Is bartering making a comeback?

Observation:  A story in today’s Dallas Morning News suggests that the age-old practice of bartering could be making a comeback.  The full story is available by clicking here.

Implications:  Speaking at a home furnishings conference a couple of weeks ago in New Orleans, I mentioned the concept of C2C marketing; where consumers try sell furnishings they already own before (or after) buying the set that will replace them.  There were a lot of heads nodding in agreement when I asked if people had noticed that behavior in their stores.

Craig’s List and e-Bay make it easy for folks to sell and recycle property.  But might there also be an increasing trend toward trading services, too?  We’ll have to watch.

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.

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.

Small business hiring intentions

This morning’s New York Times carried another report about the conservative approach to hiring that continues to be the standard for many small businesses.  (Click here to see the article.)  The piece seems like a good follow-up to our posting on the topic last from last week (see “Companies adding equipment faster than jobs” from June 10).   

Implications:  Today’s NY Times story reiterates that, just as the recession impacted different people in different ways, the recovery is not being felt by different companies in different ways.  For many, an economic recovery will be hard earned, not something one just waits around for.

The significance of this report on consumers is the implication that future income still feels a bit unsure for a lot of folks.  As jobs go, so goes consumer spending.  I’ll continue keeping an eye on this with you.

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

Number of new businesses will influence the number of new jobs and employment

Today’s USA Today offers some insight into the relatively small number of new businesses that have been launched in the year ending March, 2011… and how that modest start-up rate has impacted the rate of employment.  Click here to see the story.

Implications:  The rate of employment directly relates to the velocity of the recovery, IMHO.  So instead of just watching employment numbers, it’s smart to watch those issues that might shed light on future employment intentions.

By the way, I noticed in this story that between 2001 and 2007, companies with fewer than 500 workers added nearly 7 million employees… which businesses with a payroll of 500 or more cut nearly a million jobs.

Is your company prepared to serve this trend toward smaller U.S. businesses, going forward?

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

Companies adding equipment at a faster pace than they’re adding personnel

As the economic recovery continues, companies are more likely to ratchet-up their spending on equipment and other capital improvements, before adding jobs to their expense line.  That’s according to a story in today’s New York Times (click to link).

Implications:  Just as with cars, furniture, and personal computers enjoyed some post-recession lift due to pent-up demand, companies that put-off major investments for a time seem to be resuming those improvements… except where adding staff is concerned.  Perhaps even large, one-time expenditures seem less risky than adding personnel (a recurring, long-term expense).

It all brings us to the frustrating “chicken or the egg” dilemma; which comes first, higher employment numbers, or a robust economic recovery?

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

Financial reform still far from a sure thing

In the midst of the Great Recession, certain investment banks and banking practices were cast as culprits of the financial meltdown; it was all the perfect fuel for legislative action and sweeping reforms in the banking industry.  But according to a story in today’s New York Times, many of those reforms are failing to gain traction, as the rulemaking phase of the process faces one delay after another.  Click here to see the story.

Implications:  While many consumers accepted personal responsibility for their share of the financial meltdown (the over-use of credit, taking equity out of their home, etc.), many consumers also felt that portions of the financial industry were at least partially culpable for many of the woes faced during the Great Recession.

If the reforms intended to remedy banking practices are now going stagnant, it could represent a strong opportunity for almost any financial institution, or any sales organization which offers financing or financial services as a part of the transaction:  Transparency.

Does your organization thoughtfully explain the pros and cons of any investment instrument or financing alternative you offer?  Do you promote that transparent communication in your marketing messages?

There is one thing will protect the consumer better than even sweeping banking reform (if/when it actually comes to pass)… and that is help in making an informed choice.  And that’s something you can offer now.

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

When states cut, can your company gain?

From education to unemployment services and benefits, states are cutting costs.  That’s according to this story from today’s New York Times (click to link).

Implications:  What could your company do to step in and provide solutions and alternatives to reduced or eliminated government services? 

For example, does more children in the classroom equate to an opportunity for Sylvan, Huntington Learning Centers or other professional tutoring services?  If re-employment counseling and job-hunting services are less available in your state, does that represent an opportunity for private head-hunting firms, local colleges and tech schools, or even temp agencies?

When one provider leaves the market, consumers often seek an alternate provider.  Could your product or service be an alternative to something a government agency once provided?

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

An apparently welcome casualty of high oil prices: Clamshell packaging

A story in today’s New York Times suggests that petroleum-based plastic packaging could be an attractive target for cost cutting in the eyes of many retailers and manufacturers.  Click here to see the story.

Implications:  While those clear plastic packages help companies display products in an inviting manner and deter shoplifters from stealing what’s inside, few consumers are likely to complain about the demise of the clamshell package.  They’re hard to open, and they’re not the most environmentally-friendly of packaging options.

But here’s a thought:  Instead of just accepting that you’re reducing the use of clamshells as a cost-saving measure, why not present this shift toward different packaging as something the consumer will appreciate?  “We’ve been listening, and we’ve made our product easier to live with.” 

Just an idea… for manufacturers and retailers alike.

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.

