The last of our selection of keynote and speaker summaries from the 2007 Outdoor Industry Rendezvous, hosted by Outdoor Industry Association in Vancouver, Wash., focused on understanding consumer buying habits to compete in the market, future trends of the 21st century, developing a systematic approach to land preservation, guidelines for doing business in India and marketing to U.S. Hispanics.
>> Keynote: Today’s Consumer is a Moving Target
Marshal Cohen, The NPD Group
Brand loyalty has gone by the wayside and consumer-of-the-moment rules, according to Marshal Cohen, senior industry analyst for The NPD Group. To compete in the market and entice consumers to buy, manufacturers and retailers alike need to connect with them, understand their buying habits and anticipate their every move.
“Keep pace with consumers by looking and understanding where they’re spending money,” Cohen said.
From his research, Cohen said five primary reasons why consumers don’t buy are:
• No. 1: Style
• No. 2: Size/fit (“That should never happen.”)
• No. 3: Price too high
• No. 4: Staff issues
• No. 5: Too busy (“Consumers aren’t too busy to shop, but won’t wait for a special order.”)
“Size and staff issues are as important as not having a style in the store,” he added.
Cohen added that everyone in the supply chain is responsible for the consumer getting the entire message about a product. “You can’t just rely on the retailer to get the message through alone.”
The biggest opportunity in the outdoor industry is the new woman of 2008, Cohen said. Fifty-one percent of adult women are single — 10 percent of whom are widowed. That figure has jumped 4 percentage points, which Cohen noted was a dramatic lift. Single women make 35 percent of purchases in the United States.
“You need to act on this momentum,” he said. “Where are women bonding, getting together? Do some guerilla marketing to attract them. You need to catapult events like hiking and bike riding clubs to attract them.”
Also, Cohen said it’s time for retail to get out of the traditional calendar year thinking when carrying product. On his travels, he’s noticed Christmas items as early as August, pushing other product categories off the shelves so customers are unable to find them.
“We need season-less merchandise. Consumers don’t look at a retail calendar when they want to buy certain things. It’s been pushed so far early that it is out of sync with the consumer.”
The industry needs to understand the consumer dynamic and how it’s changed to keep the outdoors front and center with consumers, he said.
“Lifestyles are changing more rapidly than ever before. Stability is needed, but an element of change is also necessary. You need to have both,” he said. “Have the staple item available, but update it and explain why. Help consumers understand. Balance has to be done to sustain your existing customer base.”
Today’s gadgets now have a multitude of accessory options to choose from, allowing consumers to build on what they bought. Studies have shown that the top two products women are attracted to buying are jewelry and chocolate. Verizon released the Chocolate phone and it’s now the No. 1 seller among women.
Cohen asked, “Where’s the chocolate in everything you offer?”
Drawing on more than 25 years of market research, Cohen has developed a plan for reaching customers. The 5E approach delivers the tools to rethink your business, marketing and sales strategies, and leverage upcoming consumer trends.
• Educate: It’s critical that everyone affiliated with an organization understands the company’s mission — what it does, what it stands for and what the goals are for the year. This not only applies to the internal team but also to external distributors and retailers — basically anyone who comes between the product and the consumer. In turn, they can educate consumers rather than just sell to them.
• Explore: Learn new ways to communicate with the marketplace by studying consumers. For example, younger consumers don’t have their own money yet, but influence their family’s buying habits. Knowing that, you can adjust your message to communicate effectively across the board.
• Entertain: Make products and the shopping experience fun, not about price. Entertain them to inspire purchase behavior. Connect with consumers through celebrity spokespeople. They add value to an offering in the consumer’s mind.
• Elevate: Many consumers are looking to step up and own the next big thing. Obsolescence is making upgrades more important. Also, elevate your brand through involvement in the community. Show that you care. Let consumers respond by endorsing your product by purchasing it on the basis of that relationship.
• Evaluate: Lastly, the 5E’s of marketing can only come together when you evaluate the performance. Take the time to make sure all the links are solid. Determine if the marketing program is working effectively or is in need of modifications. But be patient: Don’t cancel programs that haven’t had time to affect the brand or product.
