Net worth returns to that of early 1990s for many

Observation:   A story from the New York Times (NYTimes.com) explains that, according to the Fed, the financial meltdown of 2007-2009 cost the average American roughly two decades of prosperity; the typical household is revisiting a net worth that they haven’t seen since the early 1990s.  Click here to see that story.

Implications:  Perhaps we can expect the more careful, prudent spending that has followed the Great Recession to linger for quite a while… interrupted, perhaps, but the occasional indulgence that feels like a bit of a reward.

Are you still explaining the value behind the product or service you sell?  (And by value, I don’t just mean “cheap price.”  I’m talking about how your product, service and purchase experience add value to the consumer’s life.) 

This story has dramatic implications, also, for anyone in the financial planning or investment business.  A lot of re-building has yet to be done.  Are you messaging in a way that demonstrates how you can help?

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

Can’t decide? Furniture store lets you sleep on it.

Observation:  The Springwise.com newsletter that was published this morning features a story about a New York City furniture store that lets you try the bedroom before you buy.  Click here to see the full story.

Implications:   This week, I’ll be in New Orleans speaking to a conference of home furnishings and interior design professionals (known as ART), so this idea was particularly timely.  It might inspire us to ask, “In what ways might I demonstrate my unique value proposition, instead of just making claims about it?” 

Not everyone can invite customers in for a sleepover, but there are other ways to help the customer take a test drive, such as testimonials from past clients, written success stories, and photographs and/or videos of your product or service in action.  

Consumer confidence is not just about the economic outlook.  You can influence the customer’s confidence by the way you help them discover the benefits of your product or service.  Don’t just say, “Believe me.”  Satisfy the customer’s preference of, “Show me.”

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

For now, the laws of supply and demand rule in favor of lower oil prices

Observation:  A story in yesterday’s Wall Street Journal explains that OPEC is operating at greater than their usual production, which should have the effect of continuing our recently stabilized gasoline prices.  The production was increased in response to geo-political issues such as the uneasy situation in Iran.  Click here to see the story.

Implications:   This winter, I think many consumers had braced themselves for higher gas prices in the foreseeable future.  The recently stabilized situation with petroleum raises an interesting question:  What if you prepare for the worst and hope for the best… and the better outcome turns out to happen? 

Does your company, product or service stand to benefit from the “dividend effect” of households that will spend less on their daily commute?  Again, if the consumer is spending less than anticipated on fuel, they have more to spend on…

Whatever.

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

Consumers giving the recovery some credit

Observation:  A recent story from the Associated Press indicates that consumers are making greater use of credit.  In fact, the jump in use of credit in March was the biggest climb in a decade.  Click here to see the story as published by the Atlanta Journal Constitution.

Implications:   This is an important example of progress in our ongoing economic recovery, as consumers had such a dramatic aversion to credit during the recession itself. 

Credit is generally used when people feel confident that their employment situation and other household income factors will allow them to pay the money back.

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

Small business sentiment seems to be getting stronger

Observation:  A recent story in USA Today suggests that small business owners and operators are feeling a bit more confident.  The article was written based on a study from the National Federation of Independent Business; click here to read the USA Today story, or to access the full report, click here.

Implications:   Clearly, small business confidence rises or falls in response to the confidence of consumers.  While the degree of optimism could still be labeled as “cautious,” it is worth noting that the “Great Recession” lasted for 19 months (December 2007 to June 2009).  While it began in July 2009, nobody refers to the subsequent growth pattern as the “Great Recovery,” because it has not been as fast or robust as recoveries in past recessions. 

That having been said, the recovery has been underway for a full 34 months… which is why we refer to this period as a time of “Reconciliation,” as families continue to manage their household differently, financially, that they might have in the period leading-up to the meltdown.

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

Frugality fatigue drives some consumers to trade-up

Observation:   A recent story from Bloomberg suggests that consumers have had enough fiscal conservative, and they’re ready to indulge a little bit more.  The story cites research from Britt Beemer’s America’s Research Group and other sources… and you can click here to see it.

