Gas Prices Changing Consumer Behavior: Some Shop Online, Others Buy Expensive Coffee Beans Pooped From the Asian Palm Civet

With all the talk about pump prices taking a big bite out of the consumer wallet, there's also opportunity when consumer habits start to change.  Two things jumped to my mind when gas prices approached four dollars a gallon a while back: 

1. consumers do the math now - I know I do - before driving extra miles to malls and big box stores to save money on purchases.  If you can stay close to home and 'shop local', you'll save enough on gas to help balance higher product prices.  Even if the gas savings to product price ration is even ... you'll save travel time at minimum.

2. internet shopping makes even more sense now.  If you can get a great price, the only math you need to do is compare shipping costs to gas and time spent shopping the brick and mortar route.

A New York Times article today, To Save Gas, Shoppers Stay Home and Click, highlights point number two.  It seems many retailers are seeing a jump in online sales:

A number of retailers — including Gap, Victoria’s Secret and J.C. Penney — are experiencing double-digit sales growth at their shopping Web sites, creating a surprising bright spot during an otherwise gloomy time for sales in brick-and-mortar stores.

One popular strategy for getting shoppers’ attention is offering free shipping, in contrast to many other businesses, like airlines, that are adding surcharges and other fees to offset their higher costs.

Businesses should always be looking for compelling ways to differentiate themselves.  If you're a small business owner trying to appeal to the cost-conscious consumer, high gas prices helps you build a compelling case to help convince local consumers to stay local and give your store a try.  A second differentiator should be customer service.  You couldn't compete on prices before, but you could out-serve the big stores.  If gas prices helps even the price difference for some, then make sure your service is the kind that will make people come back, even if gas prices drop to a buck.

There's another way to differentiate your business, and it has nothing to do with the savvy shopper looking to save a few bucks.   There's always a demand for high end products and services, even in a sluggish and spooky economy.  I noticed a press release earier in the week with a title that drew me in:  World's Most Expensive Coffee Beans to be Sold in Orlando.  Forbes picked up on it as well.  The Sol River Coffee Coffee House and Lounge in Orlando was announcing that it will carry Kopi Luwak coffee beans, for the eye-popping price of $179.95 per pound.

For those unaware of this extremely rare variety of coffee, Kopi Luwak beans get their reputation and special flavor through a very, very unusual process, as told in the press release:

They pass through the digestive system of a small mammal called the Asian Palm Civet, which is found on the Indonesian islands of Sumatra, Java and Sulawesi.   The creature eats red coffee cherries as part of its normal diet. The enzymes in the stomach of the civet add to the coffee's flavor through fermentation. The animal digests the outer skin of the coffee cherries. The undigested coffee beans are collected by natives and sold to dealers.

So these beans are basically hand picked from the poop of an animal, and solf for $180 bucks a pound.  A story like that creates a lot of buzz, which is what the owner of the Sol River Coffee House and Lounge is banking on.  Adam Dudley is offering a cup of the rare coffee for $30, swimming completely upstream in an economic environment that has prompted Starbucks to close 600 of its stores.  Dudley says on his website that the first batch of Kopi Luwak was brewed on Thursday.  No word yet on how many consumers have taken the bait.  But bold moves like this can work.  Businesses need to be 'Purple Cows' according to Seth Godin.  And if consumers see yours like just another black and white spotted cow in a huge field of cows ... you have more than gas prices to worry about.  Stand out, differentiate, give people a reason to do business with you, and when they do, make sure you provide radically superior service and products so they'll keep coming back, whether offline or online ... Brick or Click.   

**(gas prices photo courtesy of Nonnynu Blog)

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Comments

[Jeff Paul Internet Business]

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