Published on: September 23, 2014by Michael Sansolo
Given the enormous implications of the event, it’s amazing that September 15th passed last week without much fuss or reflection. While nothing compares with the tragedy and national wound remembered each September 11th, the 15th is a day business need reflect on annually…at least now.
September 15, 2008, was the day Lehman Brothers failed. It was hardly the first time a financial institution went belly up and certainly wasn’t the last, but somehow it was still different. Within two weeks of Lehman Brothers’ demise the entire global economy went into free fall. Major stock exchanges around the globe lost about one-third their value within one month of Lehman’s bankruptcy.
Just as the after effects of September 11 linger to this day, so too does the legacy of September 15 and in many ways it impact you more directly because of the way it continues to impact your shoppers.
Think for a second about the powerful implications of the student loan debt crisis that Kevin wrote about the other day. We know have a generation entering the usual retirement years under a massive economic cloud. According to some estimates about one-quarter of Boomers have no assets, the average net worth of the generation is under $150,000 and now we find that some are still under the cloud of student loans that are eating away at Social Security payments.
It makes you appreciate again the long ago words of The Who: “Hope I die before I get old.” Maybe they understood we couldn’t afford to age.
Kevin made a great point in his article: the people in this pickle didn’t deliberately go there. Yes we can question if we lived beyond our means, if we wrongly believed our houses could serve as a bank account and believed in investment scenarios that seemed to defy gravity. Then again, when this generation first entered the work force they had no idea that their careers would witness the end of lifetime employment supported by benevolent companies where benefits would extend well beyond careers.
As Kevin also astutely pointed out, we can only wonder what the future holds, with a new, large generation emerging into adulthood burdened by even larger student loans and facing the prospect of tough global competition forever. How will they ever buy homes, save for retirement or even consider educating their children?
Of course, things might change again. For better, or for worse.
This much we do know. We know that in many ways, shopper frugality is a reality in 2014 just was it was in 2008 when the Great Recession exploded. That’s why there is so much interest in whatever happens with Family Dollar and Dollar General. It’s why companies like Aldi and Canned Food Outlet are so compelling. It's why, as the Cincinnati Enquirer reports, "Kroger executives say its private label business now accounts for one quarter of all its sales excluding gasoline and pharmacy receipts – approaching $20 billion annually." It’s why shopping apps that allow easy comparison of pricing loom so large. And it’s why private label continues to grow in importance and influence.
Inside your companies and with your trading partners, you need to ask, “How have we changed since 9/15/08.” And as you think about those stories on long-overdue student loans, ask yourself also how you should continue to change, because the pressure on consumers shows no signs of easing.
The reality is the global economy changed and with it your shoppers changed their habits, their purchases and their aspirations.
Things changed. Did you?
Michael Sansolo can be reached via email at firstname.lastname@example.org . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
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