Leinberger predicted that new vehicle sales will start to rebound by third quarter. Consumers are suffering from a “frugality fatigue” and are itching to spend — as evident from the boost in recent holiday sales. But the recovery process will be slow, based on what consumers have indicated in recent surveys, he said. The majority of consumers don’t plan on going back to their pre-recession spending habits during the gilded years of 1990 to 2007.
Gone is the bigger-is-better mentality. In its place? Quality over quantity. “[Customers] walk into a store thinking very differently than [they] did three years ago,” Leinberger said. “For them, it’s not about accumulation, or ’can I full up that three-car garage.’ It’s about ‘what the stuff means in my life.’”
Knowing that customers are looking for “the dependable middle” — moderately priced, quality goods — can make or break your business.
An example of a dependable middle is Hyundai, once considered a non-competitor in the auto industry. “It’s now the perfect brand at the perfect time,” Leinberger said. Hyundai offers a $15,000 model that includes seat warmers for the back seat — a feature that in the past was only available in high-end models like BMW. Hyundai shows that today’s consumers are looking for more bang for their buck: They’re willing to lose the name-brand and luxury status, but they aren’t willing to sacrifice on quality.
“Ask yourself, what products are your ‘dependable middle’?” Leinberger counseled the audience.
Another key focus is the increased importance of community: Today, 63 percent of consumers are more inclined to buy from companies that are involved in improving their communities. “It’s about what you do, not what you say,” Leinberger said.
If you are going to “say” something, consider carefully. In the past, marketing and advertising exceled in delivering one-sided messages to potential consumers through TV, radio and print. But consumers now want to be part of the conversation — to be talked to instead of talked at — and they can do this with applications like Twitter and Facebook. Social networking usage among consumers jumped 43 percent (to 22.7 percent of consumers from 15.8 percent) between June 2009 and June 2010.
“The 25- to 34-year-olds — the heart of this market — are also turning more and more to social networking,” Leinberger said. “The Internet is no longer part of our life. It is our life.” – Cynthia Furey