Mike:
They say change is the only constant. And if you feel like the past year has been unusually anxiety, uh, producing and just a little bit wild and crazy, well, you aren't imagining it. You aren't alone. Um, and as brands and retailers try to think through developing strategies for consumers, we know that that, um, understanding how they're making decisions becomes the most important thing. And as they are trying to get a leg up and a foothold in a really crazy socioeconomic time, it's easy for their panic to become our panic, right? As, as brands and, and retailers. But the good news is here at Sales Factory, we feel like there is nothing new under the sun. Um, and here to talk with us a little bit today about how to keep calm, carry on. We've got VP of innovation, Matt Goldfarb, and President Dave Geren. Guys, thanks a lot for being here today.
Matt:
Yeah, thanks for having us, Mike.
Mike:
So guys, last year we talked a lot about uncertainty, and I think now we've moved past uncertainty and we are into anxiety, stress, uh, lack of trust, um, and we're seeing that in consumers, right? So we want to kind of talk today about how is that panning out for consumers. We're on the end of a midterm election that was kind of anti climactic. We expected to see a lot of stuff. Um, but we're sitting here filming today and we still don't have results. Um, so people are feeling anxious, they're feeling frustrated. Um, we've moved past uncertainty into lack of patience, lack of trust. We're gonna talk about all those things today. But to kinda, uh, set the stage for what are brands up against, Matt, can you kind of talk us through some of the things that we're starting to track now? Anxiety score and, and all that type of stuff? Yeah,
Matt:
Yeah, absolutely. And you're certainly right. Um, uncertainty is, has become this normal. We're all kind of just used to going, what's gonna happen next? Right? And so, um, for us, and as we, keep our finger on the pulse of the consumer, we go out on a biweekly basis in order to understand how some of these things that are going on that feel crazy to us, are actually impacting how consumers behave. And so one of the ways that, um, we've done that is that we've started to track what we call the anxiety score. Um, and this is an index of a number of different factors such as confidence in the economy, confidence in, uh, people's incomes, um, how they make purchases during times of, uh, anxiety. Um, and all these things rolled up, um, are we call the anxiety score.
Um, and we're finding a lot of different interesting things that are coming out of that. So, um, for instance, there are certain consumers that while they may be feeling really anxious about things that are going on in the economy, they're not gonna be pulling back their spending and they're gonna plow ahead as normal by the same types of brands they were before, not trade down. Um, and their behaviors aren't necessarily changing even though they're feeling some of these impacts in their mind. Whereas there's other groups that, um, that, that do that totally differently. And they're saying, now I'm gonna pull back spending, or I'm gonna trade down for brands. And it's really interesting to kind of parse that out. Um, especially when we look at it for some of the, uh, brands that we work with, um, and try to really find the nuances in their prime prospects and how their target audiences are, you know, maybe changing their minds or maybe saying, um, no, I still intend to buy this brand or, you know, spend on this category.
So millennials, for instance, have been tracking lower on anxiety score than any other generation. But when you start to look at the things that pop for them, it's things like the war in the Ukraine, um, or the decision that happened with SCS on weight. And those things popped really high for the anxiety score. And they're saying, you know, those are kind of things that are gonna actually affect how I'm going to be pulling out my, my wallet and spending on things. Um, whereas other generations say things like inflation, gas prices, et cetera. So those are all things that are, are super interesting and help us in our clients to make better decisions.
Mike:
How about things like net promoter score, um, consumer sentiment being down, um, and kind of seeing up and downs and stuff. Anything on those that are really important for brands and manufacturers to kind of pay attention to or, or be aware of in terms of how they think about it?
Matt:
Yeah, I mean, you nailed it with the NPS stuff. Um, so just maybe a surprise to folks, but brands are really suffering from all this anxiety, worry, and fear that are going on in the mind of the consumer. Um, the NPS scores are pretty much directly correlated with all these measures. So as stuff like consumer sentiment goes down, so do the way that folks, uh, say that, they love or, or don't love brands. Um, so, you know, that's the reality of it, that their mindset is that they're not loving brands as much, but you know, the good news is the brands that they do love, they're still sticking with. Um, so there's, opportunity there as they're trying to navigate this thing to make sure that they love your brand.
