No Gift Like the Present

Every year we do a study about Holiday consumer spending trends. You may have read about them on this blog. Some years people spend a little more, some a little less. It's easy to say it's all about the economy, but that isn't the complete answer. People are only consumers some of the time – and even then they do not even closely resemble a simple buying equation. They remain people with emotions and passions.

One trend is clear: people understand their brand choices have social and even spiritual consequences, and are re-examining some of the deeply held notions that underlie their brand loyalties and lifestyles – holiday greetings, festive celebrations, and gift-giving among them.

We all like to think about what we might receive at the holidays, and most of us are fortunate enough to take gifts themselves for granted. But, like so many things – our hearts beating, our planes flying, our buildings standing – we think little about them until they are lost. This is human, and it is normal. But it is not good.

We believe that this holiday season presents an opportunity to pause in our lives. It is a time to stop, look around, and think of all we take for granted. To pause and feel the humility that only comes from unspeakable gratitude: to those who, for example, walked away from home and into battle for their country, and will never walk back home.

This year we made donations in our clients’ honor to Homes for Our Troops, an organization committed to helping those who have selflessly given in their service, and have returned home with serious disabilities and injuries. By raising donations of money, building materials, and professional labor, they coordinate the process of building a new home or adapting an existing home for handicapped accessibility. The finished home is then given to the veteran at no cost to them or their families.

So as the year comes to an end, the Brand Keys team pauses to express our gratitude to our followers and supporters too. As is our tradition, and in order to “re-charge” our own mental, physical, and spiritual sides, our offices will be closed from December 22nd through the New Year.

We wish you and yours the very best of the season and a happy, healthy, and successful New Year.

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The Brand Keys 12 for 12: Brand and Marketing Trends for 2012: Part 2

When it comes to trends we prefer to rely upon the very validated power of predictive loyalty and engagement metrics. They allow marketers to measure the direction and velocity of consumer values and expectations at least 12 months in advance of the marketplace. Examine those changes closely enough and you can identify real meaningful trends for your brands. This year we offered up 12 trends for 2012. Because success comes from acting on a trend when it’s identified – not waiting for market highs and lows. These 12 will have direct consequences to the success, or failure, of next year’s branding, engagement, and marketing efforts. On Tuesday we presented the first six, for today’s blog we’re presenting trends seven through twelve:

7) Mobilized Money
Handheld technology and smarter-and-smarter smartphones will increase opportunity for more mobile monetary transactions. Brands that do not facilitate small screen transactions will find consumers hanging up on them. Watch for increased credit card and promotional outreach, especially if the brand can customize the small screen experience.

8) Real-Time Branding
As brands (like Amazon and Zappos) taught, and consumers learned, fragmented lifestyles and increased expectations could be better serviced by the near-instantaneous availability of products (and their return). Consumers will expect brands to respond with the click of a “Send” key, no matter in which category they compete.

9) Innovation is Sincerest Flattery
Given increased consumer expectations and decreased brand differentiation, brands will need to understand what really drives their category and where to innovate against consumer pain points. Zappos sells shoes – but their brand equity lies primarily in the emotional driver of “service” and how they quickly they process both delivery and returns. Oh, and it’s free--erasing a consumer irritation with innovation in delivery, and likely increasing sales in the process as ordering more, and likely keeping them, became painless.

10) Coolsumption
Creative response to consumer expectation will become de rigueur for brand leaders. But the brand party many attended before the economy called in the police has left a beauty hangover that is not going away anytime soon. Sure, Apple sells phones and mp3 players, but they leverage engagement and loyalty, not by delivering “communication” or “entertainment,” but by delivering products that are beautifully, creatively and organically designed. Look for a desire for the coolness of beauty--whether a graceful delivery system or a gorgeous product--to escalate.

11) Simplexity
Increased consumer desire for simplicity is a strong trend as complexity pushes on people. Look for smaller, higher-quality products, and ease-of-service delivery methods. This will result in the convergence of complex services and products into simple, expectation-exceeding solutions. But only if brands know where to look in their own categories for the "wow" button to press.

