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I was listening to an episode of This American Life on NPR when a particular segment struck me. The segment featured conversations between a writer and her homeless friend and begins with them getting a bite to eat at a restaurant. As the topics unfolded, the conversation turned toward what the difference is between the homeless friend knowing he would be sleeping on the street that night vs. having a bed for the night vs. having a bed for 16 straight nights in a longer-term shelter. The writer's friend referred to a movie scene to explain the impact of having secured a bed for 16 nights. In the movie scene, the actor enters the shelter room, similar to a hotel room, sits on the bed and then closes his eyes and slowly sinks into the softness; the softness which would be his for 16 straight nights. And what the softness represents is ... possibilities. Specifically, it represents the possibility that one could survive this - whatever "this" is for each of us.
And I believe that is where consumers are at right now. How easy would it be for this homeless man to give up and not believe that there are possibilities for him – quite easy I would suspect in his circumstance. But he has not lost his optimism, and it takes but the simple luxury of being able to sink into a mattress to revive his thoughts of his own possibilities.
Almost daily I read reports in the media telling of consumer doom and gloom. How restaurant visits are down, consumer confidence is down, private label is attractive, coupons are attractive and on and on. But the reports that I most appreciate and which are the most useful are those which compare sentiment and behavior to what consumers were doing during the economic crisis – now that is useful information.
For example, AlixPartners did a study in the second quarter 2011 and found that 70 percent of consumers dined out at least weekly, a 43 percent increase over the first quarter of 2010. And it was Nielsen that reported that 45 percent of consumers currently say they are eating out less often at restaurants to save money, down from 52 percent who said they were doing so in 2008. Another great example was from a COLLOQUY study which recently reported that 58 percent of U.S. consumers often have conversations with family, friends and coworkers about products and services they have used, down 20 percent from 2008.
The final example is more subtle in its implications but massive in meaning. When consumers are in a recession and displaying fearful behavior, they rely more on social networking and have more conversations with people around them before making decisions – decisions on food, movies, clothes, computers, everything. They cannot afford mistakes financially or emotionally during a crisis. It is part of the Clanning phenomenon (gathering behavior). When coming out of a crisis, economic or other, they behave more confidently, bravely and consequently rely on others less to assist with their decisions. This behavioral shift is occurring more often in Gen X and older; Gen Y is still behaving dependently. So that this study shows a 20 percent decrease in this reliant behavior is also speaking to consumers' confidence.
Their confidence is translated into optimism and can be seen in their behavior towards food and other areas of their lives. Food trends right now have shifted away from comfort and back towards adventure. When you see the spotlight turn away from mac and cheese, apple pie, cheap wine, and meatloaf and toward grits, gelato, cocktails of all sorts, and insects – my friend, be assured, you are looking in the face of optimism. The Labor department agrees, too, that although consumers are being cautious (and smartly so), they are not panicked and they are not willing to give up their new found optimism. The message here is, don't focus on the numbers being reported as much as the change in numbers so you have a better feel for shifts in consumer mood.
And join me in keeping your fingers crossed that the neon green computer sleeves, Hibiscus colored dinner plates, and satellite pink and black sneakers keep selling because the second they all go to earth tones – it will be time to panic!
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