In 2008 I wrote an article entitled: The Grinch or Santa this Year? Has a year made a difference? Read on for the 2009 update of this important topic as we look into the consumer crystal ball one year later.
The Consumer Mentality Today
Is the consumer in shell shock? We have been in a recession since the middle of 2008. Last year at this time we did not really know what to expect of the economy, our jobs, our businesses or much else. While in the past 12 months millions of people have lost jobs, careers, companies and income, for the most part we do think that the recession has hit bottom.
So in most people’s minds it’s more of the same, but at least we know what we have and where we are; and most of us can deal with that, knowing our situation. Not knowing (like in 2008) was stressing us out. Not to say that life is easy this year, but for the most part we know which cards are in our hands now and we can figure out how to play them.
Consumer Spending: What Does it Take?
Getting the consumers today to open their wallet is going to take products that seem “right”, plus they need a good reason to do business with you. The influence of being local is a key part, but on the other hand, ecommerce is still increasing. With the threat of Swine flu this year, retailers are concerned that people will not get to the store as much… so it’s a good time to have an online presence. But whether your store is virtual or on main street it is going to take some thoughtful incentives to get consumers to spend. A good example is the Cash for Clunkers program. Think about it and put on your merchandising hat!
The New Normal
Earlier in 2009 I wrote an article on what is happening to practically everyone in every corner of the country, if not the entire western world. As we readjust our habits, thinking, spending, and goals we are experiencing The New Normal. This shift in our culture and lifestyles is affecting every person in every town and city. No one is immune to the effect of this recession, and as a result our lifestyles and values have changed.
The new normal is causing today’s consumers to seek value in spending. We are reading the labels better, calculating the cost of groceries, going out of our way to find a good deal and doing without “stuff”. We keep our cars longer, take better care of our clothes, travel less, and make every penny count. But we still want to enjoy life, be happy and help our friends and family do the same.
The Holiday List
So…will Santa come this year? Yes, but with his belt about two notches tighter. As we have adjusted to the new normal experience we have found that we can do the same with less, but we also have adjusted what we feel is important. There was a good TV commercial for a popular insurance company which told us that “who” is sitting around our TV is more important than how big it is. What is this telling us? People enjoy their family time and friendships close to home.
I am not an expert in the retail trades, but it doesn’t take a Rhodes scholar to figure out what type of merchandise is going to be important to consumers today and what isn’t. Affordable, high-quality products that help us enjoy our new lifestyles are top on the list. Products that help us become “greener” that are made from natural or sustainable materials are important to help us contribute and be a part of positive changes at home and in our communities. It makes us feel good about doing something.
We find indulgences in smaller, quality experiences such as with pets, gourmet foods, coffees, teas and treats. We spend more time at home and are cooking more, so kitchenware, oils, spices, and related gifts should get some attention in stores. We are better quality seekers, so apparel, and tote bags that are made well is on the list. We want our homes to be enjoyable, so merchandise that helps us enjoy our experience at home is important. And we stretch product farther so regiftable or resuable products represent a value and a cause. PS: I still want a bigger TV… hey, I’m a guy!
Nashville Wraps as an Indicator
Once again I’m going to reveal what business Nashville Wraps is doing relative to the number of orders and dollar volume. I’m just removing the dollar reference, but you can still see the trends. You can also draw your own conclusions.
Nashville Wraps is an excellent business barometer because we supply a very wide segment of retailers. Overall, we think that packaging sales (an indicator of retail sales) will be off from 2008 Q4 by 10% to 12% on average for most people. Getting it to be flat is excellent and going positive is practically unheard of this year. See the article Flat is Up for more insight.
Number of orders per week 2007 – 2009
Dollar volume per week 2007 – 2009
One way to help your business it to take advantage of the outstanding retail packaging products at Nashville Wraps. (Hey we have to pay the bills too). This fall we have lowered our shipping rates up to 25% and have brought back the popular Free Shipping program with any $300 stock order. Despite the economy, Nashville Wraps has added many new holiday packaging design groups and lots of gourmet food and take out packaging. We have the best selection, the best service and competitive prices for all your gift and retail packaging needs.