Tuesday, May 03, 2016

Beer Manufacturers Are Getting Craftier

Someone once said, “Reality is an illusion caused by a lack of good beer.” But today they might want to amend that statement to read an “excess” of good beer, as some new category realities kick in.

For some background, consider it was 34 years ago when Jim Koch founded the Boston Beer Company. Armed with a revolutionary “craft” alternative to traditional beers, he launched the now-famous Sam Adams brand. Back then Mr. Koch capitalized on shifting consumer tastes and their desire for novelty, and turned the company into what’s now the second-largest craft brewery in the United States. In the regular beer category, Sam Adams shows up at the top of the list in our Customer Loyalty and Engagement Index, and it’s the only craft beer that appears on that list, but it seems that Mr. Koch’s brand may become a casualty of the beer revolution he began.

According to the Brewers Association, of the top 50 overall breweries, 43 are craft brewing companies, meaning companies that produce smaller batches of beer than large-scale corporate breweries whose beers are characterized by an emphasis on quality, flavor, ingredients, and brewing innovation rather than just ubiquitous distribution. To put our “excess of good beer” comment into perspective, new craft breweries are hopping up at about 2 a day, so currently there are currently about 3,100 craft brewers in the U.S., albeit some of them very small.

But it explains part of the reason why domestic craft beer sales were up 22% year-over-year. Well, more options, sure, but also a continuing consumer desire for all things new, with made-to-order better-meets-my-expectations feel to them – or more accurately, a better/different/unique taste. Which is all good for craft brewers, but problematic for bigger, more traditional beer brands. That includes Sam Adams, whose success works against it to a certain degree.

As the brand got more popular and more widely distributed, it lost some of its authenticity, some of its local “craftiness,” if you will. It also means that on-premise and retail competition has gotten a lot tougher, and that’s making the larger, more traditional brewers, including Boston Beer, nervous.

But as they also say, there’s nothing for a case of nerves like a case of beer, or at least case sales of beer, and when it comes specifically to craft beers, for the moment, Sam Adams is #1 on that list too. Here’s how consumers ranked the top brands when it came to meeting consumers’ thirst for a great-tasting beer, with that authentic homegrown brew “feel:”
  1. Sam Adams
  2. Sierra Nevada Pale Ale
  3. Yuengling
  4. Lagunitas
  5. Fat Tire
  6. Shiner
  7. Brooklyn Lager
  8. Bell’s
  9. Dogfish Head
  10. Deschutes
There are more craft beer brands on the way, so the battle for the retailers’ shelves, saloons’ taps, and consumers’ wallets is only going to surge. And there will be victors and losers, but brewers should be stout of heart. Napoleon advised, “On victory, you deserve beer. On defeat, you need it,” so watch for further dispatches from the front of the battle of the beers.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Monday, April 25, 2016

Dressing Up Mom: Mother’s Day Spending Up 6%!

There’s a saying that goes, “a sweater is something a child puts on when a Mother feels a draft,” which turns out to be a lucky turn of phrase since clothing has increased most as Mother’s Day gift-of-choice this year. 

According to the annual Brand Keys Mother’s Day survey, 88% of consumers plan to celebrate Mother’s Day, and clothing is this year’s big winner. Celebrants intend to spend an average of $205.00 this year, up six percent over 2015. Men, following a long-standing tradition, intend to spend more than women, reporting an anticipated average spend of $228. Women reported an anticipated spend of $182. Like many major gift-buying holidays, the majority consumers (65%) indicated they are waiting to make their purchases until the deals shake out at toward end of April and the very beginning of May.

Tradition trumped tech, with cards, meals, and flowers the holiday’s ‘price-of-entry’ purchases. Clothing gifts are up 10 percent. Jewelry was up 7%. Tech related gifts were generally unchanged from last year, with only 12% indicating that category of purchase.