Mike:
Yeah, that's interesting that it's important that a lot of this is creating opportunity, right? It's easy to see kind of how, um, all of the chaos, all the disruption is creating problems for brands. Dave, would you say kind of the main, uh, challenges is, is figuring out how to win in environments like this and, and deliver for the end user? Um, and, and how do you, how do you do that? How do you start to kind of think through, okay, there's a lot of chaos and a lot of uncertainty? Um,
Dave:
Yeah, I mean, I think when you said at the start, there's nothing new under the sun, but however you think about things that are going on, I mean, specifically like inflation and things like that, these are things that haven't happened in a generation. I mean, yeah, a lot of people have never experienced it, never understood it, have gotten used to 3% mortgage rates and things like that. You know, they never experienced inflation before. So if you think about like a millennial, well, they never even, they didn't even know what inflation was, um, until recently. So this has come to bear out of nowhere for them. And, and they don't even really potentially even understand, um, they do now, but maybe at the time they didn't. Um, you hear some of the more recent events that stick in their head, right? With things that are happening in the world, in the Ukraine or, or the Supreme Court or different things like that, that are weighing on them.
So I think you have to have a little bit of empathy for the customer, um, who hasn't experienced some of these issues in a long time, if they've experienced them at all. Um, so they're working through that in their own mind, and they're trying to get their head wrapped around, well, what does this mean to me? What do I do with this? Um, and how do I operate? And, to Matt's point, I mean, it, it has a drag on everyone. So as you think about everything that influences your life, um, if all you're hearing all day long is day in, day out, this is bad news, this is bad news, this is bad news without a lot of answers, right? And so I think as the consumer, they're looking for answers. They're looking for a port in the storm to say, where do I go to get information?
Where do I go? I can't trust, you know, whatever social media angle I'm looking at, or whatever station that I prefer. Um, even those that are, you know, fans of a certain media outlet are showing like, well, I don't know that I fully trust that they're giving me the straight story all the time. So I think we've gotten into a pretty intense time of some new ground for some people that they're waiting into. And a, a world that is kind of got a, got an angle, you know? And even what we found through the, the midterms, I mean, I think I heard the term closely divided, um, used over the last few days a ton. And part of me is like, what, what does that mean? Um, but that is it. I mean, you see a division and depending on where you fall on certain things can start to paint a picture one way or another.
But one thing for sure, it's created a lack of trust Yeah. Across the board. And so, uh, for us, you know, that are trying to, you know, sell and market our way into, into different, uh, retailers, into whether that be on Amazon or in brick and mortar or things like that, we're sitting here. So, so what do I do with that? What impact does that have on me? And I think what we're seeing is, is it is having an impact on people's trust and the way they engage with brands and the way, the way they think about brands. I think it's also created a, a very tight rope. We have to walk, um, where the consumer, I think gave a lot of benefit, uh, doubt in the past. Um, and when happy days are here, it covers a lot of sins, right? So if things are going well and you're feeling good about things, you kind of roll with the punches better.
Um, then if you're under a ton of stress. And I think that's what we're seeing is that the consumer's under a ton of stress. It's showing up in the way they trust and the way they think about things. So now, as marketers and, and sales folks, we've gotta be able to, to pivot with that, and we've gotta be able to meet the consumer where they are. So it just puts pressure on us to be more transparent. It puts more pressure on us to be straight with the consumer. It puts more pressure on us, um, to bring something positive to the table. Um, we can't just ride the coattails of what's happening in the world. We've gotta bring something positive to the table.
Matt:
Well, you talked about one side of the squeeze, which is that you have housing rates climbing, right? Right. And so, um, they had 7%, which is now the largest it's been since 2008. Um, and so for younger folks where half of millennials, uh, still haven't gotten into their first home, uh, yet, um, so they're seeing that opportunity maybe start to look a little bit less possible for 'em. But then you have the other side of it too, where you have the Dow, which dipped under 30,000 in September, so that was just over a month ago. It's climbed back a little bit since, um, which is good. But then, but you have more established folks too, that feel like they might need to wait or may need to, uh, think about their savings and their retirement and how that's affecting their spending too. So it's really squeezing in from both sides, right?
