LEFLEIN INSIGHTS

China Furniture Tariffs to Adversely Affect Consumers

With the impact of tariffs top of mind, The International Home Furnishing Representatives Association (IHFRA) asked Leflein Associates, Inc., a leading market research firm, to field a survey among IHFRA members in order to gauge their perceptions of how current and future tariffs might impact the landscape of the home furnishings sector.

Based on input from close to 340 IHFRA members, who represent independent sales representatives, suppliers, retailers and other active in the home furnishings sector, more than 40% of the respondents believe that tariffs will cause furniture suppliers to shift production to countries other than China.

Some 35% of the respondents are also predicting that manufacturers will have to adjust pricing as a result.

And when the question was asked about who would ultimately foot the bill should higher priced furniture emerge as a result of the tariffs, over half of the survey respondents said the consumer would be one paying more for goods impacted by tariffs.

According to Ray Allegrezza, Executive Director for IHFRA, “This survey underscores the volatility the industry may be facing should higher tariffs come into play in coming weeks and months.”

The challenge for the industry, Allegrezza added, is that the issue of tariffs comes at a time when furniture sales, while reasonable, have not seemed to keep pace with a steadily improving economy.

And when that is coupled with the timing and focus of the impending tariffs, that could spell more trouble for the industry, Allegrezza suggest.

“As opposed to the earlier tariffs against Chinese imports, which took hold at the end of September and targeted some $200 billion at 10%, the impending tariffs, set for January 1, 2019, will come in at 25%,” he noted.

“But here is the rub,” Allegrezza explained. “While the earlier tariffs mostly hit materials, about 25% of the planned tariffs will target consumer goods directly, making the perceptions of our survey respondents right on the money,” he said.

Based on what Allegrezza sees ahead, sales of furniture, electronics, computers are all positioned to feel the brunt of higher prices.

What follows are the top line results of the Leflein survey:

 

If the tariffs on China furniture imports increase to 25%, what do you believe furniture manufacturers will do? (Select all that apply)

  • 44% of IHFRA members cite if the tariffs on China furniture imports increase to 25%, furniture manufacturers will move their production facilities to other countries
  • More than one-third (35%) believe manufacturers will adjust their pricing to compensate for the tariff.
  • Only one in ten (10%) believe manufacturers will build plants or expand facilities in the US

 

Who will be most impacted by furniture tariff increases? (Select One)

  • The majority of IHFRA members (51%) predict consumers will be the ones to experience the biggest impact by the furniture tariff increase. Here’s some explanations for why & how:

“Consumers don’t really understand the costs of furniture now. They always want the lowest price products unless they are of the top earners in their respective markets. Many of the top volume producing products are made in China. That much capacity cannot be reasonably spread to Vietnam, Malaysia, India, and Mexico. The logistics of shipping alone make that impossible. So, consumers will have to pay more of their money to get product in their home, even at the low end of the market.”

“Everyone will be impacted. I am a sales rep and I already feel the pinch as the stores are holding back buying or if they are still purchasing they are absorbing the 10% increase. I think that furniture will become a lower priority as everything in the whole country is going to increase 25%. Customers make the ultimate decision and come Jan- Fall.”

“Furniture is the first of the big ticket items to be affected by cost increases.  With no effective long term consumer financing, furniture is a cash sale 75% to 80% of the time.  The vast majority of sales thus are dependent on how much cash a consumer has available people don’t have the cash to afford the level of quality they desire.

  • Three in ten (29%) foresee manufacturers experiencing the most impact. Here’s some explanations for why & how:

“I think Manufacturers will bear the brunt of tariff increases because consumers can always shop other choices, reps can grab other lines, and retailers can adjust their assortment on their floor to create the best value for their customer. This is why Manufacturers will have to be agile and move some production, eat some of the tariff, and possibly look at expanding in the U.S.”

