A Flat Economy presents opportunities for CPG

It’s Earning Season! Not to be confused with the significantly more fun Christmas season, earning season is a time when publicly traded companies report their quarterly earnings. It is also a time for general macro-data. The latest is the US retail sales numbers which reported this week that sales slid for the third straight month, falling 0.5% from May to June.  So does this mean that consumers have just given up? Of course not! A study done by SymphonyIRI, a market research and consulting firm for retail clients, gives us a little bit of insight into the sliding trends. Generation Y (those born around 1983 to the early 1990’s), a group traditionally set with higher than average under and unemployment numbers, is increasingly turning to home treatments bought at your local drugstore instead of more expensive professional services in order to save a few dollars. While this means that aggregate numbers are down it does bode well for many of our CPG clients with this latest trend confirming what many have already known; hard economic times make consumer goods more relevant in the consumer’s mind. While it would be wrong to suggest that recessions are good for business, we will go as far as to say that there is an element of safety in the world of consumer goods.

It’s all about ME!

The first thing they teach you in Marketing 101 is that you need to have a well-defined target market because if you try to appeal to everyone, you will appeal to no one. While I am sure that many of you are currently rolling your eyes this back-to-the-basics lesson may be even truer today. With the growth of technology has come the growth of smarter advertising platforms that have somehow figured out that I like rocking out to Taylor Swift and can serve me ads accordingly. As a new study by EMarketer Digital Intelligence points out, the Canadian consumer is smart. They know that a platform has these capabilities and has come to expect that the ads being served are relevant to them. So at the end of the day does a more personalized campaign make the all-important dollars and cents? This study suggests that it does with 51% of consumers saying that they would be more likely to purchase a product after viewing a more personalized ad. Sure, 51% isn’t an overwhelming majority but when you compete in such a globalized market can you really afford to discount it?

Have you seen a better return on your more personalized campaigns? Feel free to share your thoughts below!

The Smartphone reigns supreme!

Does anyone remember when they sat down at a desk, waited 10mins for the computer to start-up and another 20mins for the dial-up connection to connect you to the internet? For some of our younger readers, yes, this actually happened and you know what? We actually considered this cutting edge! Technology seems to change as frequently as the weather as a new study by state-run CINIC and reported on by the BBC notes that mobile phones have eclipsed the desktop as the most common method of accessing the internet in China. As with all technology trends there is an underlying driver here. Smartphones are getting cheaper as new players entering the market put a downward trend on prices. This opens up the once elusive market to the vast rural areas of China. There are two issues that arise here. Firstly, we can see that people are not all that different based on a very similar study reported on by CNN in 2010 that notes increasing mobile internet usage for Americans, especially among younger users.  So what does this mean for retailers? It means that at a fundamental level, consumers have the same wants. They want to stay up-to-date in a manner that is convenient and cost-effective regardless of their geography. The second issue here is how advertising revenues will be affected as there has been concern over the ability of many social media sites to deliver and subsequently monetize advertising on its mobile platforms. Whether this remains an issue for much longer may be up for debate as Twitter has recently seen some success via cracking the elusive problem. In the end, as with many markets, competition will drive innovation. As along as a demand exists there will be those looking to capitalize on it.

That’s all for this week. Be sure to follow us on Twitter @ActiveIntlCA