Monday, May 25, 2015

What Size Expectations Do Your Athletic Shoes Come In?

Consumer expectations about athletic footwear rise every year. Athletic footwear sales rise very year too.

True, consumer expectations (+15% for the category in 2014) rise faster than actual sales levels (+5%), but that’s they way it is with expectations. Sure, there are some cyclical bumps for athletic footwear (back-to-school, when “official” sports seasons kick-off, when a brand signs a new celebrity), but growth in the category has been fairly consistent over the past decade.

So too have consumer engagement ratings of the main brands in the category. But to truly understand why the brands get ranked as they do by their customers you need to understand the critical drivers for a category like Athletic Footwear.

What’s the least-important driver? “Range of Athletic Shoe Types.” Why? Every brand pretty much has shoes for pretty much any athletic challenge you can think of. Driver #3 has to do with “Customization” – and the ability to make a shoe truly you own ­– a value that‘s fast made it’s way into everything from athletic shoes to fast-casual food. That driver is preceded by “Personal Innovation and Performance Optimization,” because you just know that the right equipment for you will help you perform better. And the first-most important driver of engagement is “Brand Value and Empowered Design.” That means what the brand stands for in the mind of the consumer will make an added-value contribution to engagement, purchase and loyalty.

New Balance and Nike were #1 in our 2015 Customer Loyalty Engagement Index, followed by
2. Skechers,
3. Reebok,
4. Adidas,
5. Mizuno,
6. Under Armour,
7. Asics,
8. Fila, and
9. Brooks

If you understand the four drivers of engagement and attendant loyalty, where the brands end up being ranked tend to be self-evident. As could profitability, if brands competing in the athletic footwear category – actually, any category – did that too. Unfortunately, most don’t.

Adidas, perennially at the middle of our list in good years and sometimes closer to the bottom of the list in bad years, has announced they are going to address their problems in the United States market. Adidas CEO Herbert Hainer declared that the company is going to turn the brand around in the United States, which has been a bunion on the brand’s profit statement for a while now. Mr. Hainer declared that the Adidas North American division will be profitable by year-end, so no small task.

Sure, everyone knows the Adidas name, but as it is written in the Marketer’s Bible, “awareness doth not guarantee share, sales, or profitability.” Forty years ago, perhaps, but not in today’s marketplace, which moves at the speed of consumer values, which is why Adidas – down 7% in 2014 – lags behind Nike and newcomer to our list, Under Armour in U.S. retail and apparel sales.

So Adidas is doing stuff. They moved their head of design to U.S. HQ in Portland, OR. They have a new U.S. President. They hired 3 top designers from Nike, and they’re looking at creating buzz and brand engagement à la relationship/sponsorship deals with the likes of Derrick Rose, Kanye West, and Pharrell Williams, even going so far as to equate some recent sales increases to all these shifts, although it’s probably too soon to actually know any of the same-old, same-old is really working or it’s just Summer back-to-camp sales.

It’s not, however, too soon to keep in mind another Biblically-related quote. “The race is not always to the swift, nor the battle to the strong, but that's the way to bet – particularly when you’re dealing with customer expectations!”

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

Tuesday, May 05, 2015

Marketing Mother’s Day 2015

“Tradition” is the watchword again this year when it comes to gifts for Mom. Eighty-seven percent of consumers plan to celebrate Mother’s Day, with total spending estimated to reach nearly $20 billion, according to our annual Brand Keys Mother’s Day survey.

More-and-more, Mother’s Day encompasses a broader spectrum of relationships, as it’s become a universal holiday. It embraces everyone from moms to wives to step-moms to female relatives, to female friends, and divorced and single-parent households. This holiday crosses all ethnic, cultural, and religious boundaries, which makes it a real opportunity for retailers –an occasion nearly everyone can celebrate.

Celebrants intend to spend an average of $193.00 this year, up five percent over 2014. Men, following a long-standing tradition, intend to spend more than women, reporting an anticipated average spend of $215. Women reported an anticipated spend of $161. But buyers are again leaning towards more traditional gifts, a continuing trend with, this year, “tradition” outpacing “tech,” with consumers reporting intended purchases of traditional gifts like cards, meals (brunch or dinner), flowers, spa services, jewelry, and clothing.

As part of our annual Customer Loyalty Engagement Index, we polled 6,000 men and women, ages 18-65, asking them if and how they were planning to celebrate Mother’s Day, with most consumers indicating multiple gift purchases. This year’s largest increases were seen in Meal Occasions, Jewelry, and Clothing, up 8%, 7% and 6% respectively. Gift cards were down 8%, the first decline we’ve ever seen that since the category became a gift-option staple. (Percentages in parentheses indicate changes from l2014 with a margin of error of +2%).

