We live in uncertain times ... and I'm not just talking about Wall Street. I'm also talking about Main Street and, even, 'Domain' Street.
And while the latest financial 'bear market' is hardly new news, this latest financial crisis has come with a few new twists which will ensure profound implications on consumer sentiment and spending.
Let's start with the obvious…European nations' wealth is crumbling and America's debt is almost incomprehensible (think 10 to the power of 12!), the equivalent of more than a million dollars a day … since Jesus was born!
Is it a temporary hiccup? Or are we witnessing yet another industrial superpower consign itself to history? Will the US follow the 20th Century demise of Japan and USSR and move more towards commercial irrelevance in a new century defined by the Asian Tigers and their seemingly insatiable appetite for growth (and Australian minerals, fortunately)?
On top of this, we are witnessing amazing scenes of popular uprisings which have roots in the Middle East, noticeably Syria, Egypt and Libya. But it has now spread as far as the UK. It appears that in such uncertain times, the 'people are revolting' and demanding stronger leadership with more action and less spin.
They are uncertain about the future and what might happen. They are demanding that someone takes control and leads the way. They are figuratively and, perhaps, literally re-storming the Bastille.
And such sentiment is not just restricted to our political leaders…every brand and business needs to reprove itself and show its relevancy to a community and client base concerned about their future. Will riots in the streets ever manifest themselves into a more silent but just as effective protest in a supermarket? Time will tell … but don't be surprised if a premium name and price doesn't command the type of respect and loyalty it once did.
Of course a great deal of blame needs to be fairly laid at the feet of that annoying, pesky, brash teenager…the internet!
Despite the fact that if the internet was a person, it would be too young to drive (well, not without L-plates and a parent on board), the digital revolution is effectively tearing down the way of the old with gay abandon and little acknowledgement to past loyalties and sensitivities.
Let's briefly consider a few of the more interesting developments that these times have thrown up for consumers and how we communicate with them.
Seemingly caught up in a web of endless sales, constant bickering, strengthening dollars and spiralling rent, on-line sales are destroying traditional retailers as effectively as the looters and vandals currently rioting through London streets.
For some time now, I have put forward the proposition that if your product isn't perishable and can fit into a box or envelope, you may as well close your store now and save further anguish. And I can see no sign of it abating.
Today's solution is no longer about a store with an on-line presence…every retailer simply has to become a genuine on-line store with a possible (smaller) physical presence. And they need to do it now!
Bear in mind that the NBN has only just started to roll out in mainland Australia (assuming Brunswick still considers itself such); that nearly half the phones sold in Australia are 'smart' meaning we're carrying the internet with us everywhere we go; that apps have become the new fashion accessory; and that mobile phones will outsell computers this year…makes you wonder exactly what type of store and shopping centre destination will actually survive.
And then there's how we need to communicate…
Whilst television (FTA and cable) shows no real sign of decline and the radio industry talks up digital as its next iteration and reinvention, the start of the communication show must surely be 'social media'.
Whilst msn messenger seemed to leave the building with Mario Bros, our days are now full of accepting invitations on Linked-in, branching out into Branched Out, updating Facebok and Tweeting … and let's not even count email!
I once saw it written that email would be the next casualty of the digital revolution as we continue the migration to Facebook (or whatever its successor will be called).
Today, you need a fine balance of traditional above-the-line media, a strong and pinpointed social media presence and a smattering of new 'trialists' to not only reach consumers, but to genuinely motivate them and prove your worth as a modern business with a justifiable premium price and brand.
Or you could just sit back and wait for your superannuation funds to return to a figure we'd be happy to retire on.
Paul Gardner
Chairman, Grey Group
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