This got me thinking about homebuilder sales centers.  Why not have a fleet of bicycles stored at the sales center for prospects to use to tour the community?  Typically there is an empty garage where the bicycles could be stored, plus you could purchase a few cruiser bikes for less than $1000.  This would give prospects the opportunity to more intimately experience your community instead of driving through by car.  It would be a differentiated purchase experience that they would be hard-pressed to forget.  If your community is in a Master Planned Development it is even a better way for a prospect to see how their home will connect to parks, schools and stores.  Not to mention it gives the sales associate the opportunity to burn a few extra calories through the day.

The latest trends in housing point to downsizing not just because of economic factors, but also to make the “right statement.”   Sales for certified pre-owned luxury cars are brisk.  The “smart” thing to do is buy a two or three year old used luxury car instead of flaunting the latest model right now.  This certainly is a 180 degree turn from a few years ago when products like Bling H20 bottled water that came embellished with Swarovski crystals hit the market.

Consumers are also downshifting, which involves people voluntarily accepting a drop in their income in order to rebalance their lives – often in order to regain control over time and to improve their personal relationships.   Research suggests that in the UK, 20-35% of adults aged 30-59 have downshifted and resulted in an average income fall by 40%.  In a US study, 19% of people from across social classes had voluntarily changed their lives and made less money (http://www.citizenrenaissance.com/).

Brands can leverage this new frugality to their competitive advantage by actually enabling the concept of simple living in their marketing and social-networking efforts.  This may sound counter-intuitive to marketers who want to promote more consumption.  Patagonia in an effort to simplify and cut environmental impact dropped 30 percent of its clothing line in its most recent catalog without a negative effect.  Last fall subscribers had a choice of five ski pants, now they may choose between two.  The two designs contain all that Patagonia has learned about design and the best available coatings for weather protection.  They felt the other three pants offered were unnecessary and did not offer any extra value.  Kia, the Korean car maker, promoting its Sedona model in the United Kingdom, attempted to differentiate itself from competitors by encouraging walking instead of driving for short trips; not your typical car company marketing tactic (http://www.greenbiz.com/feature/2008/12/22/taboo-talk-buy-less-stuff).

Brands that continue to innovate new processes to minimize environmental impact, tout their products durability/sustainability, and focus on the utilitarian connections of their products will reflect the current consumer mindset and stand to benefit the most in the near future.

The one mistake I see over and over for many of these innovative start-ups is the belief that just being “better” will be enough to get consumers to switch to their product. “Better” is not a strategy. It is a false hope. What you need is a solid strategy describing the magic that will make the product fly off the shelf. Then you need a very consistent marketing program to reinforce the strategy and to compete with the bigger competitors in the market. Too often I see companies getting marketing or product advice from people (read friends and family) which in no way reflect the general public then apply that advice very inconsistently at best. The product fails to hit the sweet spot, then they get nervous and begin discounting, then a recession ensues, and their back to making the product in their garage again.

The good news is the recession may not be having as much effect on many of these companies as previously thought. According to a report; despite the recession and their occasionally higher cost, most consumers are still buying green products. A survey by Portland, Oregon-based non-profit product certifiers Green Seal found that of 1,000 people surveyed, half are buying as many green products as before the downturn, while 19 percent are buying more. Only 14 percent are buying fewer. While sales are down overall at Home Depot, its Eco-Options label of energy efficient products are outperforming conventional merchandise sales across the board.

Now maybe the perfect times to enter this market as opportunities are still high and competitors are pulling back. Just make sure you have that strategy worked out.

However, signs are beginning to creep in showing the potential to squander this opportunity like GM did with the EV1. Many builders are only talking about green or energy efficiency as a cost savings measure when they should be talking about green as an aspirational and emotional connection to the community as well. Consumers buy on emotion and justify with facts.  The industry needs to appeal to people’s hearts first then their pocket books much like Toyota did with the Prius.

A UC-Davis study found that consumers purchased Priuses for the symbolic benefit and what it communicated to others.  Prius drivers wanted to project an image of “socially responsibility,” “environmental stewardship,” and to be seen as “pioneers.”  Toyota has been successful in capitalizing on these consumer emotions through their marketing.  Even the consumers who said they purchased the Prius for cost-saving reasons could not calculate their savings payback.    Further evidence that consumers were more interested in projecting an image of frugality and intelligent consumerism to their friends and family.

The quicker the builders can start appealing to consumers’ green hearts as well as their pocket book the better off they’ll be.  They really need to take an emotional and rational approach to their green marketing instead of just a rational approach. The consequence of consumers not connecting emotionally will be price discounting of “green” homes and loss of any additional margin or profit incentive to build more green communities.

More to come on this…

Also see recent Seth Godin post on rationale marketing:

http://sethgodin.typepad.com/seths_blog/2009/02/the-rational-marketer-and-the-irrational-customer.html