2015                                      Percent Purchasing

Cards                                       95%              (-2%)
Brunch/Lunch/Dinner               88%              (+8%)
Flowers                                    86%              (unchanged)
Clothing                                    70%              (+6%)
Gift Cards                                 52%              (-8%)
Jewelry                                     52%              (+7%)
Spa Services                             50%             (+4%)
Candy                                       15%              (-2%)
Electronics/ Smartphones         11%              (+6%)

Preferences for shopping venues continued to reflect this year’s fondness for more traditional gifts, with Department Stores up slightly (4%) and Catalogues down again this year. Discount (55%), Specialty (50%), and Department Stores (50%, +4%) were at the top of consumers’ list of places to shop for Mom. Online (30%) was ­unchanged. Like many major gift-buying holidays, many consumers indicated they are waiting until the last moment to make their purchases.

But waiting or not, this is the time of year when everybody loves Mom. There’s a saying, “a Mother is a person who, seeing there are only four pieces of pie for five people, quickly announces she never really cared for pie at all.” Maybe that’s why Meal Occasions are up this year!

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

Sunday, May 03, 2015

Basketball’s Most-Loyal Fans

The 2015 NBA playoffs are just underway, and while it may be unwise to jump to conclusions as to which team will ultimately win over all others, fan loyalty turns out to be much more than just the teams’ win-loss ratios. As they say in New York City, when it comes to making the playoffs, “it couldn’t hurt.” Making the playoffs helps increase a team’s fan loyalty levels by about 10%. Winning almost doubles that and the 23rd annual Sports Fan Loyalty Index reflects just that.

The Sports Fan Loyalty Index was designed to help professional sports team management identify what drives fan loyalty in their home and national markets and allows team management to identify areas, particularly the emotional ones that need strategic brand coaching. Brand Keys assesses all teams, interviewing 250 self-classified fans from each of the 30 NBA teams’ immediate metropolitan catchment areas. The current 2015 NBA top-5 and bottom-5 team standings (and their standings last year) are as follows:

Top-5 2015                                       2014

1. Chicago Bulls                                (#5)
2. Los Angeles Clippers                    (#4)
3. San Antonio Spurs                        (#1)
4. Miami Heat                                    (#3)
5. Dallas Mavericks                           (#6)   

Bottom-5 2015                               2014

30. Sacramento Kings                    (#30)
29. Minn. Timberwolves                  (#29)
28. Milwaukee Bucks                      (#27)
27. Orlando Magic                          (#24)
26. Detroit Pistons                          (#23)

Winning may be the only thing when it comes to a playoff championship, but when it comes to fan loyalty it’s not the only thing. Fan loyalty correlates very highly with broadcast viewership, merchandise purchase, and to a certain degree, ticket revenues. Teams can count on some “lift” to fan loyalty from making the playoffs (a 10% lift) or a championship win (about a 20% lift), both of which fall into the “Pure Entertainment” category driver.

Before your go ballistic that your team didn’t make the top-5, keep in mind that teams don’t leap to the top of the loyalty roster just because they win a playoff or even a championship. It adds to a team’s loyalty bond (and their related ranking), but you need the complete package, and there are three other emotionally-based factors that must be taken into account when measuring real fan loyalty: Authenticity, Fan Bonding, and History & Tradition, with all the loyalty drivers functioning like this:

How well they play as a team. Sometimes a new arena and, often, new manager, can help lift this driver. Which brands sponsor the team can matter here as well.

Fan Bonding:
Are there players ­– the more the better – that are particularly respected and admired, but in this case that means respect and admiration for something more than just a great 3-point shot. If it helps, think of it as the “Jordan Factor.” And if you have to really think about who that might be on your team, or can only come up with one name right off, your team’s Fan Bonding is likely to be low. And yes, all these pro players are supposed to be the best of the best, but the roster of players that fans emotionally bond with is relatively small.

History and Tradition:
Have the game and the team become part of fans’ and community’s rituals, institutions, and beliefs? This is one of the strongest drivers when it comes to fan loyalty in all of Major League Sports. For some teams it accounts for the lion’s share of loyalty they possess. Think about a team like the Utah Jazz where only a reasonable level of History & Tradition keeps them out of the bottom-5.

Teams need to meet some minimum levels on all four factors to create reasonable levels of fan loyalty. If one of those drivers weakens, or even disappears, so do high levels of loyalty. Want proof? Consider the New York Knicks’ past season.

The NBA again ranks 3rd of the four Major League Sports Brand Keys tracks. The National Football League is currently 1st, with Major League Baseball in 2nd place, and the National Hockey League last. Keep in mind that overall league and team rankings – no matter which league – correlate with viewership merchandise sales and ticket sales, and since rankings can be influenced depending upon how loyalty drivers are managed, it’s critical team marketers act as strategically as the coaches.

Want to know the secret to high NBA loyalty levels? Have 5 great players – and as many fans as possible for as long as possible.

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