Grist: Wanted: Something New Under the Sun
BY Adam Hanft
If we measured consumer excitement about new products and used it as a bona fide economic indicator, we'd all be pretty worried. That's because there's too little cool stuff to buy these days.
Why does everyone fret so much over the consumer sentiment index? I've never understood the predictive value of such a fluttery, day-by-day mood check. A far more meaningful measure of economic vitality would be one that doesn't exist yet, but should: the consumer excitement index. The CEI would track how motivated consumers are to buy, based on the appeal of those products battling for our few recessionary dollars in the rowdy tussle of the marketplace.
How would a CEI score look today? Bad enough to make Greenspan's furrows go even deeper. Across the board -- with some glowing exceptions -- there is a universal lack of worthy stuff to buy. It's both scary and breathtaking that the consumer landscape exhibits such a deficit of must-haveness and is so lacking in imagination and insight, so populated with small ideas and joyless copycatting. McDonald's is in trouble, losing money, and the best big concept it can muster is "premium salads": decades late and 600 calories to boot?
The fashion industry is so uninspiring that women's apparel sales are down 6%. Unless there has been a global swap of the Lucy Ricardo shopping gene with the Bonnie Raitt shopping gene, that shouldn't happen. Sadly, Levi's has pinned its resurrection hopes on the introduction of Levi's Type 1 jeans, which are nothing more than a classic pair of Levi's with a red tab and rivets.
The food industry should be a red-hot laboratory of ideas, but check out its two most "successful" new products of the last five years: Frito-Lay WOW! chips and Pepsi One. Since the initial hoopla of their introductory years, WOW! sales are off 63%, while Pepsi One is down 46%. Just this May, Kraft proudly proclaimed the launch of 150 new products. No one can have 150 ideas capable of tickling the consumer excitement index, and Kraft certainly confirmed that. Do you really need an M.B.A. in marketing to introduce Cool Whip in strawberry?
The domestic auto industry is another imagination graveyard, again with a few exceptions like the Hummer, which is the only car in the entire GM portfolio that is selling without the help of incentives. Speaking of incentives, last year a total of 336 billion coupons were distributed, tantalizing consumers with more than $270 billion in potential savings. Because they're boring folks to death, the only way companies can reach their sales goals is through sheer bribery.
Wherever you look, the CEI staggers. When was the last time you got excited by a new financial product? Technology sales are flat because, as analysts say, there's no reason to buy anything new. And maybe the reason the music industry is dying isn't that consumers are naturally crooks, but that Pressplay and MusicNet -- the two industry-sponsored online ser-vices -- are more interested in litigating than motivating.
There are some exceptions to the boring norm, though, and one of them is the inspiring Apple iPod, which has sold more than 800,000 units to date. The amazing thing about the iPod is that it isn't a technological breakthrough, but a brilliantly designed solution that hits on all consumer cylinders: memory, speed, the tactile coolness factor. Whole Foods Market is another hot light. Started in Austin in 1980 with just one store, it has reached annual revenue of $2.6 billion by creating a richly differentiated consumer experience.
The otherwise arid innovation landscape presents a wide-open moment for those companies that are often the geysers of creativity -- small businesses, the spine of what Inc. is all about. Who will be the next Viking, whose restaurant-grade functionality and off-road aesthetic gave conventional appliance makers a kick in the oven? Or the next OxiClean, from the privately held Orange Glo International, which has built a successful brand in the brutal backyard of the detergent giants? The relationship between consumers and marketers is a co-dependent one. Consumers need a genuine incentive to buy, which means that economic growth depends on a real spike in the consumer excitement index.
Contributor Adam Hanft (email@example.com) is president of Hanft Byrne Raboy, a Manhattan-based advertising and marketing firm.