Treasure Hunt: Inside the Mind of the New Consumer

by Michael J. Silverstein, John Butman Narrated by John H. Mayer

Overview

A BMW in a Costco parking lot?

A working-class family with a 50-inch plasma TV?

What's going on in the mind of the new consumer?

TREASURE HUNT takes us into the homes of real people making real decisions, and into the CEO's offices of innovative companies finding new ways to accommodate them. Written with the same flair, empathy, and intelligence that made Trading Up an instant classic, this is an essential guide to the moods and habits of the constantly changing consumer.

Editorial Reviews

Wall Street Journal

Treasure Hunt has a strong sense of the shopping zeitgeist.

Harvard Business Review

Treasure Hunt...is not just about saving money-it's about gaining control, achieving goals, and attaining the things that matter...

USA Today

Silverstein's book will...help entrepreneurs get rich, and in the process, enrich the lives of "average consumers.

Financial Times

...businesses need to steel themselves...The companies that win will have displayed a clear treasure map at the front door.

Knight Ridder

There is a treasure trove of premium advice and valuable information in Treasure Hunt for anyone in any business...

Bloomberg News

...a fun, savvy book.

HBS Working Knowledge

Treasure Hunt is very well written and ultimately convincing in its thesis...

Jack Covert Selects

...As a merchant, I recommend this book.

Washington Post

Silverstein is persuasive -- and entertaining

Library Journal

Silverstein (senior v.p., Boston Consulting Group, coauthor with Neil Fiske, Trading Up: Why Consumers Want New Luxury Goods-and How Companies Create Them) and Butman (Juran) have produced essential reading for those who currently work in marketing or are marketing majors in college. Engaging and loaded with statistics and interviews with consumers and CEOs, the text provides an excellent inside look into how today's consumers are embarking on "treasure hunts" for quality products at reasonable prices. While Trading Up noted the trend of middle-class consumers pursuing high-end goods, here the authors study consumers who will go on "treasure hunts" for low-end items as well, at such stores as Costco and Wal-Mart. They trade up or down to obtain the goods and services they want at the price they desire. As a result, many notable companies have changed their product lines and repositioned themselves in the marketplace to meet new challenges and increase their market share. The authors look at such examples as Aldi, LG, and Dollar General, to name just a few, and point out that other companies, e.g., Sears, Ford, and General Motors, who pursue neither the well-packaged bargain nor the inspiring luxury presentation, continue to lose market share owing to their "middle" position in the marketplace. This book should be part of any corporate or academic library as well as any public library business collection.-Diane Fulkerson, Univ. of West Georgia, Carrollton Copyright 2006 Reed Business Information.

Soundview Executive Book Summaries

In the U.S. and around the world, consumer markets are bifurcating into two rapidly growing pools of spending. At the high end, consumers are trading up, willing to pay a premium for top quality, emotionally rich, high-margin products and services. At the low end, consumers are trading down to spend the least amount possible on basic, low-cost goods that still deliver quality, reliability and increasingly, an element of style. In between these spending poles lies a vast expanse of mediocre, often low-margin goods that lack distinctive emotional appeal or better value than their cheaper competitors.

Companies that have profited for years by selling mid-priced products to middle-class consumers suddenly find themselves facing “death in the middle.” Companies that succeed in this bifurcated market are those who understand the attitudes, behaviors and values of middle-market consumers who are driving this metamorphosis.

For today’s consumers, shopping has become a treasure hunt - a constant search through the world’s vast and fluid store of goods and services to find the perfect value every time. Such consumers trade up in some categories, trade down in most, and mix upscale with downscale products to create a customized lifestyle.

The Dollar Store
Retailers who have found a treasure hunting format that combines hard discounts with a shopping experience familiar to Americans include the “dollar stores” like Family Dollar, Dollar General and Dollar Tree. In 2004, 66% of households report having shopped at a dollar store, and higher-income households are the fastest-growing segment of customers. The success of Dollar General and of the dollar store category in general, is having a major effect on the trillion-dollar trading down market.

The Hotel Industry: Moving in Both Directions
When hotels experienced a drop in business after 9/11, a truth about the industry was revealed - despite the glamour of high-end hotels and destinations, riches are also found at the bottom of the market. Although some hotel companies abandoned expansion or improvement plans or unloaded properties after 2001, others followed a trading-up or trading-down strategy, adding rooms and building brands that would appeal to specific segments of the market.

