Age of the Unreasonable Consumer?

Been thinking more and more unreasonable of late.   Whats driving it? 

How to Win in the Age of Unreasonable Consumer

Mukesh Gupta  in CustomerThink

I recently stumbled onto a video of Adam Morgan (Co-founder of eatbigfish and the co-author of a brilliant book – A Beautiful Constraint) shares his perspectives on how we live in an age of unreasonable consumers and what do we need to think about in order to succeed in this world where we are surrounded by unreasonable consumers.

The first question that comes to mind when I listen to Adam present is to question if we really have become unreasonable consumers?

I believe the answer is absolutely. We now expect to have clean, transport whenever and wherever we want to arrive and be hassle free.

We expect products we order to arrive same or next day and for them to cost cheaper than ever.

We want to binge watch an entire season of a TV series during a weekend.

We expect to order multiple items online and simply return what we dont like. We dont even want to go to a store to try out a new dress or a shoe or an eye wear. We want it to come to us in the comfort of our home.

And this is just the start. Every single area of our lives, we are getting more and more unreasonable, not because we want to but because we are trained to be, by brands which elevate their game and as a result make consumers more unreasonable.

This also makes consumers much more intolerant of bad experiences. Add to this is the fact that they can easily and most certainly have the ability to express their opinions (negative one’s much more than the positive one’s) to their followers or connections.  .... '

IBM Study Says Consumer Behavior Altered

Insightful look at changes we will need to adapt to

IBM Study: COVID-19 Is Significantly Altering U.S. Consumer Behavior and Plans Post-Crisis
ARMONK, N.Y., May 1, 2020 /PRNewswire/ -- Findings from an IBM (NYSE: IBM) Institute for Business Value (IBV) survey of U.S. consumers reveals shifting personal behavior and preferences resulting from the COVID-19 pandemic. The study polled more than 25,000 U.S. adults in the month of April to understand how COVID-19 has affected their perspectives on a number of issues, including retail spending, transportation, future attendance at events in large venues, and returning to work. The results   ... "

Retailwire: Why Brands Are Moving Direct-To-Consumer

From Yesterdays webinar:

If you would like to see a recording of the webinar or refer it to others, you'll find it in our Resources section:  Recording and PDF Slides (Requires registration)

For your copy of Oracle NetSuite's eBook, "Mind the Gap: What Different Generations Want From Retailers",     https://cc.readytalk.com/cc/download/schedule/9q34mh7c749a

If you have questions about any of the material, please contact:
For Oracle NetSuite:  Matthew Rhodus  matthew.rhodus@oracle.com 

For RetailWire:  Al McClain, CEO, Co-founder   almcclain@retailwire.com   www.retailwire.com    (561)  627-4974

Meeting Description:

Upstart digital native brands that market and sell direct-to-consumer (DTC) have turned the traditional consumer products distribution model inside out.

CPG brands are learning that they too can bypass traditional wholesale and retail distribution, thereby finding ways to forge tighter, more meaningful relationships with customers. 

Join us for this exclusive RetailWire webinar to learn how the increasing influence of social channels, mobile tech, rapid delivery logistics and (needless to say) Amazon are compelling brands to go direct-to-consumer. You’ll see examples of brands that use DTC to give customers a level of personalization that legacy retailers can’t, as well as the advantages brands gain in inventory control and marketplace agility. 

And stay tuned following the presentation for a lively discussion featuring two of our BrainTrust panelists, Ken Cassar and Carol Spieckerman, who will expand on the possibilities of direct-to-consumer marketing    … " 

Kroger Data Platform for Brands

A means to get value from data.

Kroger's 84.51 Launches Customer Data Platform for Brands
Stratum could be additional alternative revenue stream for retailer
By Rebekah Marcarelli

As The Kroger Co. continues to seek alternative revenue streams on the back end, its customer data, analytics and personalized marketing subsidiary 84.51 has launched a new paid analytics solution to help brands position their products both in-store and online. 

Dubbed Stratum, the new platform utilizes data from both brick-and-mortar and e-commerce transactions and aims to "draw conclusions that are representative of consumer behavior nationally," according to company officials. 

Mike Donnelly, Kroger's EVP and chief operating officer, said the retailer is excited about this next iteration of customer insights, calling Stratum a "science-powered insight tool that is designed with the end user in mind. Stratum will be an accelerator for our brands and CPG partners alike."  .... " 

Converting Insight into Action for CPG

Useful description about the ability to integrate CPG and behavior.

