Mr. Kettering made the above statement while he was the head of research for General Motors in the early part of the 20th Century. To continue to sell new cars is was necessary to plan obsolescence into your product and to be able to market that to the public. When it is part of the plan, expected and designed things generally go well.
But what about the unexpected obsolescence of retail? 2017 saw more retail store closings than any year in history. More the 5000 stores closed last year and at least 1000 more are slated to do the same in 2018. And these are stores you all know, Sam’s Club, Macy’s, Sears/Kmart, Gap and scores of other well known retailers. What happened?
According to a report from Gartner Research, today 60% of the buying process is completed before a customer meets a salesperson. This statistic is a direct result of an accelerated change in decision makers. As recently as two years ago 20% of decision makers were Millennials. The widely embraced expectation was that it would be 5 or 6 years or even longer before enough “boomers” retired and got out of the way to increase that total to 50%+.
The dramatically improving economic conditions in the US allowed more “boomers” to exit their executive positions, turn over operations to their adult children, take their golden parachutes or simply see now as the time to retire. The result - just two years later, 75% of decision makers are Millennials.
As a group, Millennials don’t patronize retailers - they use them. If a purchase is being researched and seeing an actual item is necessary, a reluctant trip to a retailer might be in order. But that does not mean the retailer will get the business. The research skills of Millennials are astounding and now the normal way to shop. So how does all this impact you and your promotional products business?
Don’t be a retailer! If you are, then the only measure of value a customer can make is between your price and that of another. They can get that information from a website or from the “price quote” you gave them. The entire focus is on the item being purchases and as noted, 60% of their decision making was done before you even knew they might be a customer.
You must amplify the “unused value” Mr. Kettering mentioned. That value comes from working with you to create successful programs and promotions. Help your clients avoid becoming “purchasing agents” and instead aid them in building their marketing credentials. Successful programs impress bosses, not the few cents difference in the price of the items used.
My semantics professor at the University of Cincinnati taught me that words properly constructed into sentences can motivate someone to do what is best even if they are inclined to go in a different direction. One of the successful techniques is to help your client adopt your position and believe it was their position. For example, “May I help you with your research?” is likely to get you a positive result rather than trying to tell your client you have a better idea!
Millennials reading this article please note, all the statements about you are the results of researchers actually talking to your contemporaries. We know that sustainability, responsibly sourced goods, proper working environments and social programs are important to you. The promotional products industry has always done better in these regards than the retail space. You can be comfortable in what you present to your customers and they can have confidence in the merchandise you propose for their programs.
The near future will see dramatic changes in all marketing, sales channels and commerce in general. Promotional products will continue to be an important part of the advertising mix businesses use. The absence of retail stores may very likely necessitate the use of durable marketing items to reinforce the brands that people no longer will be driving past. While Sam’s Club will be closing 63 retail locations, 12 will be converted to e-commerce fulfillment centers. The brands are not going away, just the retail stores they formerly operated from.
Many brand name products relied upon placement on retailers shelves, in-store signage and in-store specials to draw focus on their products. With many fewer retail locations, brand name marketers will be needing other ways to keep their logo in front of the consumers. The declining retail store environment may prove to be an opportunity for more promotional specialist advertising. If you have access to the marketing team at any brand name company, now is the time for the conversation. Retail stores may be becoming obsolete but successful marketing, not low price shopping will continue to support the sales of these merchants.
Gregg Emmer is chief marketing officer and vice president at Kaeser & Blair, Inc. He has more than 40 years experience in marketing and the promotional products industry. His outside consultancy provides marketing, public relations and business planning consulting to a wide range of other businesses and has been a useful knowledge base for K&B Dealers. Contact Gregg at gemmer@kaeser-blair.com.