UPDATE: Bigger vehicles selling well (used, too)

In this morning's New York Times, there is a story that compliments our post from yesterday about how bigger vehicles are moving better since gasoline prices have stabilized (see immediately below).  The Times story suggests that, generally, this short-term trend is resulting in nice trade-in values for owners that are moving from SUVs to more fuel-efficient cars.  Click here to see that story.

The Fuel Economy: How quickly we forget

Observation:  The Detroit Bureau reports that demand for vehicles of higher fuel consumption has regained some ground, as prices at the pump have stabilized.  Click here to see the story.

Implications:   Are you seeing folks a little less bummed-out about gas prices at your place of business?  If consumers "fear" a little less, are you seeing them spend a little more?  If so, good for you!

But it might not be a great idea to bank on low gas prices over the long haul.  The Middle East has never been a terribly stable place… and you never know when conflict might push prices higher without notice.  And with emerging middle-class economies in China, India and elsewhere, we can expect energy prices to climb based simply on supply and demand.

If you’re a business owner, manager or marketer, how are you exploiting lower (or at least more stable) gas prices right now?  What is your strategy for if (when) prices head the other way?

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

Austerity is voted out in France

Observation:  We seldom devote space to the Euro Zone at this site; there are plenty of global economic pundits covering that topic.  But it is worth noting that Francoix Hollande defeated Nicolas Sarkozy in the French presidential election.  Sarkozy generally favored cuts in public spending to solve the economic woes of the country and region; Hollande is a socialist who believes spending will stimulate the economy and people with higher incomes should fund that spending.  Click here to see the Wall Street Journal’s full story on the matter.

Implications:   I’m just watching this story wondering how many of the 17 countries in the European Union might follow suit… and how these shifts in policy might affect companies who export to Europe, or import products and services from Europe.

Also, I’m wondering whether the mood of the U.S. can be expected to shift in similar ways between now and November.  What do you think?

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

European economies likely to impact automakers

Observation:   A recent story from Detroit News suggests that the economic downturn impacting Europe will have a negative affect on automakers.  Click here to see the story.

Implications:  Speaking relatively, the U.S. economy and consumer confidence is out-performing many other parts of the world.  That might entice manufacturers to offer incentives in the U.S. market, hoping that sales lift here might compensate for softness elsewhere.

Do you find global economics having a local impact on your business?

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

Cargill: More people = higher food prices

Observation:  An article from this morning’s Bloomberg Businessweek explains that higher food prices will be a natural consequence of the growth in global population.  Click here to see the story. 

Implications:   Yes, this story looks out a few years… but it’s important, because we’re seeing a dress rehearsal right now in the energy markets.  Higher demand from developing economies like China and India are, in part, a reason that oil prices are climbing across the globe.  The Bloomberg story simply suggests that the same thing will happen to the world’s food supply; as populations grow, countries will increasingly find themselves in a supply-and-demand competition for groceries.

After seeing real prices fall, in effect, for the past fifty years… how will consumers in developed nations react to food prices that very definitely rise?  Can we expect particularly strong pressure on meat and seafood prices?  Might that stimulate a change in the kinds of foods people consume?

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.

2012: A year of (continuing) empowerment?

Observation:   Because the intent of this site is to share consumer trends, I typically avoid offering forecasts or predictions.  I consider myself a trend watcher, not a futurist.    But that having been said, one collection of trends—when considered as a whole—seems to have gained enough momentum that I could safely suggest we’ll see more of it and in more variations than ever before:  Consumer Control.

Holiday spending through online and mobile site channels out-performed all other sales growth, and by a significant margin.  Digital devices helped consumers find the best deals, while reducing the time required to shop for those items. 

Reconciliation—changing one’s household financial management—is another example of taking (or regaining) control.  For more on the topic, see “The reconciliation of 2011,” posted 1/2/12 (earlier today).   Over the past two or three years, many consumers have paid-down some of their consumer debt over the past few years and reduced their overall spending so as to enjoy more discretionary income (discretion = control). 

A recent New York Times article suggests that younger women are leaving the ranks of the unemployed… to re-enter the classroom (click here to see that story).    Lots of people are setting-up shop at Me, Incorporated; starting their own company or working as independent contractors after having difficulty finding a good job in their career field.  Either of these alternatives are good examples of consumers asserting greater control, in this case, in the way they buy into the job market (or lack of one). 

While the efforts have been somewhat less visible with the onset of winter weather in northern parts of the U.S., the Occupy Wall Street movement might be yet another example of consumers trying to assert greater control… over a system that they perceive to be broken or a financial landscape that they do not see as fair and equitable.  One might even argue that the roots of this empowerment reach all the way back to the Arab Spring of 2011, when thousands of people decided to wrestle control over their destiny away from a dictator or regime, from Tunisia through Egypt, Libya and beyond.  (If people on the other side of the world are prepared to protest even under a hail of gunfire, setting up a pup tent in a park just doesn’t seem all that difficult.) 

