To food and beverage product marketers and restaurant operators focused on attracting Generation Y (born between 1980 and 2000), it shouldn't come as a great surprise that these young people are extremely into health and wellness, customization and global flavors. But this generation is so complex -- perhaps the most savvy, brand-sensitive consumer group in history -- that understanding the nuances of how they tick is a must, according to the new "How Gen Y Eats Culinary Trend Mapping Report" from the Center for Culinary Development (CCD) and Packaged Facts. To get a handle on what drives Gen Y's food and beverage preferences, CCD conducted a quantitative online attitude and behavior study and customized focus-group sessions held in living room and restaurant sessions. The results point to several key attitudes, starting with their penchant for eating and socializing in casual, communal spaces. Gen Y's love hanging out at communal tables in bar lounges, college dining halls and other informal settings. Dining venues that offer a wide collection of foods, particularly with "far-flung global inspiration," are favorites. When they eat alone, they often "scarf solo in the car or on the sofa," adds CCD. Gen Y is of course wired to the max. These young people are not only hooked on socializing in communities on the Web; they see even eating as "a deeply wired activity." Their markedly social self-identities and need to be constantly entertained drive them to use networking technologies in food-centric ways, "from downloading menus and placing orders to subscribing to wireless recipe and ordering information services," notes CCD. College campuses are the "incubators" of this melding of technology and community. They are also thrill-seekers who crave heightened eating experiences such as intense flavors and extreme textures. "The typical Gen Y eater swoons over unusual food forms, flavor profiles tweaked with unexpected or dramatic twists and of course, vivid global cuisines, especially when they blend fresh and spicy," the researchers stress. Other salient F&B drivers include their penchant for customizing foods through adds-ons or mix-ins (the reason they love fajitas and other "build-it-yourself" foods); their dedication to local, organic, fair trade and vegetarian/vegan foods (reflecting their belief that food choices can make a positive difference in the world at large); and their firm belief in the value of health/wellness and functional (including anti-aging) foods and beverages. (Although males under 20, in particular, are also hooked on energy-blast drinks.) Marketers have opportunities in emerging markets for "all-natural" weight-control foods that help "balance [their] drive-through lifestyles," as well as in anti-aging foods and protein-rich breakfast and snack foods, according to CCD. Foods and beverages in hip, eco packaging that offer innovative tastes and functionality are irresistibly "kewl" to Gen Y, they add. Critically, marketing messages must come across as "anything but marketing messages," stress the researchers. This generation wants food and drinks that they can feel "they've stumbled onto themselves or through a peer recommendation, and with more than a whiff of cultish appeal," CCD concludes. While Gen Y's are far from brand-phobic, "the brands have to be the right ones, without the taint of the hard sell." Restaurant operators would do well to heed advice in the report from executive chef Dwight Collins (who oversees dining at the University of California at Santa Cruz): Pay attention to local sourcing, highlight green initiatives like composting; always find new ways to allow them to customize their food choices; and don't waste your time with generic versions of global cuisines, because they expect authentic regional.
With increasing consumer familiarity and growing ease of use, mobile applications for financial services companies--particularly banks--could become the new "killer app" for telecommunications. The number of people banking through a mobile device could hit half a billion worldwide by 2013, according to ABI Research. "Mobile financial services have the potential to be bigger than mobile TV and premium mobile content in terms of numbers of subscribers," Mark Beccue, senior analyst of consumer mobility, tells Marketing Daily. "Everybody's trying to do it, and they're all scrambling." The drive for more and better mobile financial services applications is being fed by consumers who are becoming more accustomed to banking online. "The lowest-hanging fruit are the online customers," Beccue says. "That's one of the only barriers to mobile banking; if you don't trust online, you won't trust mobile." But just as customers are using online banking for uses beyond simply checking their accounts, they will begin to use their mobile devices for those purposes as well. "The growing parts will be more sophisticated applications like bill payment," Beccue says. But banks will have to work on making the mobile experiences as simple and user-friendly as the online services. Increasing numbers of customers--particularly younger ones--are learning to trust the online space for their banking, and mobile will quickly follow. "Generation Y expects mobile to be part of what they're doing, and banking is no different," Beccue says. In the U.S., the mobile banking leader is Bank of America, Beccue says. The bank launched its mobile service in May 2007, and by the end of 2008 it had 1.5 million subscribers. "It's a growing segment, and it's being led by Bank of America," Beccue says.
