 2003 that reflect the connecting trend include:
Luxury stationery, scrapbooking supplies and photo albums
Connecting consumers are placing new emphasis on personal communications, so luxury stationery from Crane's or Papayrus are right on trend. Also hot, scrapbooking supplies and photo albums that encourage self-expression and creativity. Young people, in particular, are enthralled with the expressive possibilities of scrapbooks.
Never enough decorations
Since 2000, consumers have been purchasing more seasonal decorations for Christmas and other holidays. New decorations for outside the home, including flags and banners, wreaths, lighted lawn sculptures, and window decorations will be popular. Indoor collectible holiday ornaments, such as those from Lenox will be popular gifts. Lighted holiday villages from Department 56 hark to the past to help consumers connect to a simpler time.
Aromatherapy, household scents, not candles
While sales of candles stalled, partly due to concerns about indoor air pollution and petroleum-based waxes, shoppers are turning to non-burning scented products like steamers, potpourri and sprays, which also hit the under $25 gifting 'sweet spot.' If you must give a candle, shoppers will increasingly chose among the new soy-based alternatives, Ergo candles or traditional beeswax from Yankee Candle.
Baskets, boxes and tins eliminate clutter and decorate
After years of building household clutter, consumers crave a simplified, anti-cluttered lifestyle making decorative organizers, baskets, boxes and tins, in great demand. Priced across the spectrum, first choice is Longaberger's luxury hand-made wooden baskets.
Art and wall decoration trending up
Today walls are a new focus for decorating. Art, prints and pictures that capture sentiments, and wall decorations such as sconces, shelves, mirrors, clocks, and tapestries, are gaining favor. While this category can be tricky to buy for, make your selection based upon emotion and feeling, rather than color or design.
Collectibles, a favorite choice for collectors
Gift giving is simple for the avid collector on one's list. Since one out of every three people collect something, knowing what someone collects gives you an edge. But picking the right collectible can be tricky. Here's a hint: If your collector goes for characters, like classic Disney figures, try to find a piece with a gloss finish, rather than matte, which tend to look dusty. Gloss finishes, or crystal or glass from Glass Baron, Waterford or Swarovski, are favored.
What NOT to buy
Turnoffs today include anything cluttered, busy, or items are merely decorative. In our connecting world, consumers want functionality and practicality along with classic style, so vases are preferred over figurines. The best gifts connect gift giver with the gift recipient emotionally, so items that carry an emotional connection or emotional meaning are on trend.
Entertainment Purchases Are Emotional Therapy for Overstressed, Conflicted Consumers (September, 2003)
“Americans have an insatiable appetite for entertainment,” said Pam Danziger, president of Unity Marketing, today in a speech at the sixth Annual DVD Entertainment Conference. “Last year Americans spent $620.1 billion on recreation and entertainment, nearly 50 percent more than on clothing and accessories, and more than the GNP of Canada. Americans are passionate about entertainment and spend an astounding amount of money on a complete intangible.”
Over 60 percent of consumers bought prerecorded media in past year.
Prerecorded entertainment media, including DVDs, videos, music, CDs, etc., ranked second to books, magazines and newsletters as the most widely purchased entertainment and recreation product, according to research for the second edition of Danziger’s Why People Buy Things They Don’t Need (Dearborn, 2004). In the latest survey among 1,000 U.S. consumers, some 62% purchased prerecorded media in the past year, with 74% buying books, magazines or newsletters.
Purchases of new entertainment equipment drives sales of prerecorded media.
A key motivator for purchasing entertainment media is when one buys new entertainment equipment. Sales of television, video, audio and computer hardware and software reached $110.6 billion in 2002, up 4.7% over 2001 levels. Much of that growth is driven by new technologies that target the high-end of the market.
“Today’s luxury market is embracing new entertainment technology which in turn drives prerecorded media sales. In Unity’s most recent survey among luxury consumers, luxury entertainment equipment, such as plasma televisions, DVD players and the like, was the most purchased luxury item among a range of 14 different luxury product categories,” Danziger explained.
Two segments are prime in prerecorded media market.
Two distinct demographics describe the prime market for prerecorded media. Millennial generation consumers 18-to-24 years old spend the most overall on this category, with affluent baby-boomer consumers, ages 45-to-54 years old, representing a second peak in spending. “While age is a predictor of high spending on prerecorded media, income is not, so marketers need to focus more on what appeals to the different age groups, rather than on income,” Danziger said.