12) You Need to Be Aware That Engagement is Not a Fad
Engagement is the way empowered consumers do business today, period. Marketers can and should plan with engagement methods like the right platform, program, message, or experience, but out-dated awareness models will continue to be ineffective and there should be only one objective for these engagement methods: Brand Engagement. Accommodating these trends will require a change in the ways companies measure, manage, and market their brands. And yes. Change is often a scary proposition, but the key is focused changed. And that’s always a lot easier when you have the consumer telling you exactly where to focus.

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The Brand Keys 12 for 12: Brand and Marketing Trends for 2012: Part 1

The 12th year of the 21st century is close upon us, bringing not just a new slate, but also a sense of significance: the very number 12 commands a lot of attention, in different ways.

For product brands it’s a unit of trade – 12 units to a dozen, said to be cheaper than other number sets. Service brands can identify with the 12 labors of Hercules. For readers there’s Shakespeare’s Twelfth Night, Virgil’s 12 books of the Aeneid, and the Bible’s 12 Apostles. Music? There’s the holiday’s 12 drummers drumming and 12 studio albums released by the Beatles. Once on celluloid, now digitally viewed, there are popular films: 12 Angry Men, Twelve O’clock High, and who can forget The Dirty Dozen. And whether an early or late adopter, there are 12 function keys on a computer and 12 “buttons” on telephonic key pads. Oh, and as everyone knows, there are 12 inches to a foot, 12 ribs to a chest, and 12 months to the year, with 12 associated constellations – those star configurations once thought to be portents of the things to come.

But as this is the 21st century, we prefer to rely upon the validated power of predictive loyalty and engagement metrics. Those, incidentally, allow marketers to measure the direction and velocity of consumer values and expectations at least 12 months in advance of the marketplace.

So we offer up 12 trends for 2012. Because success comes from acting on a trend when it’s identified – not waiting for market highs and lows. These 12 will have direct consequences to the success, or failure, of next year’s branding, engagement, and marketing efforts. For today’s blog we’re presenting the first six:

1) Value Is the Deal
Differentiated and believable brand meaning – emotional, rational, functional, and experiential – becomes a more effective and profitable surrogate for value than low-lower-lowest pricing strategies. But only the consumer gets to say how "valuable" is actually defined. Employ effective systems to listen to them and then figure out ways to tune in the consumer’s frequency.

2) Social Network Security
Friends have an even greater influence on purchase habits than before, but the trust in the community outside the brand space will only be extended to the brand if truly understood and properly incorporated into brand outreach strategies. More connected consumers won’t call, text, or email, but will use social network streams to talk about brands, create personalized content, and increase brand engagement – all necessitating a deeper understanding of what drives a brand’s category and how social network platforms play their part. But watch for more powerful peer-to-peer recommendations coming in the form of subject and feedback blogs – more targeted, more trusted, and more motivating than advertising, promotions, sponsorships, or celebrity endorsements.

3) Inward Bound
Differentiation will increasingly come from a brand’s emotional offerings and finding what will best resonate with consumers. Doing what others do signals commodity, not brand. This is one suit that needs to be custom made. Personal connection and engagement will be more and more critical especially in today’s weakened economy.

4) Great Expectations
Brands aren’t able to keep up with consumer expectations and haven’t for a while now. Every day consumers adopt and devour the latest and greatest, hungering for cutting-edge innovations and enhanced experiences. Accurate measures of real category expectations can provide both ‘roadmaps’ and significant advantages for brands that understand their value.

5) Now Entering the Statusphere
Status remains with us, but the definition continues its shift. The curtain has been pulled back on labels without meaning. Increasingly, meaning is defined far deeper than simple ownership and ubiquitous logos. Producing, selling, and shopping based on environmentally “green” production and design, and fair-trade and socially-conscious consumption is the trend for brands and consumers. To discover their best tactics here, a brand will need to investigate the components of important category drivers. Spot them. Understand them. Leverage them.

