Strategic Marketing and Design

Sales Telling You To Change Your Behavior?

February 25, 2013 at 9:35 AM by Donald Pack



It’s pretty obvious from looking at the two graphs that consumer expectations and behavior have changed since 2008 and they have not reverted back to form.

The data comes from the Bureau of Economic Analysis and an economist with the NY Fed did both graphs.

The graph on the right ends in 2009 showing consumer discretionary spending spending reduced by about 7% and by the end of 2012 it was still at 6.5% so it really has not returned to “normal”.

In our economy roughly 70% of all spending is consumer driven.

A graph like this has implications for all businesses and helps explain a lot of weak sales.

For example we know substitution by consumers has increased. What does substitution look like? Store brands substituted for name brands is on the increase. Consumers are spending more with lower cost restaurants. You are seeing consumers act more aggressively to take advantage of sales and withhold their dollars for items not on sale.

Consumer behavior changes based on how much purchasing power they have so if you depend on high end consumers their behavior may not have changed as much as others. The problem is there are simply fewer of those consumers available.

So if your business is doing things much like they did them in 2008 and seeing less than acceptable results the graphs and your sales may be telling you to change your behavior because the consumer is in a different place.

The idea of what this means will be explored more in future posts.

Category: Marketing

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