“Where different aged consumers shop for prerecorded videos is the key for marketers who want to target these age groups. Baby-boom generation consumers tend to favor discount department stores and non-store retailers, such as the Internet. On the other hand, the Millennials and GenXer shoppers favor electronics stores and music/hobby/book specialty stores. But younger shoppers make little use of non-store retailers, perhaps because they know how to download music for free where the older generation isn’t as knowledgeable,” Danziger says.
Entertainment purchases are used for emotional therapy.
“Entertainment may represent the biggest category of consumer spending on ‘things they don’t need,’ but it serves a therapeutic purpose for buyers,” Danziger reveals. “As our lives become more complex and harried, consumers experience conflict between their emotional lives and the many external roles they must fill, e.g. husband/wife, parent, professional, neighbor, etc. In their search for new equilibrium, entertainment is a critical way consumers satisfy their emotional needs so that they can connect in their external world.
Five groups try to get some satisfaction — Bored Betty, Fantasy Fred, etc.
“Our research found five market segments distinguished by an emotional need for entertainment. For example, ‘Bored Betty’ needs more meaning in her life and finds that through entertainment. Reducing boredom and stress is the prime motivator for Betty, who is more likely to be a low-income woman living alone.
‘Fantasy Fred,’ on the other hand, finds meaning in his life by connecting with other places and times. This consumer, a highly educated, married baby-boomer with a $75k plus income, uses entertainment to expand his mind through new ideas and to express different aspects of his personality.
"Entertainment Aficionado Alex’ is the most active buyer of entertainment media and spends the most in the category. But Alex’s lower income and younger age means he spends a significant amount of his disposable income in the category.
‘Frugal Frances’ finds entertainment in shopping for bargains, and is more involved in buying entertainment media than using it. An active consumer, Frances is more likely to be an upper-income married woman aged 25-to-54 years old with children.
“Finally, ‘Coach-Potato Carol’ is the least active entertainment consumer. Equally divided between male and female, this consumer is older, often retired, and is not particularly motivated by fantasy fulfillment, self-expression, relieving boredom or stress or media as an enhancement to the quality of life,” Danziger concludes.
A copy of Danziger’s speech before the DVD Entertainment Conference is available at www.whypeoplebuy.com.
Connecting is the Key Trend Word for the Future (August, 2003)
Connecting: It’s the word that characterizes the new dominant trend in the consumer market today. Like butterflies emerging from their cocoon, consumers today are searching for more meaning in their lives. No longer preoccupied with self-centered materialism, buying more and more things to feather their ‘nests,’ consumers today are turning their focus to the external world. They are looking for ways to link up and forge meaningful relationships with others in their social sphere. Today, cocooning is dead, as the age of connecting takes hold.
As consumers make new choices in the stores where they shop, the brands that they select, and the product categories they purchase, consumer marketers are discovering that their connection with the consumers is growing more and more tenuous. Marketers are being rendered less and less relevant in the consumers’ lives. The key marketing challenge for the future is to establish a true, meaningful and lasting connection with the customer and prospective customer. Here are ways for marketers to forge a new connection with the consumers:
Talk less and listen more — Today virtually all commercial communication is one-way, i.e. through advertisements the marketer tells the consumer what they want them to know. But that doesn’t forge a connection, rather it results in consumers being less responsive to an avalanche of meaningless, irrelevant ads. Marketers must establish new ways of creating meaningful two-way dialogue with their consumers. The success of eBay is that their entire corporate culture is based upon the premise of listening more to the consumer.
Give more value, rather than take more money — Marketers’ reason for being is to make money, so naturally they want to take more and more of it from the consumers. Yet with consumers today driven by a passion for bargain hunting, marketers’ profits are shrinking as they fall into the trap of constant and continual sales. There is another way, and that is to give the consumers more value in the products you offer and the shopping experiences you deliver. Women’s fashion marketer, Chicos FAS, fully embraces the concept of connecting with the customer by giving more value and their reward is written every quarter on their rising balance sheet.
