by Karen E. Spaeder, November 21, 2003
Want to know what Americans really want? Here, distilled for your entrepreneurial pleasure, are the most important things to know about them in the coming year.
You're a mother, a father, a sister, a brother, a wife, a husband or a friend—or perhaps some combination of a few of these. And if you're reading this, you're likely an entrepreneurial hopeful looking for, or conjuring up, a brilliant business idea. No one expects you to be a mind-reader, too.
Reading our predictions for the trends, businesses and markets to watch in 2004 will give you a good idea of the best bets for the coming year as far as businesses are concerned. But you might still be wondering what exactly American consumers are thinking—what motivates them to buy, what they're buying, why they're buying and what you can do to tap into their buying potential. That's why we sat down with Jon Berry, a vice president and senior research director of market research firm RoperASW in New York City. He leads analysis for Roper Reports, the firm's consumer trends service, which since 1973 has been surveying what Americans are thinking, doing, and buying. He is also co-author of The Influentials: One American in Ten Tells the Other Nine How to Vote, Where to Eat and What to Buy.
Entrepreneur.com: What's the most important thing business owners need to know about consumers today?
Jon Berry: Every year, we at Roper do a major presentation to clients characterizing the mood of consumers. The title of our most recent presentation is Trading Out/Trading In. [We've found that] rather than being paralyzed by events—which would be understandable, given the events Americans have been through the past three years—the consumer mind-set today is very much about moving forward. Indeed, the events of the past three years appear to have focused Americans' priorities about the [type of] life that they want—and to move toward getting that life.
Entrepreneur.com: And what kind of life are they trying to attain?
Berry: Normally in soft economies you see consumers trading down. But that hasn't happened. Instead, people have been buying homes, having their homes remodeled, getting new cars, having their homes wired for high-speed Internet access, setting up wireless networks, porting over more of their phone calls to cell phones, switching to digital cameras, and trying new things—from Roomba vacuum cleaners to Toyota's Prius hybrid-engine car to organic foods.
They're trading into the life they want, buying into products and services that help them connect to the people and experiences they care about—or that offer an experience that in itself makes them feel more connected. Because of the growing sense that "the things that matter are more important than ever" (as one focus group participant put it), consumers are willing to take a risk to get something they want, something you don't normally see in soft economies.
Entrepreneur.com: What does this mean for entrepreneurs?
Berry: From what we see in our research, the changes that people have made [over] the past few years—like connecting to the Internet from the screen porch via a WiFi network, or e-mailing digital photos of the new baby to Grandma and Grandpa—are wetting [consumers'] appetite for more, and entrepreneurs need to respond with innovative ideas.
This is not a time for sitting back and waiting for good times to [return]. In fact, in this environment, doing nothing could be quite risky for an entrepreneur.
Entrepreneur.com: What do Americans really want? And how can entrepreneurs reach them?
Berry: Times are still tight, and likely will be so for some time to come. So consumers are scouring the landscape, looking for ways to save money. Many times, they're "trading into" a new purchase by "trading out" in another area to save money—making high-speed Internet access more affordable, for example, by disconnecting their second phone line and dropping their [dial-up] service.
The deal-mindedness of Americans has ratcheted up to a new level in recent years. [Increasingly,] Americans [are] saying they employ a number of tactics to save money, from waiting for sales before buying, scrutinizing price ads and confining their shopping to stores that match or beat competitors' prices, to going out of their way to get a deal or joining frequent-shopper programs. Entrepreneurs must be innovative to be part of the future that consumers are trading into—or [they must] help them get there by saving them money.
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Karen E. Spaederoffers is a freelance business writer living in Southern California.
Copyright © 2003 Entrepreneur.com, Inc. All rights reserved.
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