U.S. automakers—and buyers—shift toward small

In case you weren’t checking-in with the New York Times over the holiday weekend, there was an interesting story about our recent shift toward smaller cars in the Monday edition.  Click here to read the story.

Implications:  The current economic recovery started in the fourth quarter of 2010.  Until that time, many car buyers had been putting-off this major purchase.  So the past six to nine months have represented the first major, sustainable car-buying binge since gas prices were above $4 back in 2008.   Also, a more contemporary price hike was on our minds as gas prices jumped over $4 earlier this year.  Fuel, like never before, has been a high-profile issue… at a time when more people have been in in a position to shop for a new vehicle.

There is still a truck or SUV in many household fleets… but if this trend toward smaller vehicles should continue (and I think it will), it might influence a number of unrelated categories.  For example, if you sell home furnishings, will affordable delivery become a more important criteria on the consumer’s consideration list?  Should spacious seating become something worth promoting to those who run a roadside restaurant?  (“Stop in and stretch out!”)  What will consumers do with that new found space in their over-sized garage?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Checking-in on long-term trends with real estate

This morning, there was a thought-provoking story in the New York Times about the state of the U.S. real estate market.  The article suggested that for many people—even those who can afford to buy a home—living in a rental property has become the lifestyle of choice.  Click here to read the story.

Implications:  It would be wrong to assume that home ownership is over; that’s not true, and not by a long shot.  But that having been said, more consumers are opting-in to a rental, according to this Times report.  For some, the idea of home ownership has lost some of its investment-value luster, and for others, a rental allows for greater flexibility (compared to the longer-term commitment of buying).

This story did not leave me thinking about real estate… but of all the categories and companies that might be impacted by these emerging trends.  If you sell home furnishings, for example, how does this affect you?  Should you be offering pieces that are smaller (apartment- or condo-sized, as opposed to Great Room appropriate)?  What if you sell mortgages or home improvements?  Investments or power sports equipment?  (If someone has gone from a three car garage to two underground parking stalls, where are they putting the jet ski or ATV?)

Are your prospects today the same as the people you thought of prospects five years ago?  Do those customers have the same reasons for buying as they did in 2006?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Leveraging the voice of your most passionate customers

A story in today’s Marketing Daily reminds us that the best way to gain new customers is often to harness the power of today’s best customers.  Click here to read the story.    

Implications:  This story happens to be about boating, but the principle applies to almost any category of business.  Consumers believe other consumers (people who have experience with a product or service they’re thinking about buying). 

Does your company have passionate fans?  Who are they?  How can you harness their favorable remarks to bring other prospects into your business?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Contrary to history and logic, major crime fell during recession

Traditionally, when the economy falls, crime goes up.  But that has not been the case in recent years—at least with violent crimes—as the U.S. crime rate for things like murder and assault have actually fallen.  That’s according to this recent story from the New York Times (click to link).

Implications:  Note that this story does not dive too far into things like theft or burglary… crimes that might be reasoned as a reaction to economic difficulty.  I’ll make it my assignment to look into those rates for the recession period, which I estimate to be late 2007 through early 2010… when those figures are available.

I wish there was a survey—absent the crime rate—which investigated the degree to which people felt secure during the recession.  (Editor’s note:  Our former home was the target of a break-in in early 2009.)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Something fishy is going on

As I continue to clean up my newsletter in-box from this week, I came across a story from Marketing Daily, indicating that consumers would be willing to pay more—both in taxes and in food prices—to make sure their food supply is safe.  Click here to see the full story.

Implications:  Again, self-regulation seems like a good idea to me.  The company or industry category which is pro-active about transparency and safety is likely to gain favor among consumers.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Another measure by which to judge (vehicles, and more)

We’ve long been able to compare prices and gas mileage.  But now, consumers can look at the emissions a car puts out, as well as the gas they’ll put in.  Here’s a story from the New York Times that explains (click to link).

Implications:  Watch for many industries and categories to be judged in ever more sophisticated ways by the consumer and your critics.  Paper or plastic?  Lots of people used to favor paper because it was thought to be more bio-degradable.  But depending on manufacturing techniques, paper bags can be just as—or more—harmful than plastic.*

When consumers think “environmentally friendly” or “sustainable,” chances are they won’t be thinking of a single issue (like consumption of fossil fuels).  As people become more educated about the many moving parts involved with manufacturing, consumption and disposal, they are likely to scrutinize a purchase in a variety of ways.

