Are we really changing our spending habits?
We continually hear about it in the news. Americans say they aren’t going back to their bloated spending ways from earlier in the decade. Well, we’ve heard it before. In the shoulder-padded women, men with ponytails 80’s, yuppie-ism reached a peak before we, as a country crashed in the early 90’s. The dot.com phenomenon and subsequent bust led us to a crash in the early ’00’s. And now here we are again, with the overextension of credit and mass-consumerism of the ’00’s that has led again to a crash.
Do you see a pattern here? Each time we grew at a fever pitch, then crashed. And each time we said we were going to change. And each time we didn’t. What’s so different about this crash and is it really going to change our habits?
Well, yes, and no. We’re in for a big adjustment. One that is bigger than we’ve ever seen. But it isn’t so much an adjustment as a return to norm. Who said you had to make $12 an hour AND have a Coach handbag? Who said you had to make $30,000 a year AND drive a BMW? Who said you had to make a household income of $60,000 AND have a $350,000 house?
The issue is that we, as a society are suffering from the worst economic hangover we’ve ever had. As a result of our spending spree, we’re now bargain hunting, clipping coupons, saving money, cutting up credit cards and trying to get some stability in our financial lives.
THE REAL WORLD RETAILING TAKEAWAY
Consumers aren’t spending, and when they do, they expect a deal.
There was a great article in the Wall Street Journal today about the tough time family businesses are having. The operating philosophy has beomce “discount, or go out of business.” Do or die as they say. So small, entrepreneurial businesses are looking for any way to drive traffic, which mainly is through discounting, which mainly is destroying margins and profitability (and causing businesses to, well, go out of business).
It’s going to be tough going for a while. There’s a foreboding doom associated with the upcoming holiday season with predictions of flat to negative growth versus last year, which was one of the worst holiday seasons on record.
So what do you do to try to stay afloat? You bring in lower priced lines. You offer up enough of a deal to get people in the store, but don’t give away the store. You offer added-value. And you offer unparalleled customer service.
The world of retail is a commodity business these days. And that means that customers will almost always go for the lower price. Your customer service and attention to detail can be the deciding factor as to whether they shop with you or someone else.
How are you driving traffic?
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