Tentative times: US consumer trends for 2006

Business Resource USA

By Holly Miller, WGSN

Published: January 18, 2006

WGSN speaks with trend forecaster Irma Zandl, founder of New York-based The Zandl Group. Zandl predicts the trends – rhythms that will last a minimum of ten years - that will colour American consumerism in 2006 and beyond.

Summary

- 2006 will be a tentative time when Americans will take stock of where they are and where they are headed.

- Natural disasters and an uneasy political climate have made people feel vulnerable and exhausted.

- Blue-collar workers fear the country is becoming "a third world nation" as opportunities for a skilled labour workforce diminish.

- Spending is being looked upon with a more conservative eye: energy and income are devoted to shoring up resources and planning ahead.

- Product marketers should respond to consumers' anxieties by focusing on comfort, consistency and strong leadership.

- Brands must have personality. One of 2006's hottest products will be Tide, the laundry detergent.

- Brands that will fail in 2006 are those that "come across as trying to put one over on the consumer."

- "The Centre is the new Edge" - a return to the normal, simple, and even mundane will mark consumerism for the next ten years or more.

What's the hottest product of 2006? What brand has captured the attention and purse strings of Americans of all ages? Give up? It's Tide. The laundry detergent.

This news comes from trend forecaster Irma Zandl, president of the Zandl Group, a youth market consulting agency, and author of The Hot Sheet, a bi-monthly report analysing consumer behavior between ages eight and 24. Zandl and her staff have been compiling information on American mood swings and predicting purchasing patterns since 1986, using opened-ended surveys, "crib chats" (interviews in people's homes) and "subculture immersions" (documentaries on where young people live, eat, play, and buy).

When Zandl speaks of direction for the year 2006, she calls the coming year, "A Year of Reckoning." Citing the influence of natural disasters and an uneasy national political climate, Zandl says 2006 will be a time for Americans to take stock of where they are and where they are headed. The result, she admits, doesn't look positive.

"2006 will be a tentative sort of year," says Zandl. "Nothing is so bad that people are really pulling back (economically and socially), but no matter how much people are told things are good – they don't buy it wholeheartedly."

Natural disasters have made people feel "vulnerable" and "exhausted" and blue-collar workers fear the country is becoming "a third world nation" as opportunities for a skilled labour workforce diminish. Americans are concerned about losing their pensions, as it seems social security may not make it another generation: a large percentage of the population is retiring now and not enough youngsters are continuing to pay into the system.

Moreover, more Americans are choosing alternative career paths, working for themselves or freelancing and, thus, don't have company retirement or health care plans. Spending, subsequently, is being looked upon with a more conservative eye; energy and income are devoted to shoring up resources and planning ahead.

"People are in a funk. They are exhausted. They are shopped out. This will run its course, but (for now) they are paying off debt or their minds are on other things," says Zandl.

What's a marketer with a product to move to do? According to Zandl, the answer is to appeal to comfort, consistency and strong leadership. Or, in other words, to respond to consumers' anxieties.

"The brands that pop up (on our surveys) are the ones where people feel a clear point of view," she says. "They know who owns the company and it translates through to the product, the store and the environment."

Which brings us back to Tide. Zandl says it was the only brand that consistently appeared across America as one Americans were "hooked on."

"Tide has a lot of line extensions, but there was a connection to your mother having had it – it was a constant in (the interviewees') lives."

A few others brands that rank: P&G, Whole Foods supermarket ("taps into sustainability trend, and a single family owns it"), Apple, Jet Blue, Starbucks, and in apparel, Anthropologie - the upscale line from Urban Outfitters - where women gravitate to the "comforting" environment.

These top brands also have personality. "People talk about Target a lot. They respond to Rob Ulrich, CEO – he's 'visibly' behind everything. He's consistent."

Jetblue and Apple are cited for their strong lifestyle and design messages.

Conversely, the brands that will fail in 2006 are those that "come across as trying to put one over on the consumer."

Spenders are sensitive to buzz marketing, the faux press strategy used by companies like Burger King, which involves planting fake "buzz" about new products to drum up consumer interest.

Zandl says: "People worry now, 'Are you buzzing me?'"

The overarching theme for Zandl's insight into 2006 is the idea that "the Centre is the new Edge." According to Zandl, a return to the "normal", simple, and even mundane – be it product, experience, service or otherwise - will mark consumerism for the next ten years or more.

Below, WGSN and Zandl explore the what and how to of selling for 2006 and beyond.

Sustainability

Sustainability - concept and practice - is inspired by the belief that the health of the environment is tied to economic development. Its purpose, as outlined in the United Nation's Brundtland Report of 1987, is to "meet the needs of the present generation without compromising the ability of future generations to meet their needs."

