Fascinating article in Businessweek today about the “new abnormal” American consumer’s purchasing behavior. With the unemployment rate still near 10% and the Consumer Confidence Index hitting a five-month low this month, we shouldn’t be buying stuff – but we are, the piece surmises. The article’s deck sums it up thus: “Americans are broke and depressed—and also swilling $3 lattes and waiting in line for iPhones. Welcome to the schizophrenic economy.”
The new abnormal has given rise to a nation of schizophrenic consumers. They splurge on high-end discretionary items and cut back on brand-name toothpaste and shampoo. Companies like Apple, whose net income jumped 94 percent in its last quarter, and Starbucks, which is enjoying a 61 percent increase in operating income over the same time frame, are thriving. Mercedes-Benz is having a record sales year; deliveries of new vehicles in the U.S. rose 25 percent in the first six months of 2010. Lexus and BMW were also up.
Beautiful writing and interesting premise, but does it matter to the direct marketer? Yes and no. From a big picture perspective it matters in your positioning, which products in the portfolio you’re pushing and understanding the psychological mindset of today’s consumer. But for most direct marketers, “big picture” doesn’t cut it. Understanding a generic American customer isn’t their business. You need to segment, divide and conquer and know how each customer’s and prospective customer’s preferences. There is no mass customer profile, and that’s often the reason for direct marketing’s success.