Sunday, January 17, 2010

Hey America – All’s well?

I’m back in US after a gap of two years and there are few things which I just could not ignore. Some tell tale signs of how US is changing in the wake of Great Depression part –II.

WALMART

Wal-Mart- the world’s largest retailer with revenues of approx $400 billion symbolizes the great consumption economy that US is. I noticed that the tagline in their advertisement has changed from “Always low prices” to “Save Money. Live Better”. Now this change did not happen overnight but I just realized it quite late. This I see as a subtle change in positioning. The emphasis on saving is a huge shift in the consumer’s mindset. The whole US economy thrives on the great American spending. However, this change surely is appropriate for the times we live in. The advertisement also gives a feel of a family shopping at Wal-Mart. This perhaps is a sign of getting emotionally connected with the consumer. Apart from the slogan change Wal-Mart seems to have picked up in the décor of the store, introduced some refreshing changes in the layout and of course, service continues to be good. Of note, is that Wal-Mart seems to have decreased the size of stock keeping units. What this implies is that a smaller size of the same merchandize is now available for purchase. I was quite interested in knowing what the impact of this change has been for Wal-Mart. From the retail surveys it does seem that the change in positioning is working for Wal-Mart. It seems the American consumer does want to save money and is buying into this tagline. Saving & America; I still can’t reconcile to this fact.

SMALL CARS

Well there was a time I could hardly find a small car in US. Now the trend for small cars in US seems to be on the upswing. Gone are the days of huge gas guzzling cars, mini vans and trucks. The average American consumer has become aware of something known as “fuel efficiency” of the car. The spiraling gas prices when the crude oil touched close to $150/barrel in 2008 made the fuel efficiency one of the most popular features to look at. If the Detroit car show is anything to go by, most car manufactures are ready to showcase more small cars in US. The big guns like Ford, Toyota & Hyundai are fighting it out in the small car segment. Even Tata’s Nano is bracing up for entry in US markets in 3 yrs time at an awesome price of $5K. Having said that, it does not mean that suddenly there’s no market for big cars but the change in consumer preferences is significant. With focus on emission cuts through federal policies the small cars are here to stay in US.

SODA

Yes, the quintessential image of an average American holding a big soda and a burger also seems to be changing. I’m amazed to see advertisements from American Health Association advocating Americans to cut down on soda consumption. They do now realize that this is one of the prime reasons for obesity in US. Though the American beverage association continues to refute these claims but the ensuing war of words is quite exciting. At least, the nation is talking about it!

There may be several other perceptible signs about the changing face of America but surely the Great Depression –II has left a huge impact on US. Sometimes I wonder that these are truly character changing signs for a nation. Are these changes permanent or will America return to its true color? I’m also little pained to see that the very essence of America is under threat. The very reasons for which it used to be a dream country don’t seem to be charming anymore. So how will US look like 20 yrs from now? Something like Europe is today – living on past laurels, flattish growth and an ageing country or are we going to see a turnaround?

Let’s see how this great nation responds!

4 comments:

ameet said...

Hay Ticks,
honestly the best blog you have ever written.
You can give Swaminathan Anklesaria Aiyar, a run for his money, if did you try to get this one published in the TOI.

From my point of view, this one is absolutely flawless form a quick read perspective.

Cheers for that.
Ameet

Rakesh Misri said...

Appreciate the comments - Good observations - Indian organised retail industry also is struggling except for Big Bazar most of the modern trade stores are in mess - Reliance - Spencers - etc are not in good frame.

samtiks said...

Mats, I'm quite excited to see that you liked it..wonder what our dear friend kaw has to say..

Rakeshji,

I may have to write a separate one for Retail..honestly reference to retail was just a sidelight to make a bigger point!

Anonymous said...

NODAM why do you always take my ideas,what should I write now.IT IS TIME FOR ME TO COME TO AMERICA AND SEE THE CHANGES BY MYSELF AND WRITE Hey America – Nothing is well?" reg anil koul