Retail is rife with potential for sustainable ventures, as evidenced by Walmart's sustainable-only test stores in McKinney, Texas, and Aurora, Colo., which feature solar panels and waterless urinals.

"I think sustainable is going to become the new buzzword in the same way that organic has been. But sustainable is going to be much more of a mindset. Americans are starting to come to grips with limited resources," muses Zandl.

The South

Citing a booming population - a 36% rise in the region over the last decade – and a reserved, easy-going spirit in keeping with the nation's current mood - Zandl sees the South as the latest cultural leader in the US.

"The Southern influence translates into more Southern rap," says Zandl. Moreover, NYC hipsters are showing an interest in "real country," both in fashion and "old time country" music.

"Tricked out" cars can reflect a "dirty South" aesthetic, says Zandl. She also highlights fancy mobile homes and the spring 2003 Dwell magazine contest to design a pre-fabricated home in South Carolina. These represent a meeting of the South with youth-driven trends like sustainability and retro inspiration.

Celebrity backlash

Overexposure, thanks to a parade of weeklies, and competition from "real stars," born from blogs and reality television, are loosening celebrities' hold on America's attention span.

Zandl anticipates that "regular people" will begin to take advantage of participatory media – media that puts the viewer in the spotlight.

"I think people are getting tired of celebrities. There's less mystique about it. When everyone…can become a celebrity, [big stars] are less interesting."

Zandl notes Current TV network – a station with one-third viewer-created content, uploaded from its website and democratically elected by viewers to be aired – as one example of the new "We media." Other examples include Wikipedia, the free online encyclopedia edited and written by its readers.

Wine bars

The era of Sex-and-the-City cosmopolitans has passed. The future is with the quiet, small, boutique feel of wine bars, often featuring local vino and offering patrons a mini-lesson in oenology.

"Wine glasses have become the new status symbol replacing martini glasses," says Zandl. That's because of their more sophisticated and more intimate feel. Furthermore, "people love that there is something to learn."

Retro kitsch

Once appealing to only the edgiest of consumers, retro kitsch activities and products have a sense of playfulness and relaxation that Americans of all ages and types seem to crave.

A dive bar promises authentic experience that spaces such as Remote Lounge - a NYC bar where patrons watch and contact each other via television screens - simply can't.

Videogames and boutique hotels are a good place to look for interpretations of retro kitsch, says Zandl. Games feature 80s soundtracks spiked with the likes of Michael Jackson, Mötley Crüe, and David Lee Roth or 8-bit soundtracks that mimic the sounds of early games.

Revolution, a new system by Nintendo, allows users to play all its games since 1985. In hotels, the Phoenix Hotel in San Francisco or the Avalon in Los Angeles are two new locales incorporating mid-century modern design elements. The retro kitsch spin, says Zandl, offers a "comfortable and fun" alternative to the standard, or even futuristic, versions.

"It's also a backlash to slick mass marketing," says Zandl. "It's about dodge ball and karaoke, things that are fun and unpretentious."

Retro kitsch is important for teen retailers, such as Urban Outfitters and PacSun. Unlike authentic retro, it isn't limited by consumers' understanding of the reference.

Small is big

Audiences can choose from a plethora of TV networks and alternatives like TiVo, On Demand and Netflicks to customise their viewing experience. The scenario isn't only a television phenomenon: it's indicative of the challenge a long "tail" of smaller services can present to bigger organisations.

The more people get used to things being for them, the more they like it, says Zandl. "Once you can get what you want, when and how you want, I don't think you can go back."

"Little," or niche brands, have the advantage of providing more unique, tailored customer experiences. The key for big brands, Zandl says, is to incorporate a niche mindset into their big company's philosophy.

Estee Lauder, for example, buys small, singular brands like Jo Malone and Aveda and manages them alongside brands with mass appeal, like Clinque and Lauder brand.

Religion and faith

A third of America is born again and it seems the religious population is on the rise, says Zandl. Companies such as 20th Century Fox are devoting their attention toward Christian-oriented products. www.FoxFaith.com promotes the company's movies for faith-minded people and Starbucks is using religious quotes on their cups, notes Zandl.

Furthermore, churches see themselves as businesses and use modern marketing methods to attract more "customers". "Mega-churches" install hi-tech, theatre-style chairs to lure men. The evangelical Lakewood Church in Houston, TX, with a regular attendance of 25,000, broadcasts its services online and televises them throughout the States. A recent GodBlog Convention held in Southern California in October 2005, focused on, as the name suggests, Christian-oriented blogging.