UPDATE: Opportunities hiding within state budget cuts

Last week, I suggested that some companies could become an important alternative when state and local governments cut back on spending and services (see “When states cut, can you gain” from June 2). 

In today’s New York Times, there is an article that explains the impact of spending cuts on state parks (click here to see the story).  If you operate a private campground, theme park, or other affordable, family-friendly, vacation destination, perhaps this Times story will help spark more ideas.

If you operate a sporting goods store that sells camping equipment, fishing tackle, paddle sports gear or hiking equipment, perhaps this story will foster ideas about making regional or state parks in your area the beneficiary of a cause marketing campaign.

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.

Consumer spending varies by category

Among the mixed economic news last week as a report by Marketing Daily (via Kantor Retail) showing luxury sales up, but gains slowing down for those companies who cater to middle- and lower-income shoppers.  The logic offered was that the latter are more likely to feel the pinch of high gas prices.  Click here to see the story.

Implications:  The recession of 2007-2010 impacted people in a variety of ways.  The recovery that started in late 2010 is more strong and swift for some people than it is for others.  Likewise, inflation and high gasoline prices will impact different consumer groups in different ways.

Have you had this conversation (or researched this issue) with your most important customers?  How are they feeling about their budget right now?  If they’re cutting back, how can you position your product or service as an important priority that adds value to their lives?

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

New visual for nutrition changes the picture of health

The FDA has moved away from the food pyramid and toward their new “My Plate” presentation of a well-rounded diet; the change is explained in this story from Marketing Daily (click to link).

Implications:  How can your restaurant menu or the package on your food product fit itself into this new and widely-publicized graphic?  “The MyPlate shows you what to do, and ____________________ (product/store/restaurant) can show you how.”

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.

One third of consumers say vacation plans impacted by finances, fuel prices

Not long ago, I pointed to a Research Brief indicating that many consumers were defying the high price of gas, and taking their vacations as planned (see “UPDATE:  Gas Pains,” May 23, 2011).  Today, another survey seems to contradict that assertion, as published by BIG Research.  Click here to see the release.

Implications:  This is a good reminder that trend observations are not unilateral; for every trend, there is a countertrend.  While some folks have “had it” with the recession and are pressing on with their travel plans, there are still plenty of households where caution reigns. 

Do you cater to the cavalier or the constrained consumer?  There is room to profit either way.  Perhaps the family that declines travel this year will instead install a small pool or deck in their back yard, or purchase patio furniture or interior home furnishings… as a means of enjoying a little entertaining, down-time or family fun, without leaving home.

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.

Recovery proceeds on uncertain terms

An article from the Washington Post today suggests that the economic recovery is not going as smoothly as we would like.  The story cites a slowdown in job growth, home prices and manufacturing, among other things.  (Click here to see the story.)  

That said, it’s important to note that differences exist from one city to the next, and by region.  That is explained in this story from USA Today about declining unemployment in many metro areas (click to link).

Implications:  We all love hearing about the economic recovery.  But depending on what report or which pundit you listen to, the experts seemingly continue to send mixed messages.   That’s why listening closely to your customers remains a wise and prudent thing to do. 

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

Smart phone trends

A story from Nielsen Wire shows current ownership trends for smart phone operating systems.  Click here to see the brief story.

Implications:  Android and Apple seem to be in firm control of the smart phone market for now.  It is worth noting that roughly 3 in 4 Android or Apple owners report having downloaded an App in the past thirty days.  So it’s not just the novelty of the device we’re talking about here… but the utility.

 Is your business set-up to deliver through these preferred channels of contact?  Is doing so right for the kinds of target consumers you serve?

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

More funds for Father's Day

According to this story from the National Retail Federation and BIG Research, moms and kids are planning to up the amount they spend for Father’s Day this year.  (Click here to see the story.)

Implications:  I hope my wife and kids are reading this.

But seriously, folks.

This is one more example of the pent-up demand that can follow a recession.  People have suppressed their spending for several years now (the recession was officially given a start date of 12/1/07 when it was announced in 2008). 

Have people cut back on the amount they used to spend—or have they put-off buying entirely—the product or service you sell for financial reasons?  What kind of offer, incentive, or product bundle might help them decide to unleash their pent-up demand?

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

In reconsidering nuclear, countries could re-shape the world's energy costs, consumption

Since the disaster at the Fukushima nuclear power plant earlier this year, many countries have been reconsidering their use of nuclear power.  By way of reference, here’s a story that ran in March from CBS News (click to link). 

Yesterday’s New York Times featured a story about Germany’s decision to eliminate all nuclear power plants within the next 11 years (click to link).  

Implications:  The expanding economies of China and India were already putting demand pressure on the world’s limited oil supply.  Now, with major economies like Germany, Japan and others considering a move away from nuclear, one can only assume that fossil fuels will carry at least part of the burden.

Of course, the reason I’m thinking about it is the natural inflationary effect this might have on anything that is manufactured, shipped or used… using petroleum.  Costs are simply quite likely to rise steadily over the next few years.  Not just for gas… but for everything from food to textiles to home furnishings.  Price-point advertising will still matter, but it will be important to establish the worth and value of the products and services you sell.  (The power of price could be diminished if prices rise across the board.)

This potential shift from nuclear power could also lead to greater development and use of alternative, sustainable energy sources.  A story about that possibility also ran recently on CBS news (click to link).  Is your company in a position to brag about your sustainable energy practices?  Are those claims authentic?

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