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Treasure Hunt: Inside the Mind of the New Consumer
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Sales rank 434,240
Customers rating (based on 27 reviews)
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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.
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| Publisher | Portfolio Hardcover | | Release date | 05/2006 | | Availability | | | Edition | Hardcover |
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Continues where Trading Up left off
If you read "Trading up" you know that people will scrimp, save, and sacrifice to get a few luxury items. They buy generic food, don't have cable or satellite TV, vacation every other year, just so they can drive a BMW.
"Treasure Hunt" is about the low side of the buying spectrum. Consumers make a game out of finding the best prices on lower end products without giving up a lot in quality. Cereal. Toilet paper. Ground beef. Office supplies, etc. Hello, Costco!
Both books clearly outline the "Death in the Middle" concept. If your product is not in the luxury class, nor in the budget class, it is doomed. You lose the people who trade up to get the elite product, and the people who trade down to find the best prices on products that are "good enough."
The "Death in the Middle" concept works for a lot of products. But one has to wonder how products like the Toyota Camry, Sony Handycam, Levi's Jeans, Dell computer, etc. still sell when they are not in the luxury or budget class for their types of products. I think there is still a market for value-priced products that deliver solid quality/reliability and are reasonably priced.
The Silverstein books provide outstanding insight that you cannot ignore when positioning your product. You can tailor your marketing more precisely if you understand who your customer is.
Insights into a seismic shift in purchasing power
There is little doubt that the recession of 2008 will cast a long shadow into the future, and curtail much of the "wealth effect" discretionary spending that many consumers may have carelessly engaged in since the millennial turn. However, people will still continue to need and want various goods and services despite economic realities. More and more consumers are seeking for value - in its many forms, which include propositions such as sentimental effect, whimsy, feature-rich or rarity. In the book titled Treasure Hunt the authors postulate a significant move toward a seeking-type trend in consumerism that is reshaping the retail landscape. The authors write that middle-class women are driving this change but state that these consumers are bucking traditional buying patterns by flirting with purchases both above and below their means. While this may create headaches for those along the retail supply chain who like to categorize purchasers into cubby-holes, Treasure Hunt provides a refreshing look at the growing power of consumers which is one of the reasons Soundview recommends this book. Companies that are able to adapt to this shift should thrive during any economic cycle, while those that can't may not survive this current economic downturn.
 Brilliant!
As a professional copywriter, who lives and breathes branding every day, this book is a brilliant encapsulation of the last 10 years of consumer trends.
The "Death in the Middle" concept as consumers reach more and more for either high or low end products and complete sidestep and ignore the midpoint is likely to be even more apparent in the current recession atmosphere.
In a very real sense this book might be seen as a companion piece to the Millionaire Next Door by Stanely. The behaviors describe by Stanely are being presented by a growing community of savvy shoppers.
As the economy tanks, but people still opt for Apple computers, William Sonoma cooking wear and other high priced brands, this is the book that explains it.
Given the current economic environment, marketing executives have a clear choice. They can either read this book or wish they had.
Interesting reading!
Michael Silverstein explores the story of how people around the world are reshaping the consumer goods market by trading down to low-price products and services; trading up to premium ones; and avoiding the boredom and low value that increasingly characterize the middle. The author says that the consumers driving this change are mostly women, who have a sense of purpose and power when they buy and use goods and services.
According to the author, there are two rapidly growing pools of spending. At the high end, consumers are trading up, willing to pay a premium for top quality, emotionally rich, high margin products and services. At the low end, consumers are relentlessly trading down to spend the least amount possible on basic, low-cost goods that still deliver quality, reliability and, increasingly, an element of style. In between these spending poles lies a vast expanse of mediocre, often low-margin goods that lack distinctive emotional appeal or better value than their cheaper competitors. Companies selling these mid-priced products to middle-class consumers suddenly find themselves facing "death in the middle." Companies that succeed in this bifurcated market are those who understand the attitudes, behaviors and values of middle-market consumers and constantly alter and reinvent their product to satisfy the consumer.
The author says that today's consumers are highly skilled shopping experts. For them, consuming has become a treasure hunt--a constant search through the world's vast and ever-changing store of goods and services to find the perfect value every time. Such consumers spend their money with individuality---trading up in some categories, trading down in most and mixing upscale with downscale products--to create a customized lifestyle and standard of living suited to their own taste. For example, a $150,000 professional who buys $19 jeans at Target, flies Air Tran, and pays $100 for her dog to be groomed, as well as a $50,000 plumber who leases a $27,000 BMW and buys clothes at Kohls.
