The New Normal: Keeping Balance and Momentum in Treacherous Times

The “new normal” is well on its way to becoming one of the catch phrases that we’re all going to get sick of. It’s in headlines everywhere, especially as pundits and consultants try to figure out ways to market their services around a phrase that has more alliteration than meaning. The essential question is this: when the recession ends, will consumers persist in the changed behavior patterns – a kind of new frugality – that an economic downturn has prompted? The simplest answer is this: Who knows?It is dangerous to think about the American consumer as part of a homogeneous group with predictive behavior. Really, really dangerous.I’m not at all sure that people today are going to carry the scars of recession in the same way that so many of our parents could be described as “Depression babies.” Some will, some won’t. At MorningNewsBeat, I’ve gotten more than few emails from people who offer some variation on the sentence, “I can’t wait to be rich again.” Those folks, I’m guessing, have short memories.We also have no idea how the younger generation of consumers – you know, the ones who don’t remember a world without Google and Amazon and iPods, and whose behavior reflects easy access to information and a sense of entitlement to a life that lives up to their expectations and ideals –will react to the economic tumult they see around them. So we cannot predict their behavior. There simply is no blueprint from which to draw judgments. But rather than obsess about the permanence of recession scars, retailers (and their product and service providers) ought to remain cognizant of all the various influences that have the ability to change shopper behavior. Let me offer a quick take on four of them:

1. Nutrition Issues.As more and more regulations make it into the books in this area, and we deal with a federal Food and Drug Administration (FDA) that is both more empowered and active than it has been in years, retailers are going to have to work their way through a minefield of laws and consumer preferences. Already there is some backlash, and debate about the role of the “nanny state.” For me, I think it is all about making a plethora of choices available to shoppers – and sufficient information with which to make intelligent choices. One example: I love the laws that require chain restaurants to post calorie counts for all their menu items. I can’t tell you how many times I’ve been tempted to buy something that I seem to have developed a craving for, and have changed my mind when I saw the calorie count. I know that isn’t necessarily good for short-term sales numbers, but keeping me alive longer actually is good for business. Besides, it’ll get stores to offer more nutritious options, which could be good for business.

2. Food Safety.This is an area to which everyone in the food chain needs to pay close attention, because consumer trust is eroding slowly but surely with every headline about this recall or that contamination. The worst of it was when we discovered that Peanut Corp. of America had been shipping contaminated product with what appears to be full knowledge of the contamination – the first time in my memory that a manufacturer was accused of deliberate negligence. No matter how active the FDA becomes, this is going to continue to be a big and developing story, and almost nothing about it is good for the food business. Which is why I think the industry needs to adopt – and embrace – a philosophy of total transparency. Follow the example of the Greek olive oil company that makes it possible for consumers to type in a code number on the back of every bottle and see where the olives were harvested and pretty much every scintilla of information you could possibly need to know about it. This is the future…you might as well go there.

3. Private Label Growth.Lots of discussion about this segment, mostly because the economic downturn has sparked a lot of shopper interest – in the US, we’re seeing private brand distribution that looks more like Europe. This may or may not continue when prosperity returns – but that’s up to retailers and their private brand providers. If the quality is good and the store markets these products as part of a broader store brand strategy, then they will continue to grow along with the higher margins that they bring. Take them for granted, and things will go back to the way things were.

4. Generational Differences.I referred above to an entire generation that does not remember a world without Google and Amazon and iPods. Understanding how this generation thinks and feels, and what its rules of acquisition are, is critically important for companies mapping out a long term strategy for growth and relevance. Think about your own kids…and start asking them questions about what they want out of the retailing experience. I actually think it is pretty simple. They want what they want, when they want it, where they want it, how they want it, at a price that they think is appropriate.

Conclusion…Figure out that formula, and the future is in the palm of your hands. This is the “new normal” that retailers and manufacturers need to be planning for.By: Kevin Coupe, “The Content Guy”,