Mike:
Yeah. So it, it's kind of easy to see how some of these macro trends create all this anxiety and mistrust and stuff, but how do, how do, uh, brands and retailers start to answer that for their consumers, right? How do they partner together? And I'm gonna kind of push back on you a little bit, Dave, you, you talked a little bit, um, uh, about kind of change and anxiety and worry and stuff like that. So what's the opposite of that look like? What, how do you, how do you answer that?
Dave:
Yeah, yeah. Well, I mean, I think it's, it's, you know, the opposite of that is, you know, there's, there's stability, there's hope. Um, there's bringing some fun into somebody say there's trust. Um, you know, we just ran a study and literally, I'm gonna cheat a little bit and look at my numbers here, but, uh, the feeling our country is kind of broken was a question that we asked mm-hmm. <affirmative>, and this startled me, um, you, you kind of felt it, but we had basically nine out of 10 people that said, feel like the country's kind of broken in some way, some form, which is an interesting thing, right? So, so what, well, again, stress on the consumer, if you feel like the country's kind of broken, broken, I, I think the positive side on that was the follow up question is, can it be helped? And one, only one outta 10 said no.
Right? So that tells you, so nine outta 10 think there's, you know, we're not doomed <laugh>, right? So for me, it's, it is, how do you play the opposite of that? Not in a Pollyanna sunshine, not like you're head in the sand that, you know, but in a real way, bring some hope to the table or bring something positive to the table, or bring some experience through your interaction with the customer. Um, that is, that kind of brightens the day a little bit, but even more than that, maybe brings hope back into humanity, right? So when you're trustworthy or, or your customer service team answers the call, um, that maybe brings a little faith back to the consumer of like, okay, there's still good people in this world, <laugh>. Yeah. The country's not totally broken. Yeah.
Mike:
That's, that's interesting. And, and here in nine out 10, it's a little disheartening. It's a little shocking to all of us. I know when we saw that, we were just like, wow, that's hard to believe almost. But, uh, really, really good stuff. Um, what are, as you're kind of thinking through understanding this specifically for your category, if you're a manufacturer out there and you're thinking through, okay, well that's interesting, how do I understand this for, for my category and my product specifically, what are some of the questions that manufacturers need to start thinking about asking their audiences? What do they need to be doing to understand their end users? So like, what are those questions? And I, I wanna throw that one up to both of you guys.
Dave:
Well, I think, you know, you're right in that sometimes we sit back and we go, look, I sell widgets. What am I supposed to do about this? You know, what do I do with this? Um, I think first off, we're gonna sound like a broken record. I think every time you and I have done any of these, and Matt, you and I have done any of these, we talk about you gotta know your customer, right? You gotta know what's important to them. So knowing them inside and out in your category, what makes a difference to them. So understanding that and starting to ask the right questions, you know, we've seen that in all the polling. Yeah. You know, so we've seen terrible polling, whether it be back to the presidential election, to even these midterms, right? Where you were told going into these, uh, midterms, what was gonna happen.
And they were all pretty much wrong, um, from what we've seen so far anyway, and it's all in how you asked the question. So it's not only, um, knowing your customer and knowing what's important to them, but also knowing how to ask the question so that you ask it in a way that really gets to what they are thinking, feeling, and motivates them, um, and what's important to them. So part of it is just knowing the right way to answer the, or to ask the question to, to figure out what's going to influence them, what's important to them, so that as you're selling in your category, you know, okay, if I do this well, it's gonna bring trust. If I do this well, um, for the customer, it's gonna, it's gonna do this. Or knowing my deficit, you know, knowing, oh man, this is a big deal, and I know we fall short here.