>> Keynote: Future Trends of the 21st Century
Jeremy Rifkin, The Foundation on Economic Trends
Jeremy Rifkin is looking to the outdoor industry to join the movement, as he calls it, to “refashion the world.” In his keynote presentation, “Future Trends of the 21st Century,” he provided a big-picture analysis of the major ecological challenges of the 21st century and the initiatives that will need to be put in place to address them.
“Climate change is the most important issue. It’s affected the entire chemistry of a planet — that’s power,” he told the audience.
Rifkin envisions the dawn of a new economy powered by hydrogen that will fundamentally change the nature of our market, political and social institutions, just as coal and steam power did at the beginning of the industrial age.
“The essential technology to help the Third World take off is electricity. People talk about a connected world, but one-third of humans have no electricity. They’re powerless in the global economy, literally,” he said. “Globalization failed because it didn’t bring energy to the masses.”
Rifkin added, “This needs to be coupled with environmental priorities such as clean water and access to land, at least for subsistence; everything else is secondary.”
Every government will need to explore new energy paths and establish new economic models with the goal of achieving as close to zero carbon emissions as possible. The creation of a renewable energy regime, partially stored in the form of hydrogen, and distributed via smart intergrids, opens the door to a Third Industrial Revolution, he said.
“Hydrogen has the potential to end the world’s reliance on imported oil, as well as dramatically cut down on carbon dioxide emissions and mitigate the effects of global warming,” he added.
Commercial fuel cells powered by hydrogen are just now being introduced into the market for home, office and industrial use by Hitachi, Toshiba and other companies. Also, manufacturing and service-related companies are just beginning to introduce stationary fuel cell power plants to provide back-up generation during periods of peak load, when the price of electricity on the grid becomes too expensive, or when the grid can’t keep up with demand surges.
The hydrogen economy makes possible a broad redistribution of power, with far-reaching beneficial consequences for society, Rifkin said. In the new era, businesses, municipalities and homeowners could become the producers as well as the consumers of their own energy.
Rifkin summed it up by saying, “It’s about the biosphere and re-healing the planet.”
>> Keynote: Children and Nature – Two Passions, One Big Voice
Charles Jordan, The Conservation Fund
Charles Jordan, chairman of The Conservation Fund, is a passionate man and he brings that passion into his speaking, especially when he’s talking about kids and land preservation.
“We need to make this world a better place for our children,” he said, “but what can we do? What can I do? We’re not organized. We’re putting money out there but accomplishing nothing.”
In his decades-long career in public service, Jordan spent 14 years as director of the Portland Bureau of Parks and Recreation. He said the country has 6 million acres of land that the urban parks and recreation preserves for children and future generations, but laments their non-involvement.
Jordan added that the United States hasn’t accomplished a major undertaking as a country since President Kennedy’s push to get a man on the moon in the ’60s.
“We look for the results too quickly. We don’t have stick-to-it-ness,” he said.
Land preservation needs to be a systematic approach, he pointed out. The goal of today’s generation is to build a solid foundation, so the next generations can work on the walls.
“We need to prepare kids for responsibility, to take our seats. If everyone sticks to it, it’ll be 60 to 90 years before the roof is built,” he said. “We have to accept the fact that we may not see the end.”
Jordan emphasized unity and collaboration between organizations to achieve success. He said groups need to analyze how they are going to work together and share resources rather than hoarding funds for their own programs. “We can’t do separate programs and work alone,” he said. “Work together. Don’t compete against each other.”
In addition to the above keynotes, the Rendezvous had a number of breakout sessions. Here is a selection of summaries:
>> Road Map to India
Brian Abrams, Row Capital
India is considered an immense emerging market with many risks and rewards for those looking to enter. A land of contrasts, blending ancient and modern sensibilities, India is the second-fastest-growing economy after China.
Retail is transitioning from old to new, with estimates saying that the retail sector will double in the next 10 years — hitting $635 billion in 2015 from $300 billion in 2006, Brian Abrams told seminar attendees. While 15 percent of U.S. retailers are traditional mom-and-pops, in India it is 97 percent. In 2000, there were no shopping malls, and now there are only about seven. It also does not have any outdoor equipment superstores, but Abrams anticipates there will be in the next five to 10 years.
While Indians used to save their money, the growing middle “consuming” class — which tripled in size in the last five years — is now spending and consuming. There are 75 million consuming class households, with another 78 million “climbers” striving to be a part. Consumers are both brand and price conscious, buying on extremes — paying high prices for quality products or as low as possible for mass or cheap goods.