Today Mother’s Day encompasses a broader spectrum of relationships. It’s a universal celebration with the celebrant-range includes virtually everyone: moms, wives, step-moms, female relatives and friends, divorced and single-parent households. It crosses all cultural, ethnic, and religious borders, all of which makes it a real opportunity for retailers.


Brand Keys, the New York City-based brand and customer loyalty and engagement research consultancy, as part of its annual Customer Loyalty Engagement Index, polled 6,133 men and women, ages 18-65 from the nine U.S. Census regions, asking them if and how they were planning to celebrate Mother’s Day, with most consumers indicating multiple gift purchases. The analysis has a margin of error of + 2%.

What Are Consumers Buying For Mom?

(Percentages in parentheses indicate changes from 2015)

Category                                       Percent Purchasing                       

Cards                                                 95%    ( --- )  
Brunch/Lunch/Dinner                         90%    (+2%)
Flowers                                              85%    (- 1%)                        
Clothing                                             80%    (+10%)                      
Jewelry                                              59%    (+7%)
Spa Services                                     52%    (+2%)
Gift Cards                                          50%    (- 2%)
Books                                                19%    ( --- )
Housewares/Gardening Tools           16%    (+1%)
Candy                                                12%    (-3%)                         
Electronics/ Smartphones                 12%    (+1%)  

Where Consumers Are Shopping For Mom?

Discount Stores                                 55%    (unchanged)
Specialty Stores                                50%    (unchanged)
Department Stores                            44%    (-6%)
Online Stores                                    30%    (unchanged)
Catalog                                               2%    (-4%)

How Are Consumers Connecting With Mom?

Given the ubiquity of smartphones and the holiday itself, Mother’s Day has become one the most popular holidays to place a call.

Phone/mobile                                    65%    (unchanged)            
Personal Visits                                  22%    (+7%)            
Online                                                11%    (+1%)
Cards                                                 10%    (unchanged)

As we approach the big day itself, it’s probably worth remembering another saying that goes, “a Mother always has to think twice; once for herself and once for her child.”

But when it comes to Mom, when it comes to this holiday, most consumers aren’t thinking twice about celebrating.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Monday, April 18, 2016

Does Your Brand Have A Flux Capacitor?

This past February we announced the results of our 2016 Customer Loyalty Engagement Index. It’s a 100% customer-derived predictive view of how 635 brands will be treated by consumers in the future.

Eleven of those brands fall into the Athletic Footwear category, a class of clothing that’s been transformed by customer expectations and brand innovation, although it’s kind of a nose-to-nose race as to what’s driving which one.

The customer expectation part of the equation has to do with the fact that consumers are looking for “Performance Optimization Via Innovation,” the 2nd most important engagement driver of the category’s four, and the one for which consumers hold the highest expectations in the category. And when we look at how the brands’ own customers see them in terms of meeting their expectations for that driver, the top-5 ranked like this:
  1. Nike
  2. Under Armour
  3. New Balance
  4. Adidas
  5. Skechers

The innovation part falls to the brands themselves. So we weren’t totally surprised when, a month later, Nike unveiled their HyperAdapt 1.0 semi-self-lacing sneakers, a more-than-just-a-nod to the futuristic sneakers Marty McFly wore in “Back to the Future Part II,” although, except for a turquoise light emitted from the sole, they don’t really look like Nike Mags.

The new line of shoes – with a heel sensor that adjusts fit without having to adjust laces – is something Nike calls “Adaptive Lacing” (rather than “self-lacing”) because they can be adjusted via + and - buttons on the side of the shoe. The HyperAdapt 1.0 will be exclusively available to users of the Nike+ app in time for the winter holiday season.

Right now “Customization” (the 4th most-important engagement driver in the category) will be limited to black, gray, or white. As to “Brand Value” (a component of the 1st most-important category engagement driver), we’re betting the sky’s the limit when it comes to getting a pair of these babies! By the way, “Full Range of Shoes” is the 3rd most important driver, but since everyone pretty much has the same stuff – at least until Nike releases the HyperAdapt 1.0 and others follow with other versions of automated shoes – consumer expectations are currently pretty reasonable and pretty much table-stakes for major athletic footwear brands.

