Generation Y

This is the eighth in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we take a final look at Changing Demographics.

Stanyon’s third powerful demographic trend is Generation Y. Sons and daughters of the Baby Boom generation, Gen Ys are generally considered to have been born between 1985 and 2000, the last group born in the twentieth century.  They’ve grown up with the Internet and aren’t usually moved by traditional types of advertising.

While we boomers get our information from network television, they get theirs from one another, specifically over the Internet, in chat rooms and by instant messaging, and on social web sites like MySpace. 

A good source of information on the Gen Ys is an article from Business Week, cleverly called "Generation Y".  The article points out that this generation is more cynical than past generations and is more likely to be influenced by non-traditional types of marketing.  They’re more diverse making generalizations and mass marketing difficult.  Some big companies have tried and failed to reach this group including Pepsi, Nike, and Levi jeans. 

Mountain_dew
As the article points out, while Pepsi is struggling for market share with this group, one of their favorite drinks is Mountain Dew, a Pepsi product.  The reason?  Mountain Dew is high in cafeine, something which Pepsi doesn’t promote.  The success of the soft drink is totally from word of mouth.

Ys are more practical than previous generations and are already looking at their futures.  Many of them have their own credit cards.

As the oldest members of Generation Y are just entering their twenties, it will be a while before they start buying many durable goods for themselves, but many of them have an impact on family purchases, especially in single-parent households.  They are the future and now is the time to begin connecting with them.

Growing Ethnic Population

This is the seventh in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today we look again at Changing Demographics.

Currently there are 43.5 million Hispanics in the United States, making them our largest minority.  Not nearly as large, but still important, are other groups including Asians and Eastern Europeans.  The ethic makeup of your community is an important consideration in your sales, marketing, and human resource decisions.

Obviously, if you have a large group of potential customers whose main (or only) language isn’t English, then you should have people on your staff who can communicate with them.  That’s a given.  But, other cultures have may have different habits and customs than we’re used to.  If we’re going to cultivate a long-term relationship with the entire local community, it’s important to be aware of these things and to act accordingly.

For example, different cultures celebrate different holidays.  Many Americans believe that Cinco de Mayo is Mexican Independence Day.  It’s not.  Cinco de Mayo marks the Mexican defeat of the French army in 1862 which had a major impact on our own Civil War.  Mexican Independence Day is actually this Saturday, September 16.  If you have customers of Mexican heritage, you should be marking this Saturday as a special day.

Learning the customs and culture of all of your customers will be greatly appreciated and will create new business opportunities.  These customers can be incredibly loyal if they feel that you’ve taken the time to understand and appreciate them.

Here’s a link to an article on the Small Business Administration’s web site that you might find interesting.

Our “Aging” Population

This is the sixth in our series based on Challenges of the
Future: The Rebirth of Small Independent Retail in America
, a 64 page white paper by Jack Stanyon, underwritten by the George H. Baum
Community Charitable Trust, the Illinois Retail Merchants Association, and the
National Retail Federation Foundation.  Today’s topic is Changing Demographics.

Approximately 21% of the United States population is 55 or older.  By the year 2030, that figure will have risen to 31%.  This "aging" of America is a huge opportunity.  Today’s more mature adults have more free time and more disposable income than any similar group in our history.  They (we) also have special needs.

For example, older eyes aren’t as efficient as they once were.  Type needs to be larger and lighting needs to be brighter, both in homes and in our businesses.  If you want to alienate 21% of your potential customers, make it difficult for them to read the signs and tags in your store.  Trust me, that will do it.  If there’s something your mature customer can’t see or read, do you think she’ll ask, admitting that the eyes aren’t what they used to be?  Or will she go elsewhere?  What do you think?

As much as we’d like to think otherwise, most of us aren’t as strong or as fast as we once were.  We desire products that are lighter in weight, easier to carry or push, easier to operate, just generally more user friendly.  Believe it or not, many potential customers in this age group are not computer users.  They may be intimidated by the latest high-tech gadget.  The KISS principle definitely applies here.  You may spend more time educating this customer, but that’s something your mass merchant competition isn’t doing.

