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NACDS Webinar offers retailers strategies for surviving the downturn

BY Michael Johnsen

NEW YORK Times, they are a’changing. Already, marketing and merchandising paradigms had been evolving or redefined on a constant basis over the past decade — baby boomers, Gen-Xers, Gen-Yers, tweens, (remember metrosexuals?), e-shoppers, etc.

And now there’s a new class of shopper to add to that list — what Information Resources’ Thom Blischok has coined as the downturn generation. It’s a shopper whose behavior is being transformed by the current state of the recession economy and the uncertainty around jobs. And while Blischok also identified two other still-key demographics in their own rights, those being baby boomers and Hispanics, there may be a little downturn generation in all of us.

It’s important only in as much as your competitors don’t pay any attention to that forever redefined consumer base. Because the fact is downturn generation shoppers who may be practicing frugality to a fault are real. They exist. And according to IRI’s consumer research, they will continue to practice those shopping behaviors they’re learning now long after the recession has transformed into recovery. Being aware of your shoppers’ needs and wants, and how they decide between the two, and molding a market plan to meet those needs and/or wants; well that’s just opportunity.

Separately, IRI also released last week some startling data that underscores that downturn generations shopping behavior — 78% of both lower- and higher-income consumers believe private label products are typically of excellent quality. And that, combined with the downturn generation mindset, makes the counter-store-brand argument of “You get what you pay for,” a bit antiquated.

For retailers, that means there’s opportunity to increase their private-label penetration from below the 25% level at which it stands today. For branded-product suppliers, it means that innovation and differentiation that cannot be easily replicated is now even more crucial to the successful launch of a new product or line extension. Similarly, it’s also crucial that branded-product suppliers connect directly with those customer demographics noted above, because while the sale of national-brand equivalents may be on the rise, it’s with the brand that a consumer develops a strong emotional connection.

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Safeway adds two to board of directors

BY Michael Johnsen

PLEASANTON, Calif. Safeway on Monday named Arun Sarin and Michael Shannon to the company’s board of directors. The company’s board of directors will expand from 10 to 12 members with these new appointments, the company stated.

“We are fortunate to have individuals with these credentials joining the board,” stated Safeway chairman, president and CEO Steve Burd. “[Sarin] and [Shannon] have each run substantial businesses, and their experience will be valuable to our board.”

Sarin has worked in the telecommunications industry for the majority of his career. Most recently, he was the CEO of Vodafone Group, one of the world’s largest mobile phone companies by revenue. Sarin has served on numerous boards including Gap, Charles Schwab and Cisco Systems. He recently retired from being a non-executive director of the Court of the Bank of England.

Shannon founded KSL Capital Partners in 2004 and its predecessor, KSL Recreation Corporation, in 1992, serving as its president and CEO. KSL Capital Partners is a U.S. private equity firm dedicated to investments in travel and leisure businesses. Shannon also founded and became CEO of KSL Resorts in 2004, following the sale of KSL Recreation. During his tenure as CEO, KSL Recreation grew to become one of the largest independent owners and operators of resorts. From 1986 to 1992, Shannon served as president and CEO of Vail Associates, owner of the Vail and Beaver Creek resorts in Colorado. He currently serves on the board of ING Direct, the Vail Valley Foundation, the United States Ski and Snowboard Association and Eisenhower Memorial Hospital.

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IRI discusses health care during recession in new report

BY Michael Johnsen

CHICAGO Information Resources Inc. on Thursday released a report, “The Changing Landscape of Healthcare and the American Consumer,” outlining the forward impact the current recession will have on how Americans research, purchase and use health care.

“Health care is costly, and people are rethinking how they take care of themselves in order to conserve funds,” Thom Blischok, president, consulting and innovation, IRI, wrote in the opening of the report. “Instead of sticking with their tried-and-true healthcare options, consumers are aggressively seeking affordable solutions for health and wellness, both in terms of how they obtain care and in the healthcare products they choose.”

And while Americans are changing how they choose health care, the Food and Drug Administration is “flexing its regulatory muscles again.” And while the new FDA activism is expected to make medicines and supplements safer, it also has the potential to add significant costs overall — including added costs in drug development as well as added costs to keep those medicines already approved on store or pharmacy shelves.

The study is available as a free PDF download at http://us.infores.com/Insights/Publications/IRIPointofView/tabid/197/ctl/Details/mid/923/ItemID/900/Default.aspx.

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