But since consumer expectations only grow, what are the brands to do next? Based on where category values are sprinting, it would seem that the next step in smart apparel is increased automation.

That means that brands will take data being tracked through smart watches, fitness bands, smart-clothing and all sorts of smart wearables and use it to create enhanced, innovative versions of athletic shoes that – on their own – fulfill consumers’ expectations for optimized performance. Imagine, a shoe that adjusts for fit and prevents laces from loosening or coming “untied,” to use the present vernacular.

What’s next? Who can tell? Although it’s been said that the future is only the past again, by entering through another doorway.

And sometimes, driving a modified DeLorean.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Tuesday, April 12, 2016

MLB’s Most (& Least) Loyal Fans. The Dynamics of Root, Root, Rooting For the Home Team.

The Major League Baseball season opened this week with the cry “play ball,” accompanied by the release of the 24th annual fan survey conducted by Brand Keys, the New York City-based market research firm specializing in brand loyalty and consumer emotional engagement modeling.

It was Yogi Berra who said, “If the fans don’t want to come out to the ballpark, no one can stop them,” and though teams may not be able to manage that aspect of the game, they can manage fan loyalty. Our annual survey – interviews with 250 self-declared fans in each of the 30 team’s local markets – was designed to help sports teams identify precise fan loyalty metrics in their home and national markets. Those metrics correlate very, very highly with TV viewership and purchase of licensed merchandise. Oh, and the survey is more than just gate counts and win-loss ratios, but real insights that enable both league and teams identify areas – particularly emotional aspects of loyalty – that need strategic brand coaching.

The 2016 MLB top 5 and bottom 5 team standings are listed below. Numbers in parentheses represent the teams’ 2015 loyalty rankings.

Top 5 Teams - 2016           

1.    St. Louis Cardinals (#1)

2.    Los Angeles Dodgers (#3)

3.    San Francisco Giants (#2)

4.    Detroit Tigers (#4)

5.    Washington Nationals (#5)

Cellar Dwellers                    

30. Seattle Mariners (#25)

29. Arizona Diamondbacks (#29)

28. Colorado Rockies (#28)

27. San Diego Padres (#24)

26. Houston Astros (#30)

The Sports Fan Loyalty Index, which measures all teams in the four major sports leagues, provides an apples-to-apples comparison of the emotional intensity with which fans in a team's home market support the home team. Everybody loves a winner, but it's important to note that win-loss ratios govern only about 20% of fan loyalty. Losing may have little to recommend it, but it turns out that ultimately there are three, more loyalty-leveragable aspects (in addition to the final stats, which fall under “Pure Entertainment”) that need be considered, including:

How well they play as a team? Offensively or defensively, one or the other, sometimes both. Sometimes a new stadium or new manager can help lift loyalty when it comes to this driver.

Fan Bonding:
Are the players particularly respected and admired on and off the baseball diamond?

History and Tradition:
Is the game and team part of fans' and community rituals, institutions, and beliefs? No matter how you feel about them, the Yankees (#9, down from #7 last year) have the highest rating when it comes to this driver and, for what it’s worth, it’s what kept the Cubs going for years!

Pure Entertainment:
This has always been the most-important driver when it comes to reinforcing or building fan loyalty, but that said, while winning playoffs or the World Series certainly moves a team up the loyalty list, it doesn’t automatically skip a team to the top of the list (unless, of course, the team was already ranked in the top five, then it’s a high probability that their loyalty rank will end up #1!)

Because overall league and team rankings correlate very highly with game viewership and merchandise sales, and since rankings can be influenced depending upon how loyalty drivers are managed, it's critical that team marketers do accurate scouting regarding the strategic ball they intend to pitch to fans. All teams benefit from increased fan loyalty levels, particularly baseball teams.

