Hello and happy 2010! Yes, we finally made it out of what many of us believe was the worst of the worst. I’ll spare us all the list of horrible things that happened in the marketing world in 2009 and jump right into the goodness that is already brewing in 2010.
First, it’s good see that the financial markets are responding well to upbeat manufacturing outlooks, low jobless claims, and some nice retail numbers.
The LA Times had a good piece on retail just a few days after Christmas in which they reported that retailers are saw increases in many sectors including electronics, jewelry, footwear, and men’s apparel. We are not talking about a huge spending boom, I do not think anyone was expecting there would be one, but what Kamalesh Rao, Director of Economic Research at SpendingPulse, calls “cautious spending” was obviously noticeable. Consumers did not splurge this season, but they certainly showed that they were not too afraid to spend. “The consumer traditionally has been the mechanism in driving recoveries. We have seen a bit of a rise in spending in the last six months, but not nearly as robust as in past recoveries.” says Carl Steidtmann, chief economist at Deloitte LLP. So while we are seeing an increase, the “v” recovery many bullish analysis have predicted may not actually occur. Major creditors, MasterCard and American Express did not see the spending they were hoping for, but reported an increase in consumer activity. It is believe many consumers opted to shop with cash this year instead of piling up the credit charges.
Major retailers will be releasing their December numbers later this week, so stay tuned for the news!
Now that the holidays are over, what should we be expecting to see Americans spend their money on? Well it might be worth your while to take a look at Lee Eisenberg’s new book, Shoptimism. A recent article in MediaPost echos the idea that America is “on balance” with what it buys.
Americans have four good reasons for buying products (that don’t put them into debt), Eisenberg writes and Kerry Hannon reports: Products make them happy (e.g., ticket to a play or a trip to Paris); they transform them (e.g., a new hairdo); self-extension (e.g., Nike Air Max sneakers), and “everlastingness” (e.g., goods that in time will become an heirloom).
Maybe that is an oversimplification of the environment, nevertheless, Eisenberg makes a valid point. Consumers have identified with brands for decades, and the American consumer isn’t going to have a major paradigm shift in its brand love affair anytime soon. Building a quality brand, especially in retail, is extremely important, and that value will be made even more clear as we come out of this recession. The strong brands will be stronger, and the weak brands will go away.
It looks as though 2010 is off to a good start!
Have a safe, healthy, and prosperous 2010! We are looking forward to bringing you more ideas that build business this year!