As predicted by REX some months ago, when the economy improves the consumer will be transformed.  The New York Times (Saturday Aug. 30 front page) comments that consumers are permanently changed; uneasy about the future; thrift and caution will dominate consumer spending AFTER the recovery.

Breaking Open Leads to Learning

This is in line with my view that dramatic change occurs very fast when your are broken open emotionally.  The current recession has broken open most everyone.  Consumer caution is not a temporary adaptation, but a relatively permanent shift.  It parallels how the Great Depression in the 1920’s-30’s broke people open and show they shifted to a ‘depression mentality’ of conservative finances.  My dad graduated college in 1934.  He grew up surrounded by the depression.  He held one job his whole life; saved; counted pennies; budgeted; hated to buy a new car or spend on fancy vacations.  We were the last, the very last of all my friends to own a TV.  Learning that occurs when people are broken open emotionally persists.  See the movie Cinderella Man which will give you a sense of the forces that broke people open in the Great Depression.

This type of change can be positive. I was a smoker from my teens into my 3o’s.  Tried to stop many times.  Logically I knew it was bad for my health.  I could not stop.  Then one day my business partner in Habitat-School and Consulting Firm for The Environment, and I were meeting.  I lit a cigarette and Dick started crying.  Dick Henry always wore his heart on his shoulder.  He would cry in management meetings and my response was ,”Oh shit!  How the hell do I lead a meeting with a guy crying!”

When I asked what he was upset about, he said, ‘You know my mom just died of smoking and lung cancer, and now I am afraid I’ll lose you.’  WOW! This broke me open emotionally. I stopped smoking.

Well back to your consumer.  Consumer spending powered 70% of the U.S. economy.  And we did this in ever increasing spending.  Even if we had to borrow to spend we did it in our irrational exuberance that everything just went up.  House sizes, number of cars, vacations, appliances, clothing and we drove the nation’s economy.  We because the consumers of last resort.  We would buy anything and everything. AND NOW THAT ATTITUDE IS ALL GONE due to the breaking open from the recession and loss of retirement funds and jobs.

For the past 15 years I pushed every health club owner is a REX Roundtable to raise prices each year, and it worked. It may not now. There is a new consumer with new needs and now is the time for deep, deep thinking and reflection and data collection on what your member and consumer really wants.

The REX Newsletter: Getting The Edge is featuring articles to help you do this.  REX is also collaborating with Management Vision to provide superior market research for REX Roundtable Members.

Tags:   broken open · consumer · Economy · emotional learning · market researchNo Comments