Banks regaining *some* customer approval

Few industries took a bigger reputational hit than banks during the great recession. From liberal lending by mortgage banks, to the bundled securities (many involving sub-prime debt and illiquid assets) offered by some investment banks, to the T.A.R.P. “bailout” money offered to many commercial banks… there was plenty of negative press to go around.

Some of the bad feelings toward select banks were well deserved, but other hostility may have misdirected toward all forms of banks, including some who were impacted by, but not necessarily responsible for, the financial meltdown of 2007-2009.

It seems as if some of those negative emotions could be starting to wane, according to this story from Media Post Marketing Daily. Click here to see it.

Implications: I think that as more time passes, consumers will realize the complexity of the financial crisis that was the great recession. It was not an industry that brought all this hardship on, but certain players within that industry.

Surviving banks—even those who brought no harm to their customers or the economy—must nonetheless realize the importance of explaining their role in the community they serve… or risk being unfairly cast with an industry that some consumers are still slow to forgive.

Few consumers realize that some banks were “encouraged” to take T.A.R.P. money, even thought they did not want it. Fewer still realize that it wasn’t a “bailout,” but a loan, to be paid back with interest. Fewer still realize the many ways their local bank, thrift or credit union serves as a vital cog to business, employment opportunities and prosperity in the community.
If you work in financial services, it might be prudent to educate your customers thus, rather than waiting (or hoping) for your customers to figure it out.

Mike Anderson

A more perfect union: Looking at the world through the other side's eyes

Colleague Kim Willoughby shared an article that she had read in the New York Times last week. It had to do with an agreement between General Motors and the United Auto Workers union that included significant wage cuts for a part of the workforce that will help build a new compact/sub-compact car in the U.S. Click here to read the story.

Implications: I’m going to express this as an opinion, but bear with me: Both unions and companies have long thought that for one to win, the other must lose. At times, this prevailing attitude has resulted in harm to the company, the union, or both.

In light of another challenging month for the jobs market (click here to see the Bureau of Labor Statistics report, also from last week), it is not surprising to see unions and companies—finally—look at the world from each others’ point-of-view, and realize that they are mutually dependent entities… not archrivals.

Think about the participants in your own business cycle. Whether product vendors, service suppliers, customers or workers, have you ever looked at a person or company as if they were adversaries to be defeated, rather than partnerships waiting to happen? Review your negotiation/transaction process, and the answer will probably reveal itself to you.

Mike Anderson

Are women still hitting a glass ceiling? (And can that last much longer?)

Earlier this week, there was a story in the New York Times about a GAO report that women are still not on equal footing in terms of holding management jobs. Click here to see the story.

Implications: Sorry to hear that the playing field has not yet been “leveled” effectively, according to this report. But I think the next couple of years are going to be very interesting to watch, in terms of employment.

Men, after all, took a bigger hit than women during the recession, at least in terms of job loss (according to this story from the NY Times back in February). I’ve heard from a lot of business owners during the past few years… and I’m also under the impression that companies did not cut people during the recession, they cut payroll. (Companies were not targeting people, they were targeting paychecks.) If that assertion is reasonably accurate, and if men were earning more as we entered the recession, it would only follow that men were a more attractive target in management reductions during the great recession.

Could the recession have served as an equalizing force, in terms of gender balance in the workplace? That might be important to think about… because employees (whether line-level or C-suite) are also influential consumers.

Mike Anderson

Companies more likely to consider i-Pad

Another interesting story today from the Wall Street Journal: More companies are putting the Apple i-Pad in their corporate briefcases. (Click here to read the story from today’s WSJ.com.)

Implications: I’m thinking about all the times I’ve heard and IT specialist say something like, “We’re a PC organization,” referring to some obtuse idea that Apple products might not be compatible with the organization.

These days, it appears that companies are looking more at what might be cost-efficient and effective, as opposed to comfortable for the IT department. (I’m not suggesting that favors Apple, only that it might put the new Apple products on a bit more equal footing with other technology options.) After all, the evolution of smart phones has blurred the lines of what we expect from technology tools. Today, the question is more than just “to PC or not to PC.” We look at each component in the technology chain for what application it accomplishes, and what price that achievement comes with.

Mike Anderson

Don't just claim... demonstrate!

Last night, I read the most recent issue of the Springwise e-newsletter. It contained a brilliant example of evidential marketing (that is, providing proof of performance while serving a customer).

The story was about a flower shop that not only delivered a bouquet to the recipient; they delivered a digital photo of the actual bouquet to the customer that ordered it.

Implications: Isn’t this a perfectly simple and ingenious idea? How many times have you wondered whether the bouquet you sent was wilted on arrival? (After all, one often orders a floral arrangement on the web or by phone, never actually seeing the bouquet.) This shop has gone beyond the claim of freshness. They’re demonstrating their quality with visual evidence.

Consumer confidence isn't just a matter of how people feel about the future of the economy. You can influence the confidence of your consumers by the way you serve them.

Mike Anderson

The (re)tail no longer wags the dog

It seems that even in the virtual world, price wars are a very real issue.