“The ones whose products are made mostly in China will be forced to move production to other countries. This will take time to get established. The most obvious choice is Vietnam which is much smaller and has much less capacity and fewer raw materials than China. All relative factors will drive costs up in Vietnam and create long lead times. It will be a trickle down affect impacting all parties involved but manufacturers will struggle for a long time and some will probably go out of business. For smaller manufacturers it will be like starting all over again which will be a real struggle considering the competition in the industry. Retailers and consumers will shop differently by selecting products not impacted by the tariffs. Overall for a while furniture sales will take a dip. The question is “How long will it take to recover?””

 

Which merchandise category is most affected by increases in tariffs? (Select One)

  • Two-fifths of IHFRA members (43%) cite case goods as the category most affected by increases in tariffs.
  • More than one-third (35%) believe upholstery will
  • Only one in ten (10%) believe accessories will be most affected, only 8% cite outdoor or bedding (4%) as being impacted most.

 

 

 

Which price point is likely to be least impacted by tariffs?

  • 67% of IHFRA members believe high end items will be least impacted.
  • 13% cite mid-range, and nearly two out of ten (19%) cite low end

Which manufacturers stand to benefit most from new business as a result of the new tariffs (Please name specific companies)

Top 5 companies mentioned (among those who mentioned a company):

Ashley 30%
Southern Motion 9%
Amish-made Furniture* 8%
Vaughan Bassett 6%
Catnapper/Jackson 6%

*represents Amish mentions in general, not a specific manufacturer

Will companies selling products not impacted by tariffs benefit?

  • Virtually all IHFRA members (96%) believe those companies not impacted by tariffs will benefit from sales increases.
    • While more than half of IHFRA members (54%) believe companies will benefit somewhat, two-fifths (43%) assume those companies not impacted will benefit a great deal.

If you are an independent rep, have your suppliers empowered you to answer your retailer’s questions about possible pricing changes as a result of tariff increases

  • Eighty-six percent of independent reps have been empowered by suppliers to answer questions from retailer’s regarding possible pricing changes.

What is the future of TV content?

Millennials’ media behaviors are forcing the media industry to redefine what “TV” is

Is second hearing the new second screening?

At work millennials are splitting their attention between screens and a variety of audio content.

One-on-One with Artie Bulgrin

 

We interview MediaScience’s Artie Bulgrin to get his thoughts on quality research data and how you can stay ahead of the curve.

What does the term “quality data” mean to you?

In simple terms I would say Quality Data means:

     – Data that are clean, representative of a known frame or population and a known time period of collection.
     – Projectable and stable over time with a minimal and known range of error and bias.
     – Ultimately fit enough to make reliable, confident decisions. 

Do you believe the current “big data” movement has compromised the integrity of today’s media research standards?

I strongly believe that the “big data” movement has taken attention away from media research rigor and advancement. While advanced data solutions for advertising have value, it was also expected that return path data and census analytics alone could be a substitute for cross-platform measurement. That has now proven not to be the case – we need hybrid solutions. In the meantime we have fallen further behind the consumer and the blind spots have grown. 

You are known for developing innovative “out-of-home” methodologies for measuring viewing behavior across different screens and locales. From your viewpoint, how far away are the media and technology industries from accurately capturing the current state of fragmented consumption?

We are close, but we need persistence, competition and continued innovation. When TV and Radio measurement first began, the industry used diaries. Then competitive innovation produced passive meters and people meters. When ESPN first started cross-platform research we relied on survey’s. That insight created an appetite for more and better data. Today, innovation has produced better technology and hybrid solutions to measure most platforms. But it still isn’t easy or efficient. The challenge is that implementing measurement is now a team sport, requiring cooperation from publishers, distributors and platforms. We need more cooperation and innovation to produce simpler, passive solutions and universal standards.  We are very close, but the industry has to be on the same course. 

What are your concerns, if any,  about the increased use of DIY research solutions by media brands?

Every media company knows more about their consumers device usage than anyone – because they have the analytics. They can and should use that data to move their business forward. But one concern is that having this limited proprietary data may have reduced incentive and urgency for broader industry measurement advancement and instead increased marketplace complexity with disparate data sources. The problem remains lack of standardized measurement and transparency: Understanding totality of usage, competitive positioning and people vs. just devices. This affects everyone in the media marketplace, but mostly advertisers in terms of their inability to properly plan and evaluate the performance of campaigns across media brands and platforms. The simple, but critical, metric of unduplicated reach is now nearly impossible to measure.