When you consider the life cycle of the product or service you sell… does it compare well to competitive alternatives?  What can you do to improve that product or service, and thus make it more appealing to the consumer’s growing sense (and sophistication) of social responsibility?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

In the move from field or factory floor to the modern workstation, workers have gotten bigger

A workplace that is less physically demanding is now cited as another major contributor to obesity, according to this recent story from the New York Times.

Click to see the full story. 

Implications:  This NY Times article presents another angle of attack for anyone who is promoting health-consciousness, fitness, or weight-related products and services.  Remember that working out may not be about physique… but simply: staying healthy.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Bait and switch: Is something fishy going on?

A recent New York Times story indicates that as much as 20% of fish sold in the U.S. is labeled incorrectly, with regard to the type of fish that is being sold.  Click here to see the story.   The practice allows to overfishing of protected species, and/or cheaper fish being sold under the guise of a more expensive filets. 

Implications:  If this issue is beginning to receive such broad coverage, one might wonder why the fishing industry, itself, isn’t doing more to self-regulate the appropriate labeling of seafood.  Especially now that DNA bar coding (as it is referred to in the article) is possible… and especially since this kind of unscrupulous behavior could cause consumers to choose from something else on the menu, harming the overall industry/category.

If something like this were discovered in your industry or category, how would you respond?  Can you verify/certify that your ingredients are authentic and your suppliers are trustworthy?  Something to think about in an age of greater transparency.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Ladies & gentlemen: Start your yard parties

A brief story from today’s Marketing Daily suggests that consumers love entertaining outdoors during the summer months (75%, at least).  It also indicates that people consider some elements of home maintenance (lawn care, power washing the house) to be a part of that entertainment preparation.  Click here to see the story.

Implications:  If you sell hardware, home improvements or power equipment, are you thinking of the entertainment value of your products and services?  It would seem, according to the NPD research cited in this article, that your consumers are!

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Gas pains won't prohibit vacation

This morning’s Research Brief suggests that while consumers are bothered by rising fuel prices, they plan to forge ahead with summer vacation plans.  Click here to read the brief for yourself.

Implications:  With falling crude oil prices lately, we’re all hoping that the price at the pump will fall soon, too.  But only 39% of survey participants said their vacation plans will be altered if gas prices stay high.

That begs the question… where will the money that people spend on gasoline come from?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Gas pains continue to affect other spending

A story from the New York Times this week explores how consumer spending is being impacted by higher gas prices.  Click here to see it.

Implications:  There is an inarguable relationship between what consumers are spending on gas… and what they can spend on everything else.  How is your company impacted by the cost (to consumers) of high fuel prices?  How can your company help the consumer manage this challenge?  (More accomplished on fewer trips to your place of business?  Online purchasing or planning?)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Some companies let their marketing grow a little older

A recent New York Times story featured examples of companies that have begun to target older consumers.  Click here to see the full article.

Implications:  The Baby Boom generation has been a favorite target for many marketers since the day were born.  Now, as they head through midlife and into their 60’s, this cohort of consumers will continue to receive attention.  But beware the term “upper demo.”  Because today’s 55+ consumers look very little like their parents or grandparents did at a similar age. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Consumers delay healthcare, insurers profit (for now)

Among the purchases that were deferred or delayed in response to the recession:  Medical Procedures, according to a recent story from the New York Times (click to link).

Implications:  The idea of pent-up demand seems easy to grasp for things like furniture, automobiles, clothing or appliances.  But healthcare is not immune, either; a fact that has brought profit to insurance companies, at least until such time as patients decide to get caught-up on their overdue procedures.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Large retailers could be moving toward more customer focus

A recent story from Marketing Daily suggests that some large retailers are preparing to shift away from adding new store locations as a means of sales growth… and focusing more on frequency of visits, share-of-wallet, and digital channels as a means of growing revenue in the future.  The article cites input from KPMG, and you can click here to see the story.

Implications:  The recession caused many companies to focus on “operational efficiencies” (which is often CFO-speak for reductions in staff and service).  It will be interesting to see whether those efficiencies can be maintained… as companies strive to go to the other extreme, in which consumer wants and needs become more of a focal point.

Also interesting to watch:  Whether this organic, consumer-centric effort will be significant enough to be noticed… by the consumer.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Opening the (social) conversation

Recently, there was a very telling story the New York Times which explained how some teachers are using social media to expand on classroom conversations.  (That’s right… using Facebook and text messaging in the same place where the practice was banned not long ago!)  Click here to see the story.