Abrams’ recommendations for retailers and suppliers who are interested in entering the market are:
1. Start now.
2. Start small.
3. Develop relationships.
4. Test and learn.
5. Position current products at the high end (i.e., focus on the tourist market until the domestic market develops).
6. Re-purpose low-end products and eventually develop new products for the Indian market.
Abrams noted that outdoor sports market as the industry knows it does not exist in India, creating opportunities and challenges alike. He emphasized starting small, learning the market and growing from there.
He suggested three ways a company can get its foot in the door:
1. Set up a 51-percent owned single-brand operation with a partner. This option builds brand awareness right away, and lays the groundwork for a long-term presence and 100-percent ownership. The caveats are it requires the right partner and government approvals, and can be time consuming.
2. Form alliances with local partners or franchises. Again, this builds brand awareness right away, and shortens the length of time to attain a retail presence. But it requires careful selection of partners or franchises. It also creates potential competitors later when FDI (foreign direct investment) opens up.
3. Set up a wholesale operation. With a wholesale operation, the government allows 100-percent FDI. It also allows extra time to develop a supply chain and “learn the ropes” before entering into the retail market. The drawbacks are it requires strong partnerships with retailers and slower brand development and awareness.
>> Relating Not Translating: How to Market to U.S. Hispanics
Kelly McDonald, McDonald Marketing
As recently as May 2007, a USA Today headline reported the nation’s minority numbers topped 100 million and Hispanics account for nearly half of that growth. Harnessing the Latino market should be on the industry’s radar because as speaker Kelly McDonald put it, it has the three L’s: large population, lucrative and loyal.
According to the U.S. Census, there were 38.8 million Latinos in the United States in 2003, and 56 million expected in 2010. By 2020, it’s projecting there will be 80.4 million. Translation: One in five U.S. residents will be Latino, and the segment will represent 20 percent of the U.S. population. While the size of the Asian and African-American communities will be static, the white population is expected to decrease 6 percent to 60 percent of the U.S. population.
According to a Strategy Research Corp. survey that McDonald cited, the average household income for Latinos is nearly $46,000. They’re considered a middle class with significant purchasing clout who are making decisions every day on how to spend their money. Additionally, they are very brand loyal, according to another study by CNW Marketing Research that found nearly 65 percent will stay with a brand or service they have had a good experience with.
McDonald emphasized acculturation over assimilation. With acculturation, Latinos are acquiring a second culture while retaining their first culture, rather than forfeiting their culture for another. She identified four unacculturated and acculturated categories:
>> Cultural loyalist (unacculturated): foreign born, recent arrival, Spanish dependent, traditional values
>> Cultural embracer (unacculturated): foreign born, U.S. is home now, Spanish preferred, aspirational
>> Cross culturer (acculturated): U.S. born, first generation, bilingual and bicultural, professional, in touch with roots
>> Cultural integrator (acculturated): U.S. born, second and third generation, English preferred, Latino proud, retro-acculturation, influential
McDonald said the two groups to target are the cultural embracer and cross culturer because they are open to being a part of the U.S. culture, while the cultural loyalist has little interest and the cultural integrator is already onboard.
McDonald highlighted key strategies to cultivate Latino customers:
1. Staffing is key: Recruit bilingual staff members
2. Be “Latino ready”: Build an infrastructure to support Spanish-speaking customers, like having employees who speak Spanish, voicemail and signage in Spanish, as well as marketing materials.
3. Get the word out: Promote your business or product in Spanish, participate in grassroots events and partner with community groups.
4. Engage Hispanic youth now: 90 percent of outdoor participants were introduced to outdoor activities before the age of 18. Think of the potential when 46 percent of the Hispanic population is under the age of 25.
5. Use aspirational role models and images of Latino athletes.
6. Play to Hispanic heartstrings: Promote health to Hispanic mothers — they are the family’s gatekeepers. Stress family fun as Hispanics enjoy multi-generational activities. Emphasize Latino friendliness — hire Hispanics and put out the welcome mat.
McDonald wrapped up by saying the growth of the Hispanic market is not a fad and to pay attention to shifting demographics of your community.
“Spanish-speaking consumers will become more discriminating and use only those businesses and products that are more sensitive to their linguistic and cultural roots,” she added.