Using AI to Translate Insight into Action
By Steven Hornyak, Symphony Retail AI, CPG Solutions - in ConsumerGoods

Today, consumer packaged goods brands are tasked with much more than conveniently connecting shoppers with their favorite items. Consumers want brands to anticipate their needs and make relevant products available to them wherever they shop.

But many CPGs have yet to crack the code. They’re spending countless hours and dollars investing in trade promotions even though 72% of those programs don’t break even. They also invest heavily in new product development even though 95% of new products fail. To be successful in today’s market, CPGs must acquire and learn from a deeper understanding of consumer behavior to make more strategic, more intelligent promotion decisions.

Channel blurring has led to more complexities than ever for both CPGs and retailers. Consumers have the option to shop in physical stores or online, a blend of the two with buy online and pick up in store, or to not even actively shop at all by using a subscription service. On top of this, the growth of today’s private label and regional-based players have led many product lines to hit a premature revenue ceiling. ... " 

Consumers Breaking with Legacy Brands

Still nostalgia equity is a powerful thing for many brands.

Nostalgia Is Not Enough: Why Consumers Abandon Legacy Brands
Mar 25, 2019 Strategic Management  North America

Earlier this month, Sears ended a nine-decade presence in Lincoln, Nebraska, when it closed its store at the Gateway Mall. So it was, too, at Park City Center in Lancaster, Pennsylvania, where that town’s Sears store was one of dozens shuttered nationally in yet another wave of contraction by the once-mighty retailer.

The closings set off the expected misty-eyed recollections about the legacy brand and the cherished place it occupied in hearts across the country. In Colorado, where Sears closed two stores in Colorado Springs and one in Pueblo, a columnist for the Gazette mourned the loss. But she also admitted that her February visit to report on the closing was the first time she had been to Sears in a decade. “I left empty-handed, and a little heavier-hearted,” wrote Stephanie Earls.

Among legacy brands, Sears is in similar, troubled company. Payless ShoeSource is liquidating its 2,100 U.S. stores. Toys “R” Us — where many a young American parent remembers buying his or her first Transformer or Super Soaker – closed its 730 locations last year and is struggling to come back in some form post-bankruptcy.

You might have expected that the pull of nostalgia would have protected these brands from the retail re-sorting underway. Customers have emotional connections to certain stores — places where their parents brought them as children and where they did their first Christmas shopping, and developed certain buying habits and loyalties.

So what was the breaking point for customers? Price? Experience? Convenience? Why, in the end, are customers abandoning their shopping heritage and breaking up with brands? ... '

The Well Connected European Consumer

How does the European consumer differ from other regions in its use of information and communications technology.   Infrastructure.  Statistics.

Europe's Well-Connected Consumers  By David Pringle 
Communications of the ACM, April 2019, Vol. 62 No. 4, Page 36
10.1145/3309921

Home to approximately 740 million people, many of them affluent, Europe spends a lot of money on information and communications technology (ICT). The European ICT market was worth $769 billion in 2017 (up 1.8% from 2016).a

Yet, despite the best efforts of the European Union (EU), Europe is not one market. There are major cultural differences and economic disparities between northwest Europe and southeast Europe. Whereas Germany, the U.K., the Nordics, and the Netherlands tend to attract migrants from all over the world, many countries on the eastern and southern rims of Europe are seeing an exodus of young people and low birth rates. Indeed, the continent as a whole is aging: One fifth of the people in the 28 members of the EU (the EU28) are now 65 or over, compared with 17% in 2007.b In the U.S., the equivalent figure is 15% and in China 11%.c

The vast majority of Europeans are online. It is relatively cost-effective for the region's telecoms companies to provide connectivity: Europe is densely populated and heavily urbanized—three quarters of the EU population lives in cities, towns, or suburbs. Across the EU28, more than 87% of households had Internet access and 85% broadband Internet access at the end of 2017.d Moreover, the broadband is relatively quick: Of the top 50 countries ranked by broadband speeds worldwide, 36 of them are in Europe.e Sweden has the fastest broadband in Europe, offering an average speed of 46Mbps. However, interference between Wi-Fi networks is common in the many districts where people live in apartment buildings, while cellular networks can also be heavily congested in city centers. .... " 

Armpit Sniffing Sensors with AI

Because of the products we made, for many years we used human sensory labs to address anti-odorant efficacy.  So this digitizing of the sensory process is very interesting. 

