Context is the conditions or circumstances that surround something; the conditions that define what is of value or what is meaningful.
Well, the citizens of the USA find themselves in a new situation. There are those who have lost their jobs or had their home foreclosed, for these life is truly bleak. Then there are the rest of us with the exception of the truly wealthy. The world looks different to baby boomers who witness retirement portfolios dwindle and not enough time rebound. Many middle aged people have lost confidence, trust or a sense of control. Some have a home mortgage that is greater than the current value of their house. Others witnessed competent colleagues get laid-off to face a gloomy re-employment picture. The employment picture for new college graduates is grim and even if they land a job they can expect a lifetime income that is hundred’s of thousands of dollars less than graduates as recent as four years ago.
Crisis can have another effect. They jolt people out of routines. As new financial realities take hold, other issues can come to the forefront. Green can be good for business. People are taking environmental issues seriously in both their actions, with their pocketbooks and it is affecting what they expect from a business. Health, happiness and lifestyle are becoming more important than material goods. Terms like luxury shame have surface, conspicuous consumption is being replaced by actions like bringing a reusable bag to the grocery store.
There is a renewed in taking control as evidenced in an upswing making things from scratch. This past Valentine’s day, Yahoo Search noted a dramatic upswing in people looking ideas for gifts they could make more personal. Preparing food at home, using bulk and more basic ingredients take more time but are now found to be rewarding and contribute to a desire for healthy eating and the buy local movement. Certainly, there is an economic motive brought on by the recent economic crisis but there are also trends that were previously under the radar but are now public and increasingly popular. An important point is that the underlying motivation is not singular but rather represents a convergence of issues and these are redefining what people see as meaningful.
Take farmers markets as an example of how converging movements and desires are taking hold. The number of farmers markets in the USA rose from 1,755 in 1994 to 4685 in 2008. It is not just that people are shifting from supermarkets to farmers markets for their produce. There is an associate economic shift. People are spending significantly more in the surrounding businesses. This spending can be as much as 3 times what is spent in the markets themselves.
Farmers’ markets are not just about fresh produce. The single biggest reason people frequent them is because it brings people together. Just as participation in online social networking exploded, people are seeking ways to “socialize” in the real-world. Research indicates that public markets are motivated by and impact a number of growing priorities such as: supporting the local economy, sustainable agriculture, environment, public health and obesity, civic engagement, smart growth, livability, historic preservation, transportation.
The farmers’ market discussion is just one example of shift buying priorities. The important point to take away is that customer purchase patterns are shifting. Overall people can be expected to spend less. However, a fundamental characteristic of human beings is that we pre-wired to have desires and to become engaged in their pursuit. The absence of desire is apathy. What this means of businesses is that they need to learn how ignite the desires and engagement of in a sufficient number of customers. They need to their customers to apporate their limited resources disproportionately–to scrimp elsewhere to they can splurge on the experiences their products enable.
For more insight into executing the scrimp-to-splurge approach, I invited you to download our free paper, Customer Psycho-Economics in a Down Economy.
Excellent insights, John. These changing patters have huge implications for retailers and others with branch locations. Have recently read a few interesting bits of analysis on how retailers are looking at possible store closing/expansion http://analytics.pbbiblogs.com/2009/08/14/when-its-time-to-close-stores-a-framework-for-decision-making/
Also how banks are relooking branch networks.
Your ideas on the “social” aspect are interesting… guess we’ll see if these trends continue.
Thanks for the comment and link to articles on choosing new locations. Clearly businesses need to be where customers are and they need to cognizant of how they want to interact.
Quite a change from choices made based on their internal efficiency and convenience.
John I. Todor, Ph.D.