TV and newspapers talk about the “consumer returning.” Where did the consumer go? Nowhere. They never left. In 2009, 70 percent of the Gross Domestic Product (GDP) was made up of personal expenditures. Which means, $7 out of every $10 spent in the United States went towards one of four different sectors: Domestically Produced Goods, such as groceries, internet, and washing machines; Imported Goods, meaning anything that read “Made in China,” “Made in Taiwan,” or “Made in wherever it might be;” Imputed Goods, a catch-all category consisting of rent and property purchases; and Healthcare.
While the consumer hasn’t disappeared, they are making significant changes in their purchasing habits. Programmed purchasing, when a consumer visits a retail location having already decided what they are going to buy and how much they can afford to spend, is becoming the norm. Roger Stilson, President of Specialty Restaurant Group says:
Roughly 85 percent of consumers who go to a sit down restaurant don’t judge the restaurant on the prices they see on the menu. They make a judgment value of the restaurant based on what on they can see on their credit card receipt during the drive home.
Previously, the majority of restaurant patrons based their dinning experience on a number of factors other than price such as ambiance, service, and quality. Now that consumers are making a value shift, we can expect to see businesses follow. Products and services which meet the Baby Boomers and Millennials expectations for not only quality but end price will flourish in the market place.
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