The American Customer Satisfaction Index (ACSI) recently released results for fourth quarter 2009. Despite the bad economy, ACSI data indicated that consumers were overall satisfied with their retail experiences. While some retailers did experience a decline, there were more gainers than losers.
Professor Claes Fornell suggests that gains in customer satisfaction could be attributed to the economic uncertainty. Retail employees tend to work harder to please the customer when their job depends on it. In addition retailers likely make service a higher priority when sales goals are harder to hit.
Nordstrom, who is known for its high quality of service and attentiveness to shoppers, actually rose 4% in the rankings with an all time high of 83%. Likewise in the grocery sector, Publix, also known for superior service, maintained their lead improving by 5% while the sector overall remained unchanged.
The study also analyzes banks, department, discount and specialty retail stores. According to Fornell,”the ‘will to spend’ is evidenced by high customer satisfaction. The issue is whether or not consumers have the means to spend.” The good news for retailers that scored well in customer satisfaction is that when the means does return their work to stay connected with the shopper will certainly pay off.
At the first signs of decline, Abercrombie & Fitch held fast to their brand and declared that they wouldn’t compromise their price point. They believed that their loyal customers would hang in with them. Well, the truth hurts.
The fact is teens are feeling the pinch too and Abercrombie saw a 19% decline in December. Their hugely popular Hollister store, known for its very specifically designed store environments, had a 25% decline in sales according to the Wall Street Journal.
The article suggests that the turn may not have as much to with price as it does with changing fashion tastes. However, similar lower priced retailers like Aeropostale saw a 10% increase. This has caused Abercrombie to examine, not only it’s pricing, but what it takes to satisfy their target shoppers. Unfortunately, they waited to make that connection and are late to market with the fashions their customers desire.
It seems the tables have turned and rather than pushing brands and trends on the shopper (the cool kids buy our stuff) retailers need to find out what the shoppers want and give it to them (just blue jeans will do).
This is an interesting peer into the future and yet another lesson from the economy.
2010 seems like such a futuristic number. Well the future is here and we are still uncertain as to what to expect. This is unchartered territory and the best minds are putting their thinking caps on to figure out what consumers are thinking and where retail is going at the advent of this new century.
Adweek released a report that is sure to be useful as we all get the ball rolling for the year. “Bringing Brands to Life” is a report on in-store marketing; required reading for brand managers, marketers and retailers.
“Marketers today are focusing on actionable content, easy-to-read signage, attractive displays and an appealing store environment to drive shoppers’ point-of purchase decisions. But finding the right in-store marketing combination remains a moving target since consumer behavior is constantly changing.”
In addition, the National Retail Federation has released their Retail Sales Outlook for January/February 2010. Below is a summary of the report:
NRF’s Chief Economist Rosalind Wells says “More economic indicators are turning positive.” In the latest edition, find out:
- If economic growth will continue throughout 2010
- The impact of the current housing market on consumer confidence
- What the retail environment will look like this year
Miller Zell is very optimistic about the retail horizon. Shoppers will come back and we believe that retailers should get prepared for their arrival with new, fresh energy aisle to aisle.
Trendwatching recently released their predictions for next year entitled, “10 Crucial Consumer Trends for 2010.”
Consumerism has been through the ringer this year and everyone will be glad to see the end of 2009. But what does 2010 have in store?
Trendwatching.com touches on 10 behaviors it feels will persist and grow based on a look at how attitudes and technology are shaping our brand perceptions and decision-making processes. However, it’s clear to say that these 10 are not the only ones that will persist. This report is an interesting read as we all get ready for the new year.
After you read it, let us know your thoughts? Is there one that seems more on target than another? Are they way off base? We want to hear your thoughts about consumer expectations as well.
Click here to read the report.
There are only a few major confectioners, six to be exact. And currently there’s a four-on-one cage match underway to see who can come out on top of the heap. The world’s major players in candy are Mars/Wrigley, Cadbury, Nestle, Kraft, Hershey and Ferrero. Mars bought Wrigley last year for $23 billion securing one of the largest brands in the business and the number one spot in the industry. This year, the rest of the industry has set it’s sights on Cadbury. With Kraft throwing the first blow, Nestle, Hershey and Ferrero are now expressing interest in acquiring the historic British confectioner. The reason it’s turned into a war is because Cadbury is well aware of it’s worth and will not go easily.
According to Mark Scott’s article for BusinessWeek, the candy industry is consolidating and there are few places left to target for growth. Miller Zell conducted a focus group earlier this year with shoppers aged 16-35 where we asked about their behavior when it comes to making candy purchases. Most of the respondents, event the teen group, admitted that candy purchases are typically relegated to holiday and gum purchases. Most indicated that health was a consideration in their candy purchases and while most candy is viewed as empty calories, gum is a necessary oral hygiene accessory.
So where does this leave these confectioners? In emerging markets like India; which brought Cadbury a 16.1% revenue increase last year. Scott reports that emerging markets have an “insatiable appetite for candy [which] is fueling double-digit market growth.” No wonder Hershey and Kraft want in on that action. The predominance of their candy sales are domestic. The western hemisphere only saw a 5.2% increase in candy sales last year. Kraft actually reported a 5.7% decline.
Scott goes on to detail why this fight for Cadbury is important to the other companies and the candy business overall. However, in the grand scheme of things, it’s interesting to watch the consolidation of this particular category. One has to wonder, if over time it will continue to significantly diminish in size, once the rest of the world adopts the western way and decides that the joys of candy aren’t worth the calories or cavities. Do you think that the candy category will eventually go away as a major business and be reduced to a segment within a CPG? Can you think of any other products categories where major players dissolved to segments of larger diversified consumer companies?
