A roundtable discussion on consumer and shopper insights, with Stephanie Cota of Mattel Brands, Hermann Deininger of Adidas, Sally Grimes of Newell Rubbermaid, Alfredo Martel of Caribou Coffee and Kevin Lane Keller of Dartmouth College.
What is the hardest thing to get right with consumers today?
Stephanie Cota: One of the hardest things to get right with consumers today is message authenticity. Consumers are very smart, and they are very pressed for time. They are increasingly intolerant of messages that are over-complicated or over-clever.
As a consumer, I also become challenged when watching a clever commercial but can’t necessarily tell you what the brand or product was. That said, some brands have done a great job of staying true to their message, both at a mass and a class level.
From a mass perspective, Campbell Soup and Kraft Macaroni and Cheese do a really great job of staying true to who they are. In the class space, Louis Vuitton and Manolo Blahnik are authentic with their messages. Staying true to your message, but delivering it in fresh, compelling ways, is one of the more challenging things that we do as marketers.
Hermann Deininger: The hardest thing is to connect with today’s savvy, youth consumer. In today’s culture, consumers are very versatile and multi-faceted, so it is really important that we are a credible brand for them.
To do that, it’s important that we build, establish and continuously extend the trust between us. We must provide consumers with a full brand experience that reflects their values, needs and desires.
As a brand, Adidas acts in a triangle of sports, music and fashion. We also develop technologies to improve our products. We have to be on the edge — or beyond — when it comes to trends, whether it is in fashion or in music. To be in that sweet spot for our brand is the most important thing.
Sally Grimes: Sharpie’s primary target is teens, and so getting it right is especially critical, given how teens expect to engage with brands today. They are the four-screen generation — texting, TV, tablets, computers — often all at once. While they are willing to engage with brands, they are very discriminating about whom they “like.”
Just for perspective, teens and young adults make up almost 90 percent of our three million Facebook fans. So, we’ve incorporated what we call “real-time insights” into our modeling through our social -media channels.
Social media is a focus group at our fingertips every day. Having that direct access does mean we have more opportunities to get it right, but because of this rapidly evolving behavior, the hardest thing is just keeping up.
Alfredo Martel: It’s becoming harder and harder to realize a one-size-fits-all price/value equation given how the market is now becoming so fragmented. We’re going through significant habit changes here in the United States. Values are changing, or at least being modified or augmented.
There’s a ridiculous amount of innovation being thrown into the marketplace and into society. In many respects, we also have inflation. That’s why it’s so important to engage in a one-on-one approach in the store.
Kevin Keller: The hardest thing is that there has been a lot of change with the economy, with technology, and just generational change. With so many forces at work, it can be hard to understand what kinds of changes people are making.
Trying to get a clear view of that is really key because not everyone is changing a lot, while other people are changing a great deal. Getting a good sense of that change for any one brand, brand customer base or for any one consumer, is even more crucial than usual.
There are always the challenges of understanding what people truly think, and what they truly feel. All of those things are enduring, but the most compelling thing in 2012 is the amount and nature of change for any one consumer.
Which is more useful for consumer insight: data or gut instincts?
Cota: Data is unequivocally our anchor, both qualitative and quantitative. But data is only going to get you a certain percentage of the way. Gut instinct really has to take you — to use a sports analogy — across the finish line.
We need data to validate our instincts and we also need to take some risks, which come from the gut. Gut instincts are supposed to make you a little bit uncomfortable at times, and we think that’s a good thing.
But if you just go with your gut and you don’t ground it in any kind of consumer insight, you run the risk of doing something very damaging to your brand. So, you really need a balance of both.
Deininger: It’s definitely not an “either/or” question. For proper planning, you need data insights to set the frame — especially in changing times so that you get a clear picture of what’s going on.
On the other hand, you still have to make a decision on your own. So, it’s really a mix. The data helps you to prepare decisions, but you still have to make your own decision. The mistake would be to trust your gut feelings just because you have long-term experience. That can lead to something totally wrong.
Grimes: We certainly start with the data — everything from qualitative to rigorous quantitative analyses. That said, it’s very important to bring emotional intelligence to the data.
Emotional intelligence is your experience with the brand and the consumer that enables you to put yourself in their shoes. It means living and breathing the life of your consumer. It’s part of our DNA as a brand to start with the data but then bring the emotional intelligence to it, for balanced decision-making.
Martel: A long time ago, I was taught that your gut feeling is nothing more than the accumulation of your experiences throughout time. So, when you’re faced with an unknown, you can relate it to things that you’ve experienced in the past.