There’s a reason it’s called America's “National Pastime.” Teams need to create strong emotional connections if they want to succeed with their fans. Former San Francisco Giants third baseman, Al Gallagher, may have expressed baseball’s emotional bond best. “There are three things in my life which I really love: God, my family, and baseball. The only problem is once baseball season starts, I change the order around a bit.” Which is why teams need to track fan loyalty with emotional metrics because those are the most meaningful values of all.

As to other major league sports leagues, Brand Keys will be issuing rankings for the NBA before playoffs, the NHL for the Stanley Cup, and NFL rankings in time for the season kickoff in September.

In the meanwhile, for the rest of the season, “Go (INSERT YOUR TEAM’S NAME HERE)!”

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, March 31, 2016

What’s Green And Worth $1.36 Billion?

Sure, a stack of 13,600,000 hundred-dollar bills. But we were thinking more in terms of a brand. One that’s green and worth $1.36 billion.

Want another hint? OK, over the past decade it was perennially #2 or #3 on our Customer Loyalty Engagement Index in their category, but this year it moved up to the #1 spot. Got it yet? The category is one where Whole Foods had been #1 for nearly a decade, until it was disclosed Whole Foods routinely overcharged customers on pre-packaged good and then tried to position themselves as the “victim’ of the plot, then imploded, and ended up ranked by their own customers as #5! Got it yet?

OK, we’ll tell you. It’s in the Natural Foods Category and the brand is The Fresh Market. If you haven’t heard of them, it’s the chain of stores founded by Ray and Beverly Berry in Greensboro, NC back in1982. They looked to position the chain as a “better” grocery store hearkening back to open European-style markets. They aimed to supply higher-margin “green,” natural, organic foods, with on-site butchers, and imported cheeses, well ahead of the curve customer values were taking as regards food markets. They were so good at anticipating and then meeting customer value expectations, and were so successful at it, they just agreed to be acquired by Apollo Global Management LLC for – you got it – $1.36 billion!

As brand engagement is always a leading-indicator of positive consumer behavior – and, one can reasonably presume, corporate acquisition desirability – here’s how the current group of natural food markets ranked according to their own customers:
  1. The Fresh Market
  2. Trader Joe’s
  3. Sprouts Farmers Market
  4. Fresh Thyme Farmers Market
  5. Whole Foods
Apollo Global has been on an acquisition tear in the retail brand arena, feeling this particular category has real growth potential, which, according to our current research, tracks with the reality that consumer values have shifted dramatically over the past decade as regards food generally, but specifically when it comes to what consumers have come to expect from grocery retailers.

And if retail or food vendor brands – be they markets, super and otherwise, or fast or fast-casual, diner or fine dining – wish to profit, they would benefit from adopting the following mantra, “Nothing tastes as good as being healthy feels.” Which turns out to be equally true about a brand’s bottom line.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, March 17, 2016

Burger King Moves Back to the Old Neighborhood

Expectations move at the speed of the consumer. They never diminish; they only increase, and they increase all the time. Over the past decade, consumer expectations have increased about 18% a year. Brands, on average, only manage to keep up by about 9%, so there’s always a pretty significant gap between what consumers expect and what brands deliver. Brands that deliver best are always the category leaders.

Accompanying those increased expectations are category value shifts. And when value shifts reach critical mass – the marketing version of astronomical accretion takes place – instead of planets, new categories are formed. When that happens brands have to decide who they are, and whether, and where, they’re going to “live” – in the newly created category or in their old category.

