The virtual and sudden collapse of the U.S. economy was a such a shock to the majority of Americans that I think some things have changed forever. Put Christmas on the list of changes.
We still see mind numbing advertising for things we don’t need but most of that advertising is aimed at two over-lapping groups: the ego-centric and the twenty somethings. I-Phones are selling. They are the new Blackberry for the self-important who need ask their phone where they should have lunch together. The phone will give directions to the nearest Applebee’s.
And certainly they must not only answer ever serious, business sensitive email during lunch, but they must also send a picture of where they are having lunch to their friends. Yes, entire business empires could crumble if the buyer or salesperson happen to be out of contact for a full hour even though those same people seldom return calls or answer emails once they return to their offices. Replies just aren’t as important when sent through a PC or a mere telephone.
Kids too must have the latest thing to stay in the cool crowd. I mean, after all, who could live without being able to text “C U L8TR”?
But the rest of us have experienced a shock. The economy is not secure. The U.S. is not number one. We are deeply in debt and millions of people are losing their homes. Game over. The ‘Point of No Return” light is on. Crossing the $13 Trillion debt mark means we will never, ever pay off the national debt. We will never reduce it. The interest alone is at our maximum ability to just maintain, service the debt. A rise in interest rates will break the bank. Expect the value of the dollar to shrink. Expect your lifestyle to retract.
I must force myself back to the point.
Christmas. We won’t be going into an insane buying frenzy this year regardless of price cutting. If we, meaning most of us unwashed masses, don’t need it, we aren’t going to buy it no matter how cheap the price. Sure, we’ll look for bargains. We still need something for Mom who never really likes anything we get her, Sis who already has too much and nothing is good enough and her husband who won’t experience sobriety until sometime in March. Then there’s little Jack, what to get a kid in rehab? Naturally we’ll pretend like that never happened once we get this little episode behind us.
Yes, we’ll buy something for each and every one of those on our list but we won’t go crazy with extras and we won’t feel guilty about “getting them enough”. Things have changed. Most of us won’t load up the credit cards with little appreciated gifts. Just enough. Just enough will be fine.
And once we taste that ‘enough’ really is enough, we won’t go back to the old ways. Why would we?
So retailers, here’s your lesson and you’d better get it now. It’s not about price. You must help the shopper justify the purchase. Fill a need, make a memory, heal a wound, bring comfort—something. But just buying for the sake of checking off a list or because something is 30% off won’t make the sale. You need to teach your salespeople to offer a ‘why’. Why should you buy that?
After Christmas, prepare for the worst. There won’t be a lot of bargain hunters. We don’t need the stuff you’ve got left over even at 75% off.
Get your inventory in line with necessities and items that meet needs. Look for things that last. Avoid cheap junk from China if possible. Your customers, now more than ever, want the money to stay here. And consumers don’t trust Chinese goods as they did a couple years ago. We’ve had our pets poisoned, babies exposed to lead, homes falling apart (sheetrock) and a million other hazards as yet discovered. Revealed may be a better word.
Do that and you’ll make it.