Arm Leads Project to Develop an Armpit-Sniffing Sensor Chip 
in IEEE Spectrum  by Samuel K. Moore 

As part of an initiative to reduce the cost of Internet of Things devices for incorporation into consumer products, U.K.-based Arm is designing the first machine learning-enabled flexible plastic sensor chip to detect body odor. The chip features sensor arrays, a machine-learning processor, and an interface assembled on a thin plastic film, with a battery and display possibly added later. Arm designed naive Bayes classifier-based machine learning circuitry, while PragmatIC produced amorphous-oxide-based flexible electronics, near-field communication, and radio-frequency identification chips; the University of Manchester contributed a plastic gas-sensing solution and a model of human olfactory perception, and Unilever loaned its consumer-products expertise and its odor-testing laboratory. The sensor arrays were composed of field-effect transistors made from chemically modified organic semiconductors, refined to respond to distinct gaseous analytes. The arrays' collective response, read by the machine learning component, signals the strength of the wearer's armpit odor.  ... "

Smart Connected Consumer Products

A topic we often worked on in in the innovation center, excellent infographic overview when connected
to the smart city.  Smart at all sorts of levels.  (full clickable graphic at the link)

Reimagining Smart Cities with the Arrival of Smart Connected Consumer Products  Posted by Aarti Sharma in IOT Central

We are fast moving towards a future where cities will feature hundreds and thousands of smart connected objects, talking to each other, exchanging and producing meaningful data and insights, basically reshaping the urban landscape into intelligent and autonomous systems. Internet of Things will be at the heart of this technological transformation, as sensors and digital tags will find their way into various physical city infrastructure, monitoring traffic, weather, crime and even rat infestations! However, it’s not just hardware IoT and sensors that will provide city planners and authorities to gain more visibility into the working and management of a city. Smart connected products or ordinary consumer products tagged with digital ID’s and digital twins can open up new dimensions in how we imagine Smart Cities to function.

For the sake of painting a picture of the role of connected products within Smart Cities, let’s consider a pharmaceutical company supplying critical drugs to a city. Enabling every drug product at batch and serial item level to have a digital twin of its physical self will allow for exchange of product related data to happen between manufacturer, the supply chain, the city authorities, end consumers and the products themselves. Read on to see how the pharmaceutical industry could look like in the not so distant future.     ....   "  (excerpt, much more at the link)  .... ' 

Its all About Immediately

Its all about Immediately.   First time I had heard the 'impatient consumer' mentioned so directly.  But they have a good point there.   We all are increasingly impatient.   They make some good suggestions, but not enough about measuring this now overwhelming impatience.   When does that measure of impatience overwhelm the result?   When does the consumer measurably balk at waiting?  We know we sometimes  want to wait for the 'reveal'.  How can we measure that for purposes of design?    These are questions, they are not necessarily answered well below.

How to help today’s impatient customers on every step of the purchase journey  Sara Kleinberg   Search, Consumer Insights, in Think with Google

When it comes to spending time, everyone wants to spend it wisely. More than ever, people are applying that mantra to how they shop as they look for more ways to get what they want immediately.

Bots Changing the Way we Buy

Thoughts on bots and buying.    Curation comes up.  It also works with things as 'simple' as search.    You freely initiated it, but it also has curation in mind.

How Will AI Bots Change the Way We Buy Consumer Products? I Shop, You Buy? By Kristina Rogers in Consumergoods

Today I can go and buy toothpaste or go and shop for some. Whichever way I describe it, the activity is the same. Maybe the only difference would be whether I get my toothpaste online or in the “real world.” But in the near future, I think the words buying and shopping will begin to describe very different activities.

‘Buying’ won’t take up much of our time or attention. Today, I can tell a device on my kitchen counter to add toothpaste to my virtual shopping list. How long will it be until I trust artificial intelligence (AI) to curate a selection of product choices for me? I’d be happy for it to buy a lot of the mundane products that I don’t really want to think about. Which would likely include most of the consumer goods I use.

My AI platform of choice would become an entry point to a broader ecosystem of products, services, transactions, payment and fulfillment. It would know me well enough to evaluate what products or services I need and when. It won’t just find me the best deal on price; it will source brands and suppliers that reflect my values.

This kind of AI activity can sound a little intrusive to some people. To be sure, besides my children directing Siri to do all sorts of things, I'm personally not yet there. Somehow, I don't have time to get organized with a bot despite its promise to save me time! But 47% of consumers already say they are open to the idea of buying items through a chatbot. And almost half of U.S. consumers say they are willing to share personal information if it gets them a better deal, according to HubSpot Research. ... " 

P&G to buy German Merck's consumer health unit for $4.2 billion

New directions for CPG healthcare.  More at Reuters.