 

Implications:   Once consumers have had a taste of control, it is unlikely they’ll decide they want less of it… unless relinquishing that control results in a major convenience gained or a major stress lost. 

How is your company, product or service sharing control over the purchase experience with the customers who buy it?  Do you offer a digital channel for them to do research or even buy through?  How about mobile?  How can you offer appreciated choices/control that your competitors do not or cannot?


Certainly, this is not the first time I've written on the topic of Consumer Control; indeed, more than 100 stories in the Elm Street Economics consumer trends blog contain a reference to the issue (click here to see the category).  But 2012 stands to be a year where Consumer Control becomes more and more conspicuous, to more and more companies and categories.

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

The impending shortage of resources

Observation:  I’ve written on more than a few occasions about the likely increase in prices for a wide variety of commodities (and products produced from them) due to the expanding economies of India, China and other countries.  This weeks’ newsletter from McKinsey elaborates on that matter considerably.  And you can see it by clicking here.

Implications:   If price is your only proposition, the market is about to become more complicated.  As the cost of goods increases over the next few years, price won’t be as compelling a story.  NOW is a good time to start talking about the value you add to the consumer’s life, whether through experience, service, or other satisfaction.

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

Energy choices impacted by world events

Observation:  Two stories in the New York Times within the past month have me thinking about how world events can influence longer-term choices and consumer trends.  Last week, one article covered a renewable energy conference where experts considered the impact of the global economic strife on the alternative energies (click here to see that story).

Another article explained how life in Japan has changed since the Fukushima Daiichi nuclear power plant was destroyed.  Since that event, many of the nuclear reactors which generate the country’s power have been shut-down for inspection, leaving a country that is intensely reliant on electricity in somewhat of a quandary as winter approaches (click here to see that story).

Implications:   Environmentalists who seek to advance policies and practices that reduce greenhouse gases would be smart to consider the influence of economic issues on their cause.  Consumers are likely to “give until it hurts” where environmental protection is concerned, but then revert to their old ways if a new energy alternative becomes too costly or inconvenient.

Ironically, Japan gives us the example of what might happen in a situation where a population is over-reliant on any one energy source… an example that favors the cause of reduced energy use and creating a more diverse supply (beyond fossil fuels).

We have learned that lesson before, both during the oil embargo of 1976, and in the Northeast’s Halloween weekend snowstorm of 2011.

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

UPDATE: The Fuel Economy

A pair of stories in today’s Los Angeles Times explain why gas prices remain high in spite of various attempts to make them fall.  First, Americans are spending more than ever on petroleum; U.S. motorists will spend $491 billion on gasoline this year (click here to see that story).  But also, American oil companies are exporting more petroleum products than ever.  (Click here to see that story.)

Implications:   The law of supply and demand prevails.  With growing demand—both domestically and abroad—the available supply can be expected to rise in price.

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

Japan should depend less on nuclear power, according to new Prime Minister

The PM’s remarks are reported in today’s USA Today, and likely reflect a wide-spread sentiment on the part of Japanese citizens following the Fukushima nuclear disaster related to last spring’s earthquake and tsunami.  Click here to see the story.

Implications:   This is only a consumer trends story because it relates to previous postings about the nearly inevitable rise in petroleum, in response to the growing economies of India and China, as well as the (probable) increase in oil use by Japan.  [See this ESE posting from June 1, 2011.]  The cost of petroleum—and any product manufactured or shipped using it—is likely to gradually increase over the long term.

How will your company prepare customers for this likelihood?  Are your competitors thinking about this issue?  What kinds of efficiencies might make sense in the future (i.e., finding suppliers closer to home)?  Consider manufacturing that was shipped overseas; in a labor market that is seeing wages stagnant—or in some cases, falling—and the cost of shipping on the rise, at what point does domestic manufacturing become a more attractive proposition?

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

Recession 2.0?

A story in today’s New York Times offers some clarity to an issue that most of us have been thinking about over the past two months:  Whether the U.S. economy is heading into—or already in—another recessionary downturn.  Click here to see the story.

Implications:  If it turns out that the recession has returned, we at least have the advantage of realism, this time around.  (When the last recession hit, lots of people were shocked.  This time, they won’t be.) 

A major tenet of Elm Street Economics is that whether the nation as a whole is in recession, technically, matters less than current mood and financial state of the customers you serve.  Your customers decide whether they are in recession… not Washington or Wall Street.  Are the folks in your city or suburb adequately employed and their incomes are reasonably stable?  Or do the people in your trade area continue to feel the strain? 

