Wednesday, August 14, 2013

Drill Down to Dissect Trends

In retailing, look at the trends and select where to drill down for details. You want to decide what products to purchase for your store, what services to develop, how to advertise and publicize, what to prune out of your merchandising mix. All these require attention to where the marketplace is going, not only how things are now
     At the same time, you must attend to what the numbers are now. What do the numbers standing on their own say?
     An example of how attention to trends is deficient comes in a Harris Poll report released late last month. From an analysis of the trends, the report predicts consumers will be saving on small purchases so they can spend on major items. If this prediction is correct, you’ll want to adjust your merchandising and marketing.
     The evidence for the prediction comes from comparing current responses to those from seven months ago.
  • More consumers are cutting back on dry cleaning, cable service, telephone service, and bottled water. 
  • In spite of the economy easing, consumers aren’t showing increased interest in small purchases like hair styling and magazine/newspaper subscriptions. 
  • However, the trend is upward for plans to take a long vacation, move residences, and start a business. The Harris Poll report considers all these to be major expense items. 
     The survey methodology appears to be sound. A representative sample of 2,210 adults were included. And I have no reason to doubt the quality of the data analysis. This is, after all, a project of the respected Harris Interactive Inc.
     But I don’t agree with the interpretation of the data in the report. There was too much attention to trends and too little to the percentages standing on their own.
     For instance, in the latest survey, about 35% of respondents said they’re likely to take a vacation away from home lasting longer than a week. This compares with 29% from the prior survey. I agree 35% is higher than 29%. Still, the remaining 65% in the current survey said they’re not likely to take that vacation. While only 18% said they’re very likely to do it, 45% said they’re not at all likely to.
     The configurations are similar for the other purchase intention categories. I see no evidence that a critical mass of major expenditure plans has been reached. I wouldn’t change my merchandising or marketing plans based on these Harris Poll results.

Click below for more: 
Skim the Data to Spot Leading Trends 
Feature Economical Justified Luxuries

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