A recent report, “Casual Dining: How Brands Can Pivot from Irrelevance to Growth,” written by Tom Lutz, Dylan Bolden, Keith Melker and Mary Martin, sees the CDR (casual dining restaurant) segment as being at an historical inflection point, with older brands that have not maintained their differentiation fading (i.e. TGI Friday’s, Red Lobster, Olive Garden) and newer players rising to take their places (i.e. Chipotle, Panera Bread).
According to the report, casual concepts have been hit by a number of marketplace shifts, including the health & wellness trend’s emphasis on fresh, high-quality, hormone-free ingredients embraced by chains like Chipotle (to which CDRs are slowly responding); the growth of breakfast, which most CDRs do not offer; time-constrained lifestyles that benefit faster service models; and CDRs’ inefficiency in converting first-time guests to repeat customers (a 6.5% conversion rate, compared with 15% for quick-service and 18% for fast casual).
And while 23% of CDR visits come from Millennials, the report says that age group chooses quick-service restaurants or fast-casuals more often.
Are there inflection points in your industry?
It’s important for all marketers to look for inflection points within their industry, and at society at large. With the speed of technology, communication and business today, it’s easy for a company, even an industry, to lose connection with the key drivers of consumer choice, and more importantly, be willing to shift directions if an inflection point is observed.
Changes in people’s eating habits and a desire for more organic foods, lower consumption of sugar and soft drinks, market shifts away from big box retailers, new social media channels, streaming of music and video, and the umpteen new technologies and trends—from big data, mobility, cyber security, identity theft, cloud, and social business—are driving innovation and creating inflection points across virtually every industry sector, impacting the next phases of technology, consumerism and lifestyle shifts.
From office supplies to fashion, inflection points are affecting commerce in virtually every industry.
Certainly Office Depot and Staples have witnessed inflection points that have dramatically impacted their business. The advent of big online players like Amazon have made brick ‘n mortar retailers in the office products category, and big box chains in general) lose their once dominant connection with consumers. Like the CDR category, office products, electronics, jewelry, footwear and department stores, retailers have been hit by a number of marketplace shifts, least of which is the time-constrained lifestyles that benefit the ease and cost-efficiency of online purchasing. And while their online businesses have benefited, Office Depot and Staples have seen dramatic declines in in-store traffic over the past 5-10 years. Like the canary in the mine, all big box retailers are in danger and must reinvent themselves to survive.
Major categories in the brick n mortar channel such as tailored menswear have seen dramatic inflection points put enormous strains on their businesses. 240-store chain S&K Menswear is one of countless retail brands that have declared bankruptcy over the past 5 years, and fingers-crossed mergers such as Men’s Wearhouse and Joseph Banks may be the last flicker on the candle as men, especially Millennials and those in their 30’s and 40’s, are in industries that no longer require suits, or telecommute in their t-shirts at home.
Today, grocery chains that don’t embrace the seismic shift to healthier foods, organic produce, and hormone-free and antibiotic-free meats and poultry will find themselves rapidly losing market share to those that do. Target seems to be getting it. They recently announced they are prioritizing fresh foods over packaged goods. That means canned soup, cornflakes, boxed macaroni and cheese and other processed foods will get less optimal shelf space in a move designed to reflect the changing tastes of Americans looking for healthier options.
Coke and Pepsi have already reacted to this growing health & wellness inflection point by introducing or purchasing beverage brands with less sugar, less artificial ingredients, less chemicals, all the while, watching sales of their flagship Pepsi and Coke brands (including diet brands) shrink year after year.
Are we experiencing an inflection point in the way we view aging?
Fashion house Saint Laurent debuted an eye-catching ad featuring 71-year-old Joni Mitchell. Not to be outdone, Kate Spade and jewelry designer Alexis Bittar rolled out campaigns featuring 93-year-old style legend Iris Apfel. A short time later, L’Oréal announced that it had signed 65-year-old ’60s icon Twiggy as its latest brand ambassador, joining 69-year-old Helen Mirren.
These are only the latest members of a sorority of seniors being tapped by major fashion and beauty brands responding to a new inflection point about aging. These notoriously youth-obsessed brands are finally accepting—even embracing—women of a certain age.
That’s especially true of the luxury space with studies indicating that wealthier and older consumers are more likely than the young to pay more for quality goods. An important inflection point for luxury brands—from high-end automobiles, jewelry and timepieces, to luxury resorts and vacations.
Boomers are creating a huge inflection point for many marketers.
Baby Boomers control 70% of all disposable income in the United States, according to U.S. News & World Report. The group—defined by the U.S. Census as those born between 1946 and 1964—are 76 million strong nationwide and their influence on health care, technology, travel and e-commerce is growing rapidly.
Inflection points are numerous:
•People over 60 make up the fastest growing group of consumers in the world. In 2000, the 60-plus population globally was 600 million; by 2010, it had swelled to 800 million, and by 2050 it is expected to hit 2 billion.
•Technology is completely within their grasp, with 83% of the group conducting online research before making major offline purchases.
•When it comes to leisure purchases, 70% plan to take an overnight vacation in the next 12 months and 49% of Boomers plan to spend between $1,000 and $5,000 for their vacations in 2015.
•Overall, 55% of consumer packaged goods sales are made by Boomers. The demographic’s loyalty is worth earning, as 55% remain loyal to brands they like.
•Baby Boomers are expected to live longer than any previous generation, and they remain proactive when it comes to their health.
Many have written off Boomers in favor of younger generations, but as U.S. News’ research suggests, Boomers have only just begun to transform practically every industry in the country. A big inflection point, indeed!
STUART DORNFIELD is an award-winning freelance Creative Director/Copywriter with more than 40 years of experience in marketing, strategy, advertising and production. As the former Sr. VP-Creative Director of Zimmerman Advertising (Omnicom), the 13th largest agency in the U.S., and the former co-founder of Gold Coast Advertising, 3rd largest agency in South Florida, today Stuart offers his creative services and marketing insights as a freelancer with offices in New York and Miami.