I went shopping yesterday. Not something I do very often I have to admit. And something very interesting happened. Everywhere I went, absolutely everywhere, was offering me something for nothing.
In Boots, I was given two vouchers - one offering a lot of free loyalty points if I spent just £35 in store, the other was a money off voucher for a range of products. In addition to this, the purchase I made was a 3 for 2, and the young girl at the checkout took three minutes to run back to the shelf for me to get me my "free" paper gift bag that goes with them. God forbid I should miss out.
Fast forward to Tesco, and I'm now the lucky recipient of two (not just one) money off petrol vouchers. My husband was momentarily tempted by a "2 for..." offer in Tesco until I pointed out to him that "2 for £1.20" wasn't that great an offer when the price of the individual product was 63p. A 6 pence saving: hold me back.
These kind of heart warming rewards from national retalers are just fine and dandy. But it worries me that they just aren't getting it.
These offers are primarily about survival and driving cash flow income to a business. The short term loss, they believe, will ultimately be offset in the long term by the gain of keeping a customer for life. But is there such a thing anymore? Marketers had better hope so. For their sake.
There is one stark fact that marks out this recession from others: the market has changed considerably.
While businesses have had their heads down trying to figure out whether to stand still, give up or move forward, the market has marched forward at an alarming pace. Shifting it's media consumption irreversibly, changing its spending habits forever, re-prioritising its needs and altering its consumption patterns.
If you're not sure this is the case, ask yourself the following questions:
Do I buy music from a store in a CD format or do I download/access it in a digital format for a fraction of the price?
Do I access news via a printed newspaper which I've paid for or do I hop online and get it for free?
Do I visit company websites anymore or do I prefer to like them on Facebook and let the information come to me?
Do I buy my train tickets from the station or do I buy them online to get them at a cheaper price (and possibly a first class upgrade)?
Do I go to a travel agents to research and book my holidays, or do I wait for a great deal to come up on Groupon and buy it on impulse?
Do I send big files by email or do I pop them in my free Dropbox?
If you selected the second option for at least two of these questions, you are part of a growing generation of consumers that I like to call The Digitial Dandies.
I call them Dandies because, like a Dandy, they are (in the main) well dressed, educated individuals who are in eager pursuit of interactive leisure activities with high consumption of cultural activities such as music, events, travel, experiences, and quality products. The digital part is just the highly sophisticated mechanism they use to make this lifestyle possible - and at a fraction of the cost.
Digital Dandies want quality news content, but they want it for free. They are prepared to travel on public transport, but don't pay the full price and book online for a discount or an upgrade. They use facebook as a filter, accessing people, companies and offers via streamlined, targetted content that they have pre-selected. They love music, but they don't have a vast collection of CDs - their iPod collection is, however, extensive. They love films, but instead of going to the cinema to watch them they are either delivered by post (on subscription) or by digital download straight to their ipad or PC. They used to be called Early Adopters. They probably still are.
This is a big challenge for traditional retailers and it's clear they are fighting back with a barrage of offers, aimed at consumers like an automatic weapon: some of the ammo might miss but with just the sheer volume, they are bound to get some results.
However, it's entirely the wrong approach. Marketers need to go back to basics on this one and start looking at the market and changing their businesses to fit the new model. Old fashioned consumer research is a must (albeit, we suggest making good use of technology to get the best results....): find out what your customers are doing and follow them.
Successful businesses follow their markets and not the other way around.
