Time To Swap Those Four Ps For Five Es
June 26, 2006
In my work as a retail analyst, I've noticed a new kind of malaise: Consumers simply aren't excited to shop anymore (witness Federated's unloading of Lord & Taylor last week for $1.2 billion). This sense of retail boredom can be found all over the country, but many retailers and manufacturers have apparently decided to ignore the situation and hope it goes away. That's because they can't rely on traditional methods to gain perspective on what consumers want.
Waiting for this storm of boredom to blow over is a losing proposition. Instead, quick-witted marketers must learn how to reconnect with their customers. Once they do, it will become that much easier to decide how to improve the marketing process start to finish.
How does one begin to change the habits and retail protocols that have, over many years, become our common currency? Even today, the underpinnings of the retail world are still based on the tried-and-true "Four Ps" of price, product, placement and promotion. Understanding the Four Ps is still important to help retail businesses survive in today's world, but none of them will help a company thrive there.
That's where the "Five Es" come in. To fully address the new needs of increasingly jaded and bored consumers, smart companies need to Educate, Explore, Elevate, Entertain and Evaluate. When used together, the Five Es will shed light on the part of your operation that is currently in the dark and help you refine your brand, product or service to achieve optimum results. Here's how it works:
Educate. Sure, it's easy to put products under consumers' noses, but it's much harder to put products out there with the information customers need to make their buying decisions. For example, while other automakers were busy showing the style and speed of their cars in TV commercials, Volkswagen's "Safe Happens" spots shocked viewers by portraying a collision (the Jetta passengers walk away shaken but unhurt). Volkswagens aren't necessarily safer than other cars, but because the automaker took the high road by educating consumers, it gained a subconscious edge in consumers' minds.
Elevate. Apple Computer's iPod is a prime example of a product that elevated consumer awareness and created a new market in the process. Remember what life was like before the iPod? Listening to tunes meant playing CDs; only a smattering of tech-savvy consumers even attempted to understand the concept of digital music. But thanks to an incredible marketing program (and a groundbreaking product), the iPod became a must-have item for millions.
Explore. To truly capture consumers' hearts, companies should explore new methods of making their lives easier. Whole Foods is among the companies to do this most successfully. This natural-food retailer makes it easy for consumers to spend the better part of a whole day inside. In-store cafes allow customers to buy and read a newspaper or check e-mail (via Wi-Fi) while sipping a cappuccino. They can stay and have sushi for lunch and then buy a prepackaged meal to heat up later at home for dinner. By going beyond food shopping and transforming stores into destination places, Whole Foods has found a powerful way to be important and relevant to its customers on a daily basis.
Entertain. Entertaining consumers can inspire purchase behavior, but that's easier said than done. Starbucks has done it by aligning its signature product with different forms of entertainment. Today, consumers waiting on line for lattes will encounter CDs for sale. Starbucks recently went a step further by producing the movie Akeelah and the Bee, a strategy that further associates "Starbucks" with "entertainment" in consumers' minds.
Evaluate. These days it's nearly impossible to take your car to a Lexus, Nissan, or Lincoln Mercury dealer for service without being asked to fill out a survey. Companies, of course, need to measure consumer perceptions. But in addition to helping headquarters better understand (and market to) its customers, these surveys serve the dual purpose of letting customers know that a giant corporation actually cares about their opinions.
Putting the Five Es to work results in a more cohesive game plan: one that engages consumers while simultaneously helping companies stay connected to them at all points along the retail continuum. After all, if you can bolster relationships with your customers, you're not only benefiting your internal operation, but also forging better, longer-lasting relationships with consumers overall. That can pay increasingly large dividends in the future-a time when consumers might actually be excited to go shopping again.
Marshal Cohen is chief industry analyst at the NPD Group, Port Washington, N.Y. Contact: (516) 625-4660; email@example.com.