Tuesday, September 6, 2011 | Edited by Daniel Moores
||Lottery Ticket Sales Increase Across the Country
Despite a struggling economy -- or perhaps because of it -- lottery ticket sales have surged across the USA.
Financial records for 41 state lotteries that end their fiscal year in June show 28 had higher sales than the year before. Seventeen of those states set all-time sales records.
Kate Sweeny, an assistant professor of psychology at the University of California-Riverside, said an uptick in lottery sales largely occurs when people feel a lack of control over events larger than themselves, such as the economy.
Jeff Anderson, head of the executive committee of the North American Association of State and Provincial Lotteries, which represents 52 lotteries in the USA and Canada, said sales growth most often reflects changes in lottery games.
"In general, the play is inexpensive entertainment," said Anderson, who is also director of the Idaho State Lottery. "I have not seen any empirical evidence that indicates in a down economy, people play more."
Yet that's just what a 2004 Cornell University study found. "We see that lottery sales go up as the economy gets bad -- but we don't see people spending more on relatively inexpensive other forms of entertainment," said Garrick Blalock, associate professor of economics at Cornell and a co-author of the study.
California had the highest percentage gain over 2010 -- 13.2% -- to $3.44 billion, just shy of a record $3.6 billion set in 2006, spokesman Alex Traverso said.
Arkansas's growth was higher at 21%, but its lottery didn't start until September 2009, so the comparison with fiscal year 2010 was not over a full previous year.
Arizona posted a record $583.5 million in ticket sales and Missouri topped $1 billion for the first time.
"I think it has a lot to do with the economy," said Abel Reynoso, who works at a gas station that sells lottery tickets in Desert Hot Springs, Calif.
"People are getting desperate."
"When it gets past a certain amount, I always play it," added Roberta Orsi, 60, a Palm Springs, Calif., resident who says she's played the California lottery since it began in October 1985.
Multiple studies of state lotteries have found that those with low incomes spend a higher percentage of their income on lottery tickets than wealthier individuals. That, combined with the correlation between a bad economy and increased lottery sales, raises questions, Blalock says.
"If what looks like is going on is actually going on, states are solving budget shortfalls with what effectively amounts to a regressive tax on the poor," he said.
Buying lottery tickets is a "voluntary transaction," Anderson countered.
"If responsible adults want to decide how they want to spend their entertainment dollars, it's a little trite to say, 'You shouldn't spend that much,'" he said. "Maybe somebody can't afford two tickets to the movies, but they can afford $2 in scratch-offs. We still have freedom in the United States," he said.
Anderson questioned the significance of studies indicating the poor spend a higher percentage of their income on the lottery.
"Are they spending the bread money?" he said. "Are the children starving? Are they forced out of their home because they are playing CashWord? I don't see that."
J.P. Sira, owner of a 7-Eleven store in Palm Springs, Calif., said one thing is certain. Patrons play in the hope of getting rich quick.
"I've never seen anybody say, 'I want to help schools,'" he said.
(Source: USA Today, 09/01/11)
||Sixty-Eight Percent of Consumers Turn to Professionals for Auto Repairs
The majority of automobile owners are do-it-for-me (DIFM) consumers when it comes to auto service or repair, according to recent research by The NPD Group.
The auto aftermarket research report finds that the choice to have DIFM auto services is largely due to the need to maintain a car properly in order to keep it longer, and a higher degree of trust in professional auto services than do-it-yourself auto repair.
The NPD report finds that 68 percent of today's drivers say they will have all automotive service and repair performed by a professional. Twenty-nine percent of consumers said they will sometimes have professional auto service and some they will do themselves, and 8 percent said they rarely have their auto repair or maintenance done by a professional.
"With consumers still focused on spending only on those things they absolutely need, many are finding professional automotive service a necessity in the family budget," says David Portalatin, industry analyst for NPD's automotive aftermarket unit. "Reliable personal transportation is something that most consumers must have; it's not a nice-to-have."
Reliability is the operative word in the minds of consumers when selecting an auto repair professional. According to the NPD report, which explores factors that drive consumers to switch between DIFM outlets, 88 percent of DIFM consumers said trust in the work completed is a very important influence in selecting an auto repair outlet. Knowledgeable employees and the reputation of the outlet or automotive professional also rank high.