Implications:  Think of social media as a place where people dare speak-up… a place where they can raise their hand and share a thought, without having to stand-up in front of a lot of people.

That very simple take-away from this NY Times article might be worth gold to a company that is looking for ways of gaining input from their consumers.  One often sees marketers use social media as just another way for their company to reach-out to consumers.  Too few are using this valuable platform as a means of letting consumers reach back.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

When your phone expires before your contract

Around 62% of customers feel their smart phone is obsolete now, or that it will be obsolete before their wireless contract is up.  That’s according to a recent story from Research Brief.  Up to 48% of customers would consider buying a new phone early if terms were favorable (even though doing so would almost certainly involve some cost).  Click here to see the full story.

Implications:  Funny… my wife is going through this right now.  The phone she is carrying was more than enough to satisfy her desire to take phone calls and send text messages at the time we bought it.  But as new apps have rolled out and more sites have become optimized for mobile, she has become disenchanted with the device ahead of its’ scheduled retirement.

We inquired about purchasing a phone upgrade… and the price was over $200.  It would cost about $175 to opt-out of her contract.  If other consumers are running into a similar situation, one must wonder whether it is only the phones that have become obsolete, or whether the way they are sold has become dated, too.

Personal examples aside… consider this underlying issue:  Consumers are buying smart phones at an amazing rate, even knowing they will be confident of the product for a span of about twelve months.  That says something about how pervasive technology has become in our society, doesn’t it?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Loans for upscale homes could see reduced government backing

Legislative changes are being considered that could reduce or eliminate government backing for home loans of greater than $750,000, according to a story in today’s New York Times (click to link).

Implications:  These changes would directly impact upscale consumers, but it would also affect consumers who simply live in more expensive areas.

If your company targets an upscale audience, you’re not likely to hear the topic of real estate drop from the daily discourse anytime soon.  If the changes are enacted and loans for expensive homes become much more costly or difficult to get, one might expect that chasm between upscale and lower/moderate homes to widen… as cash regains its position as king among luxury home buyers.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Restaurant recovery proceeds slowly

Roughly 24% of adults came through the recession relatively unscathed… but the rest are still being very careful about spending their out-of-home dining dollars, according to a story that appeared today in Marketing Daily.   Citing research from NPD Group, the article indicates that a recovery is definitely underway in the restaurant category, but that consumers who are working with lower household incomes or rebuilding wealth are dining out less frequently, trading-down in terms of restaurant type, or even ordering fewer items.  (Click to link.)

Implications:  This article—and the restaurant category—provide a great example of how some attitudes and behaviors learned in response to the recent recession could linger for quite some time.  Many consumers were simply on “auto-pilot” when it came to spending decisions (or non-decisions); now, spending seems to be much more thoughtful and deliberate.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Try this on for size (virtually)

Colleague Tina Rice shared a copy of this story from Strategy and Business today:  It explains how technology allows consumers to try on clothes virtually, and use those same tools to “right size” their apparel.  Click here to see the story.

Implications:   Several years ago, Dell computers offered dozens of options in what seems like an infinite range of combinations and iterations.  But automating the selection of those options, Dell brought a “my size fits me” level of customization to buying computers online.

If companies are able to replicate those capabilities—while paying attention to the nuances of an individual human’s physical dimensions—history suggests that consumers will respond favorably. 

Lots of companies are using technology to streamline their contact with the consumer, often to the irritation of that same consumer.  Based on this S+B story, it seems at least a few players in the apparel industry are trying to use technology to enhance the product and shopping experience for consumers. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Complex needs cause consumers to search for simplicity

Today’s Marketing Daily offers a story about consumers who own 14 or more technology devices.  Citing survey results from Accenture, the article asserts that these heavy users of technology with they could have a single-source provider who helps them service all of their various technology tools.  Click here to see the story.

Implications:   Three things struck me about the headline and essence of this article.  First, that so many consumers have become intense technology owners.  But if you stop and think about it, with a computer or two at the office, another two or three in the household, plus a cadre of smartphones… it doesn’t take long for the typical American family to slip into the “high tech overload” group.

Second, the needs of a heavy-user in a category can be distinctly different from the moderate or light users of a category, when it comes to technology tools.  But couldn’t the same be true for customers of a bank, supermarket, or sporting goods store?  The heavy user in many categories has distinctly different needs (benefits) compared to the rest of us.

