Valentine’s Day Shoppers Plan to Spend $21.8B in 2021
In 2021, about half of U.S. adults plan to celebrate Valentine’s Day and spend a total of $21.8 billion, down from $27.4 billion in 2020, according to the National Retail Federation (NRF).23 But 2020 was a record year, and the 2021 anticipated spend is still the second highest since the NRF first published its annual Valentine’s Day spending survey in 2009.
Read more about the economics of Valentine’s Day here.
Pabst Blue Ribbon’s (or PBR) rise and fall is a story of a market finding a product — unfortunately, it 170 years for it to happen. PBR has been around for 170 years but only in 2008 enjoyed a 6 year boom in popularity (outside of a brief moment in the 1970s). If hipsters were around 170 years ago, it wouldn’t have taken one hundred seventy years for PBR to find popularity.
It is better to find an under-served market and create a product/service for them than wait for a market to find your product/service.
Hipsters are known for following the latest trends and fashions, while eschewing things regarded as being within the cultural mainstream. Hence the term, “I was into __________ before it was cool.”
So why did hipsters like PBR? To put it simply, it was “retro chic”, anti-mainstream, and with many people still trying to recover from an economic recession, Pabst Blue Ribbon’s low price point was an attractive option. This brings us to a tool in marketing used to find customer groups — psychographic segmentation.
What is Psychographic Segmentation for Business?
Psychographic segmentation is used in market research as a way to divide consumers into sub-groups based on shared psychological characteristics, including subconscious or conscious beliefs, motivations, and priorities to explain and predict consumer behavior. Any dimension can be used to segment a group of consumers such as style, variety, availability, price, etc.
Hipsters avoided things that were popular and some of them were not price sensitive so they were willing to consider a range of beers that occupied a certain psychographic zone.
As PBR’s popularity grew, it was departing from the zone of consideration – the region of price and popularity where hipsters were willing purchase from. Also, as hipsterism became more mainstream, the association of PBR with hipsters caused a self-fueling downward cycle.
How to Use Psychographic Segmentation for Business?
Your Startup Guru used psychographic analysis to differentiate our client’s brand from that of their competitors yet stay true to their envisioned identity:
How to Do Market Research for Business?
There are many sources at your disposal to gain a deeper insight into who your customers are and segments within that market.
Ask potential customers: Surveying is a form of primary market research. Ask them how they use their product, what they like/dislike about it. How long they have used it, is it expensive, how does it make them feel, etc. These questions will give you valuable insight on the psychology of the user.
Pose as a customer and visit your competitor’s store/website. Learn how they do what they do. See what they do well, what they can improve on. Sometimes employees are very happy to share details you cannot find anywhere else.
Industry and trade publications for your particular sector are also a great source of information. Some are free while some require memberships.
So What Should Pabst Blue Ribbon Do?
Given that hipsterism is on the way out, a brand extension with Pabst [pick your color] Ribbon which is guerilla marketed to a new niche market segment such as Yuccies: Young Urban Creatives (that are a slice of Gen Y) with product placement on their YouTube channels is a viability…or wait another +100 years.
Contact us today to get started on market research that will help pinpoint your target market.
Money is extraordinarily tight for most people right now so starting a business is a pipe dream that has been put on hold indefinitely. However, you can make the choice and do the many things you can do with little or no money to continue to make incremental progress.
One of the most important yet least expensive things you can do is gain knowledge. Research into who your customers are, who your competitors are, what it costs to launch, who can supply raw materials for your product, etc. is relatively inexpensive with a simple online search but a critical. Research is an important task because it also tells you if your idea is feasible. A feasibility study is done to consider the various aspects of a business to see if it is a viable undertaking. Very briefly, feasibility studies are curtailed business plan-like documents where you outline your product/service, the business model, your competitors and your customers, expected revenues/expenses/startup costs. A well done feasibility study can save hundreds of hours and thousands of dollars in sunk costs.
Your Startup Guru offers price matching, discounted fees, and revenue sharing options to work with tight budgets. Contact us to get started on your feasibility study.
Make the right choice — do not go back to sleep and just dream.
I just saw a commercial for Rent-A-Center and thought to myself that their old school business model is nearly a half center ahead of the times.
Founded in 1974, Rent-A-Center is an American public furniture and electronics rent-to-own company based in Plano, Texas. The company was incorporated in 1986 and as of 2014 operates approximately 2,972 company-owned stores in the United States, Canada, Puerto Rico and Mexico, accounting for approximately 35% of the rent-to-own market in the United States based on store count.
“A convergence of trends—including the Mari Kondo-sparked enthusiasm for cleaning out closets, increased concern over the impact of climate change, and a movement toward smaller, urban apartments—has made millennial consumers more conscious of how many items they’re accumulating.“
Rent the Runway CEOJennifer Hyman.
As you may know, companies are taking a similar business model and expanding it to other consumer sectors such as clothing and jewelry. This model has already been applied to transportation with Lyft/taxis/vehicle leasing and with housing with AirBnB/hotels/apartments and intellectual property with game rentals/public libraries. Entering into the fray are companies like Rent the Runway, which rents unlimited designer styles to subscribers and Fat Llama, which rents electronics (in the UK).
