An update on the housing market

The mortgage meltdown and the bubble in real estate prices are widely thought of as two of the major causes of the recent recession.  So when the Wall Street Journal offered this story about the current state of the housing market, I thought I’d share it.  (Click here to see the story.)

Implications:  The challenge with articles like this, of course, is that the housing market tends to vary widely by region.  But it’s nice to hear speculation that a bottom may have been reached with declining home values, even if an upward turn might be a ways off. 

It is important to note that while home buyers do great things for the economy, home keepers do, too.  If you own a home that is worth less than you could sell it for, aren’t you a prime customer for the kind of improvements that make it a pleasant place to live?  I’m thinking about major enhancements like new floors, granite countertops, and home theatres.  People who are “stuck” in their current house because of the real estate market are still likely to want the home of their dreams.  It’s just that getting it might involve spending on their current house, rather than moving to a new one.

What kind of opportunity might that perspective create for your company, product or service?

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

After all this, owning a home is still the American Dream

A story in today’s New York Times suggests that even though consumers know their home is not the wonderful investment property it once was… most Americans still aspire to live the dream of home ownership.  (Click here to see the story.)

Implications:  Property and safety hold a pretty important position in Maslow’s Hierarchy of Needs (also known as the Theory of Motivation). 

After reading this NY Times story, one might better understand how the real estate bubble became so inflated in the first place, and why the housing market is likely to eventually come back.  But perhaps more importantly in the near term, this respect for hearth and home might suggest why home improvement and home furnishings can be such resilient categories, even in a seemingly challenging economic environment.

It’s true.  There’s no place like home.  If your product or service is used there (in the home), is your messaging doing everything possible to push those hot buttons?

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

UPDATE: More on the increase in non-traditional family units

Earlier today (and often over the past few years), I have posted about the changing look of the American family.  Today, a story from CNN provides additional perspective—specifically on co-habitation vs. marriage—citing data from the Pew Research Center.  Click here to see the story.  

Implications:  If you cater to families, make sure you know what families look like in your city/region. 

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

A snapshot of the economic chasm

Today’s Advertising Age also included a graphic showing general economic health by family type, age, race, and education.  Click here to see it.  (By the way, notice the tabs at the top of graphic, which is how you’ll navigate between views.)

Implications:  I’m thinking about the overwhelming number of companies who describe their target as “the typical family,” and in doing so, assume that means a family that is married with children.  For one thing, families that meet that description are in the minority these days (according to this graphic, and supported by Audience DNA research projects I’ve done in dozens of major cities).  For another thing, many of those families—with the higher expenses that often come with raising a family, such as healthcare, food and housing—are feeling the pinch of the current economy event more than most.

Don’t get me wrong:  That doesn’t mean the traditional Married w/Children household isn’t a lucrative target.  But it might mean that more of these families are focused on value and cost savings than they were a few years ago.  And it means that the 2011 picture of a traditional family might not look very traditional anymore.

[Thanks, Jim Hopes, for sharing the link to this story and graphic!]

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

Can consumers buy time (from you)?

Yesterday’s New York Times had an important story about people who have lost a major “career” job, and who are now piecing-together several part-time positions to make ends meet.  Click  here to see the story.  

Implications:  When it comes to surviving the current economic environment, many people have devised creative and sometimes dramatic measures to make life work.

Think about that.  Once upon a time, we might have assumed a C- or VP-level executive to be a terribly busy person; an important customer for whom time is more precious than money.  On the other hand, one might have assumed that workers in a less stressful job had plenty of time on their hands… and that they might see savings a few bucks as more important than saving time.    

Well, you can toss those assumptions into a bin labeled “1999 stereotypes that no longer apply.”

Consider the middle-aged adult (or anyone) who lost a career job somewhere during the Great Recession… and who is now working two or three jobs (or more) to make ends meet.  Consider how tired and frazzled they are, and how little spare time they might have. 

What does your company, product or service do to help time-sensitive consumers make ends meet, either in terms of cost savings, or in the way it helps them save time… and take a much needed break?  Are you doing everything you can to streamline the transaction time?  Are you making it easy for people shop or research their purchase via your website?  Are you open extended hours, and is your staff respectful of their customers’ time?

There is an old saying that “you can’t buy time.”  But you can sure sell products and services that help people save it.

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

The chasm between affluent and average consumers continues to widen

Friend and colleague Jim Hopes sent me an article that appeared in this morning’s Advertising Age.  It had to do with the growing distance between higher income consumers… and everyone else.  Click here to see the story. 

Implications:  Since the recession began—even through the current recovery—a core tenet of Elm Street Economics is that “The target consumer you serve today might be somewhat or completely different from the target consumer you served in 2006; and even if you have the same target consumers, those people may have vastly different needs or purchasing priorities.”

The Ad Age article helps illustrate why that is the case.

