Nuts & Bolts - 5 Minute Interview: Ira Kalish: Future Consumers to be Tough Sells
Not quite a realized dystopia, the year 2020 will witness the birth of a new global consumer. These consumers could be a challenge for marketers, as they will likely be more frugal and, simultaneously, more demanding. They'll want products that are built to last, green and delivered with a smile by happy employees.
These are among the findings in "Consumer 2020: Reading the Signs," a study authored by Deloitte Research. Although released in January, the findings are being supported by an article published in April by the Pew Research Center and in a study announced in September by Altair Customer Intelligence. Pew and Altair report that multigenerational households are on the rise, with the latter finding that "14.22 percent of all U.S. households" have at least two adult generations living in them. More research released in September, a survey by Kantar Media Compete showing 72.6 percent of U.S. shoppers are waiting for sales before they buy, also illustrates the frugality Deloitte predicts will continue.
We interviewed Ira Kalish, Ph.D., director of consumer business at Deloitte Research, about the study for more insight into what direct marketers should know about consumers in the coming years. Hint: It's about more than the Great Recession.
Target Marketing: In "Consumer 2020," Deloitte Research predicts consumers will more likely be living within their means, and companies may need to go after market share rather than growing markets. What does this means for loyalty programs?
Ira Kalish: In a low-growth environment where market share is of greater importance, loyalty programs are especially important. They are an important tool in, at least, retaining market share. Consumers will be reluctant to switch retailers if they risk losing benefits. Also, if executed well, loyalty programs can be a tool for boosting share of wallet. The problem is always that they are not often executed well.
TM: Despite having less money to spend, Deloitte Research foresees consumers will choose longer- lasting products and those that sustain resources. If this prediction comes true, how should direct marketers adapt their B-to-B and B-to-C campaigns/programs?
IK: Campaigns should emphasize quality, not just price. There is evidence that consumers shop on the basis of price when they believe there are no quality differences between products. Thus, the ability to convince consumers/businesses of quality differences offers the opportunity to gain pricing power and to gain market share. Quality includes the notion that a product is durable and green.
TM: The report says companies need to be where their consumers are to ensure they have positive brand experiences. Does this include every channel, and even third-party sites? How far up the funnel should direct marketers go in order to be present at every touchpoint?
IK: Direct marketers need to be branded sellers, regardless of channel. As for the report, what we really had in mind was that growth will take place in emerging markets [such as China]. That is where companies need to be because that is where consumer spending growth will take place.