All hotel owners are looking for ways to differentiate and respond to the bifurcation of the market. The worst place to be is in the middle, where average returns are below the cost of capital. New capacity coming on in the mid-price segment is likely to earn a negative internal rate of return. At the high end, a bottle royale is developing. There are sure to be casualties, especially among the small chains not sharply focused on either the business or leisure traveler. The best place to be is at the bottom of the market.

EBay: The World’s Biggest Treasure Hunt
The excitement of going on the prowl is also what’s behind every yard sale and flea market, including the biggest and most extravagantly profitable embodiment of the concept, eBay.

After just seven years of operation, eBay had created a market value of $42 billion, which is greater than the entire value of the department-store industry of the United States, which has been operating for a century. What eBay offers is an online community that brings 336,000 registered stores worldwide, many small or geographically isolated, into one global marketplace.

The majority of items sold on eBay are inexpensive. Excluding autos and real estate, we estimate the average eBay selling price is $36, so the population for buyers represents all income levels. Most users come from middle income households who shop there for treasure.

Bath & Body Works
The ability to understand value factors like fear or hope that cannot be quantified or plugged into a spreadsheet is driving the success of Neil Fiske, CEO of Bath & Body Works. (BBW) For over a decade, BBW has been successful selling mid-price body and personal-care products for women.

BBW is positioned as a masstige (mass market/prestige) brand, based on products that are a step above the drug store and a step below the department store. For millions of women, BBW products fit neatly into their personal value calculus, delivering a combination of wholesomeness, effectiveness, and personal indulgence at a price high enough to be exciting, but not so high as to be unaffordable, even on a middle-class income.

Retailers Who Can Also Get Left in the Dust
As Wal-Mart and other winners have led a retailing revolution - achieving 20 to 40 percent annual growth and shareholder return two to four times the market average - the traditional grocery chain has lost 30 share points and the traditional department store as many as 50 share points. Zayre, Ames, Bradlees, Caldor and Venture Stores, have all been left in the dust.

The conventional grocery industry has been most transformed. Wal-Mart is responsible for much of this shift. Their super center delivers higher store traffic, drives merchandise sales, and increases per-customer visits. When you earn gross margin 50 percent higher per square foot than competitors, that can translate into four times the profits per store.

Avoiding the Seemingly Unavoidable
The single most important early-warning signal that you may be in danger of getting left behind as a retailer is a drop in share of “primary shop.” When a consumer ranks you as their first choice for purchasing goods in a particular category, you enjoy the bulk of sales and margin that customer has to offer. This is critical because retail is a very leveraged business - space occupancy, staffing, and inventory are essentially fixed costs - and a loss of as little as 10 percent of volume can cut profitability in half.

Don’t Wait
Taking action means innovating, not just more of the same, or considering acquisitions or increasing your advertising spending. Think about innovation as a series of waves of reinvention and change, each lasting three to five years, and no longer. Copyright © 2007 Soundview Executive Book Summaries

—Soundview Summary

Publishers Weekly

In their bestselling Trading Up, Silverstein and Neil Fiske explained why people are willing to spend beyond their means for certain premium goods. But that's only half the story: as middle-class customers splurge on lingerie and appliances, they're bargain-hunting for everything else. Companies will thrive, Silverstein argues, by catering to the penny-pinching impulses of consumers, or by "spanning the poles" and appealing to both the high and low ends while avoiding anything else-there's only "death in the middle." The book's profiles of individuals who splurge-and-scrimp and case studies of companies that have successfully adapted to the polarization of the marketplace show the key to survival is to offer the perception of good value for money and an emotionally satisfying experience. This is where the book becomes a tad creepy: Silverstein analyzes female consumers' relationships with their mothers and attributes an advertising executive's "lack of a father's love, a social-climbing mother and several failed relationships" as causes of her binge-spending and scrimping. Silverstein's guide to cashing in on the top and the bottom is intelligent without becoming mercenary; business owners will take notice.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

OCT/NOV 06 - AudioFile

John H. Mayer reads Silverstein's look at the ways the behaviors of middle-market consumers affect growth at both ends of the retail market. The book is directed at marketers hoping to lure today's savvy mid-range shoppers. Mayer's voice offers the right mix of professional and familiar. He details strategies designed to help businesses make intelligent marketing decisions, especially concerning where consumers are most likely to spend their discretionary cash. According to Silverstein, today's consumers never stop searching for more value and have become experts at “saving a buck.” Mayer offers an attractive, articulate “radio-voice” as he profiles marketing tactics and consumer economics for the 21st century. S.J.H. © AudioFile 2006, Portland, Maine

Product Details

BN ID:	2940172108099
Publisher:	Penguin Random House
Publication date:	05/09/2006
Edition description:	Unabridged

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