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

A study of small-business confidence

This morning, a story on MinnPost.com cited the findings of a new research report by U.S. Bank.  The study shares insight as to the degree of confidence that exists among small business operators in the 25-state footprint of the bank.  Click here to see the MinnPost.com story, or, to see the U.S. Bank report as a PDF, click here.

Implications:  While the recession was widely proclaimed to have ended in June, 2009 (see this story example from the Washington Post), this study is another example that perception is reality. 

If you’re a bank selling loans to businesses—or if you’re a shoe store selling to consumers on Elm Street—the recession is over when your customer says it is over.

Have you talked with your customers, lately, about how their personal recovery is going?  It might be a great chance to hear of products or services that you could offer to help them celebrate their recovery, or mitigate their on-going financial battles… whichever the case might be.

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

Harry Potter goes directly to the people

Author J.K. Rowling has decided that the e-book versions of the popular Harry Potter stories will be distributed independently of traditional online booksellers.  Click here to see the story as provided by MyDaily.com in the U.K.  The new online store will be part of the interactive site, “Pottermore.com.” 

Implications:  While Rowling’s publicity angle is that this is the author’s way of “…thanking the fans” and letting them interact directly with the storyline, many commentators are quick to suggest that the decision was driven purely by profit (see this take from Marketing Daily today).

My take:  Are the two objectives mutually exclusive?  I think not.  This is a great example of a situation where giving the consumer more direct control over their relationship with a product has led to more profit for that product’s creator.

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

Oil reserves released to calm the economy?

A few minutes ago, the Washington Post issued a news alert explaining that Washington was releasing 30 million barrels of oil from the nation’s strategic reserve to help cover the disruption in supply caused by conflict in Libya and other suppliers (click here to see that story). 

Okay, I’ll raise this issue for its relevance in to the topic of consumer trends (not as a politically-motivated conversation):  Isn’t this a different position than we heard earlier this year?

As recently as February, news organizations like CNN were reporting that the unrest in Libya should have little or no impact on the U.S. oil supply—or prices—because the country is not a big supplier to the U.S. and produces primarily the kind of crude that is used in diesel and home heating oil (click here to see that story). 

Implications:  So why did we NOT tap the reserves when I was paying $4.16 per gallon a couple of months ago, but we ARE tapping the reserves today, when gas has dropped to $3.56 per gallon at my service station down the street?

To quote the original George Bush, “It’s the economy, stupid!”

Two months ago, while things felt tenuous, employment reports were good, housing prices had at least flattened, the stock market was steady, and the economic recovery seemed to be (while slow) still making progress. 

Today?  I would interpret today’s move as a sign that the country’s leadership feels like the economic recovery is in a vulnerable state… and they don’t want anything further (like the price of gas) to complicate its progress.

Do consumers feel like they are making economic progress in your area?  Do they feel like the recovery is solid?  Are they (like me) a bit confused by the timing of this decision (to release reserves)?  When it comes to consumers, confusion is often the opposite of confidence.  To restore calm, the best move is to reduce confusion.  (So far, that hasn't happened... at least as far as I can tell.)

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

Data shows growing disconnect between some retailer and manufacturer priorities

Today’s Marketing Daily provides a story showing that while manufacturers are still focusing squarely on issues of category management, big retailers are turning to more to consumer insights data to drive their merchandising/marketing efforts.  Click here to see the story.  

Implications:  It only makes sense to me that a manufacturer’s nature would be to focus on the collection of goods they’re selling through to retail.  Further, it is perfectly logical that the retailer would be most focused on the consumer, as they’re closer to that touch point… that is, at least while the consumer is in-store.

I left this story reminded of the importance of partnership between retailer and manufacturer, and how important customer reconnaissance tools might be… to both sides.

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

Vacant retail spaces filling-up with more discounters

I’m in St. Louis this morning, and saw an interesting story in the St. Louis Post-Dispatch about the decreasing number of empty stores… and the increasing presence of discount retailers.  Click here to see the story from STLToday online.

Implications:  It was only a matter of time before someone’s problem (empty commercial real estate) became someone else’s opportunity (new stores at a great rental rate).   

Beyond discounters (whose operating model protects them from online purchasing, according to the story), what kinds of businesses might make sense for that empty space a few doors down from you?  What kind business might you least like to see open-up?  Can you influence the style of occupant, in one way or another?  What kind of new business makes perfect sense in this kind of economic climate?  Is that a business you should be in?

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

UPDATE: Conventional compacts cut into hybrid sales

Today’s USA Today carried a story which supports and further enlightens our posting from yesterday about hybrid vehicle sales.  Click here to see the story.

Implications:  As I wrote yesterday, conventional cars were already eating into hybrid sales.  But one must wonder how much further hybrid car sales might be impacted by the recent falling gas prices. 

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