Bounce Back in 2010 – Really?

Some pundits and experts are showing signs of consumer optimism and projecting that consumer spending will ‘bounce back’ later in 2010. Link to recent article here. My feeling is that consumers will start to feel satisfied with saving some money, and doing with less. And once they reach that point, they will start to think in terms of ‘how can I save even more.’ Buying habits will continue to evolve away from big spending, even if the economy begins to recover.

I wrote about grocery-anchored neighborhood centers over a year ago. And looking at products and services in your ‘1 mile radius.’ Trends are now showing that strip center visits are up, and that department store and mall visits are down. Grocery anchored retail centers are still performing well. Other sectors that seem to be doing well are outdoor industry retailers, health clubs, health food, and of course discounters. In trying times, people are learning to take care of themselves first.

As baby boomers move on into their post-career years, and think back on the losses they sustained in 2007, 2008 and 2009 they will think twice about that new pair of designers jeans. That pair of Sam’s Club ‘Members’ brand jeans will work just fine. Generation X will generally grow further into management positions.

At the same time companies are using all the ‘green’ and ‘sustainable’ hype they can, which will eventually become background noise. Until there is a fundamental change in personal values, and energy costs rise high enough to painful, it will just be hype. But beyond that point, these words will become economic factors, not fashion statements.

As corporate history shows, leadership roles will likely skip a generation and Generation Y will assume leadership positions at companies, or start their own and let the old ones die off with their predecessors. This evolution over the next 10 years will reshape how business is done. Combined with the effects of the recession, and evolution of sustainable thinking, I believe this recovery will be unlike many previous ones, and will profoundly reshape the way US consumers think about their purchases.