Toyota wants to bring new customers to its lineup of hybrid vehicles with a program that only Toyota is in a position to do: hybrid-only certified, pre-owned vehicles. Toyota says its Certified Used Hybrid program offers the standard three-month/3,000-mile comprehensive and seven-year/100,000-mile powertrain warranties, and roadside assistance plus an the eight-year/100,000-mile hybrid battery warranty. Toyota and Lexus combined have the most hybrid models among automakers, and--because of Prius--the highest volume of hybrid vehicle sales in the U.S. The company, which launched the first Prius in 1997, now has seven hybrid nameplates: the Camry sedan, and Highlander SUV; hybrid versions of the Lexus LS, and GS cars and the RX SUV; and later this year, a hybrid-only Lexus HS 250 car. Toyota, which unveiled its third-generation Prius at the Detroit auto show two weeks ago, says that 670,000 of the cars have been sold in the U.S. since the nameplate's inception. Of the 241,405 hybrid vehicles sold by Toyota Motor Sales (comprising Toyota, Lexus and Scion brands in the U.S.), 65%--or 241,405 of them--were Priuses. The bad news is that because of the economy, and lower gasoline prices in the fourth quarter last year, hybrid sales were off 10% overall in 2008. They were off 42.8% in December alone, when only 17,698 hybrids were sold. In December, Prius sales were off over 44%. Toyota said it would hold off on building a Prius plant in Mississippi. Still, Dan Gorrell, president of North Tustin, Calif.-based research and consulting firm AutoStrategem, says Toyota's creation of a special Certified Used Hybrid channel makes sense. "Though with new vehicles so widely discounted in the market, because of the state of the industry, I think it's a great idea for hybrids because of the nagging doubt about the battery," he says. "I think it's a good symbolic move that says 'we have confidence in these cars and we are going to back them up. Whether it is an offensive or defensive strategy, it makes sense."
It's that time of the year again. No--not the Presidential inauguration, but time for automakers to take stock of their consumer Web sites, not least because J.D. Power & Associates has launched the first wave of its semiannual rating of them. The firm says the best site is Honda's, taking top honors for usefulness in new-vehicle shopping. The "Manufacturer Web Site Evaluation Study" measures automakers' sites to determine how useful they are to people who are either shopping for vehicles or about to begin. Scores are based on appearance, speed, navigation and the information/content of an automaker's site. Honda gained 14 points from the last wave of the study in June. After Honda came Porsche, Mitsubishi, Kia and Acura, which is Honda's up-market sibling. Per the study, the industry is backsliding in Web functionality after several years of improvement. J.D. Power reports that the industry declined nine points since June. The new study, based on responses from 11,400 new-vehicle shoppers who indicated they would be in the market for a new vehicle within the next two years, says 16 manufacturer Web sites had double-digit decreases in the scores of their consumer sites. That, says the firm, is the largest decrease since the study's inception 10 years ago. The largest declines were in sections for determining monthly payment and comparing vehicle attributes within the information/content measure of the study. Scott Kane, senior research manager at the J.D. Power & Associates, says that shopper needs are driving the increasing importance of comparison tools. "Shoppers with tighter budgets turn to those tools to get information. The big shift came when people started getting financially strapped and turned to [automakers' Web based] financial calculators and tools more and more. It is not necessarily the most important element of the site, but if you aren't doing a good job, it will hurt you," he says--adding that OEMs are also increasingly limited in terms of budget to support their Web presence. "As shopper budgets shrink, OEM budgets are shrinking too." The firm says automakers are also cutting back on the variety of vehicle images and videos they have on their sites, or have simplified their photo and video offerings. Kane says GM's Hummer site is something of a poster brand for how creative is getting cut back. "They have cut way back on the kinds of images that entice shoppers," he says. "There is no comparison between Hummer's gallery today versus two years ago, when they were the number one Web site for product images. But it is across all automakers. Nobody is selling as many vehicles today so everyone is getting squeezed. "Honda was higher in every major attribute, but one thing they do exceptionally well is navigation; it's easy to get around. For example, on the model page they show you a quick video and a link to watch more of that video if you want to, and the ability to move on if you don't." He says Mitsubishi improved more than any other site. "What really helped their ranking a lot was speed. That was their biggest improvement. They went back and cut down on page weight so the site loads faster." He says GM's GMC division site, Toyota's Scion site and Jaguar's site all slid. "Scion and Jaguar fell because of speed issues that bogged down shoppers and hurt the overall experience. Scion has continuously streamed video throughout the site, and it's a huge distraction." He says the firm compared scores on Scion's site both from Gen Y consumers and from respondents at large. "[Gen Y scores] were actually well below the average for the site. So they aren't even satisfying their key demographic," he says. "Video should help you with the shopping process; branding is important, but don't let it take over."
