Published on: March 19, 2008Forbes has a story in which it looks at the “central role” that the Internet may play during the current recession.
“The Internet was around during the shallow recession of 2001, and almost 50% of Americans were using it,” Forbes writes. “But it was not yet embedded in our way of life, largely because broadband penetration was, at the time, only about 20%. Today, more than 70% of the population is online, with more than 80% of these Internet users having high-speed access.
“The Internet has empowered consumers as never before, providing previously unknown and unimagined opportunities to make informed decisions with detailed information, product ratings, expert and user-generated reviews and price comparisons on anything from computers to coffee beans to cat food.
“In good times, when consumers feel cash-rich and time-poor, they can afford to be less diligent about their spending. But as economic pressures mount, sentiment changes. People feel cash-poor and are more willing to invest time and effort in getting the best deal.
“What sets the current recession apart is that, for the first time, consumers have a tool that empowers them to subject everyday buying decisions to the kind of scrutiny formerly reserved for big-ticket items and large business-to-business transactions. Marketers should anticipate this shift. They will not be able to rely on ads to pull the wool over consumers' eyes--or on imagery to wow them.”
Forbes suggests that a number of factors will lead to consumers turning to online options – the price of gas, the lack of sales tax online, the plethora of shopper review sites that help consumers make more intelligent decisions, and the vast array of sites offering virtually every kind of product.
And, the magazine suggests, “Virtually anyone selling anything should be online, with as much sophistication as they can afford or muster.”
- KC's View:
While there clearly are demographic pockets that will be an exception to the conclusions reached by Forbes, it seems to me that the article gets right to the heart of the matter. Most of us want greater access to more products, and if we can save money in the process – whether through a lower price on the actual item, or on other factors involved in the sale – that’s even better. Young people, becoming core shoppers, are even more attuned to the importance of the Internet.
To ignore this reality is to risk irrelevance.
It is worth repeating the line from the Forbes piece, with emphasis:
“Virtually anyone selling anything should be online, with as much sophistication as they can afford or muster.”
And one other thing. If, as some believe, we are not so much headed into a recession as we are enduring an economic transformation that will affect the nation in perpetuity, then embracing the Internet as a marketing and merchandising channel is even more important.