LOOKOUT
Chock full of data on the USA's 281,421,906 people, the 2000 census is expected to provide an intimate look for marketers at population swings, demographic groups, regional migrations and changing family structures. Early returns show that the total U.S. population jumped 13.2% from 1990. Nevada was the fastest growing state, with a 66.3% growth rate; Arizona's population leapt 40%; other booming states were Colorado, Utah, Idaho and Georgia. A sharp rise in the U.S. Hispanic population helped fuel Western growth. Companies will be looking to the new census to track today's most carefully watched trends and forecast tomorrow's. A host of companies have sprung up with the sole mission of helping to crunch and analyze census data so clients can plan store locations or test-market new services.
The United States Postal Service is stepping up its plans to provide new advertising opportunities for marketers. To that end, the Post Office is introducing the Postal Ad Network. This group is selling properties the same way media conglomerates do. Visa, for example, bought ad space on 20 million Priority Mail envelopes. Other government entities are also transforming ad-free environments into revenue-producing advertising outlets. One example: space on the side of trash barrels on municipal beaches. And there are plans to sell naming rights to everything from subway stations and airports to school buildings and stadiums.
Retail sales plunged 33% last year for fat-free potato chips, according to ACNielsen data for food, drug and mass-merchandising outlets. Other fat-free products, such as cookies, margarine and ice cream, also fell precipitously. Surveys by researcher NPD Group of Port Washington, NY, found an overall 12% decline from a year earlier in the frequency that consumers reported eating fat-free food. Yet as demand shrinks for fat-free food, some smaller entrepreneurs are trying to buck the trend such as the Manhattan store F3 Fat Free Foods. "Mainstream markets become specialty markets as they decline," comments Jagdish Sheth, an Emory University marketing professor. "As larger marketers lose interest in a field, there is often cause for small specialists to move in."
Chief privacy officers are increasingly common in the executive suite, not just at dotcoms, but at companies like IBM, AT&T and Eastman Kodak. Alan F. Westin, who runs a training program for chief privacy officers, Privacy and American Business, recommends that duties include: setting up a privacy committee; studying and assessing privacy risks of all operations involving personal data; developing a company privacy code; interacting with concerned regulators and consumers, providing a contact point for consumers; creating and overseeing employee privacy training; monitoring privacy laws and regulations and the company's compliance; and conducting privacy reviews of all new products and internet services.
$19,000 is the average price tag to design and produce a typical interactive CD-ROM at a large ad agency, $12,000 at a small one. At least that is the finding of Second Wind Ltd., an international network of 720+ small and midsized agencies. Other findings in the group's pricing survey: total cost to produce a high end web site with e-commerce capabilities averages $90,000 at larger agencies, $35,000 at smaller. Production of a two-page four-color spread: $14,000 at large, $8,100 at small. Costs include everything from concept to layout and design to completed digital files and film or negative if required.
Which parts of the U.S. will feel the biggest pinch from a souring economy? This time, many economists suggest the Midwest is likely to be hit hardest because the slowdown is striking manufacturing first. The Rocky Mountain states should weather a downturn best, partly due to the flood of new workers who poured into the region during the 1990s. Over the past two decades, virtually all states have been recruiting new industries. But these states don't know how well they will behave during a recession. According to Economy.com, a West Chester, PA, economic consulting firm, the regions in order of 2001 job growth are projected to be: Mountain, 2.4% increase; Southwest, 2.2%; Southeast, 1.7%; Far West, 1.5%; U.S., 1.2%; Great Plains, 1.1%; New England, 0.9%; Mid-Atlantic, 0.8%; Great Lakes, 0.7%.