One should not ignore the macro-economic issues facing our country.  But accept that there’s little you can do about that, and focus instead on the micro-economies (the households) you serve.  Measure your offer to meet the local climate, and adjust your messaging to suit the current mood.

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

The impact of global supply and demand on local consumers

A Media Post blog titled Engage:  Affluent gives us another category to consider when it comes to the issue of global supply and demand.  Today’s posting suggests that couples in China are joining the world market for diamonds.  Click here to see the post.

Implications:  For quite some time now, I’ve been pointing-out the impact of expanding economies in China and India as forces that will put pressure on the worlds supply of oil, various food commodities and more.  But as the middle- and upper-income population grows, we’ll feel the effect in a lot of product categories.

Have you seen it in your product category?  Does it influence the price you can offer consumers?  Have you thought about ways of placing more focus on the experience or appeal of your product or service… and shifting to a focus on the way you enhance the consumer’s life?

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

The political “to do list” looks different today

A pair of stories in today’s New York Times signals a shift in the focus of U.S. government in coming weeks and months.  First, this story reviews the passage of a debt ceiling agreement (click to link).  Pundits expect the senate to approve the house bill by early afternoon and that it will be signed by the president later today... hours before the treasury department had said it would be unable to meet all of its financial obligations.  Secondly, another Times story suggests that attention will now be shifted to job creation and the economy (click to link).

Implications:    I’ve seen a lot of press focused on the frustration of people (aka voters, consumers) about their politicians, lately… and wondering why the debate about the budget and the debt ceiling has seemingly cost them months of getting anything else done.

It will be interesting to see, in the coming election cycle, whether people remember how much (or little) got done by their employees this summer.  (And I make that statement in a completely bi-partisan tone.)

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

UPDATE: Cautious recovery

This morning, a release from the Washington Post provides support for the idea that the economic recovery is moving slowly and with less stability than hoped (see the Elm Street posting from June 1).   The Post story indicates a rise in unemployment claims and a jobs-added pace of 54,000 in the month of May.  By comparison, more than 200,000 jobs were added in April.  Click here to see the release.

Implications:  When the economy was moving with speed and confidence in late 2010, many people abandoned the idea that this economic recovery would occur in fits and starts… which was the common theory when we were in the middle of a deep recession.  Now, people expect the recovery to be robust and long-term.

A lot of factory jobs were lost because the supply of parts from Japan was interrupted.  A lot of government jobs were lost because states are trying to balance their budgets.  I’m not sure any of that is too surprising.  And I’m not sure how much of it could be considered permanent. 

These headlines are scary… and a reminder how important it is to focus on the customers you serve, rather than the latest reports out of Washington or Wall Street.

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.

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.

The national mood could use a boost. Can you provide one?

Last night on the CBS News, I caught a story about a CBS/New York Times poll on how voters (consumers) feel about the state of the nation and the direction of its leadership.  It was quite telling, not just because of the dramatic numbers that came from the survey, but also because of the descriptive remarks (as brief as they were) from the real people featured in the story.  Watch the video below (commercial pre-roll required) or visit CBS.

Implications:   The two themes that bubbled up in this story are 1) frustration, and 2) the sense that leaders in Congress and the White House "don’t understand what’s important to me."  It appears that a majority of voters (consumers) think the people they hired during the last pair of elections lack empathy… the ability to consider a situation from someone else’ point of view.

Think about your company, product or service.  When people walk into your store, dealership or lobby… does their experience begin to suggest that you know what their priorities are, when considering this purchase?  Does your product/service provide some relief from the long, hard hours that consumers are working these days?  Does your website provide a means of planning their shopping visit, so that they don’t have to make additional, unnecessary trips to your store when gas prices are climbing?

Think about how your consumer sees their need and your business or product.  That is simple empathy… and people are hungry for it.

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

What does the world look like to this year's graduating class?

Last night, USA Today published an interesting perspective about the world that will be faced by the class of 2011.  Click here to read the piece.

Implications:   We’ll see many of these kinds of stories between now and the end of June.  Some will be filled with optimism and others with pessimism; this one seemed to have a good balance.

Like the generations before it, the class of 2011 will be filled with extremes.  Some students will be unable to find the job they trained for in college, or for that matter, any job at all.  Their expectations will eventually be adjusted to the options they can find or create.  Other graduates will be surprised by realizing that market conditions have led to a situation where, with even an entry-level income, they might actually be able to buy a home… an idea few people may have thought affordable four or more years ago when they were just entering college.

Are you talking to your next generation of customers?  How are they feeling about their future?  How can you help them?  What are their expectations of your company, product or service… compared to the graduates of 2001, 1991, or 1981?

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