Published on: June 12, 2008Now available on iTunes…
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Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, brought to you by Webstop, experts in the art of retail website design.
So what to make of the current economic situation and how it affects shoppers, retailers and manufacturers?
Hard to know. Food prices are rising, making it harder for people to feed their families in the manner to which they have become accustomed. Of course, that may not matter, because fuel prices are skyrocketing, so they may not be able to drive to the store anyway.
Listen to enough talk radio, watch enough 24-hour cable television or read enough newspapers, magazines and websites, and you can hear a wide range of opinions on the state of the economy and the nation as a whole. Some very smart people think that this is a mere blip, that the economy will rally in the second half of the year and that while we may not be returning to the good old days anytime soon, all the doom and gloom is misplaced.
I’m sure these folks have plenty of rationales for their opinion, but I find that kind of optimism difficult to believe. I suspect the people who see a light at the end of the tunnel may be people who don't have to worry as much as other people about the price of gasoline, or heating oil, or food. They are economists or academics or politicians or consultants or pundits who aren’t sitting down at night trying to figure out how to make the numbers add up. They are, in fact, the same people who have been arguing all along that the nation wasn't headed for recession, even as real people acted and talked as if recession already had arrived.
Now, there also are plenty of smart people who are talking in such a way that I want them to take a happy pill, or at least have a stiff drink. These are the people who are predicting the end of America as an economic superpower, who say that in history all great powers have gone into decline….and that the American infrastructure is such that in a global economy we simply cannot survive, at least not doing business as usual.
Now, I’m not quite cynical enough to accept this notion, though I do think that it is important that we as a nation cannot do business as usual, that we have to re-examine all of our assumptions – political, cultural, economic – in the light of a global economy in which power clearly is shifting.
One thing that I think is critically important – and this is where I feel the first group of economists, politicians, consultants and pundits falls down – is to work from the premise that not only is this not a temporary condition, but that a seismic transformation is occurring. The center of global economic power is shifting away from the US, and toward places like China and India. This is the argument that New York Times columnist Thomas Friedman makes, and I find it persuasive.
But the reason that doom and gloom don’t seem appropriate – and least, not yet – is that the end of the story hasn’t been written. We don't know how it all turns out. That’s called opportunity. In order to take advantage of it, though, we first must have a firm grasp on reality…and then have the courage and will do deal with it, making the changes necessary to insure that we don't just survive, but find a way to thrive in a new world.
Let’s think about this in terms of the food business. Michael Sansolo argued earlier this week, quite persuasively, I thought – about the need to reinvigorate the food shopping experience, to re-train shoppers about what is important and not important. And we got a bunch of emails from people who correctly pointed to retailers such as Trader Joe’s and Costco as examples of companies that have created compelling shopping experiences. I could add to that list companies that include Bristol Farms, Dorothy Lane Market, Jungle Jim’s, Lunds/Byerly’s, Stew Leonard’s, and plenty more.
But here’s the thing. Not every retailer can or should try to emulate these companies. They all have very specific approaches, appealing to very specific markets. There are plenty of other markets out there to which retailers and products can cater. They just have to decide which ones to go after.
There was a study that came out the other day about how people are suddenly going to be less concerned with convenience because it tends to cost money, and the new priority is to make the most of a shrinking dollar. Generally, I agree with that…except that it really depends in which people you are talking about, on what day of the week, and what kind of convenience. It is a moving target, extremely difficult to hit.
The first decision retailers have to make is to determine what target to go after. That means making a strategic choice based not just on who your customer is…though this obviously is important…but also based on what your strengths are.
The one thing none of us can afford to as we look at our businesses in the new light of a global economy, seismic competitive changes, and a customer that is being buffeted by worries about food safety, health and nutrition and economic issues - to name just a few – is to not be cold and calculating in our preparations…figuring out where the opportunities are and how best to exploit them.
Abraham Lincoln once said that if he had eight hours to chop down a tree, he’d spend the first six hours sharpening his axe.
The time is now to start sharpening. Because the last thing any of us needs these days is a dull blade.
For MorningNewsBeat Radio, I’m Kevin Coupe.
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