Marketing gurus and management experts are studying Generation Y as it enters the workplace. While Gen X'ers came of age in an era of soaring national debt, predictions of Social Security apocalypse and a bleak job market in the recession of the early 90s, the younger set mostly has memories of economic expansion. Their parents, the baby boomers, were obsessed with child rearing and car-pooled their progeny to soccer games, tutoring and community service projects to beef up college resumes and self-esteem. A source of potential conflict: Gen Y expects office cultures to adapt to them, rather than the reverse. Reality may be on the way, though, in the form of the current economic downturn. But so far, it appears that the latest dip is not raining on Generation Y's parade or sense of entitlement. Neil Howe and William Strauss, authors of "Millennials Rising," theorize that the differences between the two youngest American generations to come of age trace not only to economics but also to cultural influences. Raised in the 1970s, Gen X'ers are children of the consciousness revolution, a time when children were often neglected at the expense of parental self-fulfillment. Gen Y was raised by prosperous, increasingly conservative, childcentric parents, says Howe.
The message that good manners can bolster one's career has become a trendy topic in books. In 1999, HarperCollins released "The Etiquette Advantage in Business," by Peggy and Peter Post. And this year, IDG Books, the Dummies book series, published "Business Etiquette for Dummies," co-authored by Sue Fox, president of Etiquette Survival Inc. in Las Gadas, California. The message: "What you really want to do is make sure you, the employee, are perfect in everything that you do. Don't give the boss any reason to give you the pink slip," says Fox. Some important do's: sitting upright at business meetings with both feet planted firmly on the floor; knowing how to order a good wine at a business meal; being a good listener; and mentioning the names of people you talk to at business meetings. And the don't's: handing business cards out like candy; answering a cellular phone in the middle of a business lunch or dinner; and eating hot, spicy foods in an office cubicle where colleagues are forced to breathe the aromas.
The Internet Advertising Bureau, reacting to advertisers' complaints about banner ads — the shallow horizontal rectangles at the tops of web pages — and their inability to grab readers' attention, has approved a new advertising format and a number of new sizes and shapes for web page ads. Jim Nail, an online advertising analyst with Forrester Research, an internet consulting firm, comments: "Advertisers will feel good about these new ads, because they look more like something you'd see in a magazine or a newspaper." The catalyst: large format ads appearing on Cnet, the computer shopping and news web site, then several me-too responses from publishers like Snowball.com and The New York Times on the Web. The advertising bureau's seven new ad sizes resemble ads that appear in columns and boxes in print publications.
The latest phenomenon for travelers these days may be hotel rage. A small but growing number of guests are losing their cool over hotel headaches with loud gripes and, in some cases, abusive behavior. They're angry about everything from overbooked rooms to noisy renovations, and are pushing national complaint levels to new highs. According to a recent survey by J.D. Power and Associates, the number of guest complaints is up 22% from two years ago. While people have gotten angry at hotels before, analysts say the industry has made the problem worse. Hotels have tightened check-in rules, doubled the number of renovations, and increased the rate of overbookings by an estimated 30%. Add to that the record flight delays that travelers are enduring and the results can be explosive. Violent outbursts remain rare, but hotels are taking precautions.
The prospect of consumer belt-tightening doesn't particularly worry many of the nation's most luxurious health clubs, which offer everything from dining and spa services to shopping and exercise facilities. In addition to pulling revenue from memberships, these clubs make money from food, personal trainers, clothing retailers and other sources. Though the clubs spend astronomical amounts staying responsive to members — Chicago's 20-year-old East Bank employs 600 people, several just to gather and wash 19,000 towels a day — the additional sources of income give the upscale gyms a cushion to fall back on. Of East Bank's $42 million in revenue last year, dues accounted for only 53%. These gyms offer luxuries and also serve as places to network and entertain.
Eye shadows, lipsticks and body lotions once seemed the perfect web products. Marketers figured women love to browse among a superabundance of shades, and they could do that more conveniently online than in the department stores, where they could never take a Bobbi Brown lipstick to a Chanel counter to compare. Women who might be intimidated by a department store counter would rush to shop online, and the web would be ideal for reordering that favorite blush, the logic went. It didn't turn out that way. One problem: the inability of sites to offer the big cosmetics brands because manufacturers such as Estée Lauder balked at ceding distribution and image control. Another glitch: computer graphics don't lend themselves well to color shades, crucial to makeup sales. One answer could be a bricks-and-clicks combination. Shoppers are more likely to buy makeup or skincare products from a web site if they can return wrong shades to a store.
