Whether or not we are on the cusp of recovery and what that recovery will look like, is a concern for manufacturers and retailers of consumer goods and services. A number of sources have declared the recession “over,” and there are signs of support for that. Some components of the financial markets are doing well: today’s WSJ headlines trumpet “Dow is on pace for best quarterly gain since 1998.” Housing prices in many markets continue an anemic but hope-instilling creep upward, after that relentless downward trajectory. And yet there is cause for concern that the ramifications of this recession for consumer products and services will be long lasting.
- Consumer confidence may be up from its February 2009 low, but it is at half its historical average (www.wsj.com). This can have a lingering drag on consumer spending.
- At least one economist is predicting a double dip recession, with another dip in 2011-2012 as the economy pays for the cost of the stimulus plans, global warming initiatives, and health care plans being implemented in 2009 and 2010 (www.harvardbusiness.org/dailyalert).
Implications for providers of consumer goods and services: predicting consumer behavior regarding your products or services with any reliability is likely to be difficult, if not impossible, and any predictions may be short lived. How will your organization accomplish these important missions?
- Stay in touch with your consumers’ attitudes and behaviors, to accurately gauge both as they pertain to your category.
- Be nimble enough to respond adroitly and quickly as consumer attitudes and spending shifts.
- Create effective marketing campaigns that address consumer mood and behaviors over a shorter timeframe than might have been used in the past; the campaign that works today might not have the durability it would in the past, if the economic situation impacting your shoppers/consumers continues to move relatively quickly and in unforeseen ways.