Think about how fast food – you remember, basic inexpensive burgers, fries, soft drinks, and hot apple pies – and the Holy Trinity of Fast Food: salt, fat, and sugar lived contentedly in Fast Food land. Those brands watched as parts of their neighborhood gentrified into the Customization Community, Health-Conscious Heights, Gluten-Free Gulch, Casual City, its suburb, Fast-Casual County, Salad Street, and Anti-Antibiotic Avenue. Then some of the fast food brands tried to move into all those neighborhoods. The leader of that emigration was McDonald’s – a brand recently using customization and kale to help determine where they were going to end up living. They were quickly followed by some of the other then-leading traditional fast food brands, like the currently we’re-more-natural Wendy’s, and younger brands like Chick-fil-A.

Burger King was one of the traditional fast food brands. They yearned to move into other higher-end neighborhoods too. It took a few years of unsuccessful moves involving overstuffed menus, apple cranberry salads, wraps, “healthy” potatoes (http://tinyurl.com/je2whru) and forays into areas like smoothies and flavored coffees and lattes, to convince them to move back to their old neighborhood in Fast Food land, where consumers’ expectations-based zoning regulations actually encouraged flame-grilled burgers, fries, and (now) hot dogs, eschewing any high-end, low-calorie modifications to the brand.

Smart move? Well, when we looked at the Fast Food category in our 2016 Customer Loyalty Engagement Index, we saw a couple of notable shifts. The list of Fast Food brands had gotten longer, and the names consumers had added were those of, well, basic, last-century fast food brands. An expanded list of brands is something that only happens when consumers are looking for something to fill that gap between what they really want and what current brands are delivering.

So while the addition of more, basic fast food brands to that decision set – including Jack in the Box, In-N-Out Burger, Whataburger, and Carl’s, Jr. (see a pattern here?) – may not make competing any easier for the rest of the brands, it’s a pretty good roadmap as to the best place for a brand like Burger King to live.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, March 10, 2016

Are Tough Times Turning Around for Teen Retailers?

No denying it’s been tough for retailers over the past couple of years. Particularly for the stores specializing in the teen retail segment.

Increase in mobile retail has had a lot to do with that, which has resulted in/from declines in mall traffic. Compound that with cyclical fashion trends and an increasing desire by teens to customize everything, including personal looks. Particularly for the once-logo-leading looks. Those have fallen out of favor with teens and it’s showing up in our Customer Loyalty Engagement Index and on the brands’ bottom lines.

The CLEI brand lists we assess aren’t pre-determined. Consumers tell Brand Keys researchers which brands they actually use and brands must be mentioned enough times to provide a statistically generalizable sample. But it’s more than just statistics. When consumers mention new brands at significant levels, it’s an indicator that current options are not meeting their needs or, more precisely, their expectations. And when one brand isn’t able to meet those ever-increasing expectations, especially teen expectations, consumers look to other brands to do it for them. Brands that do, end up higher on our list. Brands that don’t, end up in Chapter 11.

For retail shoppers – of all ages – it’s the emotional side of the purchase equation that brands need to concentrate on if they want to meet shopper expectations. Today the rational stuff is easy, but if a retailer relies on that alone, profitability will continue to become far more difficult to attain. Particularly among teens who are out there looking for a personal style, not another logo.

Fast-fashion brands like H&M showed up on our lists a few years ago. Brands like Forever 21, Anthropologie, and Express have shown up only recently. Brands like T.J. Maxx – able to offer cheap-chic options – are the ones that have been doing better than traditional, established brands like Abercrombie & Fitch.

So when we look at the teen apparel retail segment, here’s how teens vote – with their emotions and their wallets:
  1. Victoria’s Secret
  2. H&M
  3. Old Navy
  4. Forever 21
  5. Old Navy
  6. Express/American Eagle
  7. PacSun
  8. J. Crew
  9. Aeropostal/Abercrombie & Fitch
  10. American Apparel

It was John Fairchild, the publisher of Woman’s Wear Daily and founder of W, who noted. “Style is an expression of individualism mixed with charisma. Fashion is something that comes after style.”

He was right. Particularly as it applies to teens.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.