These days, art often comes with strings attached. The long art boom may finally be cooling in some areas, but the market for contemporary art is still hot enough to give artists the upper hand over hungry collectors. Today's artists want visitation rights, they want their works hung in a certain light or in a certain frame, and they want art buyers to sign the art world version of a prenup.
Despite a slowing U.S. economy, Mexican retailers are eagerly expanding north of the border. Immigrant incomes are rising in the U.S. and a local beachhead provides a hedge against a weakening peso and cooling consumer demand in Mexico. The latest chain to arrive is home appliance and furniture vendor Famsa, which opened its first U.S. store in San Fernando, a Latino suburb of Los Angeles. Famsa, whose 240 stores in Mexico will post sales this year of $750 million, plans to open 15 stores in Southern California through 2003. Famsa is the third Mexican retailer to enter the U.S., following Grupo Gigante SA and Grupo Comercial Chedraui SA, two chains operating a combined 300 supermarkets in Mexico.
Manufacturers of digital cameras are trying to keep sales booming as other electronic products have slumped in recent months. They are hoping to do this by improving other features in digital cameras and pushing harder into printing and related services. Sony, the top seller of digital cameras in the U.S., is now offering retailers a "Print by Sony" service station, complete with its own printers and brand of photo paper. The concept is designed to let consumers manipulate and print images from digital media or scanned-in photos without having to buy a personal computer and printer. Other manufacturers, including a joint venture between Hewlett-Packard and Eastman Kodak, are creating new kinds of printers so retailers can keep a hand in the profitable photo-finishing business.
With occupancy rates down, hotels are trying to fill rooms by tripling the number of romance packages, which now account for as much as 10% of hotels' annual revenue. The new escape-from-it-all deals are seducing empty-nesters and over-worked couples with the kinds of extras once reserved for honeymooners: couples' massages, sleigh rides, aphrodisiacs. Such packages are filling rooms vacated by business travelers and turning romance into a year-round moneymaker.
In past eras, expatriate workers were inevitably men and the wife was the "trailing spouse." But last year, 13% of expatriate employees were women, according to a study of 154 companies, mostly American, by GMAC Global Relocation Services in Liberty Corner, NJ. That figure could rise to 21% by 2005 as more women climb the corporate ladder. Married women accounted for 10% of female expatriate employees last year, up from 5% in 1999. And more husbands are suspending their careers to accompany their wives. "In the past, there would be a commuter marriage when the woman got a job abroad," says Ilene Dolins, a GMAC vice president. Multinationals are starting to help working couples, including educational and other allowances for the trailing spouse.
Not since the 1970s has the unshaven face been so popular. "Pruned to perfection and worn with flair, a beard can create a strong impression. And an impression of strength." So says Salvatore Fodera, owner of the salon that bears his name at the St. Regis Hotel in Manhattan. That theory may account for the recent public outcropping of whiskers on personalities as diverse as Tom Hanks, who shows off his Robinson Crusoe bristles in "Cast Away," Russell Crowe, who sprouts a savage stubble in "Gladiator," and Johnny Depp, who wears a rascally swatch of chin hair in "Chocolat." Men on the street seem to be showing off a stylish brush, as well. "Lately I've trimmed more beards than I have in the last 30 years," says Adrian Molé of the Paul Molé salon. "Growing a beard seems a manly thing to do."
Marketers may covet a spot on your key ring. Exxon Mobil's creation, called Speedpass, is a 1 1/2" long plastic wand that dangles from a key chain. It lets drivers charge gas to a credit card simply by waving the wand in front of a pump. More than 4.6 million U.S. consumers have used Speedpass. Now grocery stores want to hang tiny bar codes from your key chain. So do health clubs, video stores, and others. Startups see key rings as a way to bridge the gap between online and offline commerce. As a result, the mundane key chain is becoming a high tech information center.
A new computer game system is designed to teach children to improve their ability to pay attention. Called the Attention Trainer, the game system uses the principles of neurofeedback, a therapy that involves teaching a user to modify brain waves to achieve a desired result, like stress reduction, relaxation, and, in the case of the new game, concentration. It costs $899. Tom Blue, senior VP and co-founder of East3 Ltd., the company that developed the device, says "it will teach kids what it feels like to concentrate — the technology will act as a mirror to accelerate learning."