What are some of the best ways for up and coming data/analytics professionals to learn and stay ahead of the curve of audience measurement?

Get out, get involved, listen and learn. Hopefully the company you work for has access to organizations like The ARF, The Media Ratings Council, the IAB, CIMM and others. Attend their conferences and go to their websites to read papers and watch presentation videos. I would particularly urge young professionals to read the MRC’s minimum standards document. Also, some of these organizations, especially the ARF, have educational and networking programs just for young professionals.  

You are also instrumental in pioneering the use of authentic lab-based experimental design in the world of media research. If you had an opportunity to design a “dream lab” with an unlimited budget, what would it include?

I have been working with MediaScience for the past ten years, first as a client and now as an employee. The methods, tools and technology used in our labs today have improved significantly over ten years and that innovation will continue. The dream would be to have more labs to add scale and representation of different regions of the country.  

Artie Bulgrin

EVP, Strategy & Insights

MediaScience

Listen to Barbara’s Guest Interview on The Inspired Money Podcast

 

 

Hear Barbara weigh in on:

  • How companies are using big data to more effectively engage with consumers
  • What a recent survey says about Millennials and Finances
  • What we can all learn from Millennials, their strengths and challenges

Identity and Fandom What You Need To Know

The following article is the first of a new series from Leflein Associates. We will highlight new ways in which media consumption and gratifications are influenced by “consumer disposition” or psychological factors such as personality, temperament, mood management, identity, emotions and other processes. This series entitled “Culture Matters Experts” will reveal how the social and behavioral sciences inspire us to provide our clients with even more in-depth consumer insights.

For this week’s post, we are taking a look at Identity Theory.

 

Apple Envy

What business is not at least a little bit envious of the incredibly long lines of eager consumers outside Apple stores waiting for the latest i-gadget? What are the group norms compelling this “Cult of Mac”? These devoted Apple/Mac brand loyalists think of themselves as a close-knit “in-group” with a strong social bond (Jansson-Boyd, 2010). Their motivated and co-coordinated actions in the context of group identity lead to these infamous “Apple Lines.” The concept of Identity Theory can provide insight and perspective to explain this phenomenon.

What can we learn from Identity Theory?

Do you know what it means to be you?

According to distinguished sociologist Peter J. Burke, Identity is a set of meanings that define who we are to establish a clear sense of self. Think of these meanings as the many different hats any one of us may put on throughout our lives as we interact with the people and environment around us. Some of these meanings are relatively obvious such as a particular role in society (e.g., family member, profession/vocation), a member of a specific group (e.g., political group, ethnic group), or a particular characteristic (e.g., tech geek, health conscious). However, some of these meanings exist primarily in people’s minds and are not salient or evident to the outside world (e.g., action hero, supermom). These hidden selves may include the fabled “aspirational self” many advertisers have leveraged in their messaging over the years.

These multiple roles, groups, and categories that people acquire throughout life help to establish a stable yet flexible model of behavior, providing us with guidance and influencing our decisions in everyday activities including media and consumer choices.

The Basis of Identity 

Identity represents a person’s self-knowledge, including occupying each particular role along with the performance expectations of that role. In other words, Identity is our self-concept; it tells us how we are supposed to behave in any given situation.

Social Identity (SI), one part of self-concept, represents a person’s knowledge of belonging to one or more particular social category or group, along with the value and emotional significance of being in that group. SI essentially can provide a strong sense of who someone is in the context of a group or culture.

The central insight of these two concepts is that it is possible for people to feel better about themselves when associated with specific groups, to feel more confident in particular roles, and to find themselves in situations that require identity verification in authentic ways. This process of identity verification can lead to highly motivated actions – including media decisions.

What does this mean for media brands?

Identity and social identity can be strong influences of why people seek out and engage with different types of media content. Identity-based gratification may involve using media to reinforce beliefs, values, customs, rituals, social norms and other significant cultural artifacts.

