Finally, the Post-recession Post-Multicultural era: A Societal Reset
July 2013.- The 2007-2008 economic shock AKA the Great Recession was unique in our history and so too, its lingering effects. A mega-trauma affecting everyone and everything, it changed both human and organizational behavior.
A Baby Boomer’s family saw its income double between 1946 and 1973. In the next 31-year period, it slowed to 22%. Between 2000 and 2010, household income and wealth actually declined. Americans lost $12 trillion in wealth. And, Hispanics were near the epicenter of the bursting of the U.S. housing bubble with median home equity cut in half to about $50K as compared to an 18% dip among white non-Hispanics to $95K.
Some businesses were already trending downwards. The subsequent recession accelerated sell-offs, lay-offs and restructuring. Even now, recovery is marginal and for most companies, top line growth is more elusive than ever.
On the flip side, social needs have increased, giving has declined, and economic success is being recalibrated. The idea of achieving happiness with less may be taking hold. A generation ago, owning a home was the most important factor in determining middle class status; now, a secure job is at the forefront. The boomerang Millennials coming back home to live with their parents is common practice. A new set of expectations are being embedded in Millennials as they often hear Gen X and Boomers repeat — “Kids can’t do better than we did”.
We say, let’s shake off the shock, come to hard realizations, and change our thinking –our marketing strategies. In other words, let’s engage in this newly emergent era we call “Societal Reset.”
Positive leading Indicators abound: Personal savings are increasing, debt has decreased.
A new consumerism is taking place: Consumers have wised-up for the long run, for example, about half of consumers were purchasing food Private Label (store brands) products before the recession in 2006 and now 2 in 3 consumers have purchased the same in the last year.
Source: SSG analysis of Gfk-MRI market database 2006 & 2012
There will continue to be greater awareness of where every dollar goes. Even Upscale and Affluent segments will continue to shop at Walmart, Target, Costco or Marshall’s and TJ Max for necessities. Renting, sharing and bartering, of everything from innovators like Zipcars, B-Cycle, HomeExchange, PreOwnedWeddingDresses.com, are rising in popularity.
Long-held attitudinal beliefs are being reevaluated: As individualism, a core American value, fades away, the family takes center stage, particularly as an economic and social support structure. These changing values are connecting Hispanics and Multicultural segments closer to the ‘Total Market,’ now more than ever. How can this be leveraged in building enterprise-wide strategies? We see major opportunities as consumers adjust to this new era of realistic expectations.
Here, we offer some thought-starters to guide you as we undergo Societal Reset:
- Do you have the skills, confidence and infrastructure to listen and lead consumers at the same time? How do you operationalize such processes to uncover and capture new growth?
- Are you helping your customers redefine problems – and solutions — in this new era?
- Do you maximize information about your products and services via word-of-mouth, social networks and “influentials”?
- As a manufacturer, have you been leading the conversations about the business you are in with retailers, brokers and alternative channels?
- How do Brands keep their crown as frugality and value continue to drive purchasing habits?
- Are you tapping into the appropriate means of communication to move Millennials, Hispanics and Multiculturals from awareness and understanding to activation and brand advocacy?
Let us help you focus where the highest market opportunities exist in this era of Societal Reset.
SSG is a strategy consultancy driven by management P&L experience and predictive analytics. We develop fact-based business models, growth roadmaps, insights and segmentations for the Total Market and the evolving Hispanics, Multicultural & Millennial segments. We help clients focus their limited resources where the highest market opportunities exist, and which strategies advance maximum, efficient Total Market growth.