Every once in a while, we like to share what we’ve been up to, including how our research engagements have helped our clients achieve their business goals and some of the lessons learned. This case study highlights W5’s approach to exploring and developing strategic market segments for a leading adult spirits provider.
For this study, W5 used a hybrid approach, beginning with ethnographic research of DIY spirits consumers, followed by a market segmentation to confirm initial insights learned from the ethnography. This study demonstrates how qualitative research and consumer segmentation can inform each other to produce more fleshed out, actionable consumer segments and bring these segments to life.
VALIDATING & OPTIMIZING A TARGET MARKET
A leading wine and spirits client sought to evolve the brand image of a specific brand in their portfolio ‒ the strongest performing product they offer. After identifying a hypothesized target market of DIY consumers who actively engage in category consumption and usage, primary marketing research was desired to understand these consumers and how the brand may be promoted to them.
W5 conducted extensive ethnographic research to establish an understanding of how the target market lives, creates, and engages with the spirits and cocktails category through in-home interviews. This exploratory research informed a custom market segmentation to define segments within the target market and identify key opportunities for the brand. Additionally, a survey of past year purchasers of the specific spirits product was conducted to understand who else purchases, consumes, and uses the product.
The qualitative ethnographic research confirmed the existence of this market within the broader spirits category and profiled individuals who engage not only in consumption but also hosting, cocktail serving, and other related creative activities. This research established a sense of different types of DIY spirits consumers and informed the more robust quantitative research with perspectives on consumers’ attitudes, behaviors, and lifestyles. The segmentation was successful in identifying four segments, two of which clearly represented prime strategic targets for the brand. The research validated current market strategies and provided inspiration to guide future marketing communications.
Spotlight is a special feature of the W5 Blog showcasing W5 consultants’ approach to designing marketing research studies, creating engaging deliverables, and informing strategy. For more information on W5’s approach to qualitative or quantitative research contact: inquiry@W5insight.com.
Last fall, Whole Foods announced plans to role out 365 by Whole Foods, a new store concept that is millennial-geared and a lower-cost version of its current grocery store chain in the U.S. (Check out my previous post on that, WFM Seeks to Capture Millennials with ‘365’ Stores.) In May, the first 365 opened in the Silver Lake neighborhood of Los Angeles.
On opening day, the place was swarmed! And the design and décor was on point to capture the target audience, Millennials (who else?). Tim Walker of Independent captured this in his article stating, “The store’s interior is a cool, cavernous hangar with low-slung shelves and wall-mounted iPads, where shoppers can order quinoa bowls and bánh mi hot-dogs to be picked up later from an order window, or scan bottles of wine to see Amazon-style, crowd-sourced tasting notes. There’s an in-store “Juicero”, a kind of Nespresso for fruit and veg, which turns pouches of fresh produce into 8oz of cold-pressed juice and has been endorsed by Gwyneth Paltrow.”
While the store will only carry about 1/3 of what a normal Whole Foods stocks, produce and products are significantly more reasonably priced; a strategy to compete with chains like Trader Joe’s which has seen success targeting the tech-savvy, budget– and health–conscious Millennial shopper.
It will be interesting to see how 365 is embraced as it continues to roll out stores with plans to expand into Santa Monica, Houston and Seattle in 2016. This isn’t the first time we’ve seen large retailers take the smaller square foot approach. (Let’s not forget about the failed Walmart Express pilot.)
The roll out of more health-focused retailers couldn’t come at a better time with the recent release of two reports from the Centers for Disease Control and Prevention siting America’s Obesity Epidemic Hits a New High. The reports show that efforts to encourage Americans to lose weight — at least to stop putting on more weight — are having little effect. With the obesity epidemic in the U.S. now three decades old, what role do retailers like 365 play in the big picture? According to the journal’s editors, Dr. Jody Zylke and Dr. Howard Bauchner, a significant one: “The food and restaurant industries may be the sector of society with the greatest potential to affect the obesity epidemic in a reasonable time frame.”
W5ers took part in one of our favorite annual rituals this week, an afternoon game with our local Minor League Baseball team, the Durham Bulls. The summer heat is just hitting us (but has not yet hit sauna-like levels) so it was a great day to be at the ballpark. With seats behind the Bulls’ dugout and cooled by the stadium’s massive overhead fans, we watched our team beat Yankees’ franchise team, the Scranton/Wilkes-Barre RailRiders, 4 – 3.
We love our Durham Bulls here in the Triangle, and it goes far beyond the iconic Kevin Costner/Susan Sarandon movie, Bull Durham. In the competitive sports entertainment industry, minor league teams across the nation have carved out a niche as fun community-wide gatherings, and the Bulls are no exception. Ringed by office buildings, a sports bar, and a billboard figure of a bull (hit the bull, win a steak; hit the grass, win a salad!), the stadium draws together residents of all sorts. We W5ers sat next to a group from a local senior living facility who spent the game shouting words of encouragement to both pitcher and batters alike.
The Gap Year
Malia Obama recently announced her plan to take a “gap year” before her matriculation at Harvard University, a decision that highlights a fundamental difference in the goals of Millennials compared to older generations. A gap year is a year off between high school and college in which a student volunteers, interns, works, travels, or combines all four in an experience meant to broaden horizons and explore passions. Though a recognized institution among Millennials (and places like Canada and the UK), older American generations often view gap years as a “year off,” despite institutions like Princeton encouraging (and funding) future students to take them. Read More
Planning-ness 2016 is a wrap. The successful eight year run has come full circle, with the final event taking place where it first began, in San Francisco.