In the case of social identity, it is possible that viewers self-select, as our colleagues at Hulu would say, programs and content that validate their group identities by either socially comparing themselves with other unfavorable groups, or consuming content featuring positive portrayals of the in-groups they belong to. The recent record-breaking Hollywood blockbuster, Black Panther, is a timely and relevant illustration of this process, as some African-Americans intimated in various media think pieces as feeling a strong sense of pride and self-esteem because of its empowering and progressive portrayals of people from African heritage and themes of Afrofuturism in authentic ways.

Some of our recent work with WE tv, a niche media brand with a significant viewership of diverse women, explored the critical role that self-esteem plays in the identity development of the empowered woman. We also looked at the gratifications WE tv’s empowered female audiences experience when watching programs aligned with their core values including family, and attitudes reflecting the feeling of “being comfortable in their own skin.”

At Leflein Associates, we strengthen market research with an anthropological mindset, by engaging in radically empathetic methods of attaining a more profound understanding of audiences through qualitative research. As a result, media brands have more opportunities to foster social identities with unique attitudes and behaviors that go beyond the standard emotional profiles.

Strategists, creatives, advertisers, and programmers can work to design and develop compelling emotional content and experiences to leverage these different audience groups to help create relevant and authentic engagement of brands’ messaging, commercials, and other assets. As we’ve discovered in some of our in-depth qualitative research, avid fans of engaging companies don’t necessarily think of them in the context of “brands,” but more like “a lifestyle.” Identity may be one of the keys to unlocking the door to ultimate fandom.

References:

Jansson-Boyd, C. V. (2010). Consumer psychology. Open University Press/McGraw-Hill.

 

Andreas Jackson Strategist

 

COMIC SUPERHEROES AND THE BATTLE FOR INCLUSION

Millennials today are calling out for diversity and fair character representations across all forms of media. This generation of viewers is concerned about the lack of minority group representation among characters, as well as the inclusion of current social issues in storylines. For example, while racial inequality, gun control and mental health issues have been widely debated and discussed in mainstream media, there is one millennial audience with a strong voice for inclusion that may surprise you: comic book fans!

First, it’s important to note that comic book fandom is not as niche as it once was. Many people now identify themselves as comic fans, with 72% of Millennials indicating they consume comic book content all the time or very often. In fact, only a small percentage of Millennials would not consider themselves fans of comic book content at all, as shown in the graph below:

Since Marvel created their cinematic universe in 2008, many have seen the potential for comic book movies to be a driving force to spark discussion of social and political issues. It’s no wonder that many fans are beginning to expect comic book film and TV adaptation content to reflect social changes and causes that fans are advocating for on their own. In fact, nearly two-fifths of Millennial respondents wish there were more female heroes (38%) and one-third (34%) request a more diverse set of superheroes.  Comic book fans are already aware of plot themes and characters that represent current social issues including Racial Equality (56%), Gender Equality (51%), Environmental Protection (40%), Domestic Abuse Prevention (35%), and LGBTQ Rights (35%). And these same fans want even more:

In addition to wanting current and socially relevant plotlines, Millennials are also vocal about the kind of superheroes who will portray these issues. Which are the existing characters that viewers care about and want to see spotlighted in mainstream media? Here’s how some Millennials responded:

“Captain Planet is one that I can think of. I feel like he deserves his own movie because it’s a popular cartoon show. They are trying to save the earth from pollution. I guess in that sense you can say that I feel the connection with the characters because I too care for the earth and our environment.” – Female, 30

“Ever since the first Avengers movie came out, all I’ve wanted was Black Widow movie. Actually, most people in the community have wanted a Black Widow movie since then. It took like five years for us to get a female superhero movie at all, albeit Wonder Woman is pretty fantastic.” – Female, 25

“I grew up watching Static Shock when I was in elementary school. Whenever I got home, it would show on TV and I always got immersed into the series. I think the situations he dealt with as a young black super hero made me relate to him.” – Male, 19

