Consumer Behavior

Consumer Behavior

Sean McCoy shares an older but always relevant post on why marketing departments need to align marketing spend with direction. 

The CFO says to the CMO, “Let’s boost marketing spend by 1% this month. Where should we spend it?” The ability to answer that question is true north for Marketing departments in B2C industries.

With big data and analytics radically reshaping the marketing function, CMOs now have the power to answer the CFO’s question almost instantly down to the specific market, message, channel, and product. Today’s analytical tools also allow the CMO to state with accuracy the expected incremental sales and profit from that incremental marketing spend.

That level of analytical prowess and business intelligence is true north for marketing departments. From our experience helping B2C firms with marketing strategy and marketing analytics, some marketing departments are already there, but most are somewhere along the journey. When we look at how Marketing departments can create growth and value now, the immediate priority for many companies is to develop a robust Marketing Analytics capability.

For firms we have seen at the beginning of the Marketing Analytics journey, achieving true north by building a best-in-class ROMI (return on marketing investment) tool and acting on the initial insights improved their marketing effectiveness by 10-25%.

Knowing is half the battle

The first step in this journey is the recognition that the old ways of doing things are fading. The old adage that “half of my marketing spend is a waste. I just don’t know which half” doesn’t hold up today when consumers can be tracked through their digital customer journey and digital decision-making process.

Marketing ROI

The second step is to build out the systems and processes to measure customer acquisition and retention at a detailed level. The entire marketing and sales function, including vendors, agencies, and IT departments must work together to understand and measure the journey; from prospect, through lead and first purchase, and finally repeat business.

 

Key points include:

  • Building systems and processes
  • Consumer behaviors and expectations
  • Tracking the customer journey

 

Read the full article, Marketing’s true north capability, on McCoyConsultingGroup.com.

Umbrex is pleased to welcome Taoufik El Khazzani.  Tao spent 2 years within the Operations practice at McKinsey working within the telecom, hi-tech and automotive sectors. Following this first consulting experience, he joined Vivendi to lead trend forecast and strategy projects in the telecom and media space.

He then decided to add another expertise focusing on the luxury and fashion industries : after a M.S. at Institut Français de la Mode (IFM), he has managed strategy and business development for various brands, large and small. He is always excited to collaborate on projects linked to creative industries

 

Thomas K. Hamann shares a white paper on the sale of cars in Germany and the factors that lie behind the current market situation.

Car dealers in Germany have opened again ca. four weeks ago. But the situation has hardly changed since then; new car sales are still down (Helmut Kluger in Automobilwoche 11/12 2020). Do customers simply no longer want to buy new cars? Or is this due to hurdles that can be lowered by dealers, e.g. through digitization?

#1: People Want to Buy New Cars Again

On March 13, 2020, the German Chancellor Merkel had asked to cancel all non-essential events and to stay at home. As a result, Google searches for the keywords “Auto kaufen” (buying a car) and “Neuwagen” (new car) plummeted massively. In calendar week 16 the first eases of the curfew were announced. After that, the number of those Google searches rose sharply again (Exhibit 1).

On carwow Germany, i.e. a car buying comparison site, the number of new car configurations has been growing again since mid-

 April. In mid-May, a level 20 percent higher than at the beginning of March was  reached  (Exhi- bit 2).

The number of inquiries to car dealers via carwow Germany shows a similar trend. However, they have not yet returned to the level of early March (Exhibit 3).

On carwow, there are two types of inquiries to car dealers—by message or  phone.  Phone calls point to a much stronger buying intention than messages. This is why a high proportion of phone calls is desirable. Indeed, an increasing number of phone calls has been seen since mid- April. The number of phone calls even exceeded the number of messages (Exhibit 4).

 

Key points in this white paper include:

 

  • Changes in consumer behavior since the pandemic
  • Remote sales
  • Digitizing new car retailing

 

Access the full white paper, 5 Reasons New Car Retailing Needs to be Digitized Now, from tkhamman.com.