Become involved with the customer, rather than waiting for customer to get involved with you — Marketers today have a totally backwards view of customer loyalty. They believe customer loyalty is something that the customer does for them, whereas in truly connecting with the customer, marketers discover that customer loyalty is something that they give to their customers. Southwest Airlines thrives by reaching out to their target customer and staying loyal to their customers’ needs: dependable fast service at the lowest possible cost.
Connect with the consumers’ community — “No man is an island” and consumers are connecting more and more within their social, political, cultural landscapes. Connecting with the consumer today also means connecting with the community where they live. One of the secrets of Wal-Mart’s phenomenal success is that despite their enormous size, each local Wal-Mart store reaches out to become a hub of the local community, for example, by supporting local schools and fraternal organizations in fundraising.
Create your business for your customers’ needs — Ultimately marketers need to turn themselves around 180° and look at their business, their products, their services totally from their customers’ point-of-view. Connecting means you place their needs, desires, priorities, and concerns first.
Luxury Linens Maintains Strong Consumer Pull (July, 2003)
While the market for home furnishings is languishing, the sales of home linens has remained vibrant and reached $38.7 billion last year. With the luxury linens segment estimated to range between $7-$8 billion, linens have strong appeal to the luxury market due to their increased comfort and sensual appeal. Discover the drives, motivations and behavior that characterizes the luxury linens consumer.
Sferra Brothers' tradition of fine linen
Founded in 1891, Sferra Bros. maintains old-world tradition selling high-end table, bed and bath linens, but brings a 21st century approach to marketing their products through strategic alliances and new distribution avenues.
Recent luxury brand extensions
In the news with announcements of new brand extensions are Burberry's, Vera Wang, Kate Spade, and Gucci.
Luxury branded goods: real or faked?
Counterfeit luxury goods are threat to U.S. economic security, according to a new white paper. Technology company GenuOne offers a new system to help luxury marketers, such as Richemont, protect their brands from fake sales on eBay.
Volkswagen's launch into luxury: what went wrong?
Volkswagen's failure in the luxury market was trying to impose luxury from the outside, when luxury must be nurtured and grown from the inside out. They ignored the ultimate expression of VW luxury in the passion affluent middle-aged baby-boomers feel for the experience of driving their first "VW Bug."
The Luxury Business newsletter is the luxury marketer's report. It gives marketers a new point of view in how they connect with their luxury customers. Each issue is packed full of new ideas to help luxury marketers with their primary challenge of taking the ordinary and transforming it into the extraordinary. Get the newsletter here: http://www.visibilitypr.com/pdfs/lb-may-june_2003.pdf
Pets - a $30 Billion Business and Growing (June, 2003)
Pets are big business! Today more than half (55 percent) of American households own one or more pets. Consumer expenditures are divided into pet foods and supplies, which totaled $18 billion in 2002, and pet and veterinary services, at $12 billion.
"As consumers lavish spending on their pets, increasing amounts are allocated to special services like exercise, pet sitting, grooming, even spa services. The nation's two leading pet specialty chains, PETsMART and Petco, both view services as a key growth driver," says luxury marketing expert Pam Danziger, president of Unity Marketing and author of Why People Buy Things They Don't Need.
Market segmentation points to market opportunities
Unity Marketing's Why People Buy Things For Their Pets report analyzes the purchase behavior of pet-owners for 'necessities' -- food, leashes and collars, litter and curbing needs, cages, crates and outdoor housing; as well as 'extras,' toys, bath and grooming products, dining bowls, vitamin supplements, furniture and beds, gifts, travel accessories and wearables. Over 80 percent of pet owners bought one or more 'extra' in the past year, but one segment of the pet-owning market showered their pets with the greatest share of luxuries.
Connecting with pet 'parents' who splurge on luxuries.
A psychographic study of pet owners revealed three distinct pet-owning segments, each with a different motivation toward ownership and different purchase behaviors. The 'parents' segment comprises just over one-third of pet owners and represents the prime market for pet manufacturers and retailers who cater to the carriage trade.
These consumers have given their pets a central position in the family. Demographically they have the lowest incidence of children at home and are more likely to be single, so the pet becomes the 'baby' of the family. They spend between 50-66 percent more annually on pet 'extras' and are more likely to shop at specialty pet food stores for the more exclusive luxury brands of pet food.
