Envy is Part of the Trade-Down / Consolidation Economy
How is the customer trade-down phenomenon affecting different industries?
It doesn't matter if it's B2C or if it's B2B, I am seeing the customer trade-down phenomenon across industries and types of buying. This activity is forcing everyone to be something they are not, or at least being envious at the position of the other person—even if they are in exactly the same position as you.
What is the impact of the "Consolidation Pinch" in B2B?
In B2B, the situation is you are trying to avoid the trade-down or the CFO "Consolidation Pinch."
How does trade-down manifest in B2C markets?
In B2C, it's more about avoiding the trade-down, cut-back, or defer.
How are CMSs and other platforms adapting to this consolidation trend?
CMSs are trying to be recommendation engines.
Recommendation engines are trying to be broader personalization engines.
E-mail Marketing platforms are trying to become personalization engines.
SMS platforms are trying to be E-mail platforms.
Personalization platforms are moving into e-mail and SMS.
Search platforms are moving into recommendation.
Merchandising platforms have been busily adding Search & Recommendations.
Why is everyone trying to be something they are not in this economy?
In short, it's a gigantic freaking free-for-all—everyone is trying to be something they are not in this economy under the misguided proposition that the CFO wants to see only one line item outside of Shopify covering: "All the marketing stuff we could ever imagine."
"Rechargyostopo" anyone?
How is the trade-down effect influencing retail giants like Target?
In retail, it's the same thing.
Target's earnings solidified it for me—everyone is trying to be someone they are not.
How is Target’s strategy influenced by Walmart envy?
Comp sales rose 2% and comp digital sales rose 8%, entirely on traffic increases. Increases were based on markdowns on the 5,000 most frequently purchased items.
Walmart envy.
What role does Amazon envy play in shaping retail strategies?
Everyday low prices were even mentioned on the earnings call. It strikes me that Target is taking a page from Walmart's playbook to motivate the consumer to walk into the door. For how long is the question?
In the short-term, this arrested their fall. What is being left unsaid is if they are still losing share.
Amazon is trying to reduce its cost to serve and adding a Consumer-to-Manufacturing model for a segment of items.
How are Shein and Temu responding to Amazon’s dominance?
Shein and Temu are trying to add local warehouses to look more like Amazon for popular items, and hopefully to blunt any future regulation.
Amazon envy.
Is Walmart immune to the trade-down/consolidation economy?
The only one not trying to be anyone else? Walmart. Except for the fact that Walmart has been trying to copy Amazon for years with its marketplace/fulfillment/ads playbook. So you can't ignore that too.
Walmart is busily adding convenience-oriented features to its low-price model, which has enabled it to go up-market and not lose or change its core value proposition.
What should businesses consider in this trade-down economy?
The questions to ask yourself are simple:
Do you have a defensible proposition in this economy?
If so, stick to your knitting and niche down.
If not, bail the hell out and figure out a new core value proposition.
How can businesses identify the root cause of their challenges?
The key is to identify the root cause of your current situation—did it happen because you ignored your core market's needs, or did it truly happen because of commodification?
Blame the CFO at your own peril.
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