ETD: 776 Shipment tracking; New Wireless Technology;
Demographics that Define the Luxury Market
E-Tailer's Digest
etd_post at gapent.com
Tue Apr 13 11:46:34 GMT 2004
E-Tailer's Digest --- Everything for the Retailer
Issue #0776 April 13, 2004
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Shipment tracking
[3] New Wireless Technology
[4] Demographics that Define the Luxury Market
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[1] Greetings.
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Hi All:
I was talking with an old client who is seeking a way to track
shipments. Which got me to thinking of the uses and need for such a
service. Anybody have any ideas?
List member John Shulte has some thoughts on wireless technology for
retailers. What do you think?
If you're looking to sell to the luxury market, you need to read Pam
Danziger's report. Pam's company is one of the leading authorities in this
market. A must have if that is your target.
How was the recent holiday season? Learn anything new?
Tell us about your business which will remain for posterity at
our "Members: Who Are You?" site. We just updated all those postings that
we were delinquent with the
updates. http://etailersdigest.com/resources/members/index.htm And we have
a form there for you to tell us about you. As I said when I first proposed
this idea, we have "known" each other for a long time, yet we often don't
know anything about each other. So, tell us who you are and what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] Shipment tracking
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I think I have a new business concept that we desperately need - shipment
tracking. Yes, I know about RFID and Qualcomm's tracking of trucks. But
we need a way to track shipments from point of origin to destination.
Let's say a manufacturer in Asia builds a product that is then put on a
ship to California, where it is placed in temporary storage as it clears
Customs, then picked up by a truck, delivered to a rail car, picked up by
another truck, then delivered to a warehouse. How can we track the
movement of that merchandise?
With Qualcomm, we may know the two trucks involved, assuming they subscribe
to the service. With RFID, we would know where the goods are, if they are
within a reasonable (150'?) distance of a reader. But we don't know where
they are in between.
We should be able to place a device in each container, which is tracked via
a satellite so that we would know at any time where the goods are and when
we can expect them at specific points.
This concept also works for deliveries to customers, which is where I first
thought I had a solution. An old client has been checking on devices to
track their 100,000 weekly shipments. I thought I had a solution with the
Priva fob that would track identities. Unfortunately, it doesn't work
without a reader.
With the terrorist issues today, it would seem to me that this could/should
be government funded.
Anybody have any ideas?
George
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[3] New Wireless Technology
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This winter I had to travel to Florida for a couple weeks and Arizona for a
couple weeks. Wireless "Hot Spots" allowed me to keep fairly caught up.
Although many places in New Mexico and Arizona had little if any Hot Spots.
So I have to say, this new wireless access from Verizon sounds wonderful to
me. I may just live on the road all winter and still be able to work.
For retail, my first thought is informational and data capturing Kiosks
placed in your store. With no hard wiring required you will be able to
place them anywhere in your store at a lot less expense and hassle.
--
Best regards,
John Schulte
President and Chairman
National Mail Order Association (NMOA)
http://www.nmoa.org
Email: schulte at nmoa.org
Tel: 612-788-1673
http://www.nmoa.org/schulte
+++ [Moderator's Comments] +++
Kiosks are a great idea John. Years ago we had as a client, one of the
largest retailers of music (CDs, tapes, etc) - an 800 store chain. The
reason we got the account over the three largest suppliers of retail
technology in the industry was because of a partnership I developed with a
company that provided the top-selling music plays by industry. This was a
little company in Brooklyn who offered the top plays for use in office
buildings (like Muzak).
I was fascinated with the concept and together we developed a program
to offer the service in stores. Now you come to a store, go to this kiosk
and look up your song, either by artist, album, genre or other such
categories. Then, the software would link to the inventory in the store
and point you to the aisle that had the CD. And, if the store was out of
the album, you could place an order right then.
Now, with wireless, this concept will work much easier, and allow retailers
to have kiosks at malls, which link to the warehouse, where goods can be
shipped directly to the customer. One huge savings, and excellent customer
service.
George
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[4] Demographics that Define the Luxury Market
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Three segments make up the top 20 percent of U.S. households
Confusion reins when describing the luxury market, which is variously
defined as the top two to five percent of earners or the 10 percent of
income. Others define affluence beginning at $1 million in investable assets.
