Tag Archives: marketing

Reporting

Consumer Behavior During Times of Inflation—And How to Save

My article for the Kogod School of Business

According to Numerator, a white woman between the ages of 55 and 64 years old, married and living in the Southeastern suburbs of the US, is the “typical” US Walmart shopper. This shopper likely has an undergraduate degree and earns about $80,000 annually. She visits Walmart about once per week and picks up roughly 13 products for a total cost of under $60 per trip. This shopper spends about 13.5 percent of her income at Walmart and another 11 percent on Amazon.

The typical Walmart shopper primarily buys groceries, including chicken, fruit, snacks, and sweets, but she supplements her groceries with fast food meals. Her favorite five brands at Walmart are Turkey Knob, Cheetos, Betty Crocker, Dole, and Tyson.

With the price of goods continuously creeping up, consumer behavior has been surprisingly adaptive in response. During times of inflation, it’s expected that consumers will switch to cheaper alternatives and stop spending on items deemed non-essential. More surprising, however, is that higher-income households are on this tightening-of-belts pursuit of value to quite a similar degree as their lower-earning counterparts. In a CNBC report, Walmart CFO John David Rainey said the company is attracting more middle- and high-income shoppers. Seventy-five percent of the company’s market share gains came from customers with an annual household income of $100,000 or more. He told CNBC that inflation-strapped shoppers are trading down in quality and quantity.

So, what does this mean? The Morning Brew defines trading down as the phenomenon when consumers who are facing tough times swap high-priced items for cheaper versions. A similar trend occurred during the 2009-2011 economic downturn. The ratio of high-quality to low-quality goods shifts as recessions ebb. This is also a time when consumers start paying more attention to value, which Kogod professor Ron Hill describes as the idea of how much one must give up to get a specific good.

In addition to its convenience and low prices, Walmart’s recent investments in its digital capabilities are possible lures for upper and middle-class shoppers. Professor Hill suggests that another reason is that the pandemic eroded store loyalty.

People became used to uncertainty about what products they would find in the stores, so loyalty went out the window in favor of finding the best deal—or finding the item at all.”

“Plus, there may also be a ‘kitschiness’ factor at play where it may be kind of cool and quirky for someone who can afford to shop elsewhere to shop at Walmart,” says Hill.

Of course, Hill notes, the best strategy during inflationary times is to look widely for needed items to get the best value. Comparing prices online and planning your list ahead of shopping can offer the most significant time and money savings. And look to the experts like Professor Hill whenever you can for tips and tricks that you may not have tried yet to beat inflation woes!

Reporting

A Burning Hot Marketing Spot: How Burning Man Moved from Counter to Corporate

My blog post for Ministers of Design

Burning Man, the festival in the Nevada desert, oft-presented as the ultimate celebration of counter culture has undergone a bit of a transformation. The “playa” has now, for better or worse, becoming the playa-ing ground of some big-time tech players.

Once a year, tens of thousands of people (dubbed “burners”) gather in the Nevada Desert to create Black Rock City, a temporary metropolis dedicated to community, art, and all things DIY.

Along with the hippies, however, also came the CEOs and the venture capitalists. Now, you might be wondering, how can a place that is supposed to be devoid of any sort of cash or barter transactions become host to business wheeling-and-dealing.

Among the 68,000 attendees are some unexpected names – Facebook founder Mark Zuckerberg, Google founders Sergey Brin and Larry Page, and Tesla Motors CEO Elon Musk. It is not a rare sight to behold wealthy techies arriving, via private jets, to luxury desert camps fully staffed with cooks, masseuses, and assistants.

Burning Man’s founders are not exactly fearful of these new playa-ers–after all, they often fund the massive art installations and the festival’s nonprofit pursuits.

“What we’re seeing are many more of the Fortune 500 leadership, entrepreneurs and small startups bringing their whole team,” said Marian Goodell, Burning Man director of business and communications.

But what other way to describe what is taking place than “gentrification?”

“Anyone who has been going to Burning Man for the last five years is now seeing things on a level of expense or flash that didn’t exist before,” said Brian Doherty, author of the book “This Is Burning Man.”

For those with money to spend, there are camps that come with “Sherpas,” who are essentially paid help. “The tech start-ups now go to Burning Man and eat drugs in search of the next greatest app,” says Tyler Hanson, a “Sherpa.” “Burning Man is no longer a counterculture revolution. It’s now become a mirror of society.”

So, if you can grit your teeth and close your eyes (not just to the sand in the desert), Burning Man might just be the next frontier for some surreptitious networking and deal-making…you know…like the cool kids do it. Hippies meet hipsters; hipsters meet hippies.