A convergence of trends—including the Mari Kondo-sparked enthusiasm for cleaning out closets, increased concern over the impact of climate change, and a movement toward smaller, urban apartments—has made millennial consumers more conscious of how many items they’re accumulating, according to Rent the Runway CEO Jennifer Hyman.
The spending habits of millennials, the largest single consumer group out there with 83.1 million (a full quarter of the U.S. population), was surveyed. The survey found that the main reason why they rent is to “test things before purchasing” at 57%. This makes sense with money being tight and space being limited, every purchase has to be scrutinized. The results of the survey are shown in the infographic below:
Old school brands such as Play it Again Sports and Rent-A-Center are riding the boom of the change in consumer sentiment and behavior. Rent-A-Center’s revenue grew $9M between 2018 and 2019 to $2.6B, operating income balloon an astounding $197M between 2018 and 2019 to $253M, helping net income to increase by $165M to $173M.
Employment rose by 2.5 million in May and the jobless rate declined to 13.3%, according to data Friday from the Labor Department that was better than economists had been expecting and indicated that an economic turnaround could be close at hand.
Non-farm payrolls rose by 2.5 million in May and the unemployment rate fell to 13.3%.
Wall Street estimates had been for a decline of 8.3 million and a jobless level of 19.5%, which would have been the worst since the Great Depression era.
Much of the gain came from those classified as temporary layoffs due to the coronavirus-related economic shutdown.
Leisure and hospitality represented almost half the jobs gained.
The country is not out of the clear yet, especially with a possible second wave expected, but this is some positive (even if temporary) news.
The Emergency Economic Injury Disaster Loan (EIDL) application from the Small Business Administration is fairly straightforward.
If you need assistance in filling it out, please contact me today as funds are limited and applications are coming in quickly.
4/16/2020 UPDATE: A loan officer from the SBA called me today to let me know that they will send an email with a .gov link (https://covid19relief.sba.gov/#/ do NOT click on any other URL extensions as there are many scams out there). Once I clicked on that, I resubmitted the same application which then takes me to the approval process.
You have probably noticed the deluge of advertising that is targeted to the new reality of being at home. This is obviously a response to the global pandemic we are all being affected by. The following is a breakdown of what is happening and how your business can harness the post powerful trait: adaptability.
Adapt Through Marketing Strategy Marketing
Aired prior to the COVID-19 crisis but replayed recently Campbell’s realized that people are stockpiling canned food. Set to a wholesome and nostalgic soundtrack without pandering to panic buying, they capitalized on an opportunity to remind customers of a classic pairing. On a side note, the music choice was oddly relevant — Thank You For Being a Friend was the theme song to the ’80s sitcom The Golden Girls and the elderly are among the most vulnerable to COVID-19.
Also, more people are telecommuting and are realizing their home computers might not be suitable for work so Dell aired a commercial for one of their newest laptops. Peloton, home office chairs, etc. are all advertising the benefits of being healthy and productive at home. Also, mental health app Talkspace, Delta Airlines offering free flights for medical volunteers, online education, bidets, and more are using this opportunity to advertise their products and services.
Adapt by Seizing the Opportunity
When disruptions happen, it is important to consider alternatives in order to adapt to the new environment. I have advised a new restaurant client to pivot their business model from a brick and mortar location to a commercial kitchen or food truck and adjusted their ad hoc financial projection model to reflect the pivot. Of course, depending on the stage of a business pivoting to a commercial kitchen or truck is not an option; which is why I always provide tailored consultations to each client.
Many people have a lot of downtime now with not having to go into work. It is a good time to take a break from watching the news and start mapping out the idea that you’ve been mulling. Who is your target market? Where will you be located? What are your startup costs? These are all questions you should know the answers to or be actively seeking if you are serious about taking the next step. If you do not know the answers or want a second opinion on, I always provide free consultation so send me an email. Afterwards, those pushup challenges on social media are also a good healthy distraction too from all the dire news.
These are better practices than gouging prices like that hand sanitizer guy.
COVID-19 is devastating the world economy to a degree which caused circuit breakers in the US markets to halt trading twice and oil prices to plunge below $30 per barrel. These macroeconomic tsunamis will cause waves to affect all aspects of daily operations for small businesses including closures, diminishing customer base, and supply chain disruptions. However, there is some relief:
1. U.S. Treasury to Help Advance Funds to Employers for Paid Sick Leave
Treasury Secretary Steven Mnuchin said his agency would advance funds to businesses so they can meet paid sick-leave requirements under a new House bill to combat the novel coronavirus.
In a statement late Saturday night, Mr. Mnuchin said employers will be able to use cash deposited with the Internal Revenue Service to pay sick-leave wages. For businesses that wouldn’t have sufficient taxes to draw from, the Treasury would make advances to cover the costs, he said. Read the full article here.
2. The Treasury Department is not your only option, SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance for a small business. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
the U.S. Small Business Administration is offering federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.
Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the Coronavirus (COVID-19).
SBA’s Office of Disaster Assistance will coordinate with the state’s or territory’s Governor to submit the request for Economic Injury Disaster Loan assistance.
Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities as well as updated on our website: SBA.gov/disaster.
SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
In order to get the process started to receive SBA’s Economic Injury Disaster Loans, contact Your Startup Guru here today