Data clears the way to improving on your gut feeling. Knowing is more important than feeling your way through to understanding.
The biggest challenge is that if you think of your current data inputs — gift card programs, your websites, transactional information — you collect and collate all of that and create insights out of the tsunami of information.
Keller: The thing about gut instinct is that if it’s just gut instinct, I kind of get nervous. It’s really the whole informed experience that gives you instincts. You still need data to stay current because things may have changed in ways you may not have realized.
How much has social media changed consumer behavior?
Cota: Digital media, in general, has 100 percent changed the way consumers behave. Social media is one component of your larger message and how you use social media is obviously very different depending on the consumer you’re talking to.
Barbie is enjoying over four million fans on Facebook, and our message keeps the brand fun, fresh and relevant in their eyes. We also activate social-media through mom bloggers, where the message and feedback is a bit different.
You don’t want social media to become one of those things where you just check the box. You need a strategy. With digital in general, consumers now have myriad ways of shopping, so you need to be in those places with your message and you need to be there authentically.
Deininger: Social media has changed consumer behavior a lot. Facebook, Twitter, YouTube, Skype — these are the platforms consumers use to communicate today. This makes things more challenging in general, but also more exciting.
I’m just back from a business trip to Brazil where I joined a focus group of 17- and 18-year-olds. One girl said, “If you took Facebook away from me, I would die.” This was very dramatic, but it describes how young people feel about this media platform today.
As a brand, we now have a real dialogue, where we get instant and prompt feedback from consumers on whatever we do — whether it’s a new product, advertising campaign or athlete we have under contract.
It helps us speed up our decision-making. If we get feedback on Facebook on a new campaign from two million people within five days, we don’t have to wait another six months for the market research.
Grimes: I can’t stress enough how much social media has changed consumer behavior. Consumers use social channels when they want the truth, at least according to those they trust the most — their friends and family.
Social media has added a whole new layer to shopping behavior as more consumers begin their purchase journey online. Layer onto that the growth of mobile, and consumers have access to product insights at that critical point-of-decision. It’s up to us, as brands, to earn those favorable reviews wherever and whenever consumers are accessing them.
I think of social media as a lifeline to our fans because it helps us keep up with them. Our traditional paid media is the spark; our owned media — such as our websites — are the fuel; and then the social media is the fire. So it goes from the spark to the fuel to the fire.
Martel: Once the internet arrived and people were trying to monetize it, it was all about doing brand marketing across channels — your brick-and-mortar, retail, catalog, online and email.
Things are shifting from doing brand marketing across channels to now doing it across channels on a one-to-one basis. It’s almost like we’re going back to the days before big-brand advertising, when word-of-mouth was your best source of referrals and decision-making information.
So, in a way, it’s back to the future. It’s so important to make sure that the customer not only has a great experience, but also a great disposition to tell others about it, because now their voices are amplified through all these social networks.
Keller: Social media have changed some consumers a lot and others very little. It’s a transformational force, but it is not uniformly transformational. So, again, you have to understand which consumers have been more impacted.
It’s important to recognize how much diversity and difference exist in social media across consumers and customer groups. We have to recognize that not everybody is using social media for all the brands all the time. One step removed from that are all the developments in the mobile phone, and that’s going to be even more transformational. Social media are going to become everything that happens on our smartphones.
What has the recession taught you about consumers?
Cota: We’ve learned that parents, grandparents — those who are buying for a child — don’t want them to want for anything.
But they may buy less. They may buy more things at lower price- points so they have more gifts to wrap and give. Or, they may save up to buy one big thing.
Our job is to make sure that whatever they are buying will deliver great price/value and a stellar play experience. So, over the past few years, we’ve made sure that we have a robust range of price points.
Across Mattel brands, you can find things that are approximately one dollar (like a Hot Wheels car) all the way up to a $2,000 Barbie diamond necklace — and everything in between.
Deininger: The recession had a certain impact on our business, but not nearly as much as in some other industries. For us, the key to success was to continue to be credible, while also providing enough freshness to give consumers an impulse to continue to buy our products. It was not a fundamentally different consumer strategy than we had before or that we have today.
Grimes: The recession taught us that consumers are smart. They understand that value isn’t just about price. When we were in the height of the recession, they could have traded down to a cheaper marker. All of our products are premium-priced. But they didn’t. Even at the lowest point of the recession in 2009, we held our share.