“I would love to see a movie based on either Gwenpool or Spider-Girl. I think girls need more superheroes of the women variety to give them something to look up to. I think both of these are much underplayed roles in the superhero movies and maybe not even seen at all.” – Female, 33

Films like “Wonder Woman” and “Black Panther” have already started to show how superhero films can be about social issues and still crush at the box-office; the latter now ranks 10th in the highest grossing movies of all time and it’s still climbing. On the smaller screens, popular Netflix shows like “Jessica Jones” and “The Punisher” have shed light on issues like rape and PTSD and have gained quite a following.  Some Millennials acknowledge the risk of having beloved characters tackle social issues and the effect on their popularity. According  to our findings, 16% of Millennials believe that comic book content is becoming too politically correct and 8% believe social causes have no place in the fantasy world of comics.

However, 33% of Millennials believe there should be more risk taking with diverse characters and topics and 20% believe the genre has come a long way and are happy with their progress so far. So clearly, regardless of risk, Millennials have stronger beliefs in inclusion and having more diverse stories be told.

If we assume that comic books and comic book media will continue to advance plot lines and character development that is reflective of current socio-political issues, can we also assume that fans will continue to support these changes?  If we examine our Millennial findings we can see that there will be a heavy amount of support for this trend and many might start to see comic book fans as advocates for diversity and inclusion.

 

Tom Moore
Community Manager

QSRs or OTT?
Millennials weigh in on what they can and can’t live without

“Tech savvy”, “disruptive”, and “connected” are words all too often used to describe millennials.  According to our new survey on Millennials, Taxes and Money conducted using the Fullscreen TBH panel, we can now add a new descriptor to this lexicon, “financially responsible.”

Millennials are confident when it comes to managing their own finances, with nearly two thirds (62%) giving themselves an above average grade of B or better.  Their self-reliance, may in part be prompted by their tepid outlook for the US economy (an average of “3” rating on a 1-5 optimism scale). When planning for their financial future millennials report putting their financial ambition ahead of their passions.

Millennials are no strangers to leaning on fintech resources with nearly half (48%) already using financial apps like Amazon Cash or Mint. Over three-quarters (78%) find saving tips online.

 

Rather than being frivolous with their money, we found that millennials have or would consider several concrete money saving strategies.   Practical within limits seems to be their motto as there are some things that they simply could never do without.  They will cut back on trips to the salon or even Starbucks before they cut back on their video entertainment.  Here’s what they can and can’t live without.

Millennials are financially savvy, but can they do their own taxes?

With Tax Day approaching, Leflein’s Millennials, Taxes & Money survey uncovers how millennials are reshaping businesses as they tackle their taxes.

More than half of millennials (53%) plan to do their own taxes this year. Nearly one-quarter (24%) of 18-24 year olds still rely on their parents to file for them (vs. 3% among 25-34 year olds).

A plurality (46%)  of millennials express positive feelings about Tax Day. “Responsible” is the feeling that tops the list, particularly with men ages 25-34 (26%). Younger millennials express much less positive feelings towards Tax Day compared to those 25-34 (37% vs 53% respectively).

Three-quarters of millennials (76%) are thinking responsibly, choosing to pay bills, invest, or pay off debt with any tax refund they might get.  The top 5 things millennials plan to spend their tax refund on are:

 

Nearly seven in ten millennials (68%) have used a tax preparation service or software in the past.  But what can tax preparation companies, accountants, and financial services professionals do to engage with millennials? Offer new technologies that are personalized, cost effective and offer speed are key to responding to this always-on, digitally mobile generation.

 

Today, nearly half (48%) of millennials already use one or more financial apps. Some fintech payment apps, like Paypal and Venmo, are now just as popular among millennials as direct deposit with 57% and 54% using either within the past month.

Millennials are certainly tech savvy and practical about their finances, however this group is not monolithic. Brands targeting millennials should consider their needs first when developing financial resources, products and services.