True to form, the un-conference united creative minds from across the U.S in interactive sessions that covered everything from creative problem-solving for water resource issues to understanding the paralyzing effects of stress. One session even had the audience horrified as we watched a brave attendee dodge a hungry shark and then be wheeled through a mental institution… via virtual reality. Luckily, the last day ended with a much needed guided meditation by Strategic Planning Director-slash-yogi, Brenna Smithson.
The mission of Planning-ness has always been to “provide education and inspiration to the ‘creative thinker’ community.” A few of my favorites this year were Mark Barden (co-author of A Beautiful Constraint) and Caroline Webb (author of How to Have a Good Day).
Mark talked about constraints – the all too familiar situation of being presented with an endpoint or goal that has no feasible connection to the starting point. Said another way, we never seem to have the time or resources we need. This forces us to think outside of the box, and when we truly do, we discover our ability to find unique solutions that would not have otherwise occurred to us. Caroline is a behavioral economist and former Partner at McKinsey who projects that rare mix of brilliance and relatability. She talked about the power of perception, the control that we do actually have over our daily ups and downs, our productivity and brain power, and the concept of realistic optimism – “finding ways to make our days subtly but significantly better.”
The final Planning-ness did not disappoint. W5 is proud to be the founding sponsor of an event that has brought so many bright minds together over the years and helped to further the Planning discipline!
We hear so much these days about the “localism” movement: eat local, buy local, keep it local, et al. Here in Chapel Hill, where I reside, we take things a step further by using local money, not U.S. dollars.
That’s correct. In many instances one does not have to use dollars to buy things, instead we can use “Plenty.” For over a decade, our community has been issuing, just like the Confederacy a hundred and fifty years ago, a local currency to use in place of federal dollars. The big difference from back then is that Plenty meets all legal criteria for currency as currently defined by the IRS, Federal Reserve, and U.S. Treasury. It isn’t that hard to do, all that’s required is that it must: (1) not look like U.S. currency; (2) equal at least $1 in value; and (3) have a U.S. dollar equivalent, for taxes – it’s this third point where the many Confederate currencies went astray, i.e., they stopped sending tax dollars to Washington.
The purpose, like any “localism” initiative, is to promote local commerce, self-reliance, and overall community-centric responsibility.
There are, and always have been, local currencies in the U.S. The concept falls in and out of vogue, but nevertheless there are currently over 100 U.S. communities that currently take part in such transactions with ‘hard’ currency, debit cards to mutual credit databases, i.e., digital exchanges. Given recent discontent with the political process, as evidenced by both the GOP and Democratic support for Trump and Sanders, it will be interesting to see if such initiatives take further root should discontent with the electoral process play out. Localism may morph beyond the farmers’ market and hipster restaurants down the road to core structural issues of governance – just look at how the “red versus blue” states dichotomy further aligns itself, a by-product of discontent with federal policies; no one ends up happy, and in fact, just more pissed off.
History has a heck of a way of repeating itself; maybe localism is the new kickstarter for a xenophobic zeitgeist; for localism has always had a heavy dose political ‘edge’ in its message. Tell that to the amply bearded dude serving you your unpasteurized local goat cheese appetizer this weekend.
The world recently observed Earth Day so it felt natural to check in and take cultural stock of how the US environmental ‘movement’ is doing in 2016.
Much of today’s eco-messaging seems geared at myth busting and actively trying to reposition sustainability around ‘smart’ business, valuing workers and the experiential benefits of ‘going green’. The end goal appears to distance itself from the stereotypical ‘tree hugger’ persona and incentives limited to the moral ‘feel good’ factor.
Cultural trends tend to be behavioral markers of broader, deeper attitudinal movements and shifts so it makes sense that different trend categories can share the same perceptual foundations. Finding those connections between categories is the fun part. Below are some armchair observations on possible areas of cultural overlap:
- Minimalism Is In – Beyond design or aesthetics, this trend is also informing lifestyle choices and consumption habits (who doesn’t have a copy of Marie Kondo’s book?), and the back-to-basics/whole foods/locavorism movement. Consumers want to buy less, and buy better. The impact this has on sustainability means less waste and a greater emphasis on ‘mindful consumption’.
- Go Big or Go Home – Much like the diehard adherence to certain trends around exercise (e.g., Crossfit, High-Intensity Interval Training – HIIT) and diet (e.g., Paleo, veganism) there appears to be manifestations of extremism in “green” behaviors as well, with the philosophy of ‘go big, or go home’ infusing the conversation around how much of a ‘true’ environmentalist one is (e.g., zero waste proponents, air travel abstainers).
- Empowering the Consumer – Much of the messaging is about raising literacy levels so consumers can make informed choices and effect change with their purchase decisions. The idea is that informed demand can and will affect supply, making sustainable options the norm rather than the exception at the store or workplace.
- Worker’s Rights – Think of the Occupy movement and conversations around minimum wage, not to mention presidential nominee platforms. Emphasis has shifted to workers’ rights, the 99%, and resource intelligence that extends beyond natural to include human resources. Corporate responsibility, fair trade, and profit sharing are all practices some consumers now actively seek out in their brands.
It will be interesting to watch the continued ‘mainstreaming’ of the green movement — and its interplay with broader cultural forces – as well as how the national and international conversation (and legislation) changes as a result.
You don’t need to be a market researcher to notice a shift in how products are marketed to women. While seeing less pink and weird blue fluids are well received in my book, I have noticed something about the way some of these ads are framed, particularly in think pieces from marketing and advertising newsletters that I wasn’t sure if I agreed with: hailing these advertisements as empowering to women. I fully support efforts that educate consumers and provide them with the necessary information to make best decisions for themselves. But I had to wonder what exactly does it mean for these advertisements to empower women and do they really hit the mark? Read More