 

 

Abhinav Chandra takes a look at the forthcoming holiday season to predict how fashion companies will deal with customers’ expectations, and sales decline during the pandemic.

Tackling the dual threat of COVID-19 and climate change; a data-driven action plan for retailers to adapt quickly to changing consumer purchasing behavior.

It has been an eventful few months since we last published our forecast on May 13th 2020. We have seen the slowdown of COVID-19 cases in May/June and lifting of lockdowns, the resurgence of cases, the economy rebounding quickly, but then growth slowing, and everything in between. Unfortunately for the US fashion market, our forecasted 31% year-over-year sales decline in 2020 Q1-Q2, has proved to be accurate with an actual decline of 32%. In addition, the trend so far in Q3 is in-line with our prediction of 21% decline year-over-year. Our latest forecast continues to mirror our May forecast and we forecast 34% decline year-over-year in sales in Q4. The decline is driven by a forecasted spike in COVID-19 cases/deaths and warmer than usual winter with a corresponding decrease in cold weather category sales. These conditions will make for a holiday season like no other. To deal with these conditions, Fashion Retailers and Brands will need to think creatively and act quickly to survive.

 

The article includes:

  • Sales statistics for the past year
  • Actions fashion companies should take now
  • Preparing for e-commerce order delivery challenges

 

Read the full article, Fashion Companies’ Guide to Navigating an Unusual and Unprecedented Holiday Season, on www.predictsysinc.com.

 

 

Chris Moe and Jonathan Willbanks share facts, stats, and observations on Amazon during a sixty day period of COVID-19.

The last couple weeks have been slow on Amazon – flat to slightly down for most brands. In a move that’s probably related, Amazon has removed stocking limits, turned coupons on, and started accepting deals. This was faster than we expected and we suspect grocery will be entirely “ungated” soon.

What we have been seeing:

DEMAND – slower for May – flat to down across grocery. Most promo levers now active, some new ad formats

Sales have been flat to down (5-15%) for the first two weeks of May. This seems to span many grocery categories, including the formerly white-hot baking category. The trend is still up vs. Feb, but demand seems to be softening.

~5% of sales have shifted back to younger age groups (<45 years), as it was before COVID. 

Coupons are live again, and deals are being accepted. We mostly see deals available for early June, though a few brands have been able to do earlier. (Note: Vine is still inactive.)

Ship times estimates have continued a slow march back to 1-2 day speeds, although significant variation still exists. 

The window to accept Prime Day deals was extended to early June. We still think Prime Day will be at earliest in August or later (maybe even folded into Black Friday). 

New ad formats: enhanced sponsored brand ads display a second image, and sponsored brand campaigns can now target ASINs. We’re testing both as incremental levers. SC ads are now live in Amazon Advertising (formerly VC). 

A number of our clients had their items suppressed for using ‘flags’ on the main image that called out size or quantity. This affected Seller Central accounts only – Vendor was unaffected.

 

Insights shared include:

  • Supply / logistics
  • What grocery brands should do on Amazon
  • Future outlook

 

Read the full article, Observations on Amazon amidst COVID-19 – 60 Days, on the Cartograph website. 

 

 

Cheryl Lim Tan takes a look at how the COVID-19 virus has affected what consumers are buying after the initial panic purchases.

Let’s see how the stay-at-home economy is stacking up.

The American consumer has until very recently, powered close to 70% of GDP. As we settle into what may be a few months of a nationwide stay-at-home order due to COVID-19, a very different looking consumer is emerging — in yoga pants, and in desperate need of a haircut / dye job / triple latte.

So yes, we already know people have stocked up on toilet paper and hand sanitizer. But after the initial panic-buying wears off and we settle into this coronavirus-induced new normal, what else will this new consumer be purchasing?

 

The hierarchy of needs include:

  • Survival
  • Services
  • Home Office/School
  • Self-entertainment
  • Self-fulfilment

 

Read the full article, What is that socially-distant consumer buying these days?, on Medium