One of the best things about the current economic climate (and there’s not many) is that, unlike the major downturns of the last century that were polite enough to follow some sort of logic, this inaugural 21st Century edition is a veritable free-for-all of data and theory. No one has the slightest idea what’s going on or will happen next.
Which, at the very least, has proven entertaining in that we’re all roughly as smart as the brightest PHD’s right now: there’s no ‘wrong’ or ‘right’ answers, just a lot of opinions and theories. Like the week leading up to a Super Bowl where everyone from radio blowhards to nuns to the guy at the Hooters has a theory, and the numbers and statistical history to back it up…At least until the game starts that is.
So in that same spirit of random and fully unsubstantiated prognostication, I thought it would be fun to offer my own thoughts here on what the coming days will look like and specifically the new leading indicator of recovery to really watch for, namely: Overpriced Coffee and other Super-Premium Novelties.
Yes: while economists will all cite typical harbingers of recovery like new home construction, etc., I’d submit that seemingly minor purchases and behaviors may better presage a return to normalcy for this one; that this whole new era of asceticism many are predicting simply won’t happen. We may cut up our credit cards and take a more responsible view of our finances, but give up things that make us feel good? Never. The effects of 20-odd years of purchasing ‘brands’, ‘experiences’ and ‘ideas’ are so ingrained that we’ll never go back to an old commoditized view of a world of mere ‘products’ and ‘goods’.
We’ve seen the same dynamic for years now among consumers in emerging economies with far less to their name than the average US citizen even today: a middle class worker with a few extra dollars can’t afford a new car, but a bottle of $50 bourbon offered to guests in his home can fulfill the same need for validation and self-esteem. Sales of super-premium spirits in places like India have (counter intuitively on the surface) boomed in turn.
At some point then, when the dismal science of economic data has beaten us all down logically, I predict you’ll see a marked emotional return to frivolous rewards and little luxuries far before refrigerators or big-ticket items. You simply can’t keep ‘em down on the farm after they’ve tasted a $5 coffee–or, more properly, the 20 minutes of fleeting happiness they’re actually buying with it.
And after slogging through this mess, can you blame em?
Tags: Bill Rodi, brands, coffee, consumers, economy, experiences, finances, ideas, recovery, retail