"Today's pampered pet is the beneficiary of all kinds of luxury indulgences. As Time magazine recently reported, '... the dog has emerged - above expensive restaurants, home furnishings and even security - as the status symbol of the times.' "It is the pet 'parents' segment that is turning to Gucci, Burberry and Chanel for luxe accessories and shopping in luxury pet boutiques like Los Angeles' Fifi & Romeo for $150 cashmere wool doggy sweaters." Danziger explains.
Art Market Growing, Diverging Consumer Motivations Creates Opportunities (May, 2003)
Buying art is more than decorating. With s 42% of all American households buying art in 2002, the art market is becoming increasingly diverse as distinct market segments buy for different reasons. "Art marketers and retailers are making a big mistake if they view art consumers as a 'one-size-fits-all' market of passionate home decorators," explains luxury marketing expert Pam Danziger, president of Unity Marketing and author of the book, Why People Buy Things They Don't Need.
"While home decorating will always play a role in why people buy art, today the majority of art consumers view the process as a more important decision than simply matching one's home's decor or color scheme," Danziger said.
"Art buyers today connect emotionally with the art they buy through the theme. That personal connection with the art takes precedence over whether it fits a particular space on the wall," Danziger says.
In a new art consumer survey, sponsored in part by the Art Publishers Association, a majority of art buyers agreed or strongly agreed with these statements:
Market segmentation points to market opportunities. Unity's Art and Wall Decor Report, which analyzes consumers of unframed art, framed art, original art, custom-framed art, and other items, provides a roadmap for art marketers, gallery and framing shop owners and art retailers to future market success.
"In reviewing past purchase behavior and art consumers' expected spending through 2003, and beyond, two key market segments emerge, which offer art marketers their best sales opportunities," Danziger explains.
At the luxury end, art connoisseurs, representing over one-fourth of the total art market, are projected to be the most active buyers. Their appetite for art is undiminished by world events, as they have been the most active segment buying art in the first quarter of 2003. This segment is comprised mainly of affluent and highly-educated baby boomers that view themselves as collectors, who shop primarily in art galleries and framing shops and for whom decorating takes a back seat.
"The other segment holding the most promise are home decorators, 28% of the market. This segment is largely budget-minded young marrieds who have a need to buy art to fill empty walls in new homes. Many home decorators expect to buy more art in the coming year and are likely to continue frequenting mass merchants and home furnishings and furniture stores for the already-framed prints they favor."
The new market research report, Art and Wall Decor Report, 2003: The Market, The Competitors, The Future Trends, is a business planning tool that provides marketers and retailers with the facts and figures they need to build a vibrant business into the future. Written by Unity Marketing research experts, it detail sales by product form and distribution channel, profiles leading national art and framing retailers and art publishers, and provides insights from surveys of art companies, art publishers wholesalers/distributors, OEM framers and framing suppliers, art galleries, framing shops and art and wall decor consumers. This in-depth report is available from Unity Marketing for $2,250. For more information, visit www.unitymarketingonline.com.
Retail Shoppers Returning to Normal, Gasoline Takes Less Out of Budgets, Leaves More For Life's Luxuries (May, 2003)
In April, after months of turmoil and uncertainty, the nation's shoppers are returning to normalcy, as retail and food service sales through April 2003 reached $1,163.7 billion, up 4.5% over the first four months of 2002. As the price of gasoline fell sharply in April, consumers' adjusted their budgets to spend more on luxuries and non-essentials, according to the latest statistics release by the Department of Commerce.
With a late Easter this year, clothing and accessories stores benefited from more consumer spending, as sales rose 2.1% in April over March 2003. Consumers indulged in more spending on jewelry, with jewelry store sales up 2.3% in the first quarter compared with 2002. Increased spending on the garden boosted the nation's building materials, garden equipment and supplies dealers, whose sales jumped 22.3% over March as consumers turned their attention to enhancing the outdoor living areas of their homes.
Fueled by a passion to reconnect with the external world, 'butterfly' consumers spent more money dining out this year, with sales at food service and drinking establishments up 4.3% for the first four months of 2003. The signs are positive through the rest of the year for motor vehicles and parts dealers, food and beverage stores, health and personal care stores, general and mass merchandisers, non-store retailers, especially the Internet e-commerce sites, and food services and drinking places.