P&G to buy German Merck's consumer health unit for $4.2 billion 

(Reuters) - Procter & Gamble Co (P&G) has agreed to acquire Merck KGaA’s consumer health unit for 3.4 billion euros ($4.2 billion), giving it vitamin brands such as Seven Seas and greater exposure to Latin American and Asian markets.

The maker of Pampers diapers and Gillette razors said the deal would help it expand its portfolio of consumer healthcare products which includes Vicks cold relief. ... " 

E-Commerce Direct Delivery by 'Kroger Ship' Launched

Another channel opens by a major player.   Was alerted to this today.      I see its in the local market, will be giving it a try to see how the curation works.  In our market they are offering 15% off and  free shipment for your first order.

Kroger Gets Into Online Grocery Shopping Act in ECommerceTimes   By Richard Adhikari 

Supermarket uber-chain The Kroger Co. on Wednesday launched Kroger Ship, a direct-to-consumer e-commerce platform. Ship debuted in four markets: Cincinnati; Houston; Louisville, Kentucky; and Nashville, Tennessee.

The service will be rolled out to additional markets over the next few months.

During the first phase of Kroger Ship, customers will be able to shop from a curated selection of 4,500 Our Brands products, which are not available elsewhere online, and more than 50,000 center-aisle groceries and household essentials that matter the most, as rated by 84.51°, a Kroger subsidiary.

Kroger Ship will carry staples, customer favorites, and bulk and additional sizes. It will focus on Our Brands, local and international food and flavors, specialty items, and health and wellness products.

"I think it's interesting -- and important -- that Kroger's featuring its private label in the assortment," said Nikki Baird, VP of retail innovation at Aptos.

"That has proven to be a strong strategy for Amazon," she told the E-Commerce Times.

The Ship service offers competitive e-commerce pricing, Kroger said.

Still, pricing is not the real issue, suggested Ray Wang, principal analyst at Constellation Research. The products "have to be good enough to purchase online instead of going to the store."

That's hard to do with produce unless there's uniform quality in the supply chain, he told the E-Commerce Times. "For other goods, they'd better be better than Amazon, which is the gold standard."

Kroger Ship "complements and joins our 2,800 grocery stores, 1,250 curbside pickup locations, and delivery service from 1,200 locations," noted Yael Cosset, Kroger's chief digital officer.

Ship "is our next step in creating a seamless experience that allows our customers to shop when and how they want," he said. "Our new service is just one more way we are redefining the customer experience as part of Restock Kroger, bringing more convenience and options to shoppers across America." ... "

See also in Fortune.  And https://ship.kroger.com/ 

Willingness to Pay vs Like What You Buy

This often took a place in research we did. 

Why Willingness to Pay Doesn’t Mean Consumers Like What They Buy in Knowledge@Wharton

Marketers have long relied on willingness to pay as a way to gauge consumer preference for a product, and rightly so. At the height of the Cabbage Patch Kids doll craze in the 1980s, sales passed the $600 million mark, according to Bloomberg News. Now the toy line has an estimated revenue of $50 million a year, indicating a much lower consumer preference. But new research from Alice Moon, Wharton professor of operations, information and decisions, shows that willingness to pay isn’t always a clear indicator of preference. The paper is titled, “The Uncertain Value of Uncertainty: When Consumers are Unwilling to Pay for What They Like,” and was coauthored with Leif D. Nelson from the University of California, Berkeley. She spoke to Knowledge@Wharton about other factors that should be taken into consideration when marketers are trying to price their products.

An edited transcript of the conversation follows.

Knowledge@Wharton: Tell us about your research.

Alice Moon: One of the most critical issues for marketers is how to forecast consumer product interest and consumer preference. One way they frequently do this is by asking consumers how much they’re willing to pay as a measure of their interest in, or value for, that product. I study when that measure insufficiently captures how much a consumer values that product. I find that willingness to pay is informed by many factors, such as what price they think the market is setting for this product. Sometimes those types of factors overshadow the part of willingness to pay that signals preference. Because of that, when you’re trying to understand people’s preferences by looking at how much people are willing to pay for products, you’ll make the wrong assumption about how much they like it.

“[When] you’re trying to understand people’s preferences by looking at how much people are willing to pay for products, you’ll make the wrong assumption about how much they like it.” .... "

Gillette

Gillette: Fat, Happy and Vulnerable in Its Own Fiefdom
By Bob Herbold on his blog .... 