Although trust and reputation rank high in the selection process, value appears to be another key driver and the reason for an increasing number of DIFM consumers using car dealerships and tire stores for their auto repairs and maintenance. The report finds that consumers perceive these outlets as bringing more coupons and promotional offers to the table.
"The economy is forcing shifts in consumer behavior and this is true for the DIFM consumer," says Portalatin. "Knowing who is winning in the market and how they are doing it will enable both suppliers and installers to collaborate to craft winning strategies."
(Source: The NPD Group, 08/29/11)
||How Does Your Garden Grow?
Shoppers have shown their willingness to get their hands dirty in the kitchen -- entertaining at home, making more home-cooked meals and mixing creative cocktails. This Do-It-Yourself mentality has extended into the home gardening sector, too, with shoppers' interest in food gardening consistently growing.
A whopping $3 billion was spent on food gardening last year. "The lion's share of that, over half, is spent on vegetable gardening," said Bruce Butterfield, market research director at the National Gardening Association.
In fact, participation in food gardening has increased by 20% during the past two years, according to the most recent NGA report. The biggest increase in vegetable gardening occurred in 2009. Participation stayed level 2010, although the total lawn and garden category -- which includes lawn care, landscaping and flower gardening -- saw an approximate 5% slump in sales that year.
The popularity of different kinds of vegetable plants tends to vary by growing region. Although people do try planting different kinds of vegetables like onions or eggplant, Hy-Vee Floral Supervisor Rita Peters said the most popular vegetables in Hy-Vee's Midwest stores are tomatoes, peppers, sweet corn, green beans and cucumbers for pickling.
In addition to growing their own vegetables, Peters said more shoppers are planting perennials because they consider the plants an investment.
Herbs are also big. The NGA found that consumers spent $428 million on herb gardening in 2010.
Peters said that many people start gardening with herbs in part due to the popularity of cooking shows and also because of the simplicity of growing these plants.
"That's something they can grow inside, year-round and put it outside when the weather's nice and bring it back in (during winter)," she said. "But a lot of them do start with herbs because that's an easy thing they can do."
The recession may have encouraged some shoppers to try planting vegetables in their backyards. But, gardening has taken root and grown in recent years thanks to several of the same trends that are driving the local food movement. Gardeners feel that homegrown produce is fresher and they know how their plants were raised, for example.
"The recession brought people to reconsidering what their own economic benefit would be from having their own source of vegetable(s)," Sandy Hering, owner of Floral Marketing Innovations, Mattapoisett, Mass., told Supermarket News.
"And you know this goes side-by-side with the trend of people wanting to eat healthy food, people wanting to have control over the ingredients that go into their food. And it's kind of right there with the other trend of more farmers' markets, and the promotion of the sale of fruits and vegetables at farmers' markets."
Butterfield agreed that home gardening is a way for some consumers to gain a sense of control.
"I think (it is) a combination of economics and better-tasting quality food" that attracts new converts to the activity, he said. "I've talked to a lot of folks that say, 'You know, I can't do much about what goes on in the big bad world out there, but I like to feel like I can control what happens in my back yard.'"
Whatever their motivation, more shoppers are buying seeds and live plants, and retailers are taking notice. Sandi Probst, floral manager and events coordinator at St. George, Utah-based Lin's Marketplace, said that interest is growing in home gardens, community gardens and church gardens in her area.
"People are cooking more at home, and I think the freshness of having grown their own vegetables makes a big difference," said Probst.
Summer heat is an issue for gardeners in Utah, and Probst said that rose shrubs and a heat-tolerant flower, the vinca, also sell well at Lin's.
Though for Lin's, the show stealers are a variety of heat-resistant tomatoes that thrive in 100-degree temperatures. Probst sources three varieties of tomatoes as well as squashes and cucumbers from the Future Farmers of America department at the local Snow Canyon High School. She pays the school the same amount as her other local growers and mentors the students, teaching them merchandising and how to learn from last year's sales.
Probst creates a special section in Lin's garden area just for the high school's vegetables. She said the plants are so popular that people call ahead to see if they are in stock, and people come from out of town to buy them.