It’s important to make your store customer friendly for every age group, but by catering to the needs of this group, you’ll build a loyal following.  For example, do you have chairs for your customers to sit in?  What about customer-accessible rest rooms?  How about free coffee or bottled water?  Some magazines for the spouse and toys for the grandkids aren’t a bad idea either.  Use your imagination and make your store a destination.

 

The good news is that many of the 55+ crowd is retiring early.  That means they have more time for leisure activities and more time to shop.  They’re also more likely to be value shoppers, willing to pay more for quality.  They aren’t big box shoppers. 

Give them what they want and need and they’re very loyal.  They’re likely to be involved in social activities that give them plenty of chances to spread positive (or negative) word of mouth.  Treat them right and watch your business grow.  Of course, the reverse is also true.

More disposable income and more time to spend it make this a group of customers that’s well worth your time and effort. 

Remember

Americanflagcircle200_1
I imagine that in the next few days, everybody and his brother will be offering some kind
of comment on the anniversary of the terrorist attacks of September 11, 2001. After five years, it’s probably a good time to review what happened that day and what’s happened since.

As Americans, we can have a very short attention span. Five years ago on September 12, American
flags, flag t-shirts, and flag decals were selling like hotcakes. It seemed like every car had a decal, every
house displayed a crisp new stars and stripes, and every American was wearing a
patriotic shirt.

 We were “never going to forget” what happened on that
day. We had a national resolve to show
that we weren’t going to take that kind of treatment. Country singers were fighting for time in the
recording studio to cut a new patriotic song.

After a while,

many of the flags faded and eventually
disappeared. The decals and the t-shirts
faded. The only people who still seem to
be fired up about 9/11 are the country radio stations. The patriotic songs are still playing. But, isn’t that the way we are? We have other things on our minds.

 Why is that? Probably
because we ARE the greatest nation on earth. Our security forces stepped up and did their job. We haven’t experienced another attack in five
years. We feel safe, whether we really are
or not, and have moved on to other worries. We complain about the long check-in lines at the airport and are worried
about the high cost of gasoline.

 So, what’s this have to do with your business? I guess it shows that we Americans get on
with business regardless of the situation. The business of America is business.

 During the Great Depression, we still did business. During World War II we did business. During the Korean War and the Vietnam War and
every other war, we kept on keeping on. We did business. After Hurricane
Katrina nearly wiped out the GulfCoast,
we kept on doing business. Regardless of
whether the government worked for the hurricane victims, business
stepped up and did its part.

 During the 40’s we built airplanes and guns. During the 50’s, 60’s and 70’s we built cars
and houses. Today a lot of our
manufacturing has gone elsewhere, but we still build things. We sell things. We provide services to one another and to the
world. We’ve survived because of our
business.

The biggest victory for the terrorists who attacked us in
2001 would have been if business had shut down. They know that’s what drives our economy; what keeps us strong. But we didn’t shut down. We did the same thing we did after every
great national loss, every tragedy. We
took a day or two off to grieve our losses and then we got back to work.

As we remember our brothers and sisters who lost their lives
on that terrible September day, and the days that followed, it’s only right
that we pause to grieve for them and their families. It’s also right that we acknowledge the brave
men and women who worked so long and hard at rescue and recovery and those who
are still working to rebuild.

But, don’t sell yourself short either. You can take pride in knowing that you kept
going, even when you may not have felt like it. You’re the engine that keeps the economy working. It’s your taxes that pay for the
infrastructure that responds to emergencies.  You create the jobs. You move the goods.  It’s your hard work that has made the United
States the envy of the rest of the world.

The world has changed. We need to be more alert and vigilant than ever before. We also need to keep doing the business of America,
and that’s business.

Thank you for all that you do.

