Dealer-Chic: Has the consumers perceptions and expectations on “deals” changed and where is this trend going?

Everyone loves a good deal yet some people are more willing to seek them out than others.  While I am not opposed to sales in general, I personally hate sales racks and very rarely seek out coupons. I dislike the search.  I automatically assume there is a reason it is on sale – ugly, out of season, damaged, and/or really ugly.

Am I an anomaly? Do most people enjoy the thrill of finding something great hidden under a disorganized chaotic mess of clothes?  The success of retailers like TJ Maxx, Ross’s, Nordstrom Rack, and outlet shopping malls seem to point to yes.  I am an anomaly. 

Either way, my preferences for “deals” are changing and I am fascinated by the reasons behind this change.  Social norms have changed.  It is “cool” to find deals and use them.  We share them with friends, family, and strangers via the web.  Why is getting a deal all the rage?  What need did this fill and how did this need come to exist?  How did technology, the financial crisis, and social media, among others, play a role?  Is it a need due to cost or a fundamental change in how we perceive the consumption experience to be?  How do expectations, options, and information play a role? For this paper, I want to understand the reasons behind this trend and understand how companies can leverage it in the future while maintaining brand reputation and profitability. 

While I am still trying to focus my exact topic, some questions I would like to research further include:

History:

Transition over last 10 years

How technology has played a role?

How did customer insights influence the transition?

            Demographics of users

            Technology being used

Reason behind the shift

Future State:

How will brands manage expectations and meet needs while staying competitive?

What type of role does social media play in influencing seeking and using deals?

How does a company create brand loyalty with these deals?

Are these sought out deals or reactionary/last minute decisions? Compulsive?

A few articles I’ve read discuss the use of flash sales – ''Selling a product at a discount everyday is not good for brands. If everything's 20% off everyday, then the right price is 20% off,'' said Hurley. ''Because it's limited time, because sometimes it sells out, it has the perception of scarcity.''

http://money.cnn.com/2011/05/26/smallbusiness/flash_sales_ideeli_hautelook_gilt/index.htm. 

A report from trendwatching.com discusses in detail the reasons why “dealer-chic” will grow substantially over the next few years.  These reasons include people wanting more for less, the medium and ease of accessing these deals, and access to information allowing consumers to know and want the best.

http://trendwatching.com/trends/dealerchic/

Research to continue....

This blog entry will discuss how a company could gain insights from potential customers through the customer’s use of social media.  To focus this discussion, I will look at a specific type of user, and, by understanding how this specific user interacts with social media, try to extrapolate how a company could tap in to important customer insights.

Get to know the social media user:

Ashley is a 30 year old female who spends extensive time on different social media sites.  The main reason she is at these sites is to consume information.  Ashley very rarely shares information.  Depending on the type of information she is CRAVING, she will visit either Facebook, Pinterest, LinkedIn, Foursquare, or Spotify. 

If Ash is looking to see what her friends and acquaintances did over the weekend, she will browse the Facebook newsfeed.  This is where most of her “social media” time is spent. If interested in a particular post or picture, she might click in to the person’s profile to get more information.  She rarely uses Facebook to consume branded content – it’s mostly about seeing what her friends are up to.  That being said, if a friend posts an article or likes a brand, she is probably more apt to click in and explore.  Ashley uses Facebook multiple times every day on all of her devices: iPhone, iPad, and laptop.

She LOVES Pinterest to pass the time and get fun ideas for recipes, outfits, and decorating.  She also gets to see what her friends like and what is trending on the overall post.  The “pins” provide inspiration and influence some of her clothing and decoration style.  Mostly, this is a place she can ASPIRE to make amazing food, buy adorable outfits, and plan the perfect wedding.  She browses Pinterest once a day usually from work or on her iPhone if bored.

LinkedIn is for making connections on the professional side.  Ashley uses it to stay connected with old co-workers and new business contacts.  She only really uses LinkedIn when she is looking for a job or thinking about making a career change.  It could be months in between logins.  She only uses LinkedIn on her laptop.

A new user of Foursquare, she really likes the idea of getting deals when she “checks in”, but doesn’t really like sharing her location with people, so keeps this option private.  She often forgets to use the application on her phone but is really trying to remember to take advantage of the deals.  When she sees her friends doing it, she is more likely to follow suit.  She only uses Foursquare on her iPhone.

Finally, Spotify, which is integrated into Facebook allows her to see what her friends are listening to and share playlists.  She loves to use this as a source for finding new music, using people with similar tastes in music as a resource. She only uses Spotify on her laptop a few times a week.

