Have the dynamics of your marketplace changed significantly? If you don’t regularly research your consumer base, you won’t know. Consider the demographic shift in married people versus singles.
According to Unmarried America, a nonprofit information service for single Americans, marriage is no longer the dominant trend. There are 89 million single Americans over the age of 18. Half of all households are unmarried. In fact, the majority of households in 18 states and 300 cities are unmarried. UA statistics show that more people are delaying marriage or opting to cohabitate, and the trend toward living alone continues. Considering that high-end disposable income comes from households with no children, single households, or dual-income unmarried households, jewelers who concentrate on bridal sales are missing a big part of the market.
A look at the jewelry self-purchasing habits of 3,263 Jewelry Consumer Opinion Council e-panelists in July revealed that about 40 percent of the 1,300 unmarried respondents believe fine jewelry is most often marketed to couples or married people. Fortunately, 78 percent of singles say they’re comfortable buying jewelry for themselves in a jewelry store. About 65 percent of single respondents buy jewelry for themselves whenever they see something they like, 39 percent “just because,” 29 percent as a reward, and 16 percent as a fashion accessory. Popular self-purchase prices range from $100 to $1,000. (Visit www.jcoc.info for the complete survey.)
A look at the crash of a dot-com company illustrates the importance of consumer research. Pets.com went out of business 21 months after raising over $82 million in an initial public offering. In 1999, the year it went public, it lost more than $61 million. It spent $21 million in advertising to earn $5 million in sales. The convenience of delivering pet food and supplies directly to consumers was outweighed by customers having to wait days to receive orders. Also, pet food is available at grocery stores, so there was no compelling reason to shop online.
Until recently, consumer research has been expensive and time consuming. On average, pretesting a new brand complete with product, point-of-sale materials, unique selling propositions, distribution, and price could take many weeks and cost between $10,000 and $35,000. Now, online research can be done in a fraction of the time and for 5 to 20 percent of the traditional cost.
Consumer research involves surveys, critical analysis, demographic balancing, predictive modeling, etc. Brands are the ideal research subject. They are product with a story. Testing their attributes, point-of-sale collateral, logos, color schemes, product styles, qualities and pricing, distribution streams, launch sequence and dates, public relations themes, and advertising campaigns can be done and tracked with benchmark studies. The cost of keeping a brand alive and driving sales has skyrocketed, so it’s critical to ensure all decisions that lead to product sales are correct.
One retail client, a chain jeweler, wanted to pretest a new store concept—jewelry repair shops—with regard to location objectives and unique selling propositions. Based on our research, the jeweler adjusted its thinking on what the store should be. The initial concept did not include selling jewelry, but consumers indicated a desire for a limited jewelry inventory. The company decided to heed the research, and the jewelry has been a success.
Consumer research clarifies concepts and uncovers new ideas. It allows companies to better understand the desires of their ever-changing customer base as well as home in on what’s unique about their products and services to more effectively sell their merchandise in the marketplace.