Our executive forum.
QUESTION: WILL CONSUMERS START SPENDING MORE CONFIDENTLY BEFORE THE END OF THIS YEAR, OR SHOULD MARKETERS EXPECT THEY'LL SCRIMP INTO 2010?
ROSEMARIE B. MONTROY, CMO, DIRECT MEDIA/MILLARD
I wouldn't say that marketers should expect the consumer will scrimp into 2010 — but I do expect that consumers will buy discriminately. To add to the incredible 9.5% unemployment rate, there's the fact that wages are either frozen or cut so discretionary income is limited. When consumers do buy, they'll be looking for the best possible value. Marketers need to keep in mind that “best value” isn't just a function of price; it includes product uniqueness, quality, service and ease of purchase. We can't all have unique products, but every company can create a unique buying proposition for the consumer. If you don't have the lowest price, perhaps you can have the best service or the easiest order system or the best return policy. The consumer's view of buying and spending has changed and savvy marketers need to augment the “Boy Who Cried Sale” marketing syndrome with key drivers that enhance the buying experience.
ALFRED LIN, COO/CFO, ZAPPOS
We believe consumers will stay cautious and be more conservative going forward. But, they will shop with companies they trust and feel a connection with. That has always been important, but it's even more so today. You must ensure that you have a personal, emotional connection with your customers. Don't just market to them.
JOTH RICCI, PRESIDENT & CEO, JONES SODA CO.
People will continue to scrimp, and we should be resetting our expectations for consumer spending in the new economy. We shouldn't be waiting for things to get back to the way they used to be. I am not preparing for anything other than [continued slow spending] as we run our business. On a micro level, that will affect how we spend internally. It changes some of the behaviors of how we invest, and how we manage inventory on the back side. Just as the consumer is making tough decisions about what to spend their dollars on, we have to make some equally tough decisions based on where we think that spending is going.
KITTY KOLDING, CEO, HOUSE PARTY
Consumer marketers need to be as focused as ever on providing must-have products and services at a reasonable price. Even though the economy is, hopefully, bottoming out and recovering, unemployment continues to be a lagging indicator. In July, it was reported that the jobless rate topped 10% in 15 states across the country. Additionally, the Federal Reserve recently projected that the national unemployment rate, currently at a 26-year high of 9.5%, will pass 10% by the end of the year. As a result, consumers will continue to be cautious with their spending. They will only buy items that they absolutely need and, even for those items, they will keep an eye out for deep discounts.
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