UPDATE: Never anger a reporter. (And we’re all reporters.)

Observation:   Here in the Twin Cities, one of the biggest business news stories of the day is the announcement that Best Buy is closing fifty stores and cutting jobs at its corporate headquarters (see the Star Tribune story by clicking here).

The coverage inspired me to review some of the material I’ve posted about the retailer, including a post about a nasty review in Forbes (see “Never anger a reporter,” 1/5/12).  But when looking for that original Forbes story, I stumbled across a follow-up that I had not seen until now, published by Forbes on January 9 (see “The People vs Best Buy, round two” by clicking here). 

Implications:  Let me start by saying that my heart goes out to anyone who is losing a job in this restructuring… may you swiftly find a new, fulfilling place to apply your trade and prosper.  Nobody likes to see job loss.

But there are two reasons I revisited this story and feature it again here.  First, in reading the follow-up story in Forbes—“The People vs Best Buy, round 2”—one discovers just how powerful the fallout can be from negative publicity.  In the digital age, consumers have infinite ways to pile on, and add their own two-cents about a shopping experience.  The original Forbes article was forwarded via email, LinkedIn and other means with stunning frequency.  That speaks to the viral nature of the consumer community.

Secondly, the Star Tribune story explains that Best Buy lost $1.7 billion in their fourth quarter, compared to a profit of $651 million for the same period in the prior year.  In other words, the further we moved away from the recession, the worse things got for Best Buy’s bottom line.   That issue dramatizes just how selective an economic downturn or upswing can be:  Like the recession, the ongoing economic recovery will not be an equal-opportunity event.

How is your recovery progressing?

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

The car comes first when it comes to paying bills

Observation:   An Associated Press story in today’s Minneapolis Star Tribune suggests consumers have re-prioritized the bills they pay.  The article is based on a study from TransUnion, and explains that while consumers used to pay their mortgage first, then the car loan and credit card bills… the vehicle loan has now taken the pole position over the mortgage payment.  Click here to see the story.

Implications:   There are lots of things going on in this story, in the form of lessons learned and adjustments made during the Great Recession.  First, the labor market placed a premium on transportation:  If you had a job, you needed reliable transportation to fulfill it.  If you were looking for a job, you desperately needed transportation to find it.  Even at risk of foreclosure, the car payment had to come first, because it is so directly connected to employment and thus, future prospects.

But coverage about the mortgage meltdown shed light on the whole foreclosure process, and trained many people that the “grace period” on a home loan might be more forgiving than a car loan.  The repossession process on a vehicle moves much more quickly than the foreclosure process on a home.

More than anything, this story does a great job of illustrating “Reconciliation,” the idea that after 19 months of recession—and the 32 months of recovery that have happened since—consumers have adjusted their financial behaviors to reflect their new collection of economic realities.  That’s a very personal process… and might look quite different from one home to another.

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

Cause marketing meets common sense

Observation:   Today’s Springwise newsletter includes an overview of a project called “Cause.It.”  The effort is basically an app that brings a fresh approach to Cause Marketing.  Instead of (or in addition to) simply making donations to various charities, Cause.It is an app that allows the business to reward volunteers with discounts.  In doing so, giving is potentially more personal and fulfilling for the volunteer, and cause marketing dollars become more measurable for the sponsor.

Implications:   The app is very smart, but the principle is even smarter.  Instead of (or in addition to) giving money, free product, or other in-kind donations to an organization, this article suggests that you reward the people who fuel accomplishment.  What’s not to love?

The next time your approached by a worthwhile non-profit organization, you might ask whether—instead of or in addition to giving to the group—it might make sense to create a similar plan.  If you’re offering special discounts to folks who help clean up a park, walk or run in a charitable race, or volunteer to read aloud at an area school or library…  consider the goodwill that might be generated with this focused group of consumers.

This is the kind of smart marketing that stands a chance of building a bond with a new group of constituents.  It suggests that your company respects and appreciates the effort involved with volunteerism… and respects a cause that is close to the consumer’s heart. 

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

A variety of retailers make adjustments to their pricing strategies

Observation:   An article in today’s New York Times sheds light on the reasons behind pricing shake-ups at stores like JC Penney, Stein Mart and more.  Click here to see the story.

Implications:   Early in the story, this NY Times story righteously focuses on the new sense of control that consumers have over the way business is done.  (Unfortunately, the piece quickly devolves into speculation by pundits about whether the new pricing strategies of various stores will work.  Pundits won’t decide.  Consumers will.)  In an age where competitive shopping can be done before arriving at Store #1, the game has changed.

Of course, there are other ways to attract consumers, beyond price.  (Quality, selection, service, to name a few.)  But the essence of this story is about control:  What customers want and whether you’re delivering it.

Have you sat down for a heart-to-heart with your best customers lately?