According to a story in the New York Times, Amazon has succumbed to pressure from large publishers—and the leverage of Apple—in allowing e-books to be sold at prices higher than $9.99 for the Kindle.

Not long ago, Kindle swiftly became a leader in the e-book category, both in terms of device sales, and thus, in dictating the way paperless versions of books would be sold. But with last week’s introduction of the Apple i-Pad, another serious contender entered the arena, giving publishers an alternative—and some leverage—in the way e-books will be sold.

Implications: In the world of near-exclusive supply, a provider is able to dictate the terms by which demands can be made and how they will be met. As soon as that exclusivity is gone, so is the leverage.

The world has seen what i-Pod and i-Tunes did to the music distribution business, and what the i-Phone did to the wireless business. Would you have bet against the i-Pad, if you were in Amazon’s shoes?

An aside: Isn’t it interesting that in music, Apple used its leverage to force prices down (most songs sell for 99¢), and that in music, it is using its leverage to push the price consumers will pay… up?

Mike Anderson

The Recovery: Optimism among small business owners

In retaliation for all the crummy news we started getting hit with when the recession was gaining steam, I’m taking pleasure in sharing good news when it surfaces.

Citing a report from TD Bank, Media Post Marketing Daily published a story this week about optimism in the small business community. The article indicates that 87% of respondents think their company will perform at least as well—if not better—as it did in 2009.

Implications: It was interesting to note that if they had it to do over again, 35% said they would do nothing differently from their plan in 2009; 24% suggested they might even be more aggressive, in terms of marketing.

Mike Anderson

They're not just buying the car. They're buying the road ahead.

A story in yesterday’s Marketing Daily cited a report from J.D. Power and Associates… not about why people will buy a particular vehicle… but why they won’t. Called the “Avoider” report, the findings indicate that one in five people will avoid a particular vehicle because of the perceived health of the brand.

Implications: It’s a very good time to tell consumers why your company, brand and product are stable… and offer proof that you have a future. And that might be true for any company that sells a big-ticket (long-term) product or service. Home builders, appliance manufacturers, furniture factories, insurance companies. It might be said that if you sell a big-ticket (long-term) item, you're selling people on the idea of their--and your--future.

Whether it’s your heritage, your track record, testimonials from satisfied customers, or a demonstration that you’re investing in the future… find a way of communicating your strength and resilience. People want to do business with companies that have a future.

Mike Anderson

Inflation 101

Yesterday, it was announced that wholesale prices jumped a full percentage point higher than expected (see the Washington Post story from 12/15/09). That stoked some fears that inflation was gaining steam, and caused the stock markets to drop throughout the day. On top of everything else consumers are going through… nobody wants to see inflation get out of control.

But today, it was announced that consumer prices did not rise as much as expected (see the Washington Post story from 12/16/09). Yes, prices are up a little, but only a little, suggesting that inflation is still at a modest and acceptable level.

Implications: What does it mean… if producer prices are up considerably, but consumer prices are up only modestly? I’m no economist, but I suspect it means somewhere between the producer and the consumer, people are feeling the squeeze… and margins are getting smaller.

Because almost every recession is followed by a period of at least a little inflation, it might be a good time to get your head around this fundamental economic concept. You have to start by realizing that inflation can be both good and bad.

A little inflation can be a good thing… because it can be a signal of economic recovery. Stockpiles have been depleted as companies have avoided warehousing goods in response to weak consumer demand throughout the recession. When the recession fades and demand resumes, there is often too little supply to meet that demand… and prices are forced upward.

Inflation can be bad because it means the same dollar will purchase fewer goods… either because the same goods are worth more, or the dollars that buy those goods are worth less. That can scare the consumer. (A consumer that is already a bit skittish right now.) The dollar can rise or fall in value for the same reason anything else does: the laws of supply and demand. If the money supply grows too far too fast (and there is not enough gold in the treasury to support those dollars), the value of a dollar can fall. The money supply is largely controlled by the Federal Reserve, and influenced by interest rates. That’s why a lot of folks will be watching whether the Fed’s “board of governors” signals an interest rate increase when they announce economic policy changes later today.

This morning’s news would indicate that, for now, inflation is not problematic. But before long, it could become a topic of conversation. So here are a few tools to help you brush-up on the basics:

Here’s a link to the Wikipedia article about inflation.

Here’s a link to some information about “the Fed” from “How Stuff Works.”

And here’s a link to The Federal Reserve website where you’ll find several options to gain more information, including an interactive tour of the Fed’s history.

Mike Anderson

Is this "the New Normal?"

(Or are we simply getting away from ten or twelve years of “Abnormal?”)

Within the latest edition of a newsletter that I receive from McKinsey, there was an interesting conversation about “the New Normal.” The dialogue included “Chief Strategy Officers from Boeing, Estee Lauder, Visa, and Smith International.

I’ll skip the usual “Implications” commentary, as each guest essentially provides their own thoughts on current events, as well as some speculation on the future. See the video immediately below, click here to obtain an Adobe PDF transcript, or click here to see the complete newsletter contents. Enjoy.

Mike Anderson