But some categories showed weakness through the first four months of 2003. Furniture and home furnishings stores struggled with only a .8% sales increase over the first four months of 2002. Electronics and appliance stores are down .3%, while sporting goods, hobby, book and music stores declined 1.5%.
Traditional department stores are continuing to have a bad year, as retail sales are off by 5.8% compared to last year. The nation's miscellaneous retailers, including many independent 'mom & pop' type stores, are down .6% from last year.
Home Depot Sows Seeds to Blooming Future in the Garden Market (May, 2003)
Home Depot, the $58.2 billion home improvement giant, is launching a "big box" retailing concept to lawn and garden. Called Home Depot Landscape Supply, the new stores dedicated to the home gardener and landscape professional are now being tested in the Dallas and Atlanta markets.
"With today's home gardener already choosing home centers first for their purchases, Home Depot Landscape Supply builds on the company's already considerable brand strength in the garden market," say luxury marketing expert Pam Danziger, president of Unity Marketing and author of the new market research report, Future Vision: Garden Market. "Today's $41 billion garden market offers tremendous opportunity for marketers and retailers over the next five to ten years as consumers emerge from their cocoons to turn their decorating passion to the outside living areas of their home." Research reveals the fastest growing garden category is garden "hardware," i.e. the accessories, products, furniture, tools and equipment that enhance the consumers' gardening experience, rather than garden "software," i.e. the plants, seeds, shrubs, trees and other plant material.
"The big opportunity for garden marketers and retailers over the next decade is to tap into consumers' growing passion to enhance their enjoyment of the garden by adding luxury accents, furniture, and accessories. The Landscape Supply concept, like Home Depot's EXPO home concept before it, positions the retailer to tap the whole spectrum of gardening consumers, from the budget-minded do-it-yourselfer to the affluent consumer working with their landscaping professional to design a showplace garden," Danziger says.
The report, Future Vision: Garden Market, is a business planning tool that provides marketers and retailers with the topline facts and figures they need to build a vibrant garden business now and into the future. Written by marketing expert Pam Danziger, president of Unity Marketing, it gives executives a view "over the horizon" to anticipate how the marketplace will change in the future, so that they can plan and implement strategies today in anticipation of the shifts in the market. This concise report is available from Unity Marketing for $495. For more information on the new report, visit www.unitymarketingonline.com .
Internet is Top Media Choice for the Luxury Market (April, 2003)
The Internet holds the key for luxury brand marketers, according to a new survey of affluent consumers by Unity Marketing (www.unitymarketingonline.com), which concludes that the Internet has the most influence on luxury purchasing decision-making.
Topping the list of media that influenced their last luxury purchase, the Internet/web sites was named by 44 percent of luxury consumers as very or somewhat important. Articles and reviews rank close behind, with 42 percent reporting being influenced by editorial matter. Traditional advertising lags behind with newspaper ads (31percent); television programs and commercials (28 percent); and magazine advertising (24 percent).
Based on the survey, the jury is still out on the effectiveness of image ads, as luxury brand and/or company reputation influenced 82 percent in their last luxury purchase. "But there are many tools beyond image ads that consumers use to establish a brand in their mind," said luxury market consultant Pam Danziger, president, Unity Marketing. Running a close second to product brand is store or dealer reputation/brand, named by 79%. The recommendation of friends (word-of-mouth) is next (60 percent), then salesman's information (51 percent).
How can luxury companies tap the marketing power of the Internet? "Branding, building a brand, communicating its values, and using the brand as a conduit to connect with customers will continue to grow as the pivotal axis on which effective marketing is based," noted Danziger. "Using the brand to connect with consumers is about creating a dialogue, involving them with the brand and making them active participants with our brands."
Today luxury marketer's Website's must become the central hub of two-way communications with customers. "Websites must become the platform for all branding and marketing communications. But marketers waste the power of the Internet and minimize the effectiveness of their Websites if they simply transfer traditional marketing communications from print or TV to the Web We should start all marketing and branding communications on the Web first, using all the tools, facilities and capabilities of 21st century computer networks, then transfer that to traditional media as needed," added Danziger.
