State and local governments struggle to make ends meet

Tuesday’s New York Times presented an extensive article about the effects of financial cutbacks in local governments.  The story focused on Wilmington, Delaware, but acknowledges that similar difficulties are being felt in cities and states throughout the U.S.  Click here to see the NY Times story.

Implications:  The aftershocks of the Great Recession will be many.  As federal stimulus programs dry up and tax revenues continue their somber pace, state and local governments will continue to try cut spending.  But at what point does cost-cutting hit muscle and bone, instead of just trimming fat?  And how can local and regional governments continue to spend money that they do not have?

Get ready for a very contentious election cycle.  (And I say that as someone who is writing from Minnesota, a state whose government is currently shut-down for lack of a civilized agreement on the budget.)

One question I might be asking about all this:  “Is there a way my company, product or service can provide alternatives to services that were once provided by a government agency?”  I’m thinking about private campgrounds that might fill the void of closed or declining state parks, or home health care companies that might supplement services once provided by previously government-sanctioned services… or other private-sector alternatives.

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

One shift that seems to be sticking: Store brands

Even though the recovery is underway, consumers continue to choose private-label (store branded) products at grocery, according to this story from Marketing Daily (click here to see it).

Implications:  Little comment is needed here, except to acknowledge that people don’t buy brands for the brands’ sake.  They choose a product or service they believe will deliver the benefit they seek better than other alternatives.  Absent that distinct selling proposition, the consumer has little choice but to use price as the main criteria in their decision-making process. 

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

Upstarts give traditional banks a run for their money with digital

A story from Marketing Daily looks at a recent report about the progress of banks in the digital space... and finds that innovation in online services is coming from some non-traditional financial services companies.  Click here to see the story.

Implications:  This article/research suggests that having “a blank slate” to work with is a luxury unique to start-ups.

Do you agree with that assertion?  Is your experience in you category of business an asset, or a liability?  Does your legacy in an industry prevent you from creating a start-up approach to a new business initiative?  It’s a worthwhile conversation to have with the leadership and ownership of your organization.

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

Restaurant chain realizes that many consumers want price certainty

Ever catch yourself bracing for the cost of an automotive repair with this kind of question:  “Okay, what’s the max this could cost me?” 

Apparently, the Darden restaurant group is convinced that consumers feel the same way about dining out:  They want to know what the maximum cost might be.  And they’re adjusting the promotional pricing of their Olive Garden chain accordingly.  That’s according to this article from Nation’s Restaurant News following the company’s most recent shareholder call.  Click here to see the story.

Implications:  Consumers appreciate certainty in an uncertain world.  Rather than promoting prices “as low as” for your place of business, might you be better off explaining that “you won’t pay more than ____________” for a specific product or service package that you sell?

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

Nutrition disclosure from a local supermarket

Following-up on the story about food ingredient transparency from earlier today (see below), I’ll share this recent Minneapolis Star Tribune story explaining how one grocer is attempting to provide greater disclosure to consumers about the nutritional value of the products on the shelf.  Click here to see the story.

Implications:  There has been so much coverage about health issues and obesity over the past few years that I’m no longer sure whether it is a bona fide consumer concern, or journalistic hyperbole.  This supermarket chain might represent a chance to see whether consumers are really interested in knowing about the ingredients of some foods, and whether they’ll change their behaviors as a result of having that knowledge.

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

What do you have to hide?

A recent story from the Lempert Report explains that Safeway has decided to place it’s nutritional label on the front of the package for its store brand goods.  The company thinks that doing so will generate greater health confidence from consumers, by offering greater transparency with regard to the contents of a products’ ingredients.  Click here to see the Supermarket Guru story. 

Implications:  This move should tell us—or at least, tell Safeway—just how much consumers care, are aware, or compare different food products.  But the move alone should generate goodwill from folks who are focused on their Self-Health and Well-Being.

