Marketers: It's A Matter Of Time
While the government has informed us that the economic downturn is over, the behavior of both marketers and consumers remains in a recessionary mode. A December 2010 study from RSW/US shows that the majority of marketers believe that the recovery is still in front of us. From a consumer perspective, private label products have increased their penetration of our psyche as well as our pantry. Consumers are making fewer shopping trips, making each occasion more important to manufacturers. The purchase of consumer staples is now a considered a decision, with over 90% of consumers saying that they don't deviate from their shopping lists. If your product doesn't make the list, it will not be purchased.
Similar to the inventory reductions that many retailers have made to more economically run their stores, pantries themselves have fewer products in them as people have entered into an age of cash consciousness.
While consumers were looking to extract the best value for their holiday shopping, perhaps the reason why more than half of Americans had not yet begun making purchases by mid-December was the accrual of enough cash to fund their needs. The National Retail Federation's 2010 Holiday Consumer Intentions and Actions Survey reinforced this by projecting more than twice as many consumers using debit cards or cash rather than credit cards this past holiday season.
Quick service restaurant operators have always known about the impact of payday on their business. With cash in hand, average tickets increased significantly. A study by Gallup shows that retail expenditures are more than 20% higher for weeks following paydays than non-payday weeks.
It would be great if all Americans were paid on the same pay cycle but unfortunately, they are not. In addition to those getting paid each week, many Americans are paid fortnightly and bi-monthly. Marketers, especially those with brands that cannot afford a continuity presence, should consider maximizing their presence around pay periods by advertising during the 11"overlap" weeks when most of America gets paid.
Many marketers have key times when their business is significantly better. For the pizza category, primetime is 4 - 8 pm and the key volume day is Friday. Movie attendance spikes on Fridays and Saturdays, as does grocery shopping. Auto dealer traffic is higher on weekends and it's harder to find a parking spot at the mall, too. Even the sale of OTC remedies can be impacted by the release of Social Security checks. Scheduling communications to coincide with the time or day impacts both the "recency" as well as the "relevance" of messages.
It's important to address the media consumption patterns that specifically relate to the time frame that you're trying to impact. If you're targeting weekend store traffic, television is the proven medium in driving marketing results. However, a recent Wall Street Journal article reminds us that Thursday night is "No Longer 'Must-See TV'" and other areas provide higher reach and impact for weekend targeted messages.
The NRF reports that Holiday and Back to School are the two biggest sales periods of the year, representing 85% of annual retail event sales. As marketers view these opportunities, care should be taken to recognize that December and summer media have significantly different consumption than the balance of the year. Consumers shifted their timing to buy closer to Christmas or the opening of schools, and the top-rated national television programs during these periods reside in network and syndication.
Technology also has an impact on timing. With DVR penetration approaching 50% for many key targets and exceeding it for key categories such as car buyers, the primetime programming grid is becoming an anachronism as people shift half of their nightly viewership. Nielsen's three-day commercial rating period is only relevant if commercial playback occurs within the time frame when marketers specifically need it. Marketers using media to drive weekend traffic may face operational issues if consumers, having viewed the commercials in delayed playback, request items or pricing that's no longer available.
The time has come to focus on when your message is delivered to consumers. Consumer behavior has changed as a result of the recession -- both emotionally as well as behaviorally -- with product consideration, decision and purchase occurring in increasingly narrower windows. This shift is more pronounced for some categories, and an increased precision in delivering messages at the right time can improve the return on everyone's communications investment. Here's to a bright future and a prosperous 2011.