And so it can make a strategic decision, um, become very evident that we need to change the way we do things, um, because this is gonna actually lead to a, a, you know, an NPS slide for our brand or for our product, because customers will not have the patience for it. And in a world where they have information at the fingertips, and they have the ability just to say, you know what, I'm gonna look this up real quick, and oh, yeah, there's a thousand of my, you know, people, I don't have a clue who they are, are saying the same thing and validates the fact that I don't like this. You're out in a hurry. And so you, you've gotta be able to know those things, know what's gonna be the trigger points, being able to use that information that sets your fingertips to say, okay, now I can ask these questions, I can know and then be able to do something about it.
Matt:
Yeah. And, our philosophy at Sales Factory is that, um, you build your brand to solve their problems, right? So first you gotta study what those problems are. We, in the macro context, um, we've kind of out outline lined what some of those are, what the worry and anxiety and fear, um, which, you know, certainly we want to be able to provide hope and some inspiration about how to, you know, help them not feel that as much, but then get down to their problems at your category level and when they're actually using your products or, you know, the customer experience, um, uh, of going through, uh, shopping for your products or dealing with customer service. So all those kind of things that they, they deal with that's more direct that your brand can then say, all right, there's a, a better way to do this. There's a better way to solve their problem. Um, and then, you know, kind of prop those up as reasons for them to love you mm-hmm. <affirmative>. Um, so, you know, start, start there with helping them answer their problem and then focus your brand's activities on them.
Mike:
Yeah. That, that's, that's really interesting. What I'm hearing from you guys is that there is opportunity in this, right? But it's really important to create, uh, a part of your process as a manufacturer, as a brand, asking the right questions at the right times, constantly being in touch with your end users, because if that's part of your process, you're gonna know what to do in these uncertain times, right? You're gonna have a strategy to move forward with. And if you don't know your consumer going into uncertain times, you just don't know where to start. Right? So it's part of, it should be part of your everyday before you get to this point. And if you're behind the eight ball, you better start now. Right?
Matt:
Well, think about it too. I mean, part, part of what they're feeling is, is like they don't have a voice right now. So your brand can give 'em a voice, they can be heard, um, and then you can deliver on those things. It's, it's really not that hard of an equation. It just starts with listening to them.
Mike:
Yeah. You talked about kind of giving them a voice, and I really like that. And, and expound a little bit and talk about some, some brands maybe, or how do you, how do you, you become a brand that consumers admire. We kind of used the term a lighthouse brand, and I want to kind of delve into, that's, that's a nice theory, but how do you get to that, right? What are some of the ways that brands can approach that? Matt, we'll start off with you on that one.
Matt:
Yeah, sure. Well, the first thing that I think of is that a lot of brands get stuck in just looking at the rational drivers, right? And it's like, when I think about solving a problem, it's how do I make this, uh, part of their process, um, for, you know, maybe fixing something around their home faster or easier for them? And, and, and that's great. I mean, that's where really great product development starts. Um, but you cannot, uh, discount the importance of emotional drivers as well. So when we study the consumer and we look into, um, their problems and, and really what makes them tick, there's often some really aha moments, um, about, you know, what's going on, uh, at their home with their family, things like that, that you can then tap into that piece of their brain. Um, and then that's where marketing can really help you to set yourself apart from other brands.
Mike:
Yeah, I, I mean, you talked about emotional drivers. There's a lot of negative emotional drivers that we've talked about on kind of the front half of this. There can be positive emotional drivers that lead to loyalty and those types of things and trust and, and all those things. So understanding your consumer at that base level and what are the positives gonna be is a great place to start. Right. Dave, anything that you wanna add Yeah, for sure. Add on to
Dave:
No, I think for sure, I think at the end of the day, you're looking to create a relationship with a customer, right? If you want long term loyalty, it's about creating that relationship. And if you just think about, I've heard the metaphor used before about like, at a dinner party or things like that, but it, it's very true. I mean, who do you hang out with in your life? Do you hang out with people that just talk about themself and how great they are all the time? No. Right? You don't want people like that in your life. Um, I think we probably all have some of those people in our life, but you don't want those people in your life, right? And so, if you think about a brand that's just sitting there talking about how great they are all the time, or their products only, you know, this is my product and this is what it does, and that's why it's awesome for you.
