Culture of Thrift

Last week, I talked to a top industry executive who had just had a business lunch at an upscale Asian restaurant in Chicago. His comment was interesting: “It was good, but by the time I paid $12 for the valet parking, my lunch cost me $50.”

My comment to him was, “Have you always included the cost of the valet into your check average?” His answer was, of course, no. He had never done it before. The fact that a CEO of a major corporation (who was probably putting it on his expense account) added the cost of valet parking into his value equation for a business lunch is indicative of a new “Culture of Thrift.”

Over a business lunch the next day, the topic also (not surprisingly) turned to consumer spending. One of the women at the lunch meeting mentioned her high-school and college-age children were back-to-school shopping at thrift stores. Another woman with children of the same age validated the thrift store trend. Her kids had turned down her offer to pay for a back-to-school shopping trip. Having personally never turned down an offer to go shopping when someone else was buying, I had to probe this…you know me…work, work, work. What could be driving this? Obviously, it’s a style preference number one, but it is also a financial consideration and apparently also an interest in green-movement recycling efforts and a more deep-seated connection to the “authenticity” of truly vintage clothing versus “manufactured vintage” clothing featured by traditional retailers.

Over the weekend, I heard George Will, on ABC’s This Week, use the phrase “Culture of Thrift.” This phrase suggests to me a cultural phenomenon, not just an economic consideration. A recent article in The New York Times suggested, “People are realizing they can’t (have) everything they want … that may be hard for a lot of brands – figuring out not only how to get considered by consumers, but put at the top of their list.”

That suggests an interesting shift in the VALUE paradigm:

  • Consumers want what they want (which will get a brand into the consideration set)
  • But they want it at a price they want to pay
  • With tradeoffs they are willing to make
  • In a way that validates their identity
  • And their perception of “price” incorporates all kinds of factors up to and including valet parking and the cost to the environment

In this new culture, it is more important than ever to understand how your customers view your brand — its VALUE POSITIONING. If you haven’t talked to your guests yet, you need to begin to probe what factors they have in their VALUE EQUATIONS and how your brand can connect with what they want, need and expect because that’s what will put your brand on top of their list.

Many companies have value offerings, but now we are seeing a “second generation” — more nuanced and branded. The trade press, not to mention the media, is crowded with restaurants featuring VALUE.

  • Promotional offerings in the casual-dining segment like Applebee’s lunch combos, two meal deals at Chili’s and O’Charley’s, Olive Garden’s Endless Pasta Bowl, and Maggiano’s Today and Tomorrow
  • Promotional menus such as Hooters new sports-based promotion and Outback’s three new taste adventures
  • Ongoing value components like Ruby Tuesday’s ongoing endless fries with burger purchase and unlimited trips to its salad bar, and Bob Evans’ everyday values like their new appetizers starting at $3.99 and Family Meal Deals for $10.99

I know I’ve said it before, but it’s worth repeating, your VALUE POSITIONING may be as important as your BRAND POSITIONING when it comes to getting and keeping guests in this new “Culture of Thrift.” And the secret of powerful positioning is the emotional connection your brand makes with your guests.

Talk to them. Find out what’s important to them. Find out how your brand connects, and create value in a way that puts your brand at the top of their list.

Until next time…I’d love to hear your thoughts.