In practice, what marketers mean by the ‘luxury market’ is largely
subjective. While Cartier and Bailey Banks & Biddle jewelers both target
the luxury market, each defines it differently. Cartier targets the
super-affluent $150,000 plus tier; Bailey Banks & Biddle, with 110
locations nationwide, defines the luxury market as mall shoppers of more
moderate incomes. A single woman, making $75,000 and living in Des Moines,
is a prospect for a right-hand diamond ring at Bailey Banks & Biddle, but
is not likely to shop at Cartier.
Seeking a standard definition of the luxury market, Unity Marketing turned
to the Bureau of Labor Statistics (BLS) consumer expenditure survey. The
BLS classifies the nation’s 111 million households into equal-sized
quintiles based upon household income. The lower cut-off for households in
the upper quintile, about $75,000, provides a reliable definition of the
luxury market, i.e. households with income within the upper quintile of the
BLS’s model. The average income for those households in the upper quintile
is $121,367.
Of the total 111 million U.S. households, approximately 27.9 million, or
one-quarter, have an income of $75,000 and above. At $100,000 and above,
there are approximately 15.7 million households, or 14 percent of households.
A more precise segmentation is based upon these broad perimeters:
Near affluents — Households at the lowest range of the fifth quintile,
i.e., HHI from $75,000 to $99,999, are an important segment for the future
of the luxury market, as these near affluents are likely to see their
incomes rise in the coming years. Also this segment will reach up to luxury
in specific product and experiential categories. A total of 12.2 million
households fall in this range.
Affluents —Those households with incomes of $100,000 to $149,999; 10.1
million households.
Super affluents — Households with incomes of $150,000 and above are ‘super
affluent;’ 5.6 million households.
Demographically, the top 20 percent of households are more like each other
than lower income American households. Their characteristics include:
Larger households: The typical affluent household has 3.2 members, as
compared with the total population of 2.5.
More workers in household: The affluent household has 2.1 earners, as
compared with 1.4 earners in the typical household.
Own more cars: They own 2.9 vehicles, as compared with 2 for the typical
household.
Nearly all own homes: Ninety percent of affluents own a home, as compared
with two-thirds of the typical households.
Mostly white: Black-American households comprise only 6 percent of the
affluent households, as compared with 12 percent of the total.
Higher education levels: A key demographic characteristic of the affluent
is higher education. The heads of some 80 percent of affluent households
have some or more college attainment, compared with 56 percent of typical
households.
Middle aged: Most distinctive, the affluent are members of the baby-boom
generation. In 2002 average income is highest among households aged
45-to-54, at $74,934. This income peak is flanked by age groups above and
below. The 35-to-44 year old households have an average income of $68,310;
the 55-to-64 aged households with $64,118.
Top 20 Percent Make More, Spend More and Save More
Affluent households have after-tax income nearly two-and-one-half times
that of typical households, but their spending is less than twice the
average. While the luxury consumers could spend more, they are highly
motivated to protect and preserve their luxury standard of living. As a
result, they have more money left over for saving and investing.
Their spending also lags behind their feeling of financial well being.
While a near majority of luxury consumers felt better off financially at
the end of 2003 than they did the previous year, they are not increasing
their spending commensurate with their renewed feelings of confidence. In
Unity Marketing’s latest survey, only 30 percent of luxury consumers say
they spent more on luxury in 2003, compared with the previous year; 21
percent say they spent less than the year before.
The luxury consumer is not about to put their lifestyle at risk. Rather
than spend it all, they are more likely to spend a little on luxuries they
desire and save or invest the rest. As opposed to viewing the luxury
consumer as a spendthrift, marketers need to see them as they are:
cautious, risk adverse, and protective of their financial resources. "That
is one reason why these luxury consumers who can pay full price hesitate to
do so. It makes good financial sense to seek out bargains and the best
deal," Danziger says.
The Luxury Market Is Where the Action Is Now and Through 2010
If "demographics is destiny," nowhere is that more true than in the luxury
market. From now until 2010, the number of affluent households and their
influence will continue to grow. The rising tide of affluence is driven by
the 78 million baby-boomers who range in age from 40 to 58 years. This is
the age of empty nesting, when consumers are earning the most money in
their lives, but no longer have to stretch their paychecks across the
demands of a growing family. "Empty-nesters have more discretionary income
for ‘luxuries’ that they might have denied themselves when their children
were younger," notes Danziger. Unity Marketing publishes the Luxury Market
Report, 2004: Who Buys Luxury, What They Buy, Why They Buy.
For more information, visit Unity Marketing Online
http://unitymarketingonline.com/ or call Pam Danziger at 717-336-1600.
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