"Shop ‘till you drop" is over. Save, save, save is the new mantra.
I saw a chart the other day that would have sent a chill down the spine of every marketing manager. Almost overnight, we’ve gone from a nation of spenders to a nation of savers.
According to the Department of Commerce’s Bureau of Economic Analysis, the personal savings rate in the US has risen to nearly 7 per cent. That’s the highest level since 1993.
The 77 million Baby Boomers who set the trends in consumption for the past 40 years aren’t likely to resume their free spending ways anytime soon.
As a matter of fact, all generations are asking themselves how much they really need for a balanced life. "Sustainability" is the new watchword, both in personal life and in commercial life.
How does this affect the leadership of consumer companies?
I’m hearing three recurring themes:
As competition for scarcer consumer dollars grows fiercer, consumer companies will determine what they do better than anyone and else and concentrate on it. Put all your eggs into one basket and then watch that basket!
Leaders will become more operationally focused. They know that more marketing isn’t the answer to shrinking markets. Superior operations, from supply chain to manufacturing to service, play a key role.
They are focusing on high-growth markets like Brazil, China, India and Eastern Europe. Sales of luxury goods in Brazil hit $3.9 billion in 2007 and this figure is growing at 17 per cent a year. In China, an emerging middle class of 300 million is equal in size to the US population.
Globalization has also been driving the need for international executives for many years.