Implications:   This article correctly points out that, for most people alive today, the past four to five years have been the longest period of fiscal restraint they have ever had to place on their family budget.  While the recovery seems a bit drawn out and perhaps even still “at risk” on some fronts, some folks have had enough.  They’re ready to choose the car with a few more options, the entrée that is not on the discount menu, or the mobile phone that’s just a little bit smarter with more options.

Does your company offer a more upscale alternative?  Have you placed that product or service in a higher profile position, lately, and invited the consumer to indulge?  After all, it’s been too long… and some customers might be ready to see and hear the kind of messaging that moves them back to their favorites (instead of the cheaper alternatives they’ve been settling for over the past few years).

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

Free sample: The power of product trial in an age of wary consumers

Observation:   In the wake of economic turmoil, many consumers remain more careful about the way they spend money.  So what’s a new product to do, at a time when consumers are not in the mood to “roll the dice” on a product or service they aren’t familiar with?  Some ideas are offered in this story from NRF Store (click to link).

Implications:   While focused on the grocery and packaged goods industry, the tactic of free samples might be a wise thing to consider for almost any product or service.  When a consumer can experience your brand first-hand, a first purchase is less of an experiment and more of a sure thing, which is important at a time when folks are still seeking known value for each dollar spent.

The freebie need not be lavish or extreme... just enough that the consumer can feel confident about committing dollars to your product or service offering.

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

Gulf seafood regains “comfort food” status

Observation:   Gulf of Mexico seafood producers were among the hardest hit by the effects of the BP oil spill of 2010.  But a story from Supermarket News suggests that many consumers are once again comfortable with eating goods from the waters of the Gulf coast.  Click here to see the story.

Implications:   If you run a restaurant or a grocery store, this story might lead you to add more Gulf products to your menu… or if you’ve already done that, it might lead you to bring more attention to those offerings.

If you run any other kind of business, it should serve as a reminder that trust lost is not easily regained; the BP oil spill happened almost two years ago, and there has been little bad news on that front since the well was successfully capped.  It has taken all of that time—with little or no bad news coming from the Gulf—before some categories could finally show a comeback.

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.

A by-product of bank stress tests: Stressful PR?

Observation:   A story from today’s New York Times explains how banks fared during the most recent round of Federal Reserve stress tests.  This systemic scrutiny was created after the banking collapse of the Great Recession, as a way to determine whether major banks were solid enough to survive another dramatic economic downturn or other difficult events.  According to the NY Times article, 15 of 19 major banks are in strong condition.  Click here to see the story.

Implications:   Think about this.  When you see a headline that indicates, “15 of 19 banks are solid,” I can’t be the only person who’s first thought is:  Who flunked?  Who’s in trouble?  Who are the four kids that had to stay after school?! 

Stories like this remind us that, just a few years ago, we were hearing many institutions described as, “too big to fail.”  And it might represent an opportunity for smaller, more local/regional institutions to present a more human side to the financial industry.

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

So far, consumer confidence resilient against gas prices

Observation:   According to the Conference Board’s report on consumer confidence release last week, people are feeling more secure about their financial situation in spite of higher fuel prices.  Click here to see the story as it appeared in USA Today.

Implications:   Consumer confidence is a great thing… and I think this report supports the idea that while prices might be rising—especially gas prices—nobody will be as “shocked” at the increase (at least not like we were during the 2008 energy price spike).  This time, I think it’s safe to say that most of us saw it coming.  Here’s hoping that resilience is strong in over the upcoming summer season, too.

In another interesting story—perhaps an opposing view—the New York Times published an article about the kind of conflict and crisis that could push gas to $5 per gallon or higher very quickly (click here to see that story).

No doubt:  The Fuel Economy remains a very critical component in the emerging recovery.