Um, that's not a relationship that's talking at people. Um, so if you think about it that way, like who do you spend time with, who do you want to spend time with? Who do you build trust and relationships with? It's not typically one sided. And so having the empathy for the customer on a positive side to say, these are the positive things that we can add to our life, I think you have to look inwardly. I think you have to go around your leadership and you have to go around the folks that are inside your walls at your company and say, talk to me about what, what have our products, what has our brand done for you? You know, what is something that sticks out in your head of this is something that it's important to me, this is what made this brand important to me.
And if that's a hard question to answer, um, I think you have to do some soul searching and say, okay, well then what are we, what are we gonna stand for? And what are we gonna do? You can certainly be transactional and you can make a good living being transactional, no question. But if you want to be able to separate yourself, weather the storms, you know, so whether the storms as they come and create meaningful loyalty, it's about creating some sort of tie and relationship. And you have to know what those pain points are. You've gotta know what matters to them and know how you can be part of solving that together with them versus just talking at them.
Matt:
Well, and we all know that's more difficult right now as we're getting pressure to, because of inflation, right? Right. It's, it's really hard to command the price to bring that emotional value so much, right? I mean, as, as we're getting pressure to potentially bring down prices or, or else customers are gonna trade down to house brands and, and lower. So it's, it all, it all becomes something that you have to develop your strategies
Dave:
Around, right? Well, and I mean, you mentioned it, the pricing thing right now is huge. You've got depot and Lows reporting this week. Yeah. You know, and, and we're seeing the pressure on price. And we've heard from one of the retailers saying, Hey, we partnered with you on the way up, partner with us on the way down. That puts stress on the entire system, right? If you're a manufacturer now and you're wrestling with, okay, I still have some price increases I need to go get, now you're swimming upstream now, right now, oh wait, I built capabilities, I built budgets based on getting this price. Now I gotta figure out how to ratchet that down without giving away some of these things that are gonna create the relationship with the consumer. Um, so it's a tightrope to figure out the balance and to get it right. There's no question about that. But again, that goes back to knowing what's most important for the relationship versus what's at least important. And you can, you can, where you can give and where you can't give. Yep.
Mike:
Yeah. So guys, we've kind of talked at a very high level of, of kind of some aspirational things for brands to work towards. We talked about creating long-term relationships with their, their consumers and the people that are shopping in their categories. We talked about making, uh, a rational versus an emotional decision. And to make sure you're hitting on both sides of those. But what are some of the frameworks that you need to put in place to kind of build towards those aspirational things if you're a
Matt:
Brand? Yeah, sure. Um, first I'll talk about the framework of the brand fingerprint. Um, so that one's perfect for, um, taking both rational and emotional needs of consumers and then connecting 'em to what your product and your brand can offer. Um, so, uh, in, in this framework, it, it all starts with the consumer research. Um, but then we go into a strategy session and the whole point of this is that every brand, uh, is uniquely themselves, um, and can capture consumers, um, in a way that they will then associate themselves with that brand. Um, so that's one. And then brand archetypes is another one that really helps you to get your voice in tone speaking in a way that your consumer understands that will resonate with them, them the best. And when you combine those kind of things together, then you have a strategy that sets your brand apart from the other ones that connects with the consumer, um, and can kind of cut through the clutter in a, in a time like this, when everything seems crazy, this will actually speak directly to that consumer.
Mike:
Yeah. And it all kind of comes back to understanding who are those consumers, right? Asking the, the right questions and understanding what their needs are and making sure that we're fitting that as brands and retailers and that we're positioned well to, to answer their needs.
Dave:
And the beauty of both of those, in my opinion, is that it's, it cuts both ways. It's an authentic way that you get to who you are as a brand, cuz consumers can see right through you if you're trying to be something that you're not. So it creates an authentic place that you can live. The other thing that's really great is it helps you internally where you can actually then take your entire organization and you have something that you can hold up. And anything you do, you can hold up against and say, does this fit us? Is this us, whether it be a product we're developing, a messaging strategy or the, or the way the, uh, customer service people are gonna answer the phone, does it match what we're doing here? Um, and that's a really powerful thing when you get a, an organization rallied around a unique voice to the consumer that's gonna break through the clutter, like Matt said.
