Thursday, July 19, 2012

Who's minding the store?

If you thought reports on the shifting attitudes in the US about marriage and homeownership startling; then you too will be surprised that US consumers are changing their attitudes about brands.
The research 
The Pew Research center recently reported that marriage rates among adults 18 or over has fallen to 51%, with the median age at first marriage higher than ever for brides (26.5 years) and grooms (28.7),

Only 65.4 percent of Americans own their homes, which may be the lowest level in 15 years, an alarming rate considering that 2004 marked the highest rates.  According to data compiled by Bloomberg, the current rate however matches the average reported by the Census Bureau since it began reporting in1965.  
OK, now there's confirmation that  changing lifestyles  are also evident in shopping patterns too. In a recent study sponsored by Accenture,  the economic downturn may not fully explain why in-house, or store-brand product sales have increased.  Admittedly 2/3 of shoppers now buy store brands; and mostly they buy them for their economy, they are cheaper.  But half of the consumers surveyed expressed no discernible difference in quality and 42% buy the store brand because its trustworthy. If the study is right,  77 percent of shoppers say they will not decrease the amount of store brand products they buy — even if their disposable income returns to the same level as it was before the economic downturn.

Signs of the times or signals to change?
Change seems to be the hallmark of the times, life going forward took an off-road turn with no evidence that it will return. The long held if, then else causal assumptions associating purchase habits with key lifecycle events enabled well-run brands to gain marketplace mastery and a steady increase in profits. Cracks in the validity of these assumptions create an additional speed bump on top of the recessionary pressures.
Brands, and the business of branding  contribute significantly to economic growth. The capital spent on furthering the awareness, reputation and quality of a brand is all about ratcheting up or sustaining the association of a given product or service and consumer purchase preferences.
Geoffrey James offer this simpler explanation.
...branding can associate an emotion with a product, especially when pointed at highly impressionable buyers (e.g. young men who watch beer ads), in the vast realm of B2B sales and even in most consumer markets, there is one, and only one, thing that creates customer emotion: the customer’s experience with your product.

So are these shifts irrevocable, related, or will people snap out of their current patterns? What  consequences do shifting consumers perceptions of store brands foretell? 
Is the decline of shopper interest a failure by the premium brands? In other words, do consumers really feel as if their reputation of greater overall value, as in higher quality, no longer warrants   their higher price?  Or, maybe store brands are more successful in changing consumer's perception of their brand's higher quality? The coincidence of lower prices  with the effects of  communications and marketing efforts makes it a little more challenging to sort out.

Hold on before I go off the deep end on these findings, I need to point out that as surprising this news may be, my experience in interpreting consumer trends recognizes the pitfalls of relying on averages or raw counts to tell the story.  Should I care who the 500 shoppers were? Would learning more about the distribution of the shopper's  demographic characteristics  be meaningful?  Especially when  no two shoppers are exactly alike, there are some things that will remain fuzzy.  I'm willing to trust that Accenture managed to pull their sample correctly,  that the results do accurately scale and project similar wider population shifts .
Personally, I suspect a high degree of interaction between all three of these trends.  It's why I raised attention to them in this post.  After all married couples, more than likely with double incomes , shop the decision process differs from single person households.  The shopper wants to please or surprise or endear themselves to their partner, buy what makes them happy, or  more comfortable.  Brand loyalty measures some of this when it also satisfies these experiential needs.   If my partner becomes unhappy, we can blame the brand not the shopper.

Do I really want to let the findings go so quickly? Toss them off as a by product of changing demographics ?  Maybe its time brands stopped to smell the coffee, see which players are worth fighting and which shoppers are worth fighting to keep or win. Maybe it's time brand leaders  acknowledge the obvious changes in the environment.  As a climatologist mentioned this morning, in the Sahara no one talks about drought because everyone knows that the conditions are natural and that heat happens and will continue.  If conditions have taken that off road path, time to  set to work on alternative business models, relationships or collaborations! 

Which arguments do you find more persuasive?  Which paths would you stake your future? I'd love to hear your thoughts

Tuesday, November 29, 2011

Activate your learning and enhance your performance

Emergency sirens and lights tend to draw attention, and fortunately so. They are designed to  disrupt,  drawing our attention and forcing our unconscious reactions.  Our head moves to track the source of the sound and lights, we move to get out of the way of the vehicles, or search for exits .  Our awareness  of the situation and responses precede our desire to know what has happened.  Our thoughts then begin to question what’s next?  Will there be more vehicles? Are we in danger or is this merely a warning or a drill? 
Our motivation and action, the essential ingredients in performance, does not require perception. It’s not the nature of the task as much as the triggers that predispose our behavior. 

  Smiles in contrast, generally don't stimulate fear or surprise, but they do trigger instantaneous behavior.  Like the light and sound of the siren, smiles also generate emotional responses without requiring conscious perception.  Thanks to the work of researchers in psychology and biology, our understanding of the functional relationships and neural mechanisms  between stimuli that arouse emotional and other behavioral responses continues to grow; and yet the applying this evolving understanding has been far too limited. 

