business news in context, analysis with attitude

by Kevin Coupe

Here are two recent headlines that are eye-opening in that they suggest - with seemingly contrary views of the world - where 2011 shopper could be headed.

On the one hand, there were numerous stories over the holidays about how some experts are predicting that before too long, we’ll all be paying $5 per gallon for gasoline, raising the cost of filling up our cars and keeping them on the road. This came on the heels of news that the average cost of a gallon of gasoline in the US had topped $3 - which was amusing to people in places like Connecticut who have been paying more than that for months.

At the very least, the $5 per gallon projections suggested two repercussions. One, people will have less disposable income to spend on other things. Two, car companies will have to redouble their efforts to sell cars that get better mileage.

The other headline appeared just this week in the New York Times: “Mocked as Uncool, the Minivan Rises Again.” This story suggested that car companies are reintroducing the minivan - a family favorite before it was replaced in the population’s heart by the more rugged-appearing SUV - with ad campaigns that stress both their sportiness and functionality. But it also may be that a re-emergence of the minivan is due to a back-to-basics consumer mood ... that the 2011 shopper, battered by several years of recession and possessing reduced expectations and less enchantment with artifice, is looking for something different.

While rising gas prices and the promotion of more big cars might seem to be working at cross purposes, they could together point to the direction in which the 2011 shopper is headed. More value-oriented (which is different from being low price-oriented), with less disposable income to spend, and more focused on functionality and (in some cases) family. Add to that the simple reality that people are better informed than ever, expecting a level of transparency from the institutions with which they do business, and you start to get a picture of the US consumer.

Or, at least some US consumers. It isn’t a homogeneous group. But there may be certain inevitabilities around which retailers and manufacturers can start to build their strategic and tactical plans.

And that’s our Wednesday Eye-Opener.
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