Danzgier recommends the use creative meta-tagging to lead customers from search engines to Websites. "Websites must include all the data required to give consumers the tools they need to make an informed purchase decision. Luxury marketers, in particular, need to actively pursue a dialogue with consumers, inviting them to communicate with us, making sure someone with marketing authority responds in real-time to their incredibly valuable consumer input. Companies that are truly connecting with consumers online include eBay, Amazon and the two leading cable home shopping networks, QVC and HSN," reports Danziger.
Every point of contact between the luxury brand and the consumer must be reconfigured for two-way communication. New methods of communications must be established between and among the luxury brand's customers, retailers, distribution partners and the company. "The challenge becomes connecting why the consumer buys with how to reach them and where to reach them, while providing means and opportunity for the consumer to connect back to the brand. The Internet is tailor-made to do this," concluded Danziger.
Luxury Market Report 2003: Who Buys Luxury, What They Buy, Why They Buy, is a business planning tool based upon integrated qualitative and quantitative research, conducted in association with House & Garden magazine, among affluent (incomes of $50k-$99.9k) and super-affluent consumers ($100k and above). It analyzes consumers' purchase behavior in 14 categories of luxury products and seven luxury services in the past year. This 200+ page report is available from Unity Marketing. For more information visit www.unitymarketingonline.com .
Garden Market Forecast - Unseasonably Hot with Extended Sunny Skies and Rising Sales (April, 2003)
As consumers emerge from their winter cocoons, they will focus their decorating passion on the exterior living areas of their homes, according to a Unity Marketing research study, Future Vision: Garden Market.
"For the next five to ten years, garden marketers and retailers will enjoy a period of steady growth as consumers shift their decorating focus away from the home's interior to the garden, patio and lawn," predicts Pam Danziger, president of Unity Marketing, and author of Why People Buy Things They Don't Need (Paramount Market Publishing, 2002).
Garden spending reached $40.7 billion in retail sales in 2001. Consumers spent nearly $41 billion on garden-related products in 2001, soaring 12.1% from $36.3 billion, in 2000. With the average U.S. household spending $444 on lawn and garden goods in 2001, the fastest growing garden category is garden "hardware," i.e. accessories, products, furniture, tools and equipment to enhance the gardening experience.
Garden "software," the plants, seeds, shrubs, trees and other plant material grew only 5.8% in 2001 to $18.5 billion, while purchases of garden accessories jumped 18% over 2000 levels, to $18.8 billion. "Today more garden consumers turn to home centers, like Home Depot and Lowe's, for garden purchases rather than specialty lawn and garden centers," Danziger says.
Three demographics distinguish the gardening market - Home-owning, middle-aged, and affluent.
While 80% of U.S. households bought something for their lawn and garden, the prime market for the garden today is middle-aged, affluent, home-owners. "The garden market is morphing into a luxury market for consumers with incomes of $75k plus. The big opportunity for garden marketers and retailers is to tap consumers' growing passion to enhance enjoyment of their garden by adding luxury accents, furniture, and accessories," Danziger advises.
Second most popular luxury purchase - luxury garden.
Luxury garden purchases for high-end barbecues, luxury patio and pool furniture and decorative garden enhancements, i.e. pools, fountains, and sculptures, were the second most widely purchased luxury product; luxury electronics were number one in Unity Marketing's latest luxury market survey. Forty-five percent of the affluent consumers surveyed purchased luxury garden products, with the average household spending $1,000 on luxury enhancements for their yard.
"Upscale garden-marketer Smith & Hawken has tapped the luxury garden trend by partnering with Saks to add garden boutiques to 240 Saks' department stores. The product mix features luxurious teak outdoor furniture, gardening tools, copper watering cans and pots, decorative pottery, and plant containers," Danziger says.
Increased spending driven by the desire to reconnect with nature.
Demographics, an aging population and rising home ownership, is behind the increase in garden-related spending, but the real growth driver is the consumers' passion to reconnect with the natural world.
As contemporary American culture becomes more "virtual," computerized and electronic, consumers feel a growing need to ground themselves in the real world, a trend which is finding expression in the garden as consumers divide their yards into "outdoor rooms" as they build elaborate garden getaways to shut out the outside world and connect with the sounds, smells and sights of nature. They are inviting wildlife into their yards, and not just birds. More adventurous nature lovers are building bat houses and adding turtles, frogs and exotic fish to garden pools.