Mike:
Yeah. And, and that's interesting. And that kind of leads me to my, I wanna talk a little bit about innovation next, so I give you guys a little time to think about that. But I think that's really interesting to say, Hey, here is our roadmap. And, and to look at things like, you know, brand fingerprint, brand archetypes, all those types of things where you can point to it and say, this is who we are. And when there's times of chaos and it feels like everything is a scramble, you're trying to keep up, you got traffic down, you got ticket sales down, like everything feels chaotic and everybody's trying to keep up, it's nice to have that up on the wall and say, this is who we are, we gotta stick to who we are in these times, right?
Dave:
Yep.
Mike:
It keeps you anchored, it keeps you on the path. I wanna talk a little bit about innovation in that light. What does it mean to, to meaningly innovate, right? We've all seen, seen innovation for innovations sake. That is not a long term strategy and it doesn't resonate with consumers. How do you, how do you get to meaningful innovation? And it doesn't always have to be some crazy new product, right? So I want you guys to kind of talk about, um, innovation in these times.
Matt:
Yeah. Well, I'll start off by saying you, I will start with research of course, um, and to the target audience. Um, but there, there's a, there's a funny quote, um, uh, I believe it's credited to Henry Ford <laugh>, um, that he said, uh, when, when he asked consumers what they wanted, they wanted a faster horse, right? So he said, you can't make a faster horse, so you need something innovative. Yeah. Um, and, and of course that's where, um, the assembly line came from. Yeah. So, um, start with consumers, um, understand what their issues are, um, but then understand how you can make something meaningfully different. Um, you don't have to reinvent the horse as it works
Mike:
<laugh>. Thank goodness. Talk a little bit about, um, things like receptivity and how do you, how do you figure out if your innovation is connecting?
Matt:
Right? Yeah. So anytime, uh, you're gonna bring any kind of new product development to market or introduce a concept, um, in a different kind of way, uh, you're gonna want to test that with consumers. And so, um, we use a, uh, process called receptivity indexing. Um, and this really helps us to, uh, understand how viable that product or that concept is gonna be, um, when it's brought to market. Um, we have benchmarks over years and years of data collection that help us to understand, um, the viability, but then we also have diagnostics for it that say, what can we do to make this better, um, more appealing to, uh, target audiences more relevant to them. Um, so there's a number of different metrics that go into it. Um, as I mentioned, we look at relevance and appeal. We look at how believable the concept is.
So, you know, sometimes the way that you describe something, um, may simply not be viable because it doesn't make sense to the consumer. They don't think it's gonna work the way that, um, that you intend for it to work. Um, in addition to that, we look at uniqueness. So, you know, really is this new, is this actually innovative? Um, and in order for a consumer to be receptive to the product, they have to score really highly on all those metrics. Then we believe that they're likely to purchase it when, when it's introduced. Um, so we recommend, um, developing your product and testing it out with consumers in that way.
Dave:
Yeah. Well, and even that believability metric has been under pressure lately, right? So in a, in a world where everybody's like, I don't know if I trust you or my neighbor or my doctor, they're not trusting brands or products or either. So it's, it's creating a little bit of a challenge. And we've seen that in some of the studies we've done of late. But I think also, you know, you mentioned the faster horse, you know, sometimes it's has nothing to do with the product, like product development. It could be in the way that you merchandise could be an, there could be innovation in the way that you're bringing something to market. There could be innovation in the way you're using other channels to make them work together. Um, or innovation in just the way that you present the product itself. So there's a lot of different things or you know, that that can come to play even like customer service, you know, the way that you, you could bring something totally new to the market and the way, um, that you service a product.
Right? And I think, you know, to me, looking at, the environment we're in, you know, that's a place I would look, I would look right now, you know how I would, I would look at my customer service, you know, what are the ways that consumers interact? How are we doing on that? Knowing I've got a less patient customer, I've got a less trusting customer, and stakes are higher than ever that I could lose a customer and never get 'em back. That's a place I would look. And are there places that you either need to shore up or are there places you can innovate there and are there ways to take all that friction out? Because that's what customers are looking for now, right? Just like take all the friction out, right? Yeah. Help me just get to the end as fast as I can possibly get there. Yeah. I got enough stress in my life.