 

While Consumers Expect This Year’s Super Bowl Ads to Address Social Issues Costly Mistakes Could Damage Brand Equity

Leflein Associates Unveils Latest Marketing Research Techniques to Advertisers Looking to Align Their Brand with Social Causes

Ringwood, New Jersey, January 30, 2018--– Leflein Associates, a trailblazer in the emerging field of brand receptivity research, is offering its latest insights on social issues and diversity inclusion sensitivities that should be considered during any ad campaign to avoid costly mistakes and improve marketing effectiveness.

Leflein Brand Receptivity Index

“Today, more than ever, companies need to become culturally aware and informed when making advertising decisions about how they portray women and multicultural audiences. By basing creative decisions on data-driven evidence CMO’s can preempt social media disasters and sleep better at night,” said Barbara Leflein, President and CEO of Leflein Associates.

“Recently we’ve seen far too many high-profile mistakes advertisers have made that have cost them dearly through social media backlash. Those are the things we can help our clients avoid by simply taking the time up-front to utilize our methodology and apply it,” she added.

Whether it is racial inequality, immigration or women’s rights, it’s important to explore whether consumers give the brand permission to genuinely support a particular cause. According to a recent study conducted by Leflein and GenForward national survey of 1,816 adults 18-34, 88 percent of millennials cited a social issue they would like brands to bring attention to in their advertising efforts.

Yet, despite millennials’ well documented passion for social causes, two out of five are skeptical, believing that companies only pretend to care or that brands and social issues don’t mix. Brands that do take on a social cause have to tread very lightly, as the study found that 80 percent of millennials said they would take action against the brand whose advertising mishandled a social issue they care most about.

This Sunday, advertisers will pay an average $3.8 Million for a commercial in the Super Bowl, which are big investments with big potential payoffs. These ads, according to a recent article appearing in Advertising Age, will face scrutiny amid the #metoo movement, for how women are portrayed, if included at all.

Brands that want to align themselves with women’s empowerment should note that younger millennial women 18-24 are 21% more likely than men in this age group (58% vs. 48% respectively) to say they would stop purchasing or spread the word to boycott a brand if it mishandled a social issue they were passionate about. “Advertisers are always at risk of making tone deaf mistakes, but a fumble at the Super Bowl can get you benched indefinitely,” Leflein cautioned.

Leflein Associates has developed a measurement technique called a Brand Receptivity Index™ (BRI), a proprietary methodology used for studying how a brand is received by the audience they are looking to reach with their message. When determining if any social cause is appropriate to the brand and whether brand messages are on point, it’s paramount to be sensitive to the perceptions of diverse audiences.

Addressing today’s pressing advertising needs, Leflein Associates is introducing its BRI Workshops for B2C and B2B companies. The Workshops are designed in two to three hour sessions for advertisers interested in connecting with the passions of diverse millennial audiences. These workshops can be tailored to a particular event or need based on the requirements of the client. For more information on arranging a BRI Workshop, go to: www.leflein.com.

 

About Leflein Associates

Headquartered in Ringwood, New Jersey, Leflein Associates specializes in custom market research, innovation techniques, and advanced analytics. The firm is a 100 percent woman-owned, full-service market research company specializing in branding, PR surveys, global A&U tracking, employee surveys, ad testing and new product ideation in the B2B and B2C sectors.

An award winning research provider, Leflein is on the cutting edge of advertising, business messaging, branding and culture mining. Leflein is located within an hour’s drive from the heart of Manhattan, the media capital of the world. At Leflein, Research Empowers Creativity!

Copyright © 2018 Leflein. All Rights Reserved. All trademarks, trade names, service marks, and logos referenced herein belong to their respective companies.

The GenForward Survey of Millennials is led by Dr. Cathy Cohen from the University of Chicago. It is the first of its kind—a nationally representative survey of over 1,750 young adults ages 18-34 conducted bimonthly that pays special attention to how race and ethnicity shape how respondents experience and think about the world.

The sample from which this data comes includes 1,816 respondents with oversamples of African American, Latino/as and Asian American Millennials. Data was collected from August 31 through September 16, 2017. Contact: Cathy J. Cohen, Founder and Director GenForward, University of Chicago.