Why the economy could be heading into trouble

Recession-US-EconomyConsumers, 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.

recession

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.

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

View all posts by richmeyer →

One Comment on “Why the economy could be heading into trouble”

  1. Do you think that there’s any chance that the consumer credit bubble in the US is starting to burst?

    When you look at the consumer and student loan debt that American citizens are carrying where even families with household incomes of USD$150,000 per annum are living from pay cheque to pay cheque, just to pay their minimum payments, something has to give eventually.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.