A reoccurring theme of many “Twilight Zone” episodes was time shift — people and events being out of whack, with all the expected upheaval that would bring.
Some think that time travel is the fifth dimension. I agree but in a very real, not so Rod Serling way. I believe consumers regularly come and go through experience-related “economic time zones” largely dependent upon their life circumstances. And to the extent that they do, the fortunes of manufacturers and retailers swing wildly.
The majority of the population younger than 30 grew up understanding that you pay for TV, whether it be basic cable, satellite or pay-per-view. Presuming they have the money, greater numbers of them value the paid services than those of them who don’t.
In contrast, the 60-plus crowd lived half its life without being asked to pay for TV, and as a result is more likely to stop and think about doing so now. The younger group never came through the “economic time zone” of free TV, whereas the older group did, resulting in very different attitudes and a propensity for the young’ins to buy all things related to TV, including TVs themselves.
I recently had a conversation with a very articulate, highly mobile, financially upper-middle-class, 60-plus female who told me about making $10 a day as an early twentysomething. She has money now and can buy whatever she wants — which isn’t much. She can afford it, but sees price/value relationships through the prism of her earnings more than 40 years ago. She is an “economic time zone” traveler.
This phenomenon is not the exclusive territory of the white-haired set; economic time zone travelers come in all ages. Some students who finally graduate and find themselves with three times or more the income they lived on though school often morph into overly frugal adults. Or, in much larger numbers, become one of those who cast aside all restraint, quickly finding themselves way over their heads in debt.
The first group is stuck in an earlier economic time zone, and the second is accelerating at warp speed to a future one their incomes may never support.
There are currently two events that are completely and absolutely obliterating the conventional wisdom upon which your business has been based: $4 gas and the total undoing of what had been cast-in-stone housing market economics — that prices always go up. This in turn means that your consumers are moving through economic time zones they never dreamed existed, and as they do they become very different customers as a result.
There is an obvious, well-publicized downside to this (sales of light trucks off 25 percent from a year ago, sales of existing homes down 13 percent, home prices down 7 percent), but don’t miss the not-so-obvious. When the overall use of public transportation increases 3 percent during January through March and light rail usage is up 10 percent, and when Americans drive 53 billion fewer miles since November relative to a year ago, you don’t need an economist to tell you your store traffic will be different depending on where you are and what you sell.
- Time For Change: A Management Manifesto - January 6, 2011
- Brand Value Can Be More Critical Than Price In Closing The Sale - June 22, 2010
- Marketing Matters: Retailers Respond To The Call For A New Independent - March 23, 2010