Friday, August 27, 2010

Senior Boomers

Blink:
I understand marketers’ obsession targeting youthful consumers between the ages of 18 and 49. Rationale: This group has not yet committed to their favorite consumer goods while older folks have. Marketers, time to shift your focus to Baby Boomers, soon to become Senior Boomers in the next decade.

Read On:
Baby Boomers according to the US Census Bureau is someone born during the Post-World War II baby boom between 1946 and 1964; an estimated seventy-six million Americans who now range in age from 46 to 64. Some facts marketers need to take into account as Baby Boomers mature in the next decade:

· Market researchers forecast that the younger generation known as Millennials or Gen Y will have fewer children, leading to smaller households, thus fewer consumers to lure over the next decade. On the other hand, the over-fifty crowd will grow 21% in numbers.

· Baby Boomers have an estimated annual spending power of $1 trillion. More specifically, the over-50 crowd outspends the under-50 crowd by $400 billion. As a frame of reference, Walmart net sales in 2009 were $401.2 billion.

· Myth: Boomers are too old to embrace technology. Wrong! A recent Forrester study indicated that 60% of Baby Boomers are avid social media users. Their usage is up 40% throughout the various social media platforms versus a year ago. They also account for 40% of customers paying for wireless (don’t forget most are still paying for their children’s mobile phones) and 41% of the customers buying Apple computers.

· An estimated 40% of all Baby Boomers are grandparents; over 55% of all grandparents alive today are Boomers. On the flipside, due to divorce, some grandchildren have more than one set of grandparents. Bodes well for the amount of disposable income spent on grandchildren over the next decade. Advertisers need to evoke the emotional chord of Boomer grandparents.

Sounds like advertisers need to now recognize the shift in demographics/market dynamics and focus their marketing dollars. Senior Boomers are going to be where the buying action is over the next decade. Senior Boomers are going to be the young “old”.

Wednesday, August 18, 2010

Integrated Generosity

Blink:
The Chronicle of Philanthropy calculated that fund raising excluding Haiti relief, grew a median of 11 percent in the first quarter of 2010. Despite the economy, America’s giving spirit also continues to proliferate as it relates to consumer products or services with a charitable component – what I title integrated generosity.

Read On:
My first exposure to social enterprise was back in 1982 with Newman’s Own salad dressings. Actor Paul Newman’s food company pioneered the concept when he donated 100% of the proceeds after taxes from the products he marketed to various charities – currently over $300 million and still counting. It was American Express in 1983 that coined the term “cause marketing” with their efforts to support charitable causes, specifically the Statue of Liberty Restoration Project.

Flash forward to 2009 when the term Generation G surfaced. Consumers disgusted by corporate greed and a shaky economy, recognized the importance of “generosity” as a community mindset, thus wanted to support socially responsible businesses. In response corporations are implementing what trend watchers call “embedded generosity” strategies that make giving and donating relevant. A classic example is IKEA’s SUNNAN LED desk lamp powered by solar cells. For every unit they sell worldwide, they will donate an additional unit to
UNICEF to give to children living in remote areas without electricity.

What‘s next? Integrated generosity where consumers connect with their communities online via social media to champion a cause. My personal favorite is
Tasty TwEats, a cookbook conceived by world travelers that conduct a weekly conversation on Twitter. People submit their favorite recipe or sponsor a page for a minimal donation of $25, with all proceeds going to Planeterra a global grassroots organization that matches each donation 100 percent. People then select the project or cause they want to support. This coming September, integrated generosity will take center stage in the restaurant industry during Share Our Strength’s Great American Dine Out. The mission of this event is to raise funds to end childhood hunger in America by 2015. Restaurateurs will be utilizing numerous social media platforms (e.g., Facebook, Twitter, Foursquare, etc.) to engage with their guest’s to promote participation in the event running from September 19th through the 25th. Mark your calendar, the
Great American Dine Out tweet-a-thon is scheduled for Monday, September 20th. You can sample integrated generosity first hand and eat some good food too!

Tuesday, August 3, 2010

Anticipation

Blink:
The seventh annual Boston Consulting Group survey on innovation indicated that seventy-two percent of respondents revealed that their company considers it a top-three priority this year. However, thanks to the economy; companies are gearing their innovation toward minor improvements to existing products and services. Why is everyone behaving so cautiously?

Read On:
The BCG ratings were the highest in the seven year history of the survey. A majority of the companies, sixty-one percent, indicated their company would boost spending, but only 26 percent planned to raise it significantly (by more than 10 percent). When probed, C-level executives and decision makers revealed that the two biggest factors holding down spending on innovation were a risk-adverse corporate culture or lengthy product development times. I am going to take the liberty and add a third factor – over processing.

Back in 2009 in my blog titled
Good Thinking, I wrote that innovation is essentially about making unexpected connections between things (looking for new places to make connections). Unfortunately we are all guilty of getting caught up in the day to day firefighting of maintaining our business or staying on budget. As a result, we tend to overlook making those connections. When companies finally decide it is time to innovate, a majority tend to practice closed innovation and rely on their R&D departments or other key employees to fuel the lengthy process. Henry Chesbrough from the Center of Innovation at UC Berkley challenged our thinking back in 2006 when he published his book Open Innovation: The New Imperative for Creating and Profiting Technology. He advocated that companies need to use external ideas as well as internal.

With the advent of social networks, I now believe open innovation will thrive more than ever. As a result, companies will be able to reduce innovation spending – external online feedback notwithstanding the cost to monitor it, is relatively low cost. Let me share two great examples:

· Outback Steakhouse back in June posted a survey on Facebook asking their fans what favorites from the last twenty two years should they bring back. They fielded 600 comments. This approach appears more streamline than conducting internal brainstorming sessions, product tastings, product testing, etc

· Kimberly-Clark has been tapping into the various communities of young mothers for over a year now. Their listening validated research conducted by Babson College that documented women have been credited with starting businesses at nearly twice the rate of men, but still experience a difficult time raising venture capital. As a result, Kimberly Clark cleverly launched the Huggies MomInspired Grant Program providing $250 thousand in seed capital and resources to bring great ideas to market. Sounds like a great way to fill Huggies innovation pipeline.

Thanks to our “pull” economy, consumers/communities are constantly buzzing daily about products and services. Market leaders, take note, this is not the time to act cautiously. Make innovation your number one strategic priority – listen and anticipate.