6) Appvertising
As a result of growing smartphone/tablet ubiquity, look for more and more apps and their effective use to create an interactive nexus to increase consumer engagement and brand differentiation. It’s not just about games anymore. The future may not be what it used to be, but on Thursday we’ll reveal the final six trends for 2012. We can tell you now that marketers that have loyalty and engagement metrics in place will have a handle on the trends that are going to show up in their offices. And in 2012 that’s more important than ever because to be prepared is always half the victory.

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We’ll Take McHatten

McDonald’s, which has remodeled a dozen Manhattan locations over the past year-and-a-half, is planning on opening a dozen locations in Manhattan over the next half-decade.

Currently there are 73 Manhattan locations. And while the quick-serve restaurant category isn’t expecting any real growth spurts, McDonald’s is looking to take advantage of the decline in retail rents and landlords are looking for safe tenants, so it works out for both groups.

We’ll be conducting our 2012 Customer Loyalty Engagement Index in January, but currently Quick-Serve Restaurants rank as follows:

1. McDonald’s
2. Subway
3. Burger King
4. KFC
5. Wendy’s
6. Quiznos
7. Hardee’s
8. Jack In the Box
9. Taco Bell
   

Those are the national rankings, but anyone who’s visited a Manhattan McDonald’s can’t have overlooked the lines of locals and tourists, which thus count the brand among the company’s most profitable.

It’s been reported that the new New York store designs are modeled after locations in Paris and London, although to be fair it was Julia Child who noted, “It is the Americans who have managed to crown minced beef as hamburger, and send it round the world so that even the fussy French have taken to le boeuf hache.” So Vivre le hambougaire!

Or, as we say in New York, “Yo, McD!”

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Digital What?

Throughout 2011, the same sort of questions kept coming up as we talked with the good folks at brands. No matter what the category, it seems every CMO is wrestling with similar dilemmas, which can be boiled down to one big question: what impact is digital having on my brand?

Most brands are long past the “should we be on Facebook” question. They are already there because they’re afraid not to be, putting their most friendly face forward. But behind closed doors, they don’t really know if it matters. Or, if it does, how to most strategically use the opportunity to actually connect consumer with their brands. And, perhaps the ultimate question they are asking, how do they best approach those who are digitally involved? — a critical one to answer as the non-digital person continues to go the way of interest-bearing savings accounts and land-line telephones.

Studies of digital usage are easy to find, but we have found none that offer these kinds of answers. Simply knowing what digital platforms people are using does not tell a brand how that platform can best be leveraged, linking the platform to the emotional and rational aspects that drive consumer engagement with a category. Or which digital platform is more important than another in a category. Or how high digital involvement changes the way a consumer looks at the category. Usage has remained in a silo, separate from how consumers engage with and choose among category brands. And that approach is far too limited.

To answer these questions and more, we are debuting the Digital Platform Engagement Index — the DPEI — the first-ever addition to our annual Customer Loyalty Engagement Index, now in its 16th year.

This unique approach to understanding what’s behind consumers’ engagement with digital platforms — in over 80 categories — will be available in early 2012. Feel free to contact Leigh Benatar at leighb@brandkeys.com for information on our pre-release packages.

We feel the time has come to really answer the question for brands of what to do in the digital space. Watch this space, as they say, for more as we continue to insist that the easy questions are usually not the ones really worth answering.

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Celebrating Cyber Monday

It’s not likely a surprise to anyone, but on-line activity in the retail category has increased year-after-year and this year was no exception. Cyber Monday got off to a turbo-charged start with an increase of traffic of nearly 25%, which translated to nearly $1.25 billion in sales. According to the Brand Keys Holiday Survey, here’s how online retailers ranked, the top-15, when it came to customer visits:

1. Amazon
2. Wal-Mart
3. Apple
4. Target
5. Zappos
6. Best Buy
7. Kohls
8. Sears
9. JCPenney
10. Macy’s
11. Toys R Us
12. Kmart
13. Overstock
14. Bed, Bath, and Beyond
15. GameStop

We’re predicting a 3% increase in holiday sales this year. But whether bricks or clicks, real and virtual cash registers are ringing more this holiday season. And that should give retailers something to really celebrate.

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