For example, Sunday’s NY Times story about willpower by Greg Walton and Carol Dweck raised some good questions about the evolving research of the role of glucose on our ability to exercise will-power.   Mental models, mindsets and even mindfulness are not uncommon references in everyday conversation.  How often have you been told that success will follow those who put their mind to the task.  Do you really believe what you've been told?  What exactly does it mean to put ones mind to the task anyway?


Carol Dweck,  in her lifelong work on mindsets,finds that our sense of self, our capabilities and capacities  predisposes our behavior, our willingness to take on a challenge and or continue to learn.  From birth and into early childhood, the rate of assimilation of new information or “learning” is astonishing, primarily because the number of associations or relationships between stimuli and response are numerous. It takes time to build the initial database and link elements that become shared knowledge, common language, or the experiential knowledge base that enables us to routinely decode stimuli  and produce appropriate, contextual responses. 

At any given moment the perennial stream of thought running in our heads is a series of questions to help us get or keep our bearings, for example we wonder what's coming next, what has just happened, who is that etc.  People predisposed with a growth mindset respond positively to continuous change and smile or feel elation at the prospect of something new. In contrast, people with a fixed mindset are more wary, even fearful.  Different circumstances will cause us to revert to growth or fixed.  The Growth mindset however is what allows us to adapt and keep learning.
Carol Dweck’s work demonstrates how its possible to foster the growth mindset.  My own work in organizational change directed toward innovation uses story to surface and then address the unconscious barriers and circumstances present within an organization’s culture that foster fixed mindsets.   

For example, consider the difference perspectives makes.  The story of Goldilocks, which unlike the majority of fairy tales does not end with all the characters living happily ever after. The Bears have their routine and  and Goldilocks, the interloper proceeds very systematically to meet her needs.  The peaceful and gentle home environment where  the three bears comfortably reside is turned upside down. The bears have an ordinary problem, their porridge is too hot. They choose to take a walk and make good use of the time they need to wait until the porridge cools.  Goldilocks enters the now vacant house and proceeds to try everything , eliminating the extremes and always settling on the middle option.  She begins trying out each of the three available chairs, then samples each bowl of  porridge, once sated, she sleepily seeks the beds(too hard, too soft), finally she is just right.  How and what does Goldilocks learn? In her solitary exploration she is immune from expectations and just keeps trying until she finds a good fit.  The context suggests that Goldilocks approached the empty cottage and her adventure with a learning mindset, She had no obvious prior knowledge to keep her from entering the house or recognizing the subsequent danger posed by a house of bears.  The simplicity of the story can be told from the perspective of possibility, and the device of repetition creates expectation and cues readers to realize that given three choices , one will always satisfy.  The story doesn't end there, its ending with the bear's discovery of the disruptor, Goldilocks who then runs away never to be heard from again.

The narrator or storyteller stops short of a lesson.  What happens to the Bears and what happens to Goldilocks is left to the reader to ponder or ignore.  IF Goldilocks is the emergency siren, merely a temporary disruption that once passed, the bears in all liklihood return to their routine. 

Dynamic Learning
Framestretching©,a strategic planning tool I use, invites  you to put your own organization into the story framework.  In this case we invite you to spot a disruptive agent to play Goldilocks. Identify who are your organization’s three bears and more importantly the three services or products that define your activities.  The exercise asks you to align your realities as closely as possible by stating What IS the status quot.  Then consider what disruptions have come and gone with no obvious impact?  Over the period since you first noticed the disruption, has your performance changed or that of your relative market position? Or has your own culture snapped back to its routine?  Stretching the framing of your reality to the story makes it possible to see and discuss the environment without making it personal.  Using the story frame to stand in for your own organization consider what if the three bears had not left the house? Or been less efficient with their time and didn't return while Goldilocks was sleeping?  Or perhaps had been more resourceful in solving the hot porridge problem and never left the house open and unattended?   Could they have avoided the impact of the disruptor?  What if Goldilocks had  simply gone upstairs to bed not tipping off the bears to an intruder in their midst?

Now there’s a method to the madness of these questions.  The more you twist the simple story around, the more naturally new possibilities open and organization practices questioned.  Uncovering where and what to change is never a good approach to developing strategy, it’s merely a tactic or means to help you turn your presenting problem around.  Was Was the presenting problem the bears faced the real problem? What made porridge too hot their issue?  Again the simplicity of the story is what makes it effective, for its easy to imagine the underlying motives and reasons and recognize them as projections of our own experiences.

By nature, a disruptor will appear with our without a welcome mat.  They should be great wake up calls, and prevent the cultural snap back to routine, but only if you take the time to share the experiences.  A post disruptive review or Goldilocks session can engage everyone, win some grins and foster a learning mindset putting your organization on the path to higher performance.  

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