Finally, technology—while purportedly designed to accelerate and simplify our lives—is often the very thing that makes it more complicated.  And when that happens, customers seek the provider who can simplify their lives.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Drop in oil prices doesn't last

A special release from USA Today a few moments ago suggests that the drop in oil prices was not long-lived.  Prices are moving higher today.

If you sell vehicles, destination travel or product that is shipped, this is just one of those stories that we have to watch, even if it seems to change daily or even hourly.

Mike

UPDATE: U.S. economy adds jobs, confidence

Earlier this morning (see the story immediately below), I wrote a post suggesting that the dip in commodity prices and inflation was temporary, because of the fundamentals in play.

Later this morning, the New York Times published a release indicating that the U.S. economy added more jobs last month, and that the recovery is gaining momentum.  Click here to see the story.

Mike

A temporary reprieve from inflation?

A huge drop in commodity prices—including silver and oil—received wide coverage in at the market close last night.   Here’s one story from USA Today (click to link), and here’s more coverage from this morning’s New York Times (click to link).

Implications:   Here’s the good news.  Speculators are now suggesting that the price of gas could drop over the next week to ten days (just in time for Memorial Weekend travel). 

Here’s the catch: While many analysts are looking at the run-up on silver as another “bubble,” the fundamentals that were driving price increases for other commodities are still in play.  Those items are greater demand from growing economies in China, India and elsewhere… and an improving economy in the U.S.  (Two reasons for yesterday’s drop in commodity prices was the jump in new unemployment benefit claims and the slowing growth of the economy.)

Yesterday’s drop in oil and other commodity prices is a welcome thing at the consumer level.  But stand by…

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

More people under one roof

This morning’s USA Today offered a story about an important trend in housing:  It appears that more people are sharing the typical residence.  Click here to see the article.  

Implications:   There’s a bit of irony to this story.  It was affluence that led to bigger houses holding few people over the past fifty years or so.  But it was economic hardship that led to the reversal over the past several years.  The recession forced foreclosures and unemployment hardships; people who lost their homes moved in with family or friends, adult children were more likely to put-off moving out of the house, and some college grads were more likely to move back home than strike out on their own.

If you sell home furnishings, appliances, or home improvement, it’s critical to pay close attention to this trend.  Think about your industry or inventory and ask:

Are their accessories that let someone cordon-off their bedroom as if it was an apartment (think home electronics, headphones, personal TVs, laptops, room dividers, dorm-room style refrigerators, etc.).

Are there smaller furnishings that fit more comfortably into a crowded house or apartment?  (Down-sized versions of the recliner, a loveseat instead of a sofa, and perhaps with a pull-out bed?)  I’m having flashbacks about beanbag chairs and futons, here!

Do you offer an escape, when someone simply needs to get away from the crowd?  (I’m thinking about how coffee shops, bars and restaurants could benefit from this issue!)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Evidence of corporate confidence

We frequently visit the issue of consumer confidence at this site, but today, I’ll share two examples of something equally important:  Corporate confidence.

According to this story from today’s Research Brief, small businesses are poised for growth, and willing to take some risks to create it.  Click here for the story.

Yesterday, there was fairly widespread coverage of the fact that factory orders were up for the month of March, too.  Click here to see the version of that story that was released from UPI.

Implications:  These numbers are welcome indicators because they focus forward; they are signs that many companies believe opportunity is on the horizon.

If companies behave with greater optimism, it’s easier for the consumer to follow suit, don’t you think?  

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Automotive sales gaining momentum

The car business has been enjoy a resurgence this year.  One example of the positive press comes from this recent story in the Los Angeles Times (click to link). 

Implications:   There are likely more than a few factors contributing to this recent spike in sales (and if it keeps up, we’ll be referring to it as a trend, not just a spike).  Among them, increased employment and resulting consumer confidence, higher gas prices that have consumers looking for more efficient alternatives, and the pent-up demand that was created by the self-denial of the recent recession.

If you’re not a car dealer, do these issues play a role in your company, product or service?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Shortages of Japanese cars/parts looming

A recent story from MSNBC indicates that Honda is warning of shortages of its popular Civic by this summer, resulting from parts shortages in the aftermath of this year’s earthquake and tsunami.  Click here to see the story.

Implications:  The supply issue for Honda is aggravated by the demand issue; many consumers are looking for higher mileage cars just as many Japanese manufacturers are announcing that they won’t be up to full production until late this year, in some cases.

