Forecast suggests consumers will indulge—a little—during the holidays

A forecast from Deloitte offers some optimism about the 2011 holiday shopping season.  See the overview that was published by Marketing Daily this week by clicking here.

Implications:   I’m always entertained by the idea—as explained in this story—that smartphones and touchpad computers have become “needs,” since neither product even existed ten years ago.  (But the Deloitte representative was right… many of us consider these items absolute necessities these days!) 

Small indulgences and self-gifting:  Two important sales opportunities to be watching for this holiday season.

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

Health insurance costs rise sharply

If health insurance is taking a bigger bite out of your paycheck, you’re not alone.  A story in today’s New York Times indicates that policy prices have jumped 9% in the past year according to research from the Kaiser Family Foundation.  Click here to see the story.

Implications:   As I sat in the waiting room before a doctor’s appointment this week, a lady at the front desk was sharply criticizing her bill.  It was a private conversation that I did not want to overhear, but both the volume and the demeanor of the exchange made it impossible to be unaware of.  “All they did was take my blood pressure and do a med check, and I didn’t even see the doctor,” she complained.  (Her only contact on the visit was with a nurse.)  “How can that possibly be worth (more than $175?)”  The woman went on to explain that she did not have insurance, so it would be an out-of-pocket expense. 

I felt sorry for the both the frustrated customer and the office manager trying to explain the charges.  (Even the clinic employee was having a hard time justifying the cost, which amounted to a rate of more than $1,000 per hour.)  With both unemployment rates and health insurance costs at such high levels, we can expect this conversation to be repeated in waiting rooms across the U.S., and often. 

There are two learning points that I took away from this experience and the Time article.  The first one is for the healthcare and insurance industries:  Some of you haven’t done a great job of communicating the value you provide for the dollars you receive, and some of your patients are losing their patience.  Those consumers are likely to start scrutinizing healthcare charges more closely.

Secondly—and this is for folks outside the healthcare field—we can expect consumers to take more health issues into their own hands.  From fitness to nutrition, consumers will be looking for ways to avoid healthcare (and insurance) costs.  Is there any aspect of the business you are in that could constitute “an ounce of prevention?”  Think health-conscious menus at restaurants, any product or service that involves getting some exercise, or packaged goods that involve portion control.  Communicating any healthful attribute your product or service has might be just what the doctor, or… patient, ordered.

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

Is stability the best that U.S. real estate market can hope for?

I dislike this over-used cliché as much as anyone, but there was an important story on CBS News last night, which suggested that the current real estate market might represent “a new normal.”  In the feature—which ran as the lead story in the broadcast—Yale economist Robert Shiller challenges the conventional wisdom of those who are waiting for a real estate recovery.  Click here to see the story, or watch the video immediately below (commercial pre-roll required).

Implications:   Of course, this is not just a story about new housing starts and existing home sales; this issue impacts the home furnishings, home improvement and mortgage industries, directly, and virtually all other retail categories at least indirectly.

Frankly, I liked one of the messages sent by this story:  It’s time to stop waiting to see what happens, and get back to the business of doing business.  If the housing market recovers, great… consider that a bonus.  Meanwhile, the smart money is on regaining a focus on who your ideal consumers are, understanding their needs, and communicating how you can satisfy those needs—at least the most important ones—better than your competitors.

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

Manufacturing and jobs vs. the economy

Recently, the New York Times published a video story about the Marvin Window and Door factory in Warroad, Minnesota.  The story caught my eye because the town is not far from where I grew up in the extreme north central U.S., but it is also a testament to the convictions of a privately held company—and its employees—during rough economic times.  Click here to see the story, or watch the video immediately below.

Implications:  Susan Marvin, the company’s president, sums this story up well.  “You can sustain the business operating like we are and wait for it to improve.  Or, we can say that’s just plain not good enough and we’re going to do something about it.”  The quote is a teaser, but we can assume it means finding new ways to sell and satisfy customers… or finding new customers to satisfy and sell.  Perhaps Marvin will find new markets for their product line, or new product lines for their facilities to manufacture.

But you have to love how they project an air of control, rather than begin victims.  And that’s an attitude that trickles down right through the ranks of their employees.

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

Thought leadership: Are they media, marketers, or both?

This morning’s New York Times illustrates how the line between media company and marketing has become more blurred, as leading fashion magazines start acting as a direct conduit in the retail relationship.  Click here to see the story.

Implications:  The theme to these campaigns might be something we think of as “Thought Leadership.”  Consumers seek the counsel of fashion magazines to determine what’s in style; it is only a natural next step to click on the magazine’s website to commence the retail transaction of that style.  The consumer came to the media seeking information, and product was tucked conveniently into the equation.

