Home Marketers: How to Use Consumer Insights about the Best Customer Segment – the Affluent – to Build a New Brand and Gain the Competitive Edge
As Unity Marketing’s chief cook and bottle washer, I wear a lot of hats – market researcher, focus group moderator, statistical analyst, marketing consultant and brand strategist, as well as speaker, writer, blogger, and media talking head. Recently, I’ve been wearing my “marketing consultant hat,” focused on marketing and branding strategies for a home furnishings company looking to expand in the U.S. luxury market. For this project, we completed primary research by interviewing industry influentials and prepared a detailed strategic marketing plan for the client, combining findings from the expert interviews, and analysis based on my experience in the affluent home furnishings market.
As I worked through the brand positioning and recommendations for the product range, pricing, distribution channels, and promotional strategies, I also turned to Unity Marketing consumer research library for consumer insights into the affluent home furnishings market in a trend report entitled Home Is Where the Luxury Is. This report gives direct access to data about the target consumer, their needs, and desires, and it broadened the research perspective beyond industry influentials to consumers.
It has been a while since I wrote that home trend report and quite a few other reports have come down the pike since then, so I really didn’t remember many of the details from that study. But I do know our research approach, so I knew I could find data about affluent purchasers and purchases of home furnishings, including consumer demographics, spending on home furnishings, places of purchase, key motivators/influencers of purchase, types of items bought, styles, and the like.
This was a unique chance for me to read my own report as one of our clients might. I came at it fresh and with a totally different perspective, that of an information user, rather than as an author and analyst trying to interpret the data. What I found was a truly useful, valuable and insightful report that gave me added authority in positioning this client’s brand for the U.S. market.
The report’s statistically-valid survey findings served as a reliable platform on which to base recommendations, rather than relying solely on intuition, past experience, or the limited sample of 12 interviews among industry influentials. As a result, this client’s strategic marketing plan and its recommendations are made with authority that the client can invest in and implement with a solid research foundation.
For example, in my client’s home furnishings project, pricing is a key factor in the overall market success but based upon the influentials’ interviews, pricing recommendations were all over the board, from extremely low to extraordinarily high, mainly because the product line is totally new and with few competitive reference points on which to make a pricing judgment. However, the Home Is Where the Luxury Is report contained several key questions about affluent customer’s spending and attitudes about purchasing that gave me the ammunition to make a solid pricing recommendation that the client can feel confident will maximize their sales potential in the U.S. market.
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Home is predicted to be hot, but you need to focus on the best prospects for your home brands and that is the affluent
Across the retail landscape home-furnishings stores, as well as the building materials and garden segment – Big Box hardware stores – have been the bright spot during 2013 in an otherwise tepid retail market. The latest estimate from the Census Department’s Monthly Retail Trade Survey puts sales at furniture and home furnishings stores up 4.6 percent year-over-year, and building materials up even more, 5.9 percent. By comparison general merchandise stores, including department stores and mass market discounters, were up only .5 percent.
In another sign of industry health, trade publisher Home Furnishings Business reports that furniture and bedding industry sales reached its highest quarterly level since 2007 in 4Q2013. Overall combined Furniture and Bedding jumped 8.3 percent over the same 4th quarter of last year.
But this uptick in home goods sales is not across the board, since not all shoppers are buying home goods at the same rate. For example, the nation’s affluent households (those at the top 20 percent of income, which starts at just around $100,000 and goes up) account for 42 percent of total consumer spending on home furnishings and equipment in 2012, according to the Bureau of Labor Statistics Consumer Expenditure Survey. This compares to only 22 percent of total home furnishings consumer spending by the upper-middle income segment, with incomes ranging from about $60,000 to just about $100,000.
That means for any home furnishings marketer, brand or retailer, the best customer prospects – those who will contribute most to your company’s bottom line – are the affluent top 20 percent. So whether you are selling at the high-end, think Horchow or increasingly Restoration Hardware; in the mass middle market, like La-Z-Boy or Bed Bath & Beyond; or targeting the moneyed, but discount-oriented shopper, like Joss & Main, One Kings Lane or WayFair, attracting these high-potential customers to your brand, store or website is key. To do that you really need to understand them, what they buy, how they shop, their attitudes and motivations directed to their homes and their lifestyles.
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Unity Marketing can be your business partner in understanding your customer and turning that understanding into successful marketing and branding strategies
Unity Marketing’s been in the business of studying the consumers for over 20 years. Our surveys among affluents gave us – and our clients — a six months advance warning in 1997 of the brewing financial crisis that led to the recent recession. We are out in the market four times every year with in-depth surveys among affluents about their shopping behavior, attitudes and purchase motivations. Unity Marketing should be your partner in understanding your best customer prospects, which are the affluent consumers who make up only 20 percent of the population, but who account for over 40 percent of all consumer spending. We stand ready to work with you to develop targeted marketing and branding strategies that will build a loyal and lasting relationship with those customers.
Get in on the ground floor: Unity Marketing plans to conduct a new study of the home furnishings and furniture market. You can get in on the ground floor to direct the focus and objectives of that study by participating in a brief Information Needs Analysis survey. Click this link if you’d like to weigh in the kind of information you need about the home furnishings consumer market.
Get started today: Unity Marketing’s vast library of syndicated market research studies, like the Home Is Where the Luxury Is trend report, are low-cost ways for marketers to gain reliable data and customer insights about specific consumer markets, including home, fashion, jewelry, travel, art and many more. And with Unity Marketing’s focus on the affluent consumer segment, you will be assured insights that apply to the best customer prospects for your category whether you are selling to the masses or the ‘classes.’
Develop a system: Consumer insights aren’t a “once and done” effort; it takes on-going efforts to track and monitor brand connections with the target customer as he or she changes buying behavior or brand preferences. Unfortunately, one market research report isn’t going to give you ongoing feedback on the results of your marketing efforts and whether your marketing messages are breaking through. Unity Marketing can help you develop a marketing research program that can provide on-going tracking data so that you continuously monitor the shifts and changes in your target market. For example, our Affluent Consumer Tracking study gives marketers at the high-end of the market data about their customers buying behavior and consumer confidence and attitudes every three months. We also offer marketers a ‘lite’ subscription if they need to track only one product segment.
Intensify and focus: With experience in both collecting and using market research information and insights, Unity Marketing can help you not just in gathering consumer insights, but uncovering the nuggets that will yield the best return to marketers in strategies and tactics. Call me at 717.336.1600 or email pam@unitymarketingonline.com for a confidential discussion of where the gaps are in your customer understanding and how Unity Marketing can bridge the gaps.
Pam Danziger is president of Unity Marketing, a marketing consulting firm that serves consumer-product businesses.. Copyright 2014, author retains ownership. All Rights Reserved.