A recent article in Fortune magazine discussed the massive loss of market share by Gillette; moving from 71% when it was acquired by Procter and Gamble in 2005 down to its current 59%. It points out that a key reason for this was that Gillette simply missed the growing consumer interest in an adequate performing, and very reasonably priced, razor. Dollar Shave Club, Harry’s and Schick jumped on this trend. Meanwhile, Gillette simply stuck to its decades-old game plan of evermore sophisticated and complex razors at ever-increasing prices.

How did Gillette become so unaware of reality? Basically, it appears that Gillette was its own isolated fiefdom at Procter and Gamble, basking in prior success. They got away with this because competition was historically weak, and Gillette was making good profits, so P&G management left them alone. ... " 

McKinsey on the Chinese Consumer

A considerable look at the China consumer.   Much more in the article.

Double-clicking on the Chinese consumer
By Wouter Baan, Lan Luan, Felix Poh, and Daniel Zipser

 The rising post-90s generation is emerging as a strong engine of consumption, in one of four important new trends in the Chinese consumer landscape.

If you’re looking for evidence that Chinese consumers are confident, look no further than the one-day online-sales phenomenon known as Singles Day, which falls every year on November 11. Singles Day has morphed from being a day dedicated to lonely singles to becoming the largest e-shopping day globally. With an estimated $25 billion in sales, or over $1 billion in transactions per hour, Singles Day this year easily bested last year’s sales by close to 40 percent, and was larger than Black Friday and Cyber Monday in the United States combined. .... " 

Chinese Consumer Landscape

Double-clicking on the Chinese consumer
By Wouter Baan, Lan Luan, Felix Poh, and Daniel Zipser.  In McKinsey

A rising post-90s generation is emerging as a strong engine of consumption, in one of four important new trends in the Chinese consumer landscape.

Millennial Attitudes

 Millennials' Attitudes Toward IT Consumerization in the Workplace
By Heiko Gewald, Xuequn Wang, Andy Weeger, Mahesh S. Raisinghani, Gerald Grant, Otavio Sanchez, Siddhi Pittayachawan 

Communications of the ACM, Vol. 60 No. 10, Pages 62-69

" ... Our research investigates the attitudes of millennials who have not yet entered the workforce toward the use of information technology (IT) in terms of "IT consumerization." Specifically, we want to know how this significant part of the population weighs benefits against risks when it comes to intention to use technology in a business environment.  ...."

Abstract and conclusions.

Foot Traffic Counting

This company called Density was brought back to my attention for possible analysis.  we did this kind of analysis in the retail aisle.  (Their site at Density.io  no longer exists, leaving this here to state the problem)

" ... Density is, as the company’s website puts it so simply, a people counter. Like other startups that analyze foot traffic, Density is designed to let retailers, coffeeshops, co-working spaces and other places collect better data about how many customers pass through their doors.

In conversations at online forums, Density’s founders are candid about their belief that hardware sales are becoming a tough game. That’s why the company’s own device is both simple and free. It’s essentially just a pair of infrared sensors, with parallel beams crossing a doorway so it can count the people passing through and know whether each one is coming or going. Getting and installing the hardware costs nothing; Density makes its money through subscriptions to its data-analysis service. ... " 

Consumer Brands and Blockchain

IBM piece. Refers to some work done by Wal-Mart using Blockchain.  But then takes it further.

By Laurence Haziot, IBM Global Managing Director and General Manager Consumer Industries

Why Consumer Brands Should Care About Blockchain
At the Consumer Goods Forum Global Summit in Berlin this June, I spoke alongside Frank Yiannas from Walmart about how blockchain is a collaborative solution that can help increase the traceability and transparency of food across the supply chain.

In our digitized world, consumers are demanding accurate, real-time inventory information, faster service, and low or no-cost shipping, all which require an efficient and agile supply chain.

Today, supply chains are mostly analog. Transactional data is still paper-based or uses tools such as Excel or e-mail and often have to be reconciled by the various parties at different points in time. And it comes at a huge cost to brands. Recent estimates of disruption and lack of visibility in the supply chain are around USD 300 billion globally.

Blockchain technology simplifies our complex global “system of systems.” This shared, immutable, online ledger tracks all kinds of transactions from product codes to serial numbers to contracts, images, videos and more to establish one single version of truth between the entire ecosystem of suppliers, distributors, transportation providers, retailers, banks, governmental agencies, and ultimately, consumers.  .... "