Consumers, who drive the economy, are starting to cut back and it should have marketers worried. It could mean a recession or it could be just pre-election jitters, but the time to prepare for possible changes are now.
I have seen and read the signs that economy is struggling including:
1ne: People eating out less.
2wo: Lines at Starbucks disappearing.
3hree: Companies cutting back on capital spending.
4our: Auto makers seeing a slowdown in sales and getting ready to offer bigger incentives.
So what does this mean? Well, it could be that consumers are nervous about the upcoming elections as the media is doing a good job of using scare tactics rather than focus on the facts or it could be warning signs that consumers, after a healthy spending period, are ready to cut back.
The time to prepare is now, but rather than going through a lot of meetings and Power Point presentations you should focus on how to keep your current customers and how to increase your brand’s value without necessarily increasing your budgets.
For CPG found in the market that means looking at ways to drive sell through. Nielsen recently reported, for example, that 70% of grocery purchases were unplanned. That means a better use of your budget could be the increased use of POP displays and shelf placement.
When consumers are feeling good about themselves and the economy, they treat themselves to things like a Grande Latte or they eat out more. Cutbacks, even little ones, can have a ripple effect in the economy. Prepare now or be ready for the consequences.