The best-known brands aren't always the most valuable, and a new ranking from Interbrand Design Forum proves it: Walmart comes in first, with its brand value estimated at $129.8 billion, followed by Best Buy, at $22 billion, and the Home Depot at $20.8 billion. But many household names - including Kroger, Macy's and Sears - don't even crack the top 50. Walmart is doing so well, says Greg Silverman, SVP of strategy for Interbrand Design Forum, a retail consultancy based in Dayton, Ohio, not just because of its enormity and timely value positioning, but because "it's really proven itself to be a learning organization, taking cues from many of its competitors, including Target." Best Buy, which sells many of the same brands as its rivals, including Walmart, Target and the now-kaput Circuit City, has successfully established itself as a rewarding, special place to shop, he says. The Home Depot, he points out, is a different case, earning its ranking on the basis of scale rather than brand innovation. "To me, it's not surprising that they came in as high as No. 3, and I wouldn't call that a strong performance for them. After all, it's the world's third-largest retailer. When you look at its brand valuation as compared to sales, it's a much lower percentage than Lowe's." Lowe's comes in at No. 8, with the brand valued at $10.7 billion. "Home Depot may be winning based on its operational advantages, but it hasn't delivered the brand management that Lowe's has." Silverman says that the way consumers feel about a brand accounts "for up to 80% of the decision to shop at a particular store." Brand plays a much lesser role in grocery-store selection, where chains score low in terms of customer loyalty and brand strength. (Whole Foods Market, No. 47, is the lone grocer in the Top 50.) And department stores didn't score well because of their financial woes. Interbrand Design Forum computes its ranking by combining how much chains are likely to earn in the future with its valuation of brand strength, and reports that the traits the most valuable brands share are clarity of purpose, a relevant shopping experience, delivering on the brand's promise, and staying consistent over time. Consistency during a period of economic flux is tricky, he concedes. Target, for example, which is No. 4 on the list with a brand valuation of $17.1 billion, recently launched a TV campaign emphasizing the price of specific goods - a first for the company, and a major departure from its image-driven advertising history. With some 96% of Americans able to recognize its bull's-eye logo, the brand has some wiggle room. "Every brand management decision involves a bit of a trade-off," he says. "In this case, the company is trading off a little brand equity to generate short-tem traffic. It could be a misstep, but it's not going to kill the brand - Target is just spending down some of its brand equity." Like many retail experts, Silverman agrees that the current downturn will result in a shakeout. "Without dedication to brand management, there's going to be a lot of companies exiting the market, and lots of consolidation. But those who are focusing on the long-term brand strategies - not just 'What are we going to do about January?' - are going to win disproportionately," he says, adding that the recession is sparking big brand changes. "We're on the verge of a creative renaissance in brand management in retail. Once they've squeezed all the costs out, stores have to find new ways to get customers to fall back in love with them."
1 Walmart11 EBay 2 Best Buy12 Staples 3 The Home Depot13 Nordstrom 4 Target14 Amazon.com 5 CVS/pharmacy15 Costco 6 Dell16 Victoria's Secret 7 Walgreens17 Avon 8 Lowe's18 GameStop 9 Sam's Club19 Gap 10 Coach20 Tiffany & Co. Source: InterbrandDesignForum
By Todd O'Donald, co-founder and managing director, ecomii.com As part of its commitment to the environment, Coca-Cola recently announced that its landmark Times Square billboard is going green along with 29 neighboring billboards. The 30 billboards will be drawing on wind power, which would be the equivalent of powering 38 households for a year. On face value, it is difficult to think of the bright Times Square lights and multi-national Coca-Cola coming together for a meaningful green conservation initiative. Is this a turning point for major consumer marketers or another case of greenwashing? Greenwashing is defined as a form of corporate misrepresentation wherein a company will present a green public image and publicize green initiatives that are false or misleading. For instance, a company might release misleading claims or even true green initiatives while privately engaging in environmentally damaging practices. For Coca-Cola's part, it is making meaningful strides in its environmental stewardship particularly in its water conservation initiatives around the world and recycling campaign here in the U.S. The Times Square announcement coincides with the new Coca-Cola campaign: "Refresh. Recycle. Repeat," which supports its long-term goal to recycle or reuse 100% of its aluminum cans and plastic bottles in the U.S. By highlighting and promoting its early green efforts, Coca-Cola is breaking new ground for multi-national consumer packaged goods companies. For some time, corporate social responsibility initiatives were confined to annual reports and PR departments looking to counter negative presence. Marketing departments have historically been weary of promoting them out of fear of opening Pandora's box. Coca-Cola's Times Square announcement showcases its leadership and also signals that companies are evolving to current trends and consumer demands. To a large part, this shift in emphasis can be attributed to the emergence of a mainstream conscious consumer who is grappling with the same challenges corporate America is facing albeit on a much smaller scale. Over the past few years, consumer attitudes have shifted toward the environment. There is increased concern among consumers about the long-term consequences of their actions on both their health and the environment. Conscious consumers are concerned about global warming, the environment, the health of their families, the price of gas and dependence on foreign oil as well as their personal finances. They shop at Whole Foods in pursuit of natural and organic products and are creating a greener home but have not yet traded in the SUV for the hybrid or mass transportation. These little hypocrisies have not just let them be tolerant of corporate America but let them evaluate their green deeds in a positive light. Conscious consumers appear to acknowledge that although it is not ideal, it takes time for mainstream social consciousness to take root. This emergence of a mainstream conscious consumer is reshaping corporate America's sustainability efforts as well as the way it promotes them. According to a 2008 DoubleClick Performics Survey, 60% of consumers say it is either extremely important or very important for companies to be environmentally conscious. For its part, savvy marketers such as Coca-Cola are responding by doing more and saying more. As environmentally conscious consumers, we are frustrated by the time it takes for change, both at home, within business and within government but we applaud the efforts of all who are marching in the right direction and doing more. In this case, it's Coca-Cola making a meaningful difference. Who's going to be next? Todd O'Donald is co-founder and managing director of www.ecomii.com, the leading 'green' lifestyle destination on the Internet. ecomii is a credible and comprehensive resource for answers on green living and a social network for consumers in pursuit of a better, more sustainable life.