If you’re a dealership for one of the brands that finds itself in short supply, you’re probably thinking about ways to get people to move to available models, or hold-off until the model of their choice is available. 

If you’re a competitor, you’re probably eager to get consumers to consider your brand as a logical alternative to their previous choice.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

What can 10 billion people do to supply and demand?

This morning’s New York Times carried a story that may not have looked like a Consumer Trends issue… but it very definitely is one.  The article cited U.N. estimates that the world population will exceed 10 billion by the year 2100.  Click here to see the story.

Implications:   Okay, I for one don’t plan to see either the year 2100 or the 10 billionth resident of the planet.  But that’s not the point.  Fluctuation in population generally leads to either unrest or stability in global politics, scarcity or abundance of supply, and increases or decreases in demand.  So population expansion will definitely impact the consumer… and it won’t take 10 billion people to make it happen.

The price of petroleum, for one thing, can be directly linked to increased consumption in China and India.  That's not waiting for 2100... it's happening right now.  And when the price of petroleum goes up, the cost of shipping almost anything will soon follow. 

As raw materials are in greater demand, countries and their manufacturers will be forced to compete (or bid) for them.  That will force prices for finished goods upward.  Which raises the question—again—are you selling the deeper value proposition of your product or service (how it adds value to the consumer’s life)… or are you focusing on price alone?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Healthcare changing channels

This site has offered a number of stories about the changing face of medicine (see the Healthcare set by clicking here).  Today’s Marketing Daily features a story about the growth of in-store clinical services at chains like Walgreen’s, CVS and Riteaid.  Click here to see the article.

Implications:  This is interesting not only to the (previous) providers of vaccines and other routine treatments.  It should be interesting, too, to those health care providers that rely on traditional physicians for their referrals. 

If you run a specialty orthopedics office, a strip-mall MRI facility or other specialized healthcare office… could your referrals be coming from a different source than they were five years ago?  If revenue is up more than 80% at the chain quick-clinics since 2005—as stated by the Marketing Daily story—one must assume that at least some diagnoses will increasingly occur outside the conventional doctor’s office.

Perhaps some specialty healthcare providers will have to take a more retail approach, with regard to patient marketing; doing so could help make-up for referrals which might not be as likely to travel through traditional channels.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Watching the health of the economy

While some tremendous headlines have bumped it from getting too much attention (like the storms that swept the south last week, or last night’s announcement that Osama bin Laden had been killed), a story of significance ran last week having to do with the still-fragile economic recovery.  The economy grew at a tepid 1.8% in the first quarter of 2011… representing a fairly dramatic slowdown from the quarter earlier.  Here’s the story as it appeared in the New York Times (click to link).

Implications:  It will be interesting to watch the jobs reports that unfold over the next several weeks, to see whether this kind of news makes employers skittish.  Household incomes, more than any other single factor, will help determine the strength and resolve of the continuing recovery.  (Although gas prices are respectable runners-up.)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Devastating storms continue to strain the south

Work-related projects had me spending most of last week in Atlanta, Georgia, not too far from some of the areas that were hit by the violent tornadoes that swept across the south.  From my vantage point, the coverage was more local than national… and I found myself checking-in on the story almost constantly.   

This morning, a story in the Wall Street Journal explores the path ahead for survivors, in terms of both the challenges they are facing and what the process of rebuilding might look like.  Click here to see the story.   

Implications:   For dozens of communities and thousands of families, recovering from last week’s tragic storms will be a years-long process.  If appropriate for your company, product or service, consider this an opportunity to do something really great, whether through a financial donation, an in-kind contribution, or other means of support.  (If you don’t know where to start, consider contacting the American Red Cross.)

Please note:  The genuine need for help is likely to far outlive the national headlines granted to this story.  (Just this morning, another major global news event has bumped the topic from the front page of many national news websites.)  Don’t focus simply on the ideas you can execute quickly or which are in the public eye; consider the long haul.  The secret to a well-received cause marketing effort is not to do it just because it's fashionable or hip... but because it heartfelt and it actually helps.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Multi-tasking with technology starting younger

A recent story from Marketing Daily helps us realize the extent to which kids—even the very young—are multi-tasking their media, as they watch videos, play games and update their social networks, often near-simultaneously.  Click here to see this story.

Implications:   It doesn’t sound like media consumption will be slowing down anytime soon.  The challenge for marketers will be presenting a message that cuts through all that traffic, and leaves an impression in spite of the considerable competition that exists… for the consumer’s attention span. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.