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JetPaws softens the pet fare blow
Desperate college kids turn to peer-to-peer lending
Spoiled rich kids? Wealthy parents have little faith in their heirs
ISM has noticed that restaurants of all grades are bending over backward to offer deals and steals. Because of the recession, people are trading down to cheaper places or not going out at all. When they do eat out, they’re adopting a number of strategies to save money, namely ordering no or cheaper alcohol, choosing tap water over bottled, sharing portions and nixing dessert. Consumers are also relying more on free samples and popularity contests—taste “guarantees,” if you will—before committing to spending money on an entire family dinner. We’re seeing Recession Menus, Dinner Bailouts, Early Bird Specials and even Buy One Get One Free. We’ve seen a 35-cent martini with complimentary grilled cheese sandwich and tomato soup at the Edison in Los Angeles. And, customers traveling 15 miles or fewer to Everest restaurant in Chicago can get a luxury car service for $15. New tech tools are also emerging to help diners seal the deal. Eater.com offers a Dealfeed feature and a “recession specials map.” UEatCheap.com lets consumers search for meals under $10 by zip code. Hot concepts for the early part of 2009 include anything that makes the customer feel comfortable and in control. Pricey restaurants are allowing diners to share pastas and main courses, a practice often frowned upon in times past. Wagaboo, an online reservation tool in Spain and Portugal, lets patrons reserve specific seats, à la high-end movie theaters. You won’t see a lot of white-tablecloth restaurants opening in 2009, but you will see pubs and neighborhood bistros. When enough people believe in a restaurant, they can prop it up both virally and financially. Chef John Halko at Comfort restaurant in Hastings-on-Hudson, NY, cooked up creative loans by selling V.I.P. cards to regulars, and we expect to see full-on CSRs—Community Supported Restaurants—as the recession tightens its grip. What will keep people spending at restaurants, besides coupons and specials, in these days of uncertainty and woe? Comfort, control and experience—all wrapped up in a tasty empowerment package. Making it worthwhile to go out means treating diners like kings and queens. But ISM has found that today’s kings and queens have different expectations about the royal treatment. No longer are we living in a generation gap of “Boomers and Matures crave formality when they dine out” and “Millennials want to wear shorts.” Across demos, consumers are embracing less flashy, more down-to-earth fun and flavor. It’s about understanding that a great burger can be just as indulgent as truffles and caviar; an interactive menu or customized booth lighting can be more satisfying than a 4-to-1 waiter-to-diner ratio. It’s trading down out of economic necessity, but also out of sociological peer pressure. While menu prices aren’t generally negotiable (yet), consumers might start to seek more involvement in restaurants’ business decisions and financial welfare.
Oakland residents are running a time bank that allows members to record the hours they spend performing tasks for others and swap the time for services. Time is literally money for the 160 members of the Sobrante Park neighborhood’s Time Bank, which is part of TimeBanksUSA, a global network of communities that use “time dollars” as currency. Members record the time dollars they accumulate and spend in a database. Sobrante Park’s time bankers are mostly Latino and African American; they pick up people at the Amtrak station, provide rides to the hospital, cook, mow lawns and translate for each other. ISM believes time banking strengthens communities and connects residents. It’s a unique combination of community service and bartering that offers interesting opportunities for grassroots marketing and branding.
Pet-friendly air travel hasn’t been exactly price-friendly, as a plethora of airlines including American Airlines, Delta, Continental, JetBlue, United, US Airways and Spirit increased passenger fees for traveling with pets anywhere from $15–50 per ticket. Positioned as a value add-on, JetBlue, which raised round-trip pet travel fees from $50 to $100, launched the JetPaws program. Members receive travel “petetiquette” tips on traveling with pets and redeemable reward points for flying with their pets. Four-legged jetsetter companions also have the option to travel in style: the program sells a branded pet carrier, travel kit, collar, hoodie and polo shirt. Fare-fatigued consumers who protest paying for the pillows, blankets or drinks they used to get for free will be more fee-tolerant if there is a benefit or visible value attached. With people increasingly treating pets as family members, ISM believes it’s smart business to dial up the offering and to give their program some personality.
College students are in a tough place these days with the economy in shambles, loans drying up and Mom and Dad’s 529 in the tank. But many are turning to friends and families for donations and loans. GreenNote connects needy collegians with friends and family who make loans at a set (and reasonable) interest rate of 6.8%. CollegeDegreeFund.com facilitates direct donations, typically between $10 and $100. And GradeFund.com is designed to help good students get financial gifts for achieving good grades. All of these sites evade SEC scrutiny by trying to amp the “lending a hand” aspect of family and friends, rather than acting as investment tools for would-be loan sharks. ISM sees a whole new generation of online tools that allow desperate consumers to work their networks for what they want and need. Behold, the first web-enabled recession. Taking the profit motive out of peer-to-peer lending through regulation may slow its growth, but consumers are finding good workarounds.
The super affluent aren’t just worried about the economy; they’re worried about their kids’ incompetence with cash. In a survey of Americans with at least $1 million in liquid assets, just 20% said they believed their children would “keep their family’s wealth secure for future generations.” Only a third thought their kids would ever “make financial sacrifices.” Analysts at U.S. Trust blame materialism. Over the past decade and a half, the affluent have taken conspicuous consumption to new heights and their kids identify primarily through fancy clothes and exotic automobiles. The extreme wealth generated during boom times means that about $50 trillion will be passed to the next generation in the next 50 years—probably the greatest transfer of wealth in history. ISM believes that financial literacy isn’t just for the middle class. In fact, the children of wealth may be even more at risk for financial mismanagement, since life has been pretty easy for them so far. Savings, entrepreneurship, philanthropy and investing: these are the areas rich kids need to focus on and ISM feels that any business that can aid in this task could be in a position to earn the trust and loyalty of multiple generations. | |
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