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

“Frustration Nation" leads a new list of consumer trends from Forbes

Observation:   Earlier this week, Forbes published an entertaining list—and maybe even an insightful one—of consumer trends.  It starts out with Frustration Nation (less confidence in institutions), Human Touch (the desire to interact when we transact), and Life on Pause (the feeling that careers or other life progress might be on hold).  Click here to see the full story.

Implications:   If nothing else, these lists give us pause to think about what’s going on in our own businesses.  This is a well-written briefing that lets you quickly decide whether the trends they cite are relevant to your company, product or service… and start asking how you might respond to one of many consumer sentiments.

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

Consumer credit grows (a testament to increasing confidence?)

Observation:  A recent story from Bloomberg suggests that consumers may be feeling more confident about their future prospects, and therefore more comfortable with the idea of borrowing money.  Click here to see that story.

To see an interactive chart about credit trends, click here.

Implications:  If you sell big-ticket items—or loans—this is great news for your category.  Have you planned a messaging strategy that speaks to this increasing confidence (or at least, a greater willingness to borrow)?

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

Temporary staffing appears robust

Observation:   A posting from the AMEX Open Forum blog this morning suggests that temporary employment is picking up across the U.S.  The story is informed by Stephen Berchem, president of the American Staffing Association.  Click here to see it.

Implications:   The reason Temp Staffing is an important benchmark, of course, is that it serves as a canary in the coal mine; temporary workers are among the first cut going into a bad economy, and among the first hired when an economy is picking-up steam.  (Companies can add employee firepower on an as-needed, or contingency, basis.  That allows them to wade toward increased capacity without diving into higher expenses, and getting in over their head.) 

Who cares?  Anyone who sells anything.  Paychecks are the prerequisite to purchasing… it’s that simple.  In the aftermath of the recession that ended in June, 2009, many employees were looking for two or more lower-paying jobs to replace the career position that they had lost.  A temporary staffing spike gives those people more options, as well as an entrée into new companies and career opportunities.  Further, it is a signal that overall employment can be expected to gain momentum.

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

Political projection 2012: A year of angst for elected officials

Observation:   Consistent followers of this site know that I try to avoid the topic of partisan politics.  But a collection of recent stories makes the topic difficult to ignore, as the collective coverage of voter satisfaction is an interesting case study for consumer sentiment and corresponding behavior.

In today’s Washington Post, there was a story about the sharp divide between those who think the Obama administration is doing a good job (click to link).  Earlier this week, the same newspaper ran a story with the headline that only “84% of Americans disapprove of the job Congress is doing” (click here to see that Washington Post story).

Last month, both the Washington Post and the New York Times ran stories about the high person incomes of members of Congress, relative to the constituents they represent.  Click here to see the Post story, and if you prefer the New York Times version, click here.

Also last month, USA Today ran a story about the general disenchantment of voters—from both parties—and the significant number of people who no longer consider themselves a member of the party they were aligned with in 2008.  Fully 2.5 million voters have left the Democratic and Republican parties since the last general election.  Click here to see that article.  

Implications:   An election year is seldom a cordial, polite thing to witness.  But with the apparent discontent of voters with regard to both the White House and Congress, as well as the candidate-driven rhetoric that is only likely to escalate as the 2012 campaign moves forward… this year is likely to be particularly messy.  

Will voters (aka consumers) be impacted by it?  Or will they simply begin to ignore it in greater numbers?  Is the move away from their political party driven by anger with the policies or ideology of that party, or the tactics their party has employed to further those platforms?  Could we be seeing a period when, politically, "the party is over?"

Based on the feedback I’ve heard—in the press and from informal interviews we’ve been doing all over the country over the past year—voters are focused on things like jobs, economic stability, deficit reduction, and income equality.  It will be interesting to see which (or whether any) candidate connects with those themes successfully. 

Does your company, product or service represent an escape from all of the election noise?  Does your messaging communicate that you understand the challenges your customers face right now, and you have ways to help?

