Now that we know all of our consumption over the past 20 years was irresponsible and we must pay for our awful behavior, The Detroit News ran a column yesterday about what we will and won't give up.
Of the six or so people interviewed, virtually everyone mentioned salon services. They were split: some thought of salon services as a need and no way were they going to give up their manicures and hair cuts. Others thought of salon services as a want and they opted to forego them.
More than ever, differentiating between needs and wants is critical to marketers, retailers, producers and companies such as TNG.
First, we must decide if we need the product to begin with. Let's take a bottle of wine. To those that don't drink wine, it is irrelevant. But let's say you have had a glass a day for the past ten years. Most will say that wine is a need.
Second, once identified as a need, what is the price we are willing to pay? If the average bottle of wine was $10-$15 in the past, what is the price you need to pay now? Wine in the range of $2.99-$4.99 a bottle is all the rage. Hence, consumption still occurs but at a far drastic reduction in price paid.
Eating out was also mentioned. During the "crazy" years, people would have a cocktail then order their meal. Again, people interviewed were split. The current trend is to have a cocktail at home first and then go to the restaurant. If alcohol is ordered, it is minimal and items like appetizers and desserts are eliminated. Again, the need is met but the consumption is drastically cut.
Retailers like Abercrombie must be wondering about teenager allowances. Need or want? Companies such as Altria (makers of Marlboro) have no worries as cigarettes are more of a need than ever. But what about coffee? We love our coffee and it is a need. But where do we draw the line? If not Starbucks, Dunkin' Donuts? Or Speedway? Or at home in a thermal mug?
Movies are doing well- a great value for the entertainment dollar. But do we need $4 Cokes and $5 tubs of popcorn?
We are lucky that people still need to go to salons to get their hair cut. We need to focus better on making salon services and products needs vs. wants. For instance, a $20 bottle of shampoo or conditioner today is a want. A $2.99 bottle of Ginger Lily Farms is a need.
I remember selling Essie polish for a buck a bottle. Today it's four bucks a bottle. How many bottles does anyone need at that price? If Essie was $2.99 a bottle, would people need or want it?
Perhaps the biggest question of all is what businesses do consumers need and/or want? For those that don't meet the right criteria, their future is doomed. And for this, I always go back to one of the Gallup customer engagement questions: "Can you imagine a world without (name of company)?"
I think the Big 3 and a whole lot others are wondering this very question.