Online corporate booking systems have become the fastest growing segment of the internet commerce travel market. By 2005, business travel sales generated on managed corporate booking systems will grow nearly eightfold, to $33 billion, according to a report by Jupiter Research, a leading authority on e-commerce trends. Even with this sharp growth, online booking will still account for only a small portion of the total that American companies spend annually on business travel (about $185 billion in 1999, according to the Institute of Business Travel Management. But the projected steep increases from the $4.4 billion booked through inhouse corporate booking sites last year suggest that a major cultural change has begun for the way business travelers manage and arrange their lives on the road.
Fake luxury goods are increasingly realistic. As the luxury economy falters, a boom in high-end fakes is shifting into overdrive. These aren't the old, tacky knockoffs that can be spotted a mile away, but a new breed of look-alikes, born of high-tech manufacturing techniques and savvy packaging. They are pricier and more varied than even a year ago, and thanks to new distribution channels, more available than ever. Retailers estimate that in the last year alone, sales of fakes have jumped 25% to $2 billion a year.
AARP, formerly known as the American Association of Retired Persons, is re-introducing a much more attention-grabbing, slicker-looking Modern Maturity, the largest consumer magazine in the country. It is aimed at the 55-and-older crowd who belong to AARP. A bold new cover design features two large M's and the words "Modern Maturity" in small type. A steely-eyed Clint Eastwood adorns the cover. A new junior version called My Generation, aimed at a 45-55-year-old readership, lets baby boomers know that it's hip to be old. As America's population ages faster, advertisers clamor to reach those older, fatter wallets.
An oft-forgotten financial resource, the U.S. Small Business Administration helps companies get medium- and long-term guaranteed financing — not just startup funds. With 7(a) Guaranteed loans the agency guarantees 75% of up to $750,000 of a loan that can be used for anything, i.e., working capital or the purchase of equipment. The interest rate is variable or fixed and may not exceed 2.75 percentage points over prime. 504 loans finance the purchase of assets such as land, buildings, plant and equipment and have maturities of 10 and 20 years. Fixed rates are pegged to five- and ten-year Treasury notes plus a maximum of two percentage points. LowDoc loans of up to $150,000 are approved in up to 36 hours with one-page documentation. Microloans up to $25,000 are funneled through nonprofit community lenders.
The trunk show, a decades-old, highly personalized sales tactic, is making a steady comeback with retailers across the country. They are typically two-day affairs where designers send representatives to stores to present their clothes in an intimate setting and then take customized orders from customers, at full price. As more consumers become picky about all kinds of products they purchase, retailers now see opportunities in events such as trunk shows to fulfill consumers' growing desire "to customize more of their own product, from creating their own CDs on the internet to bikes and jeans," says Philip Kowalcyk, a retail analyst at apparel industry consultants Kurt Salmon Associates. "The trunk show is a fantastic method to build retail traffic that is specifically not a 'sale' event."
Just uncovered: a new trick that enables someone to bug an e-mail message so that the spy would be privy to any comments that a recipient might add as the message is forwarded to others or sent back and forth. This is one feature of a fancier and increasingly common form of e-mail known as HTML mail, which enables users to send and receive e-mail messages that look and act like a web page. With the spying technique, a few lines of a programming language called JavaScript, often used on web sites to create pop-up windows and navigational aids, can be embedded in such a message. This implant, not visible to the recipient, enables the text to be secretly returned to its original sender every time it is forwarded to another recipient, as long as the recipient's e-mail programs are set up to read JavaScript.
Deemed unhealthy a decade ago, liquid diets are making a comeback. Many are being retooled as higher calorie drinks and are being combined with some solid food and weight loss drugs to prevent pounds from returning. Sales of prescription liquid diets, at $235 million last year, are still well below their peak of $419 million in 1989. But they have soared 45% since 1997, according to Marketdata, a Tampa, FL, firm that tracks the industry. An estimated 120,000 consumers are using prescription liquid diets today.