No one needs to tell consumer oriented companies that the party’s over. Their number one party animal, the monthly payer, has had his last drink and was put in a taxi and sent home. Now, all that’s left is a mess and a lot of party hosts who are wondering how to get some life back in this soiree.
Just a short time ago, the monthly payer never thought twice about what something costs. Hey, the only thing that mattered was how it affected his monthly bills. He was the creation of our no-money-down, low interest incentive, the stock market only goes up, you can always refinance, economy that proliferated over the past 30 years.
This really wasn’t anything new. In his book, Business Cycles, economist Joseph Schumpeter forecasted trouble whenever debt was “light-heartedly incurred by people who foresaw nothing but booms.” The book was published in 1939. Eerie, huh?
Now that so many are predicting a quick end to the current recession, you can bet that companies will follow the lead of successful firms in previous economic downturns. What worked before should work this time too, right? Here’s what to look for in marketing efforts:
- More promotion of value. Just don’t let someone else define that for you.
- More promotion of usefulness. Ditto! But they still want your money.
- More promotion of family. Don’t get reeled in by a cute commercial.
- More promotion of simplicity. Simplicity is “less stuff” not more!
- Less promotion of luxury. Be careful how they repackage it.
- Less promotion of brands. Brands can show up in the most interesting places.
- Less promotion of monthly payments. Payments were a cash cow so look out how they will make up for it.
- Less promotion of debt as a way to finance lifestyle. Thank goodness.
Consumer oriented companies believe that, moving forward, you and I will react positively to marketing efforts that will allow us to feel that our new-found frugality is a lifestyle choice rather than an economic constraint. They believe that if they can tap into our newly discovered approach to discretionary thrift, they’ll be better able to separate us from our cash and pad their bottom lines.
How do we combat this approach? Switch to cash and ask yourself if you really, REALLY need that item. There’s a store in most malls that carries some of the most interesting gadgets. I like going in there because of the “why didn’t I think of that” moments. But I recently described the store to a friend of mine as “3,000 really cool things that you actually don’t need and have been getting along without for decades!”
One day the consumerism party may get cranked back up again, but I don’t think it will ever be like it was. We’re in an economic cycle that can only be broken by getting things like income levels, debt, and real estate prices back into balance. We still have a long way to go.