Gather insights from behavior?

This type of user is particularly hard to gather insights from because she is such a passive user (ie. doesn’t post, comment, like etc. with frequency).  Since she spends the majority of her social media time consuming information on Facebook, I would want to understand the demographics of her friends, and (provided she updates her profile) where she is from, what type of interests she has listed, music she enjoys (Spotify), her education and work experience, and her relationship status.  In relation to these items, it would be nice to track how these change over times.  Did she get married? Have a baby?  Get divorced? Move?  Buy a new house?  Get a promotion?  A company could use Pinterest to see what specific items she likes to understand what is important to her.  Is she only interested in clothes or does she post pictures of wedding dresses, houses, and cute babies?  Does she like motivational posts about losing weight or exercise?  LinkedIn could be used to understand what motivates a person professionally or to estimate income levels.  From this information, insights about her life, motivation, drive, among others, could be gathered.  One thing to be mindful of is who she portrays on social media versus who she really is. 

Key Words: Professional, family, risk averse, methodical, purposeful, proud

Persona
Gary, a 66 year old recent retiree, was born and raised in Montana, residing there nearly his entire life.  Between being a ski bum in Sun Valley, getting an MBA, and building his own financial services company, Gary has developed a wide range of interests.  A love for the outdoors combined with his desire to be his own boss, he settled in North West Montana in 1975– trading big city money for quality of life.

Think and Feel?
Gary is transitioning from working 60+hours a week for the last 40 years to less than 15 hours a week managing his personal investments.  In addition to being worried if he will have enough money to last through retirement, he is worried about how he will keep himself occupied and entertained without work.  After selling his business a year ago, he was supposed to fully retire however he continues to go into the office each day to "wrap up the loose ends." Besides his two daughters, work has been his life.  He plans to travel, ski, hunt, and read more.  He also plans to visit his daughters every chance he gets.  He has always lived a very conservative lifestyle, never caring about what type of car he drove or what brand of clothes he wore.  He values time with his family and experiences over material items.  He also worries greatly about his daughter’s happiness and success in life.  When his daughters are happy, he is happy.  When his daughters are stressed out or upset, he is stressed out and upset. 

See?
Gary sees a world quickly changing before his eyes.  While fascinated with all of the change, Gary has a hard time with it and thus has struggled keeping up with new technologies – computers, email, cell phones, iPods, digital camera etc.   He enjoys using his digital camera and iPod, but the pictures never seem to make it on to the computer and his iPod hasn't been updated in years. He has always been the last to adopt, just getting his first cell phone a few years ago.  He still struggles with checking his voice mail and has no idea how to text.  Frustrated and confused by it all, he feels much more comfortable doing most things the “old way” - ie. using a phone book rather than "googling" a phone number. The volatile economic environment he sees also makes him nervous, unsure what the future will hold and how it will affect his life.  Day to day, Gary lives a very regular life.  He gets up each morning, makes the coffee for his wife and himself, enjoys a piece of toast and goes in to the office.  He goes to the same place for lunch he's been going to for the last 20+ years.  Here, he sees old friends and business partners - although none of these relationships are particularly close. 

Say and Do?
Gary is very professional and conservative – one could describe him as an introvert.  He prefers eating in with his wife, enjoying a gin and tonic, salad, and steak, to going out to eat at a restaurant. He runs a three to four times a week and gets regular health evaluations.  Overall, a very healthy person – he does not smoke or drink in excess.  He is a very caring and loving father, checking in with his two daughters on a regular basis.  He has always expected a lot out of himself and has pushed his daughters to be the best they can be.  He has worked hard for what he has today and thinks people should do the same.  He prefers to let his wife pick out his clothing and shop for groceries, not out of laziness but apathy.  He dresses professionally for work and casual at home.  He prefers quality over quanity. 

Hear?
Gary reads the Wall Street Journal and the Economist and watches Fox News and MSNBC.  He takes all of this information with a grain of salt, preferring to do his own analysis.  While he listens to his friends and family, he prefers to make decisions only after a significant amount of personal research has been done.   

Pain Points?
Pain points for Gary revolve around finances and family.  While he has always lived a conservative life and has substantial savings, the economic environment still makes him nervous.  Seeing his clients nest eggs vanish over the last few years has increased his fears of something similar happening to him.  Always a planner, he has a number of back up plans and could downgrade his house if need be.  As for his family, he has always been concerned with his two daughters’ happiness and safety.  He would do anything for them, but as they grow up, he realizes that most things are out of his control, and all he can do is wish for the best.