And despite the uncertain economy, shoppers are still willing to pay for quality when it comes to plants.
At Hy-Vee, Peters said price points depend on how her customers are using plants. For instance, shoppers are willing to pay extra for the convenience of easy, ready-to-grow patio plants.
Hering is hearing much the same thing. "What I'm hearing from the industry is that it's a wide open market," she said. "Of course, there are customers looking for the least expensive plants, but another trend in horticulture has been branded plants, and branded plants are increasing in popularity."
To give an example of the wide variety of price ranges consumers are looking for, Lin's recently offered colored bowls and planters with different kinds of flowers in them, priced between $4.99 and $49.99.
Maintaining quality and appearance is critical, particularly when a floral department or garden center offers higher-priced items.
"The real driving force in selling garden plants is maintaining the quality of the plants and understanding the upcoming weather conditions," said Hering. For instance, she's seen unwatered plants at a garden center ruined by a windy day.
Coupled with quality plants, good customer service can convince shoppers to pick up a plant for their garden. The average consumer shops for garden supplies in more than two locations, said Marvin Miller, market research manager at West Chicago-based Ball Horticultural.
Probst said it seems like this year's gardening sales were robust at Lin's due to one-on-one time that associates spent with shoppers asking questions and offering suggestions.
"And a lot of people have moved to this retirement area and don't understand what they can and cannot grow here because of our heat," she said. "So that's the main thing they'll ask you, 'Well, what do you plant that doesn't, like, choke when it starts getting warm?'"
Unfamiliar problems regularly crop up for even the most seasoned backyard gardeners, so providing shoppers with access to information and a place they can have their questions asked is an important way to build loyalty and repeat business.
Miller also pointed out that much of the industry's recent growth has come from an influx of novices.
"We have a new clientele. I mean, we do know that beginning a couple of years ago, we actually were seeing new people getting into it." Miller said this growth is possibly due to recent foodborne illness outbreaks, or even the influence of First Lady Michelle Obama, who planted the first vegetable garden at the White House since Eleanor Roosevelt's "victory garden" during World War II.
Suppliers are getting in on the garden education, too. Ball's program Burpee Home Gardens offers gardening information through smartphone QR codes and a website, Miller said.
In addition to learning from websites, retailers and their own experimentation, Miller said some focus groups said they learned about gardening from their children, who learned about it at school.
And, not only have the people that have been gardening changed, but the places they're doing it have changed, too. Moving to an apartment or small space no longer means consumers say goodbye to their garden.
"One of the things that has been noted is there's an increased interest in urban gardens," said Hering. This is an encouraging trend, she noted, particularly within neighborhoods with otherwise poor access to fresh fruits and vegetables.
(Source: Supermarket News, 08/29/11)
Daily Sales Tip: Living with Problems
I'm often asked, "What's the biggest mistake you see salespeople make?" I answer, "Whatever they do to lose the sale!"
Seriously, there is one pattern I've witnessed with clients in my career. They sometimes assume that a customer with a problem is a customer who is committed to acting on the problem.
I tell this story in my seminars to make this point. A client of mine presented a new product to one of his customers and the customer said, "This is great. I can't stand the product we're using. I hate it." The salesperson worked up the sale value and figured he had a pretty good opportunity in front of him. He told his manager of this newfound opportunity and the manager, knowing this customer well, said, "Don't get too excited. The guy you called on has hated the product he uses for 10 years."
One of two things is likely going on:
-- The person who hates the product has no authority to change; or
-- He has no personal motivation to change that overrides his hating the product.
For example, if the new product costs twice as much as the product he hates he might choose to live with the problem and save money. Or, it could be a big hassle to change even to a better performing product and he concludes that right now the better performance is not worth the hassle to get it.
The salesperson's mistake is in thinking that "hates product" equals "committed to change." Fundamental to this story is the salesperson really doesn't know what the problem is.
If you or your salespeople stumble like my client did just remember that it isn't a problem until the customer says it is, and often there's more to the problem that they need to learn. Also, someone has to authorize making a change. The person who hates the product has to live with it if he's not the one authorized.
Source: Marketing consultant Mark Sellers