Synopses & Reviews
The essential follow-up to the BusinessWeek
bestseller Trading Up
A BMW in a Costco parking lot? A working class family with a 50-inch plasma TV? 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 about $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 consulting 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 fixtures to beauty products.
But Trading Up revealed only part of the story of the new consumer. The same middle-class people 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. Treasure Hunt shows how even the most mundane shopping for things like paper towels and pet food has become an adventure rather than a tedious chore.
In just about every category, both the high end and the low end are growing and innovation-rich. Many middle-class consumers gladly spend $5 a day for a Starbucks venti latte; others spend forty 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, H. E. Butt, eBay, Commerce Bank, and Tchibo.
But beware: in our bifurcated global market, businesses need a clear strategy for aiming high or low, while avoiding 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 then, as many fallen companies have discovered, your tried-and-true marketing strategies will go into a severe stall.
Treasure Hunt takes 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 Up an instant classic, this is an essential guide to the moods and habits of the constantly changing consumer.
"In their bestselling Trading Up, Silverstein and Neil Fiske explained why people are willing to spend beyond their means for certain premium goods. But that's only half the story: as middle-class customers splurge on lingerie and appliances, they're bargain-hunting for everything else. Companies will thrive, Silverstein argues, by catering to the penny-pinching impulses of consumers, or by "spanning the poles" and appealing to both the high and low ends while avoiding anything else there's only "death in the middle." The book's profiles of individuals who splurge-and-scrimp and case studies of companies that have successfully adapted to the polarization of the marketplace show the key to survival is to offer the perception of good value for money and an emotionally satisfying experience. This is where the book becomes a tad creepy: Silverstein analyzes female consumers' relationships with their mothers and attributes an advertising executive's "lack of a father's love, a social-climbing mother and several failed relationships" as causes of her binge-spending and scrimping. Silverstein's guide to cashing in on the top and the bottom is intelligent without becoming mercenary; business owners will take notice." Publishers Weekly
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"The authors look at such examples as Aldi, LG, and Dollar General...and point out that other companies, e.g., Sears, Ford, and General Motors, who pursue neither the well-packaged bargain nor the inspiring luxury presentation, continue to lose market share owing to their -middle - position in the marketplace." Library Journal
"Citing numerous case studies, Silverstein and his coauthor lay out in detail what companies must do today to appeal to the 'treasure hunt' and examine this paradigm with not only anecdotal evidence but also a considerable amount of data that you would expect from a veteran from the Boston Consulting Group." Booklist
The essential follow-up to the BusinessWeek bestseller Trading Up looks at an important countertrend: how middle-income consumers have gotten better than ever at finding bargains in some areas to trade up in other categories.
About the Author
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 an established business author and journalist.
Table of Contents
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
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
The story of the Monforts 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
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 sourcres of financial vulnerability.
4. Spanning the Poles
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
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
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. In a Pickle
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 BurgerMcDonald's nemesis?
8. Nickels and Dimes
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?
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
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.
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