While people purchase Sharpies for all sorts of utilitarian projects, it is also an affordable “sweet treat” that people sometimes buy just because it makes them happy. It brings color to dull days. During the recession we touted the fact that, at about a dollar a marker, Sharpie is a great value.
For example, we had a campaign that included, for example, a print ad with the headline: “Designer jeans for about a dollar” that showcased a pair of jeans decorated with a Sharpie. The idea is that, with Sharpie, you can do it yourself and you can save. That’s at the heart of what we learned during the recession about consumers.
Martel: The recession taught us that we like a lot of things, but we love only a few. We’ve strived to become part of those few loved things. With our re-branding, we really wanted to pursue the notion that folks referred to Caribou Coffee as “my Caribou.”
When we started to dig under why that was, we found all these values that were intrinsically there, but we had to bring them back to life. We believe that many of our loyalists love their Caribou. That’s why we are still part of their lives despite these tough economic times.
Keller: The recession reminded me about the importance of value in its fullest sense. Value is all about what you pay and what you get. The customer is all about that, and the brands that got hurt the most were the ones that didn’t provide the best value.
It’s just a good reminder that’s always true, but that’s even truer in a recession. Marketers should always keep in mind that the price-point doesn’t matter — premium luxury or discount — it ultimately comes down to value and all the benefits that you provide with your products or services and the costs associated with that.
You need to make sure consumers truly understand your value because sometimes they don’t. In a recession it’s easy for consumers to focus on price and not value, so some marketers learned how important it is to make sure that people understood and appreciated their value.
Which brands do you most admire for their consumer insight?
Cota: Madonna has done a phenomenal job of understanding her consumer. My team and I talk a lot about her from a brand perspective and what she has achieved. Madonna, like Barbie, is unapologetic and continues to evolve decade after decade without losing her vision, DNA or signature style.
She has continued to evolve through her children and does a fantastic job of delivering global reach. She is the epitome of a brand that remains relevant and connected to what her consumers want.
The Four Seasons Hotel has also done a remarkable job. For more than 50 years, the Four Seasons has stayed committed to the needs of its guests. A guest could be staying in an entry-level room or the grandest suite, but the quality of service at Four Seasons is exactly the same. It’s impeccable. They really just deliver in a way that many other luxury hotels miss ever so slightly.
Deininger: I am fascinated by Whole Foods. I think they do a really great job communicating with the consumer in a premium segment in an environment that is not really supporting premium.
My favorite car brand is Audi. They understand the consumer very well. They’ve been undergoing a total re-launch over the last 15 years, and they’ve now overtaken Mercedes Benz in terms of numbers.
What Audi did was a radical change. They thought of a completely new design language and combined that with their heritage of quality and technology. They are evolving and innovating constantly. They have become a very credible and reliable brand without the “grandpa” image they might have had before.
Grimes: As the mother of a tween girl, I have a personal affinity and profound respect for what Dove has done to change the face of beauty and build self-esteem in girls.
Dove heard women when they said they were tired of the beauty industry making them feel inadequate. Their campaign that did an about-face on what it means to be beautiful is incredibly admirable.
I’ll also talk about Zappos, because they listened to their customers, too. Zappos heard women and their complaints about the dismal online shopping experiences — overly restrictive return policies, shipping charges, and robotic call centers.
Zappos tapped into this insight and staked its claim on customer service to win consumer trust and loyalty. Because of this they have my loyalty.
Martel: I had the opportunity some months ago to meet Randy Harward, senior director of research and quality for Patagonia. We were in an innovation think tank and it was just very interesting how he was so focused on knowing what his core constituency of customers wanted from his brand.
He said that Patagonia’s core customers are the “dirt bags.” And, of course the room just went: the what?! Yes, the dirt bags. These are the hard-core climbers. These are people who really know climbing, who really understand Alpine sports. They appreciate quality and they understand design.
It really resonated with me to the point where I now own about eight Patagonia products. The more I went to that brand to see what Randy was talking about, the more I connected with it. They really have got it going on.
Keller: The classic brand I admire is Procter & Gamble, which has done a really good job with insights and launched a lot of successful new products. They’ve revamped their marketing and put more focus on the consumer and the customer. Getting new insights in mature categories can be very challenging. So, I admire Procter & Gamble a lot for what they’ve been able to do over the last decade or so.
It’s also remarkable what Nike has done through the last 30 years or so. It’s a tough market, a very fickle market, and a very competitive market. It tends to be teens and young adults. They stay close to their consumers and have done a great job with insights by staying on top of popular culture. They innovate to stay relevant.
That’s the name of the game to build any brand over time.