Many consumers are focused less on the macro economy of the U.S. these days, because they realize they have little control over it (even at the voting booth).  But they have taken matters into their own hands, managing their micro-economy (their household finances) much differently than they did just a few years ago.

Are you in touch with those realities?  Does your company, product or service resonate with their new priorities?  Have you explained how… to the consumer you serve?

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

Stressed, but coping

Observation:   An interesting story in today’s USA Today suggests that consumers are stressed, but dealing with it.  In fact, an on-going study indicates that people feel their stress levels have fallen for the first time in five years.  Click here to see the full story.

Implications:   The story does not conclusively explain why people seem more “at ease” with the stress they are under, except to hint that the economy seems to be getting a bit stronger, employment prospects seem to be increasing…

And last but not least, people have been under pressure for long enough that they’re getting used to it.  (Reconciliation strikes again.  Click here to see all of the stories we’ve offered on that topic.) 

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

Consumer to remain cautious for the foreseeable future

Observation:   The premise of Elm Street Economics is to avoid the collective noise that tends to come out of Wall Street or Washington, and refocus on what your consumers are trying to tell you.  To that end, a great story from yesterday’s New York Times takes a consumer-point-of-view in helping us understand the current situation faced by many folks, and the behaviors we might therefore anticipate.  Click here to see the full story.

Implications:   This story seems to suggest that consumers are not going to single-handedly pull us into a robust recovery, at least not in the next few months.  They remain cautious and careful; reconciled to spending in a way that matches their current financial realities. 

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

Consumers grow more cautious on economy, jobs

Two stories related to consumer confidence caught my eye this morning.  The first cited research from Bankrate that appeared in today’s Marketing Daily; it suggests that consumers have cut-back over the past sixty days in response to news about the economy (click here to see that story).  The second story appeared in today’s New York Times, and focused on fears about the job market (click here to see that story).

Implications:  The debt ceiling debacle of August added new worry to a period of concerns about a second recession for many consumers.  Are you sensing that politicians on both sides of the aisle are more loyal to their political party than the nation’s economic priorities?  I don’t think I’m alone on that one.

Consumers can be expected to focus on their own, personal—and household—micro-economy for the foreseeable future.  Make sure the product or service you’re selling is presented in terms of how it will make the household more productive, cost-efficient, or enjoyable (part of hiding from the recession continues to mean spending more time at home).  Or, present your more indulgent products/services as a way of getting away from it all. 

Either way, it looks like we’re still in a period when it is critical to focus on the consumers you serve (the folks who live on Elm Street), rather than the news coming out of Pennsylvania Avenue or Wall Street.

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

Wild swings in stock markets less shocking than they used to be

Like many folks, I’ve grown tired of references to, “the new normal.”  But I’ll come close to using that descriptor in suggesting that for the stock market, the new normal may be abnormal.  That notion came to me this morning as I read this story in today’s New York Times, which reflects on the wild gyrations most investments are delivering right now… and asks whether something fundamental has changed in the way investment markets are working. Click here to see the story.

Implications:   Are your consumers less spooked—more conditioned—to the inflammatory headlines about the stock market, lately?  (Those shocking headlines are, after all, appearing very frequently.)  Are they sensing a chasm between their household economy and the greater, national or global economy?

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

Creating consumer confidence… at the local level

Ben Bernanke stopped here in Minneapolis yesterday to speak at an economics luncheon, and today’s New York Times shared an interesting perspective on his remarks:  That, as tough as things are, consumers think the situation is even worse than it really is.  Click here to see the story.

Implications:  Alas, the Federal Reserve chairman realizes who sets the tempo for the economic recovery… the consumer, of course.

We can debate all day long about whether the current sentiment of consumers is rational or not.  But here’s a better idea:  Ask what you can do to amplify the optimistic, encourage your customers to enjoy themselves as they escape reality by walking through your store, or deal with today’s realities by taking advantage of the products and services that you offer.

I’m not waiting for the government—either party—to create consumer confidence.  We’re going to have to do it ourselves.

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