My friend told me a few weeks back that she somehow spent $7,000 last month on her Amex card. She was rattled by the depth and breadth of her spending, even though it did include a new furnace and some vacation airline tickets. But she paid it and then went back again the next day to Costco for supplies for a trip to her lake home. She’s lucky. She only spent seven minutes thinking about that seven thousand dollars.
Think again about that seven thousand dollars. That is the total amount of discretionary spending that 34.5% of U.S. Households have in a year. Over 50% have less than $10K to spend on non-essential items.
These stats from the 2011 Discretionary Spend Report (from Experian Simmoms) are troublesome for the economy, for retailers and especially for brands that used to command a price premium because they occupied some favored space or status in our minds.
Now, most of the consumer mindspace is crowded with fear. Not brands. And with math formulas that subtract from the weekly food budget the outrageous prices we pay for a freaking tank of gas for the car! And our minds are full of endless marketing, ranting at us to devote lots of time to online shopping before we go shopping because we must, we must, we must seek a discount or coupon for every single purchase we make.
Can you stop and think right now what brands really make a difference in your life when you’re in that crazy space of being on the edge of household poverty after twenty some years of prosperity? How many brands even have a tiny sliver in your mind anymore when all you have for discretionary money is ten grand for a whole year? Think of what Groupon has come to mean in your life. Is it meaningful or is it fearful?
What’s fearful to me is the fact that Groupon is now turning their monstrous machine to supermarkets. Classic brands should be sweating in the heat that is about to crank up to enable any growth, even growth with no margin, as the CPG brands clamor after share of wallet in the most aggressive way.
A surge in the endless round of discounting, some of it even disguised as “shopper marketing” is like getting out more nails to pound in the casket of the concept of classic CPG brands. IF HALF OF THE U.S. HOUSEHOLDS HAVE LESS THAN $10K TO SPEND IN A YEAR ON THINGS THEY WANT, WHAT ELSE SHOULD YOU DO TO ENCOURAGE SHOPPERS TO SAVE A SPACE IN THEIR CLUTTERED, FEARFUL MINDS FOR YOUR BRAND?
Yes, brands could shout. And many do. But who’s listening? Plus, all the shouting is about deals. We run after them like mice on the wheel. So uninspiring.
I want to know which CPG brand is going hire ambassadors at retail to hand out hugs? so many of us need them. They can create just a moment of heartfelt empathy, or caring, of joy. Maybe a few brands won’t jump on the Groupon coupon wagon….. Maybe they’ll capture our hearts, which is really the path to our wallets.
(Note: as I wrote this, I started thinking about Coke’s open happiness campaign. They manage to find great high ground for branding and stick with it. And then the old song came into my head: “things go better with Coca-Cola, things go better with Coke.” I’m no soda drinker but suddenly I’m craving a Coke in a green glass bottle. It might just feel like a cold, but warm hug that’s worth a couple of bucks.)