A $3,000 coffee maker?

Dacor_coffee
Have you ever seen a coffee maker that would set you back three grand?  Well, you have now.  That’s it on the left.  The Dacor CM24P built in coffee system.  According to the manufacturer’s web site,

" Only from Dacor will you find a plumbed coffee
system allowing for the consistent brewing of coffee without needing to
refill a water tank."

The unit’s built into the wall and brews "the perfect cup", one cup at a time.  It has an adjustable height dispenser allowing for taller travel mugs.  It has a digital display and customized brewing software.  It works with either ground coffee or with beans.

If a plain cup of coffee isn’t your cup of tea, "it Not only is it the perfect choice for coffee, the
versatile unit dispenses espresso, cappuccino as well as water for hot
tea or chocolate all from the touch of a button."

It has an "integrated frothing system" and built-in cup and saucer storage.

Don’t ever be afraid to offer your customers the top-of-the-line product.  Afraid they’ll have sticker shock?  Think about this.  The low-end Mr. Coffee sells for around $20.00.  At $2,900 the Dacor unit is 1,450 % higher.  But, don’t forget, it has a built-in frother.

Seriously, if you’re a coffee drinker, wouldn’t you really like to have one of these things?  I know I would.

 

Watch it!

The Internet can be a valuable tool for doing business.  It opens new avenues of conversation and information that we couldn’t have even imagined as recently as ten years ago.  The technology changes almost daily.  But, the Web can be a dangerous place, too.

The following are some excerpts from a message posted on a Yahoo group.  I’m not going to name the group or the dealer involved, but I think you’ll see just how powerful and potentially destructive an unhappy customer can be.  The comments are cut and pasted, leaving all of the original spelling and grammar intact.

"Girls just a word of warning. I ordered a part for one of my machines from an online company who seemed very professional & reliable……"(she goes on to name the dealer) 

"what a joke"

"I emailed him and asked him if he had the part he said he did & emailed me a
link for a credit card order. I ordered it on the 18th of August 2006 by credit card."

" I emailed him ( which was several times thru the month) he would all ways say crazy things that had nothing to do with my part or when & how he mailed it,I honestly thought he must be doing drugs,because nothing he said made sense."

The writer goes on to say that the dealer emailed her on August 30 to tell her the part was in, and again on September 1 to tell her that the part was no longer available.  She closes with:

"So I want you girls to be ware of this very unprofessional and vulgar bussiness so you do no have a month long ordeal like I had here are his 2 web sites so you may avoid them. I hope this helps sincerely your friend.
xxxxxxxx

Avoid these like the plague"

Then she gives links to the dealers web sites.

First, let me say that I have no idea whether the dealer mentioned is reputable or not.  I don’t know him, although he does buy a small amount from our company.  I notice, though, that the woman ordered her part on August 18, a Friday, and was told that the part wasn’t available on September 1, exactly two weeks later.

She says "I emailed him ( which was several times thru the month)…"  a period of fourteen days.  Her "month long ordeal" seems to be slightly exagerated.  But, that’s not really the point.  Whether the dealer is a saint or a jerk, the damage is done.  The "girls" in the group, which numbers 2,132,   are naturally sympathetic to the writer. 

One even makes the rather bizarre comment that she has done business with this particular dealer in the past.  She writes, "I did not have the same experience- he was prompt and friendly BUT I’ve had enough bad experiences with other internet retailers- that I won’t shop with him again. If he can do that to one customer- he’ll do it to others."

There are enough gaps in this lady’s story to at least raise the suspicion that there might be another side to it.  It seems that she might have been a little aggressive in her emailing.  To acuse someone of being "on drugs" and to imply that he may try to charge her credit card for merchandise she didn’t receive seems to be a little over the top.

It goes without saying (Why do people say "It goes without saying" and then proceed to say it anyway?) that we must give each customer the best possible service.  Our livlihood depends on creating loyal repeat customers.  But it’s also important to remember that if we make a mistake, the story can be spread around the world in a matter of seconds, without our having any chance to defend ourselves.