Trading-down companies have created 10 times plus the market value that trading up companies have created. Big winners include Target, Costco, Lowe's and Dollar General.
Whereas those at the top of the income ladder are rarely forced to make substantial trade-offs, and people at the bottom have few options, those in the middle constantly face difficult choices. In the United States, the middle class is defined as the 48 million households that earn between $50,000 and $150,000 per year. These people control 75% of discretionary spending, which means they control the market. They are not going into debt to trade up, nor is debt driving them to trade down. They do both because they can and want to. The purpose is not to just find the lowest price (if you are trading down) or highest quality (if you are trading up). It's to determine the right price for the right product at the right time and place.
Every middle-class consumer has a "want list" of things she wants to buy that is constantly revised. If you understand the want list of your consumers, says the author, you may discover that you are competing not only against other companies in your category, but also against completely different categories. For instance, if you make watches, your toughest competitor could be a handbag seller. If you sell flat-screen TVs, your toughest competitor might be a Caribbean cruise or a high-performance mountain bike.
Cheap used to mean bad. The cheap product was, by definition, of low quality. If you bought your clothes at K-Mart, it wasn't something you talked about. But the author correctly says that today, everyone loves a bargain and they brag about the low prices they get. It's a victory to spend the smallest amount you can, no matter how wealthy you are.
In 2004, 66 percent of households report having shopped at a dollar store, and higher-income households are the fastest-growing segment of customers. Retailers are looking for ways to fight back. Wal-Mart has been testing concepts for its own in-store version of the dollar store. One is called the "Hey Buck" section where food and soft goods sell for an average of 98 cents per item. Target has tested a concept called "One Spot" with merchandise priced at $1. The author says that the low-cost revolution will continue.
Best Value Inns (BVI), the fastest growing hotel company in the U.S., has become the preferred choice for business and leisure travelers who are seeking a clean room, free cable TV, swimming pool, mini-fridge and free morning coffee, and can only afford around $65 a night. A stay at a BVI is a smart use of money, according to the author.
Marriott seems to have mastered the difficult trick of succeeding at both poles of the market. Long known as a middle-market hotelier, they purchased the premium Ritz-Carlton hotels. They have also aggressively expanded in the trading-down market with Courtyard by Marriott properties for business travelers and low-price Fairfield Inns for leisure travelers. Marriott's biggest growth in rooms and revenue has come from its trading down brands.
All hotel owners are looking for ways to differentiate and respond to the bifurcation of the market. According to the author, the worst place to be is in the middle where average returns are below the cost of capital. The best place to be is at the bottom of the market.
LG, the $50 billion South Korean worldwide manufacturer of electronics, chemicals and industrial products, has accomplished what few companies in the world have done: transformed itself from a supplier of low-cost, poor-quality goods to a leading producer of home electronics and appliances that serve both trading-down and trading-up consumers. Today, their appliance division is possibly the fastest-growing and most profitable in the industry. They offer a $550 top-freezer refrigerator that competes with Frigidaire and Kenmore on the low end and a $3,100 model that competes with Sub-Zero at the high end. For LG, spanning the poles is about participating across the whole range of price segments in its market.
Then along came eBay. As more than 135 million registered users in 32 markets have learned, eBay offers the thrill of discovery every day. After just seven years of operation, eBay had created a market value of $42 billion--greater than the entire value of the department store industry of the United States which has been operating for a century. What eBay offers is a fantastic business model: an online community that brings 336,000 registered stores worldwide, many small or geographically isolated, into one global marketplace. The estimated average selling price is $36, so the population for buyers represents all income levels. Most users come from middle- income households who shop there for treasure.
People are looking for emotional highs. Winning companies invent new products that capture the consumer's imagination. The author says that taking action means innovating, not just more of the same, or considering acquisitions or increasing your advertising spending; but rather think about innovation as a series of waves of reinvention and change, each lasting three to five years and no longer.
Any Advertising Rep should read this
This book should interest you especially if you are in the field of advertising. This book gives you insight into the psychology of buying. I found it very interesting as to how the new consumer ticks. There is a reasson why people buy what they do and you'll find out the information in this book. I applied the knowledge I gained in this book to my business. Great insight.
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