Americans save more, spend less. Will it last?

Read Original



Evidence of a new consumer mindset keeps piling up. Today's New York Times front page reports Americans are becoming savers. When they shop, it is for necessities. They are spending less on impulse purchases.



"We have gone in a radically short time from conspicuous consumption to conspicuous saving," Anne Brouwer senior partner at Chicago-based retail consultants McMillan/Doolitle, LLP, told me last week. "Everybody, retailers included, recognizes this is a major change -- lasting change."
As the Times reports, a patent attorney in Austin now grows her own vegetables; a Macy's saleswoman says people are running in and out of the store with only the basics they need, no more. The Times marshals evidence that this is part of a change in consumer behavior that will last after the economy gets back on its feet.

We have seen the signs out there all along: Penny pinching parents have made the back-to-school season dicey for retailers. And early indications are that the holiday season will be a hard sell, too.

Nearly every retailer reporting results for the second quarter either fell short or met Wall Street's profit expectations by cutting costs and inventory. The very few that managed to post a win, like The TJX Cos., (TJX) were stores that clearly played as the alternative to expensive stores.

The depth and width of this recession make it different than the recession-lite dip we experienced after 9-11. Then, the government asked consumers to open their wallets and give the economy a boost. Americans complied and the recession was over by the time economists finally agreed there had been one.

Not this time. Cultural mores are shifting. Being unemployed doesn't have the stigma it used to. Shopping at thrift shops now gets you admiration, not pity.

Even American youth, those self-involved champions of brand-name shopping, have not been shielded by the reality of this recession, says Brouwer. With all the media and social networks they're exposed to, they are very aware of the economic conditions and what caused this credit crunch, so they may actually grow up thriftier than their parents.

Since consumer spending makes up to three-fourths of U.S. economic activity, this cultural shift could be bad news for the economic recovery. But given that it was a credit crisis that got us in this mess, maybe learning to live within our means is a good thing.

Original Source

Apple, Enemy of The TV Industry??

Read Original



Is Apple the Enemy of the TV Industry? Microsoft Thinks So

Music’s long struggle with the web has been well documented. As consumers shifted from CDs to digital media, music labels, artists, and the RIAA have struggled with how to cope. While some have decided to sue consumers for $22,500 per song, others have found ways to embrace the web.

Now Microsoft’s Director of Consumer and Online in the UK predicts that the same turmoil is going to hit the television industry in the next few years. And unless the TV business “aggressively move its content online” and builds “a critical mass of content that the traditional buyers of airtime will understand and buy into,” they will face an “iTunes moment” where their online business becomes dependent on Apple.

According to The Guardian, Microsoft’s Ashley Highfield believes that TV execs have just two or three years to adapt or be thrown into chaos the music industry is currently experiencing:

“So realistically I think the industry has about two to three years to adapt or face its iTunes moment. And it will take at least that long for media brands to build credible, truly digital brands. But, importantly, I do believe TV does have a small two to three year window in which to respond.”

More than anything, Mr. Highfield believes that TV needs to find ways to generate significant revenue from online video and to make it easy for advertisers to buy ads in bulk for online TV. He also strongly suggested that the TV industry aggressively move its content online, on its own terms.

It’s interesting that it is a Microsoft exec making these suggestions and mentioning Apple as the online enemy of the TV industry. We can see his logic though: you don’t want one company to dominate online sales like Apple does with music in the iTunes store. The music industry’s been between a rock and a hard place for a long time now.

However, we think there are a lot of flaws to Highfield’s logic. TV doesn’t make its revenues based on sales, as the music industry does, but by advertising – something that is both effective and measurable on the web. We’ve also seen TV more readily embrace the web successfully, most notably with Hulu.

So yes, TV needs to embrace the online world or suffer losing control over its content distribution. However, the television industry is already light years ahead of the recording industry in that regard.

Original Source here