Consumers Spend on the Basics in February, While Seeking Diversion by Dining Out (March, 2003)
"Back to basics" was the retail story in February. With consumers dogged by the weather and deepening crisis in Iraq, shoppers hunkered down and focused spending on essentials, keeping the gas tank full, stocking up on food and beverages, and shopping for health and personal care products at mass merchants, discounters and general merchandisers.
In February 2003, retail and food service sales totaled $304.1 billion, up 2.6% over the previous year, with the fastest growing retail channel being gasoline, which posted a 24% gain over last February. Total retailer sales were up only 1.2% without considering gasoline sales.
Consumers were largely unwilling to venture forth for "extras" like home furnishings, and sporting goods, books and music, as both categories dropped last month. Consumers took a wait and hold strategy on durable goods so car dealers, consumer electronics and appliance stores also saw sales decline.
Neither clothing and accessories stores or traditional department stores could coax reluctant shoppers out to buy. Instead, consumers turned to non-store retailers, like the Internet, to buy other necessities. Retail sales among non-store retailers went up 8.4% in February over the previous year.
Consumers Still Need a Release, Have Dinner Out
But with all their worries and fears, consumers still needed an emotional release. Driven by a desire to reconnect with the outside world, consumers spent more on dining out in February. Retail sales at food service and drinking establishments rose 4.2% over last year, continuing a positive trend in dining out this year.
Planning for the future, retailers can expect consumers to return to shopping for feel-good, emotionally-based purchases, as soon as the uncertainties about war are resolved. Once the current geo-political crisis is settled, consumers will reward themselves for their fortitude and patience through this trying time with spending driven by desire.
The Big Lesson
in Retailing Let the Consumer Win (January,
"During the last week in December, which ended Jan. 4, retail sales soared 29.4 percent, from a year earlier." ShopperTrak, Chicago
The big story in retailing this past year was discounting. With Wal-Mart, Target and others of their ilk dominating retail, consumers know they almost never have to pay full price.
Even at the luxury end of the shopping spectrum, expectations of discounting rule. In Unity Marketing's recent survey of luxury consumers, the majority bought their last luxury on sale or at a discount in every single category save one, beauty and fragrance luxury products.
It's instructive to look at the luxury beauty products category since it traditionally doesn't resort to discounting to drive consumers into the store. Rather, following the trendsetter Estee Lauder that established the practice, beauty product marketers sponsor special events two or three times per year where shoppers receive a special gift package for buying a certain dollar amount of cosmetics. Rather than discounting, savvy beauty marketers give something extra, a reward, to their loyal consumers.
The lesson: discounting price isn't the only way to drive shoppers. But marketers and retailers have gotten lazy, and instead of thinking of creative ways to inspire shoppers to buy, they resort to the same-old discounting strategy, which is ultimately becoming less and less effective.
The key to success for marketers and retailers is to give more value at a reasonable price. There are more ways to make consumers feel like winners in the shopping game than just cutting prices. After all, what luxury consumers, who can afford to pay full price, want to achieve when they buy at discount is the feeling that they have won, beat the system, achieved some special status by saving money.
Ultimately, it's not about the low prices, but feeling like a winner! So give those winning shoppers a goodie-bag of special gifts or some other valuable bonus that will result in an "emotional lift."
Marketers and retailers need to change the ground rules on which consumers measure their "winnings" in the shopping game to retain margins and generate profits.
About Pam Danziger & Unity Marketing
Found in 1992, Unity Marketing (www.unitymarketingonline.com) is a marketing research and consulting firm that helps companies apply the concept of emotional marketing to corporate branding and marketing initiatives. Using its "why people buy" research strategy, Pam Danziger, company founder, president and author of Why People Buy Things They Don't Need (Ithaca, NY: Paramount Market Publishing, 2002), uncovers the motivations, desires and emotional needs that drive consumers to buy. This approach turns consumer insights into actionable marketing and brand strategies and gives executives "future vision" to plan the direction of their business. Unity produces market research studies that are essential business planning tools for executives competing in the luxury market, jewelry, art, home furnishing, gifts and collectibles, toys, personal care/cosmetics industries among others. Unity also publishes the Luxury Business and Gifts & Collectibles Business newsletters. Today Pam is at work on her next book, Let Them Eat Cake: Marketing Luxury to the Masses (as well as the Classes).