If you're like me—in your early 30s and struggling to find opportunities hidden in our current grizzly bear of a market—yesterday's remarks by President Obama sounded sweet and promising. Yes, we can “restart the engine of our prosperity” while transforming the U.S. with “bold action and big ideas!”
Mercifully optimistic, the President's promise that we “will emerge stronger than before” sought to pacify the news that U.S. consumer confidence "tumbled in February to its lowest level in more than 41 years, partly because people are increasingly discouraged about job prospects."
While Fed Chairman Ben Bernanke holds out hope for an economic recovery by 2010 "even as new signs emerged that the recession and financial crisis are feeding on each other in ways that worsen both," the devastation already wrought on our fragile consumer psyche threatens to compromise even the most established companies' relationships with their best and most loyal clients.
For this reason, I suggest taking a look at a recently published report by Bain & Co. In its inaugural "Consumer of the Future" report, the consultancy measures the effect of the global economic downturn on consumer trends. Not surprisingly, changes in purchasing behavior have already emerged, and Bain's look into future spending habits warrants careful consideration.
Consider the risk that companies now run as they wrestle with controlling costs, retaining customers, and managing cash flows: squandering "years' worth of brand equity for a few quarters of sales." The consultancy raises an interesting idea: that today's economic demise impacts current trends, but does not necessarily initiate new ones. In this light, the consumer experience will become even more important coming out of the recession. Unfortunately, it appears unlikely that today's damages to consumer confidence can be healed any time soon, and one must begin to wonder if the days of brand loyalty are in fact coming to an end.