October 11, 2019 |
Honestly, if I see another Linkedin post on the latest trends then I will write a post on the trend in making up trends.
The default position of someone who wants to be seen by their peers as an expert is to look at popular restaurants in the USA, rework it into a trend report for their local market and slap it with a harrumph of self-satisfaction onto Linkedin. Their followers then ‘like’ it and, worse still, add comments to qualify it as something ground-breaking. The most scary part is when these unfounded findings, that have little or no relevancy to the local market, are used to convince investors to pump money into a weak concept in the hope of riding this wave. It may pay off, but history suggests otherwise.
I was at a conference in the week where the main topics appeared to be trends and discounts. An inordinate amount of time was spent talking about trends in everything, with stage-hoggers making CIA-esque claims to knowing something that no-one else did and that they would let everyone else know soon.
Seriously mate, if you think that you are some sort of soothsayer with prophesies and insights into the future then you wouldn’t be boring the gnashers off 100 people in a conference room.
Another topic in this conference, where the only stimulation came from the over active AC unit, was that of discounts. Wise words from the stage included telling the audience that being known as a discount brand was bad, which presumably is why bars have Ladies Nights, Happy Hours, Chaps’ Nights, crew discounts, total guest discounts, resident discounts etc.
Greed and profit, which for a long time was accepted as the norm, is being threatened by consumers who will not pay a full price for anything anymore. So now we live in a discount culture. Cause and effect?
As you can’t replicate the experience of going out via the web or through a delivery portal, outlets have created an asset out of the word ‘community’ and valued it at a much higher rate than the consumer. Similar to a real estate agent exponentially marking a house up because of the view, whilst there is a market for this, it is not for the masses and therein lies the issue.
Discounts exist because a vendor can’t get the volumes required at a full price, so therefore they have to reduce their prices to achieve the numbers. If ever there was a mismatch in perception and reality, it is in that statement.
Whilst on the one hand brands want to build a loyal set of customers to create a community, they are generally unwilling to price it at a point that creates the frequency required to create this community. So to create the community, they bring in discounts generally veiled as events and loyalty.
But the community being built is not loyal to you, it is loyal to not paying full price. So if a better happy hour or more free drinks for ladies is going to give you the volumes you need then good luck to you. But where does it stop? Greed will scamper to the front with its hand raised high asking for more attention. Extend happy hour, add a night for somebody else, oh but what about Monday lunchtime etc.
The bizarre thing is that all of this guesswork can be alleviated through the use of data in the concept development. You don’t need a half-baked trends report to base your next investment decision on, neither do you need to create a pricing strategy that looks great on paper, but hideous in reality. A clear strategy that is backed by localised demand and supply data should tell you everything you need to know.
So if you need to price it high as your perception of your offer is high then fine, but don’t start bleating when you need to cut prices later on. Conversely if you want volumes, then price for volumes – seems simple, doesn’t it. Which begs the question of why we need discounts if the price is aligned with the perceived value of a clearly defined target audience.
It seems perverse to me that retailers create a brand that is untargeted and not corroborated by research and then create reactive, discounted events to gain more people whilst simultaneously spending money on promoting something of a lower price. Surely better to use data to create a compelling and consistent offer to a defined audience?
Anyway enough from me as my local bar has the rugby on, serves a great lunch, the beer is cold and the prices are great. You won’t find that in your trends report.