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

Automotive recovery shifts into higher gear

Observation:   A recent story from Automotive News indicates that the car-buying public has moved from “need-based buying (replacing an older car when it becomes unreliable) to “want-based buying” (buying a car because they feel like it).  Click here to see the story.

Implications:   While everyone knows what is meant by the term, “The Great Recession,” few people feel like we ever had the chance to celebrate a “Great Recovery.”  That’s because the turnaround has been very gradual, allowing no great announcement of good tidings.   

But that having been said, the recession lasted (only) 19 months, and at this writing, the recovery has lasted 32 months.  The wariness has, for many people, worn off.  While gradual, the recovery has turned out to be somewhat reliable for many Americans… and they’re ready to get their lives underway again.  That is what we mean when this site references the term, "Reconciliation" (see our other postings on the topic by clicking here).

How are things in your category?  Have consumers begun to return?  Are they coming back so gradually that you’ve failed to notice?  Have they returned to the category, but not your company?  The mindset of many consumers is shifting to the good; has your messaging kept pace?

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

Letting younger consumers drive: GM prepares for a generational shift

Observation:   A recent story in the New York Times explains how General Motors is adjusting to the needs and preferences of Millennials (people who were born between 1981 and 2000).  The lives of people in this group are not as culturally tied to the automobile as previous generations, the story explains, and GM is trying hard to regain relevance.  Click here to see the story.

Implications:   We’ve posted dozens of stories at this blog under the label of Generational Economics; the term we use for how consumer priorities changes as they move through different life stages.  But clearly, this decade’s “18-34 year-old” is not buying the same way that an 18-34 may have in during the 1960s, 70s or 80s.  And that’s not just true for automotive; it is a reality check for restaurants, supermarkets and furniture stores, too.

Is your company, product or service seeing a change in the way young adults buy?  Indeed, is your category changing in a way that response to shifting consumer preferences?

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

Restaurant-quality food, but not from a restaurant

Observation:   A story from Supermarket News this week illustrates just how far grocery stores have crossed the line and moved into restaurant territory with their ready-to-eat offerings.  Click here to see the story.

Implications:   Kowalski’s supermarket—featured in this story—is a great example of how to think beyond the competitors in your category… and considering other categories you can compete with. 

(On a personal note, it’s fun to see this company doing so well, as they used to be one of my favorite clients when I worked with a media company here in the Twin Cities prior to joining CSS.)

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

Prices for fuel-efficient used vehicles are on the rise

Observation:   A press release from Kelly Blue Book this week explains that the price for hybrids, compacts, and sub-compact cars are surging in response to rising fuel costs.  Click here to see it.

Implications:   Rising gas prices will hurt some categories, but help others.  (If you sell fuel-efficient cars, of course, you will be helped.) 

How will changes in The Fuel Economy impact your company?  Will it harm some of your product lines and help others?  How will you message when higher prices at the pump are forefront in your customers’ minds?

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

What retail has in store for the future

Observation:   Earlier this morning, Research Brief published a story summarizing a recent whitepaper from Nielsen, which focuses on emerging trends and likely adjustments that will impact retail over the next four years.  Click here to see the story.

Implications:   A number of these trends are worth thinking about...  including the polarization of store sizes between small “grab-and-go” locations to one-stop convenience of mega stores, as well as the increasing pursuit of experiences that will guide select consumer decisions.

In the years ahead, what you do will not distinguish you from the competition; it is how you do it and how you add value to the consumer’s life—how you do it—that matters.

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

Price still an important thing, but it’s not the only thing at drug and grocery

Observation:   That’s according to this story from Drug Store News, citing research from SymphonyIRI (click to link).

Implications:   “Value” isn’t always about price.  Consider, instead, how the product or service you sell—or the way you sell it—adds value to the consumer’s life.  I’m banking on more and more digital interaction (especially mobile), concern about The Fuel Economy, and increasing Time Sensitivity as issues that drive consumer trends in the next few years. 

What are you anticipating?

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

The risks of research: Asking too much of your customers

Observation:   A recent story in the New York Times suggests that the frequency with which companies are asking customers for feedback could be approaching a point of no response; the consumer does not have time to answer every questionnaire she is invited to fill-out.  Click here to read the story.

Implications:   Few things are more precious to a company than the input of its customers.  Their feedback tells you what you’re doing right, what you could do better, and it might even reveal services or products you could provide that you haven’t even thought of yet.

Keep in touch with your customers, but don’t take their attention for granted.  With each survey you write and every question you ask, scrutinize whether you are likely to harvest information that is actually useful.  The response of your consumer is not something to take for granted.  And you don’t want to burn them out with pointless research that presents nothing more than patronizing answers to softball questions.

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

UPDATE: Another casualty of the digital age

Observation:   Last week, I posted an article noting the end of the printed edition Encyclopaedia Britannica.  Over the weekend, a story in the Los Angeles Times pointed to another casualty of the Internet age:  The printed business card.  Click here to see the story.

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