Treasure Hunt Inside the Mind of the New Consumer

by Silverstein, Michael J.; Butman, John

• ISBN13: 9781591841234
• ISBN10: 1591841232
• Format: Hardcover
• Copyright: 2006-05-04
• Publisher: Portfolio Hardcover

Summary

The essential follow-up to the BusinessWeekbestseller Trading Up A BMW in a Costco parking lot? A working class family with a 50 inch plasma TV? A 27-year-old Japanese administrative assistant with a collection of Coach purses? An 87-year-old retiree in Ohio exclaiming the value of Aldi brand honey? What's going on in the mind of the new consumer? Today's consumers can seem impossible to understand, and even harder to please. For instance, the average mall shopper will spend her $100, then leave when she hits that limit. She'll probably buy shoes rather than clothing, because she doesn't want to think about her dress size. And the store most likely to get her money isn't the one with the nicest display or the deepest discounts... it's the one closest to her parking spot. In his research with dozens of leading companies, Michael J. Silverstein has interviewed thousands of customers, extracting fascinating patterns about what really drives their purchase decisions. His first book, the acclaimed bestseller Trading Up, has taught a generation of marketers about the "new luxury" phenomenon, and why consumers will happily pay a steep premium for goods and services that are emotionally satisfying, from golf clubs to bathroom hardware to beauty products. But Trading Uponly revealed part of the story of the new consumer. The same middle class consumers who are happily trading up at Victoria's Secret and Panera are going on treasure hunts at Costco and Home Depot. And they are often getting as much emotional satisfaction in the discount stores as in the luxury stores. Silverstein's new book explains how the new consumer approaches bargain hunting, and how even the most mundane shopping ? for things like paper towels and pet food -- have become an adventure rather than a tedious chore. It turns out that, in just about every consumer category, both the high end and the low end are growing and innovation rich. Many middle class consumers gladly spend $5.00 a day for a vente Starbucks latte; others spend 40 cents a day on home brewed coffee, feel good about their frugality, and save up the difference to buy Apple's newest Nano. Treasure Hunt explains the success of companies as diverse as Dollar General, LG, H. E. Butt, Ebay, Commerce Bank, and Tchibo. Beware: in our bifurcated global market, businesses need a clear strategy for aiming high or low, while staying away from the treacherous middle, where so many have recently stumbled. If your offering isn't exciting enough to inspire trading up, but not enough of a bargain to satisfy the treasure hunters, you'll have no emotional connection with your target audience. And, like General Motors or Sears in recent years, your tried-and-true marketing strategies will go into a severe stall. Treasure Hunttakes us into the homes of real people making real decisions, and into the CEO's offices of innovative companies finding new ways to accommodate them. Written with the same flair, empathy, and intelligence that made Trading Upan instant business classic, this book is an essential guide to the moods and habits of the constantly changing consumer.

Author Biography

Michael J. Silverstein is a senior vice president of The Boston Consulting Group and the coauthor of the business bestseller Trading Up. He works with leading companies around the world.
John Butman is the author of more than a dozen books.

Table of Contents

To the Reader	vii
Introduction	xiii
How I came to write this book.
The story of Lillie and the cockroach.
Why listening to consumers is so important and such an underdeveloped skill.
The main thesis: the market is bifurcating and the middle is becoming a wasteland.
1. The Bifurcating Market	1	(25)
The story of the Nelsons and their "Daewoo Christmas."
A dynamic market meets an unpredictable consumer: confident, savvy, tight with a dime, indulgent, and self-soothing.
Why people trade down.
Growth at both ends of the market.
Trading down: a global trend.
How Kraft faces death in the middle.
Strategies for winning.
Why you shouldn't wait to respond.
2. The New Middle-Class Consumer	26	(35)
The story of the Montforts and their life of trade-offs.
Who is in the middle class and how did they get so much power?
Lifestage spending.
The pivotal role and influence of women.
The value calculus.
The four emotional spaces.
How to listen for actionable insights.
The want list.
When dreams go on hold.
3. Cheap Is Good	61	(27)
Or, as they say in Germany, geiz ist geil.
The story of Hilda Schmidt and how she stockpiles.
Hard discount as a threat.
How Aldi grew to become the leading hard discounter in Europe.
The rise of the dollar store in the United States.
Dollar General is funky, but people love it.
How everyday-low-price retailers are fighting back.
Not all consumers trade down; some go without.
The story of Betsy Vitalio and the three sources of financial vulnerability.
4. Spanning the Poles	88	(20)
My journey to Korea to meet the LG cadets.
How LG started at the low end in home electronics and now spans the poles of high and low ends.
The hotel industry transformed by 9/11.
The story of Best Value Inn, the fastest-growing hotel company in the industry.
Marriott, a late entrant but well-endowed participant in pole spanning.
The story of Jim and Anne and why they had to sell their piano.
5. All Treasure, All the Time	108	(24)
Stephanie's scarf addiction.
eBay is the world's greatest treasure hunt.
Win-win economics.
A new language of retailing.
The one and only Tchibo: market power from merchandising.
The many different types of treasure.
6. When the Calculus Shifts	132	(29)
Why an attractive, intelligent, educated thirty-year-old woman like Lauren James worries about ending up alone.
How the young, single "office ladies" of Japan wield disproportionate influence in setting consumer trends.
Making the leap at Bath & Body Works from "outer" to "inner" beauty and from decline to growth.
The infallibility of the value calculus.
7. Ina Pickle	161	(23)
Jim Cantalupo and the quest to remake McDonald's.
Understanding the experience train.
Mom and the "veto vote."
How an explicit and directed response to consumer dissatisfactions and market shifts can lead to a big, bold breakthrough plan.
In-N-Out Burger—McDonald's nemesis?
8. Nickels and Dimes	184	(24)
Arnold and Molly are tight with a dollar and proud of it.
The Fleet juggernaut meets the Commerce Bank insurgency.
The financial trials of Bob and Joyce.
Brad Warner directs FleetFinancial's makeover into a more nimble, consumer-centric bank.
Money is at the root of fear and insecurity.
9. Left in the Dust?	208	(18)
How Peter Kim got left behind.
Trading down to get back on course.
Retailers who wait can also get left in the dust.
H.E. Butt: prospering where others can't.
Avoiding the seemingly unavoidable.
10. Taking Action	226	(23)
A philosophical conversation with inventor Leslie Wexner.
Many models of success, all sharing three common elements: emotion, energy, innovation.
Viking looks to span the poles.
Recutting the data.
How The Home Depot aspires to do it for you.
How to get started.
Serving the middle-class consumer can be a noble enterprise.
About Our Sources and Methodology	249	(4)
Acknowledgments	253	(4)
Index	257