What are you trying to hide, as a company, product or service?  If the answer is, “nothing,” you might ask whether putting your back-story on display for everyone to see… as having nothing to hide is akin to having something to brag about!

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

UPDATE: Smartphone growth

Thirty-eight percent of consumers now own a smartphone, according to this story from Marketing Daily (citing research from Nielsen).  More people now by smart phones than traditional cell phones at most local wireless stores.  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.

Colorful... but confusing?

Another story in the New York Times this week showcased how paint manufacturers are using descriptive storylines—rather than color names—to get customers excited about paint.  Click here to see the story.

Implications:   Because my background includes copywriting and campaign creative, I can appreciate the desire to make a product stand out.  But because I am also one of those people who has a hard time telling the difference between beige and taupe—it’s all tan to me—I’m wondering if abandoning the actual color name is a great idea!

This story was a good reminder that messaging should not overwhelmingly be designed to help a company stand out in its’ industry; the first priority of messaging should be to fit-in with the target consumer. 

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

Most don't anticipate a raise

Before I head out for the weekend, I’m cleaning up the various newsletters that did not seem urgent to share, but were worth referring to before I filed them.  One such note came from a recent issue of Research Brief.  It cites BIGresearch in suggesting that many folks don’t anticipate a raise this year, and will adjust to rising prices by changing their purchase behaviors.  Click here to see the briefing.

Implications:  The workforce—also known as consumers—seems to have adjusted its expectations on a variety of levels.  They are more realistic—pragmatic is a good word—and more careful managers of their household incomes.

I don’t think that necessarily means everyone is looking for a low price.  But I do think most folks continue to scrutinize every purchase… asking themselves whether the value and benefit they have received will match or exceed the payment or sacrifice they have made.

Have a great weekend.

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

Women worldwide are more empowered (and stressed)

According to a story from Marketing Daily, women are feeling more empowered, but feeling the stress that comes with that responsibility.  The article was based on research from Nielsen (click here to see the story). 

Implications:  I caught myself thinking back to the 1970’s, when American women headed for the workplace in droves, really for the first time since WWII.  The demands of a new career were in addition to—not instead of—the demands they felt at home... having the affect of creating multiple pressure-points on working women.

That shift was the beginning of a wave that continues to move across the world. 

This story also reminds me that women can benefit from a reliable, hard-working partner who is willing to share the burdens of work, home and family.  Not just a spouse or significant other; one of those partners could be your company, product or service.

Are you presenting yourself that way?  Could you?  Should you?

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

Restaurants recovering on the dinner menu

A story from Marketing Daily this week suggests that growth has occurred in the dinner day part for the past three full quarters.  Click here to see the article.

QSRs are doing better than other restaurant categories, according to the report.  And one driver behind the growth is the narrowing margin between the cost of eating at home or dining out… with grocery prices on the rise, of late.

Implications:  More than almost any other category, the pace of the overall restaurant recovery will probably match the employment recovery.  Until then, you can bet the restaurant will be extremely competitive.  But were you captivated by the idea that you might be competing… with grocery stores?

And why not.  Supermarkets have been picking a fight with the restaurant category for years… with frozen foods, heat-to-complete, grab-and-go, and now an ever more sophisticated line-up of deli foods.

If grocery prices continue to rise, does that mean restaurants should look at this period as an opportunity to reclaim share?  And what should grocery stores do to defend against that assault?

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

Affluent consumers feeling more optimistic

Citing research from Ipsos Mendelsohn, confidence among upscale consumers is on the rise, according to a briefing by Marketing Daily earlier this week.  Click here to see the story.

Implications:  I am seeing/hearing a campaign that starts out, “Okay, you’ve demonstrated great personal restraint as we’ve come through a tumultuous time… but now, it’s time to reward yourself…”

Does your product or service represent that kind of long-awaited, well-deserved reward?  Or… does your brand represent the kind of extreme value that lets the consumer fund that treat (with all the money they saved)?

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