Mike:
What are some ways, what are some ways we've, we kind of did some research recently that just came out, talked about QR codes, we talked about, um, we always talk about the framework of learn, shop buy and how that has changed so much since we all started this. And I won't age us all sitting at this table by talking about that. But, but, but I do want you to talk about like how has the consumers um, shopping journey changed over the past Yeah. 10 years and even recently, how has it changed?
Dave:
Yeah, I mean it's very different. I mean, in that you had, you know, back in the day, um, I'm older than you guys. Um, there was definitely a very linear way that you had to get people aware of who you were or what you were or what you were doing. And then you had to get on that short list and then you had to prove it and then you're gonna work your way around, right? And it was very linear, you know, it's not that way anymore, you know, not at all. You know, I can come in at the very end of the process with just something maybe my wife asked for, jump on Amazon, see a bunch of star ratings and go, yep, good enough, go, right? And I, I never even hit the awareness phase, right? It was like that lasted all of like a second and a half on search, right? So, I mean, it's just very different
Matt:
Now. Yeah. I mean, you mentioned Amazon, so, um, that is now gradually creeping its way up to being almost as close to Google. Not quite, but again, but creeping up on it as one of the first places that people go to even just start learning about a product, right? So when they want to start research, why are you on Amazon? What's your content look like there? If it's not the first, it might be the second. So get that right.
Dave:
When does that, content connect to what they see other places? Right? So that's friction, right? If you see it one way there in another way, somewhere else, that creates friction. And I know we try to distinguish our retail partners from each other, but we gotta be careful cuz that can be at the detriment of the consumer,
Matt:
Right? It's all merchandising, right? It's the way that they view how you're presenting the product, right? And it's gotta be consistent,
Dave:
Right?
Mike:
So today we've kind of talked a lot about, um, a theme that's kind of emerging is empowering consumers, right? We've talked about kind of giving consumers back a little bit of control, <laugh> you up port in the storm as you said earlier, Dave. And I think that's really an interesting concept. And, I think I just want you guys to kind of talk a little bit more about just kind of to wrap things up, thoughts on how to, how to empower cons, consumers as you're thinking through things. As a manufacturer, as a brand, how do you partner with retailers to give that little bit of control in a chaotic time back to consumer? So Matt, start with you.
Matt:
Yeah. Um, well first of all, I, uh, I would like to start with giving them easy choices. Um, so in a lot of cases when consumers are coming in totally blind to your product category, they need some kind of frame of reference. Um, so there's a concept, uh, called Relativity, um, and it's really just starts with having a few different options, a few different prices and a few different, uh, features or benefits that they can start comparing stuff with. They, they can't make a choice in a vacuum. Um, so Relativity is about understanding what clear step up, um, from a cheaper product or more value oriented product to something that's a little bit better to maybe something that's best in class. Um, if consumers are given too many choices, it's really hard to set that frame of reference if they're given multiple price points that are all the same on the shelf. Um, and it's hard to determine what features are different, then they get paralyzed. Um, so think about, uh, on the shelf, first of all, how, um, the different products from merchandise and how you can parse 'em apart, um, based on price points and based on features and what makes sense. Putting yourself kind of in the, in the mind of the consumer as they're just getting started.
Mike:
Yeah, it's interesting, we, we just kind of recently did a podcast episode that talked about the fact that consumers don't know what something should be priced in a given category, right? Unless you're shy. It's easy for us cuz we're in the stores all the time. It's easy for manufacturers cuz they're in the category all the time. We just live in this world to kind of think that consumers understand it, they don't, right? So you gotta give them that relativity to, to kind of anchor themselves and, and be able to make a
Matt:
Decision, right? And use those price anchors to your advantage too. You don't want to sit so many anchors down at the bottom of the line that's gonna drag people lower. Um, so, you know, think about how you can have some of these innovation units, even if it's not something that's designed to be your top seller, figure out what can be good at the top end. Um, you know, think about the $4,000 red leather couch. Um, that's not gonna be the couch that everyone's gonna buy, but people are gonna say, that's probably more comfortable. It's probably cooler. I'm, I'm gonna either look for something that I can then compare to that and feel happy with. Um, or maybe I'll look at that brand and see what else they have. It just helps 'em get, get going.