Lets turn the tables and put the same principle be to work for your business.  Does your company provide information to its customers?  What kind?  How valuable is that information?  Does your messaging (marketing) include the kind of counsel or guidance which could be grown into your own Thought Leadership campaign?  Does your existing website—or could a new blog—provide the kind of intelligence that makes purchasing in your category easier?  Just as magazines have placed product close to the coverage, could you insert a knowledge campaign conveniently close to the products you sell?

We live in an age where media can be divided into three different types:  Paid (where you spend money to advertise), Owned (your company’s website, blog, publication or social media presence), and Earned (those actions on the part of your company which are covered by the press as public relations).  Thought Leadership can help you maximize all three types of advertising.

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

Independents vs. Chains: Consumer insights as to who wins what

A broad-brush story in today’s Marketing Daily points to the differences between chain restaurants and independent cafes… from the viewpoint of the consumer.  Click here to see the story.

Implications:  Of course, this story doesn’t provide an actionable plan for any chain or independent restaurant, but it gives some great pointers as to questions you might ask in local research of your own.  There are plenty of independent restaurant owners who would love to have the resources of a big chain operation, but there are also an abundant number of franchise restaurateurs who would love to have the local menu and flexibility of an independent café. 

The truth is, you both have advantages worth talking about.  The key is to focus on your strengths… as seen by the consumers you serve.

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

The consumer as Information Technology manager

A story in today’s New York Times suggests that more companies are allowing their employees to drive the decision about the computing devices they will use.  When it comes to smartphones, tablets and laptops, decisions are increasingly being driven more by consumers and less by the I.T. department.  Click here to see the story. 

Implications:  In the company I worked for before CSS, I met resistance when bringing my personal laptop into the building hoping to connect to the company’s server and email system.  Of course, the concern was security, and that my personal machine might contaminate the network with a virus.  In reality—because I so frequently upgraded my own equipment—they created a situation where my personal technology was better than theirs… and I had to “dumb-myself-down” to work at my workplace computer.  And it made the after-hours work I often provided more difficult to deliver.

Today, consumer technology rivals that of many sophisticated companies… first because overhauling the I.T. capabilities of a business is very expensive and takes time.  But also because consumer technology is changing so fast. 

Once upon a time, companies had to wonder whether their employees had better technology than the business.  Now, businesses must figure out how to manage the needs of customers who are well equipped, too.

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.

20% price difference can make shoppers with smartphones walk

L.E.K. research published by Research Brief this morning indicates that a 20% price swing could make someone change stores.  Click here to see the link.

Implications:  First, it would be smart to re-consider store displays… and strive to make the shopping experience compelling enough that the consumer is thinking about your goods and services, not their smartphone.  Second, make sure your competitive reconnaissance is focused on spotting differences of price or value that exceed 15%.  (By the time it hits 20%, the decision process is already slanted way against you.)

Finally, you might consider messaging that says, “Before you pull the trigger at one of our competitors, take a moment to visit our website (which is optimized for mobile).  Sometimes, a challenge is just an opportunity in disguise.

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

The bad news: It's easier for consumers to be influenced by bad news

Most of us have long suspected this to be true, but yesterday’s Research Brief provides some empirical evidence about the idea that it’s easier for consumer to be influenced by bad word-of-mouth than good.  The data comes from Cone Research, and focuses on opinions delivered/received online.  Click here to see the story.

Implications:   Among all the other issues that are changing in business these days, we are reminded that technology is not the lease.  Your business does not just reach and serve YOUR audience… it can reach THEIR audience (your customer’s FB, Twitter or blog followers). 

When focusing on matters of customer satisfaction in your place of business, remember that many consumers are packing cell phones (aka “cameras”), and can Tweet, Facebook, Youtube or Flickr… on-the-spot and at any given moment.

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

Poverty rate gives pause

Last night, the Washington Post released a special alert citing new Census data… and indicating that nearly 1 in 6 Americans now live below the poverty line.  Click here to see the story.

Note:  The New York Times also had a pretty strong story on the piece in this morning's edition.  Click here to see that version.

Implications:   Regardless of your current financial situation—and regardless of the neighborhood you live in—there is likely someone just down the street that is finding life a bit tougher in 2011 than it was, say, in 2006.  For some, it has been a dramatic change in lifestyle in just a short five years.

This report reveals just how widespread the effects of the recession have been, and why the impact of those years seem to linger.  This issue (and jobs) will serve as a focal point of the next election, future merchandising decisions, and overall public policy.  (Lower incomes mean lower tax collections, and more prudent decision-making by those in government, regardless of political persuasion.)

So, the questions become:  Do you target folks less impacted by the economy?  Or do you modify your offerings to serve those consumers who are operating on less income than they used to?  Or, is the answer a compromise that puts you somewhere in between?

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.