Maybe it's time to dial back on those no-no-no promos
Jerry Epperson -- Furniture Today, June 20, 2005
Sometimes it's interesting what you don't notice in advertising. In March, automakers began phasing out zero-percent financing. With an exception or two, it's only a memory. Why? Auto company talking heads say it's because they have lots of new models that should attract consumers. Logic would point more toward higher interest rates and a more vigorous economy.
In any case, the auto industry knows it must wean car buyers off zero-interest loans. How long will it take? Who knows, but even after zero percent is forgotten, they still have cash rebates, which they also would like consumers to forget.
We remain unconvinced the economy is as healthy as some of the financial gurus assure us it is. A while back, we did a five-day rumble through New England, and all is not superdooper neato keen.
Even so, we salute the auto industry for at least trying to remove an expensive promotion the recession made necessary, so that it has an impact when the economy swan dives next time — and we all know it will.
I have given up fighting our industry's deeply entrenched "no-no-no" promotions. It would be easier to get the world to speak Esperanto or teach most Eppersons to read.
Still, we need to ask ourselves what else we can offer beyond the most onerous of the multiple degrees of no-no-no. Would this be a good time to go to less costly variations? We could change the no-payments, no-interest until 2010 back to only 2007 and see if the consumer notices.
One young lady recently told me that every furniture store she went to had similar financing available, so it really didn't factor into her buying decision.
We're seeing a lot of new styles and ideas in furnishings, so we might want to explore some new forms of advertising. Statistics show that fewer households are utilizing credit provided by furniture stores, so maybe this needs to be re-evaluated in terms of its impact on our target audience.
For example, this year's tax refunds ran 9% larger than 2004's, with this year's average at $2,436. That's a good ticket size for a furniture purchase, if we can get the consumer to agree.
Target consumers increasingly are being subdivided into key groups. One is clearly the older (age 41 to 59) baby boomer that is a homeowner, often seeking a second home, with near-peak earnings, perhaps getting at least part of an inheritance, with the kids leaving the nest. The second group is younger, just starting out, in need of everything but with minimal discretionary income.
One absolutely needs credit, the other doesn't. We need to remember that in our promotions.