So what should you do?  First, after making sure that every customer experience in your store goes as well as humanly possitle, we must be aware of what people are saying about us.  Join the news groups and chat rooms that involve your business.   Read the blogs.  (After you finish reading this one.)  Take the time to Google yourself and your business.  Who knows, you might find some positive things that you can print out and show to your customers.  If you find something negative, take steps to correct it.

Of course, the positive side of this story is that it points out the problems with buying over the Internet.  If this lady had gone to her local dealer she probably would have her part by now and been spared the "ordeal."

Carnival of the Capitalists Again

Thanks to Starling David Hunter for choosing our post, "A Tale of Two Retailers" in this week’s Carnival of the Capitalists.  There are some very good posts in this week’s Carnival and Hunter’s "The Business of America is Business" blog is worth a look, too.

PS.  If you have school-age kids, check out this post from the Carnival, "Go to College for Free!  A Real- Life Example."  College costs are through the roof.  This article offers some good advice and some good links.

Where Do YOU Shop?

Let’s start with a basic assumption.  You offer your customers a unique value proposition.  You don’t have the cheapest prices in town, but you provide benefits to your customers that far outweigh any price advantage your larger competitors might have.  You’ve taught your people to sell the benefits of shopping in your store.

Every customer who comes into your store is greeted with a smile.  You treat them so many different ways they have to like one of them.  You get every customer’s name and contact information, whether they buy from you or not.  All sales are followed up with a thank you note.  You send regular emails and snail mail to each person on your contact list with helpful information, including news about the latest and greatest new products.  You seem to be doing everything right.

So, the question today is "Where do you shop?"  What I mean is this:  Where do you buy your office supplies?  Where do you buy your tools?  Where do you buy your light bulbs?  If you’re buying anything from a big box store, STOP!!! 

What message do you send your customer when she sees a box of Wal*Mart brand tissues sitting on your counter?  What about those Office Depot note pads sitting around?  What does it say to your employees when they see Target brand cleaning supplies in the back room?  Or KMart light bulbs?

You preach a message of value rather than price, but your actions say something else.  Suppose your customer’s husband owns the local True Value and she sees a box of Wal*Mart branded trash bags sitting on your counter.  Is she likely to want to be your customer?

You’ve given your employees all the reasons why it’s better to buy from your local store, but then you send one of them to Target to buy supplies.  Are they confused?  Do they have a reason to doubt your sincerity?  You bet!

If you’re going to live by the gospel of supporting your local merchants, you’d better really live by it.  I once attended a workshop on "How to Beat Chain Store Competition."  One tip the presenter gave involved taking pictures of customers.  This was before digital cameras and photo printers.  He suggested that the cheapest place to get pictures printed was at the local warehouse club.  I wonder how the guy down the block who owns the local photo store would feel about that suggestion?  How would YOU feel if you knew that your neighbor had bought something that you sell from Sam’s or Costco?

Contributing to your competitor’s bottom line is a bad idea.  The advent of the big box retailers has made your life more difficult.  Why would you want to give part of your hard-earned profit to them? 

In this case, that’s the least of your worries.  If the independent retailer is going to prosper, it’s going to be by presenting a united front.  That means that the vac shop owner buys his kid’s bicycle from the local bike shop.  The owner of the bike shop buys his wife’s sewing machine from the locally owned sewing center.  The sewing center owner buys her couch from the family-owned furniture store.  The owner of the furniture store buys her light fixtures from the lighting showroom.  And the owner of the lighting showroom buys vacuums for his business and his home from the vac shop.  And none of them buys their office supplies from the big box store.

See how the money stays in circulation among the local business people?  What you and I spend isn’t going to make or break any of the big chains.  But where you shop can have a big impact on your bottom line.

Vac_shop
Bike_shop
Sew_shop
Furn_shop
Ltg_shop