Dr. Maynard Brusman is a San Francisco Bay Area executive coach and consulting psychologist. Maynard is the president of Working Resources, and an expert in strategic talent management specializing in executive coaching and leadership development. www.workingresources.com
Dr. Brusman notes: "Consumer confidence is an economic indicator that measures the degree of optimism consumers feel about the state of the economy and their personal financial situation. How confident people feel about the stability of their incomes affects their economic decisions, such as spending activity, and serves as one of the key indicators for the overall shape of the economy."
According to Dr. Brusman, "Consumers are showing caution displaying worry about the economy. Consumer confidence is falling, and people are more pessimistic in their assessment of current business conditions. The recent sequester has created uncertainty regarding the economic outlook, and as a result consumers are less confident. Those saying business conditions are good has decreased, while those stating business conditions are bad has increased. People are continuing to have a hard time finding jobs. Americans in recent weeks have cut spending in recent weeks reflecting fear about the economy after a resilient start to the year. Anemic job growth and high economic anxiety are also tied to the gridlock in the American political system. There is a growing lack of trust in elected leaders to consciously collaborate and compromise focusing on the common good rather than self-interest."
"In the wake of returning consumer confidence, many organizations will experience consumer dissatisfaction instead," notes Wayne McKinnon, President of The McKinnon Group in Ottawa, Canada.
Without deliberately making the mental and strategic shift from cost cutting and survival tactics to innovation and growth, organizations risk discouraging consumer spending by under-delivering on the value-added components that many have stripped away. McKinnon states that this shift in thinking needs to be articulated, and behaviors changed at every level throughout the organization from product inception all the way to service delivery.
McKinnon goes on to say that this is not a time to focus on cost, but rather on value to the consumer through innovation and exploiting new opportunities.
"As a global business consultant and former supply chain executive, I watch trends—and business activity is up," points out Lisa Anderson, President of LMA Consulting Group, Inc. in Claremont, CA. "Undoubtedly, consumer confidence is returning; however, even more noteworthy is that consumers and businesses alike are tired of waiting. Instead of putting off spending, my best clients are beginning to selectively invest in top talent, ERP system upgrades, and in collaborative customer and supplier programs which will drive dramatic returns down-the-line. Although this seems like an obvious 'good idea.' most of my clients and contacts were hesitant to pull the trigger previously."
"Watch what consumers do and where they do it more than what they say" advises degreed economist and manufacturing operations strategist Rebecca Morgan, President of Fulcrum ConsultingWorks, Inc. in Cleveland Ohio. "Recent surveys report that consumer confidence is weak yet spending patterns demonstrate the opposite."
Morgan continues, "The important question is how and when does consumer confidence impact your business? Evidence suggests that consumers are now freely spending on what they see as non-luxuries, and those with good credit are dipping a toe in luxury (to them) purchases as well. But those baby steps don't mean 40 foot boat sales are about to skyrocket. Those "financing-based luxury providers" should watch credit ratios and availability more than consumer confidence in the months ahead."