Swotting up on post-collegiate trends
What you don't know about the post-collegiate consumer could hurt you - or at least your bottom line. The market is enormous, and what's larger than the numbers is the fact that for those brands missing the boat, it's a huge opportunity lost. Here, Stacy Baker outlines some surprising facts about a little-known market.
According to a recent study by New York-based Brand Keys, the post-collegiate group is surprisingly different than age groups surrounding it.
Here, Robert Passikoff, founder and president of the marketing firm, shares what he's uncovered about this market based on research of 2,400 recent college graduates and 2,073 college students in 52 schools nationwide (evenly divided between public and private institutions).
Odds are that once collegians graduate, they won't want your brand
Huge changes happen when people graduate from college - they get jobs, make more money, their needs and tastes differ - and the result is a value shift that impacts how this segment buys, what they purchase and what they see as important or valuable characteristics in a product, according to Passikoff.
"When people get out of college their category drivers change, which means how they will view a category, what standards and conditions they set for comparing offerings in a category and ultimately expectations for the different drivers that define how they will buy," he says.
Although these category drivers aren't carved in stone they suggest that people generally buy the same way year after year regardless of style changes. In fact, his study shows that the value shifts are so great in the fashion arena that the likelihood post-collegiate shoppers will buy the same brand is very, very low - 6:1 against the brand.
How does this brand-switching mentality compare to other market segments? Computers 2:1 against the brand, cell phones 9:1; athletic shoes 4:1 and beer 4:1.
"Most apparel brands work from a position of the 'Field of Dreams' syndrome," he explains. "If we build it, they will buy. If we advertise, they will buy. While that works for some consumer segments, those who came out of college are creating new sets of orders of value that define how they will behave in the marketplace."
Dr Robert Passikoff is founder and president of Brand Keys Inc
Post-collegians shop differently than any other segment
The Brand Keys survey revealed that whereas pricing, fees or discounts are usually the price of entry into a category and the most important driver, this is not the case for those getting out of college.
This is counterintuitive, according to Passikoff, because you would expect people to be responsive to discounting based on income coming out of college. In apparel, the four drivers of a purchase are quality/value, the right brand for me (is it a line that I will wear?), comfort/fit and distribution (store reputation, where do I buy, location), but with the post-collegiate market, "right for me" is more important than quality/value by 17 per cent.
"What we find is that the brands that do really really well are those that understand how to best bond with their marketplace," he says.
The sports brands, for example, all performed well in the study. Why? Because the values in sports don't change, therefore the four drivers are established and it doesn't matter what age or demographic profile the consumer is. Within fashion, however, the drivers change, which explains why brands that market on the basis of resonating values are the ones who will have greater loyalty to this market.
Design isn't enough
It wasn't long ago that brands really stood for something, particularly in terms of status, says Passikoff.
Take Lacoste, for example, a label that communicated something very specific and very distinctive 20 years ago. Not only that, consumers felt they got what they paid for even if it cost them a hefty price tag. Today it's a different story.
"These findings should be a wake-up call for fashion brands," he says. "You can't get along on a neat design anymore because people aren't making neat judgment calls. Today people will prefer to buy from J Crew, for example, than they might from Brooks Brothers - now that design is all the same consumers figure they might as well get an item cheaper."
Ten or 20 years ago, when a garment was inexpensive, it usually meant it shrank or faded quickly, and a high-quality brand meant something in terms of value. Now it's an even playing field.
So how does this market differ from collegiate and adult categories? The market's spending drivers shifted and these consumers' expectations changed.
"Many apparel makers are no longer sure how to address this segment in terms of marketing," he says, pointing to Tommy Hilfiger's outdoor kiosk concept as a successful example of meeting its market's needs. The brand today, though, is not as hot.
Why? The designs, quality and ad budget seemed to stay the same. What's different is the fact that this brand - along with many others - doesn't mirror the values that people use to remain loyal to a label, he says. Admittedly this is no easy feat: brands are dealing with an increased number of seasons in a year, heightened consumer demands for new styles, evolved consumer tastes and an increasingly competitive market.
One apparel brand does it right
Ralph Lauren, according to Passikoff, seems to be the exception to the idea that few contemporary labels are reaching this market well. Most likely its success is based on the company's extensive marketing strategy, he says, but the brand would see even more rewards if it focused instead on what these consumers value.
Most labels today don't track the direction and velocity of the category drivers of their consumers. The key is to understand where your brand sits in terms of what drives this market to spend. Ask yourself whether your brand can meet or exceed those drivers. Not only that, but will consumers believe it about you?
Passikoff says it goes way beyond advertising - you're setting a strategic brand strategy that "allows you to talk the talk," one that's not based on demography. Instead you get answers to what he calls "meaningless" questions that allow you to assess what your market values.
For example: "Would you like a Versace dress?" Yes! "Would pay $8000?" Most likely not (for this group at least) but "what if we had a similar-looking one for $400, would you like it?" By not taking the time to figure out these types of wants and needs in your customers, you risk having them turn their spending (and loyalty) to another brand.
Other labels besides Ralph Lauren in a solid position to target this market well? Look to those like Calvin Klein, Donna Karan and Armani on the high end and on a casual level, those like Adidas, Reebok and Champion have the makings to do it right. To succeed, these brands will need to apply consumer research on their customers' lifestyles, attitudes and more to their product development as well as marketing campaigns.
This segment can make your company money
Although the exact size of the market is debatable, one thing is certain: it's enormous. And what's larger than the numbers is the fact that for those brands missing the boat, it's a huge opportunity lost.
"It's very likely that fashion brands aren't responding to this market yet," says Passikoff. "These brands typically don't target this market specifically - they assume it will be an adult audience and tailor their strategy as they would their other adult labels."
The other strategy seems to be aiming promotions at the collegiate level that are designed to build loyalty for the long haul, say, by sponsoring a concert or co-branding with a soft drink during orientation, a strategy not likely to work based on Brand Keys' results.
The upside is that if you can gear your brand to this market, the potential for success is large. "People have to buy clothing," he says. "When they're out of college they're not just going to classes and dressing up for prom, they need specific clothing and it's a tremendous chance to get your brand noticed by people who are ready to spend. Why would you put yourself in position to lose opportunity?"
By Stacy Baker.
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