Dave:
Yeah. And I, I would say think about the different customer types too, right? So the way a customer's gonna interact, a DIYer is gonna have a, you know, less of a knowledge base about the pricing and the features than a pro, right? So then as the pro comes and interact with that, and pretty much every category today has the ability to to, to create those step ups in a logical way, um, those all exist today, I would argue in most cases there's probably more skews than are necessary, right? And not everybody wants to hear that, I understand that. But it puts the pressure on the manufacturer, on the retailer of getting the right mix and the right way to maximize the sell for both the pro and the DIYer. Depending on the category, sometimes the pro is more important than a diy Yeah. But just understanding the differences in those two, um, is extremely important.
Mike:
So it, it's, it's interesting to think through kind of these concepts of understanding price, understanding innovation for consumers, and those ways to empower them. What are some other ways to just for brands to kind of think through speaking the language of their consumers and right, and being well positioned in their category. Matt, you wanna talk a little bit about
Matt:
That? Yeah, sure. One of the things that, uh, I love to study when it comes to consumer behavior is heuristics. Um, and that is just simply, um, the idea that there are mental shortcuts that consumers take in lieu of having enough information to make choices, um, where they are more impulsive or more emotional about decisions. Um, and you can imagine it happening in grocery stores all the time. Um, when you're filling a shopping cart, you're not always, you know, planning every single purchase out. You're seeing that something might be on sale or something might jump out on you based on, you know, your awareness from a commercial that you saw. Um, so if you study and understand what type of heuristics, um, might benefit your brand and your category, you can help the consumer to have those mental shortcuts. And a couple of the things that that can help you there, you know, innovation right away we discussed that alone is a mental shortcut for somebody to say that there's, there's something new going on.
There's something that this brand has worked on to try to make something better, um, hopefully easier for me. Um, and that's better than tried and true generally. Um, so that's one mental shortcut made in USA is another one. Uh, a lot of folks, um, associate made in USA with high quality. Um, so are you communicating these things enough? Are you making sure that you know some of these things that for a consumer makes it really easy for them to make a quick decision? Um, are those forefront on your packaging, on the merchandising? Um, so that then they go, okay, um, I I can get this, I trust that, um, and get it and go.
Mike:
Yeah, well it's, that's such an interesting concept and it kind of all ties back into understanding the end user and understanding the consumer and how they're making decisions in your category, right? If we're talking about how to brands and retailers empower the people that are online or in their aisles, it all kind of comes back to understanding how they're making decisions. Cuz if you understand, then you can empower them, right? To make decisions in a way that is beneficial both to the retailer and then also to the manufacturer, right? So in times of, uh, macro and socioeconomic chaos and turmoil, there really is a huge amount of opportunity there. But you gotta start with your process of understanding the end user, understanding how they're making decisions, understanding how they're interacting with your category, either online or in the aisle, and then giving them the power and that just that little bit of control, um, or that safe passage or safe port in the storm.
Um, and you will build your brand, both with your retailer and separately as your own, as your, as your own brand, um, and kind of work towards becoming that lighthouse brand in, in those times. So there's huge opportunity here, although we all may feel like it's a lay little chaotic, if you stick with your process, there is a way to come out of this and, and gain share and, and feel really positive coming out of it. Uh, so guys, I just wanna say thanks for being, uh, here today. Uh, Dave, Matt, appreciate, thanks a lot for joining us. Thank you. And, uh, we're gonna toss this up now to, um, to the question panel. So if you have a question, throw it in the chat. Uh, we're gonna do a live q and a now, and we just wanna say thank you so much for joining us. Uh, it's been a pleasure sharing some of the recent research that we've done, talking a little bit about what's going on in the world today and how do we take advantage of it. So with that, thanks again and we'll see you in the chat.