As usual, nearing holiday season is people's, or economists', period of a close watch. This period of November to December is when consumers usually spend their money for the upcoming holidays, Christmas and New Year. The consumer spending for year end holiday is crucial, for the fact that it can be a starting point of analysis for the following year's economy. What happens in the US certainly can represent the overall worldwide economy movement and by that, businesses in the rest of the world can decide what to do for the following year, in this case, 2010. Let's see how it is.
Potential Downturn
The so called global crisis that was centered and initiated in the US market clearly made its way to hold some upturns. Job market was hit first as many layoffs took place. This indicates a tendency of less consumption by consumers, or at least most people consider whether it is wise to spend more this year end. On the other hand, the recently announced rescheduling of Dubai World's debt creates another indication of a downturn, since many of Dubai World creditors are institutional US investors or financial institutions. Most of these institutions, of course, lay good hopes for Dubai World's debt settlement. Possibly too many spending plans have been set ready for implementation in 2010. And the announcement, despite the uncertain probable salvation by Abu Dhabi, really didn't make their week. So it's an even more strict budget for the investors a year ahead.
However, consumer spending is the most important factor to estimate the probable future profile of the economy, more crucial than what is being faced by the institutional investors for Dubai World. Retail sector is where the real economy movements happen. They move in a systematic way that operates businesses in the real sector. High volume in this sector means a rational hope for fixing our expectation to a better state. And that is where consumer behavior takes its role. Consumers can change their consideration of spending so long as there is a reason to do so. There is still a hope for avoiding any potential downturn.
It's What the Companies Do That Counts
It's true. You'll never see yourself buy a good present without discounts in this time of year. So this is the time where companies should adjust their business strategy. Focus on operational turnovers, put forth a generous promotion, and cut prices. These will certainly divert consumers preference of spending and result in sales. Companies need to make consumers see why they should spend this year end. After all, the holidays are the most wonderful times of the whole year, something too good to miss. It's the default mindset the people have. Get rid of other constraints that blocks this default mindset into effect.
Build a powerful promotion along with a carefully planned marketing strategy to make a stro
ng holiday season. We need to have a good holiday to keep everything going. If this is happening, then it will bring a chain reaction as it helps the production/manufacture sector, distribution sector, and many others to strengthen the economy, at least for finishing 2009 and looking up at 2010. 1st quarter of 2010 will be very much depending on how the companies conduct their campaign this year end.
Why US Market Matters
The reason why the world needs to pay a close attention on US consumer market is this, it's the downstream area of the biggest economy in the world. Many US companies produce goods with help from their counterparts worldwide. Outsourcing has become a new trend since several decades ago. That means, increasing volume in US retail market means increasing sales for many companies outside the US that export their goods to US-resided companies.
Not only that. Retail sector is the estuary of all businesses. Almost every business model will eventually reside in retail, since at the end their goods and/or services will meet their end customers. More over, retail sector pulls over so many other sectors that help deliver goods and/or services to end users. Manufacturing, distribution/transportation, telecommunications, and sometimes banking, all take part in retail sector movements. By having all these, retail volume will certainly roughly reflect how other sectors perform. Imagine if among all those players in retail support sectors reside companies from around the world. It's just too big to fail.
Rational Hope
After seeing the above description, it is clear. There is indeed some conditional hope that the US economy will enter 2010 in a not-so-worrying state of mind. And this is subject to how companies in this end point of 2009 conduct their strategy. If they can come up with a clever and dandy measures, we may be able to predict that economic downturn is not yet to come, for the US and the rest of the world.
(Picture sources: www.msnbcmedia.msn.com, www.usm.edu, blog.nielsen.com).
Potential Downturn
The so called global crisis that was centered and initiated in the US market clearly made its way to hold some upturns. Job market was hit first as many layoffs took place. This indicates a tendency of less consumption by consumers, or at least most people consider whether it is wise to spend more this year end. On the other hand, the recently announced rescheduling of Dubai World's debt creates another indication of a downturn, since many of Dubai World creditors are institutional US investors or financial institutions. Most of these institutions, of course, lay good hopes for Dubai World's debt settlement. Possibly too many spending plans have been set ready for implementation in 2010. And the announcement, despite the uncertain probable salvation by Abu Dhabi, really didn't make their week. So it's an even more strict budget for the investors a year ahead.
However, consumer spending is the most important factor to estimate the probable future profile of the economy, more crucial than what is being faced by the institutional investors for Dubai World. Retail sector is where the real economy movements happen. They move in a systematic way that operates businesses in the real sector. High volume in this sector means a rational hope for fixing our expectation to a better state. And that is where consumer behavior takes its role. Consumers can change their consideration of spending so long as there is a reason to do so. There is still a hope for avoiding any potential downturn.
It's What the Companies Do That Counts
It's true. You'll never see yourself buy a good present without discounts in this time of year. So this is the time where companies should adjust their business strategy. Focus on operational turnovers, put forth a generous promotion, and cut prices. These will certainly divert consumers preference of spending and result in sales. Companies need to make consumers see why they should spend this year end. After all, the holidays are the most wonderful times of the whole year, something too good to miss. It's the default mindset the people have. Get rid of other constraints that blocks this default mindset into effect.
Build a powerful promotion along with a carefully planned marketing strategy to make a stro
ng holiday season. We need to have a good holiday to keep everything going. If this is happening, then it will bring a chain reaction as it helps the production/manufacture sector, distribution sector, and many others to strengthen the economy, at least for finishing 2009 and looking up at 2010. 1st quarter of 2010 will be very much depending on how the companies conduct their campaign this year end.
Why US Market Matters
The reason why the world needs to pay a close attention on US consumer market is this, it's the downstream area of the biggest economy in the world. Many US companies produce goods with help from their counterparts worldwide. Outsourcing has become a new trend since several decades ago. That means, increasing volume in US retail market means increasing sales for many companies outside the US that export their goods to US-resided companies.
Not only that. Retail sector is the estuary of all businesses. Almost every business model will eventually reside in retail, since at the end their goods and/or services will meet their end customers. More over, retail sector pulls over so many other sectors that help deliver goods and/or services to end users. Manufacturing, distribution/transportation, telecommunications, and sometimes banking, all take part in retail sector movements. By having all these, retail volume will certainly roughly reflect how other sectors perform. Imagine if among all those players in retail support sectors reside companies from around the world. It's just too big to fail.
Rational Hope
After seeing the above description, it is clear. There is indeed some conditional hope that the US economy will enter 2010 in a not-so-worrying state of mind. And this is subject to how companies in this end point of 2009 conduct their strategy. If they can come up with a clever and dandy measures, we may be able to predict that economic downturn is not yet to come, for the US and the rest of the world.
(Picture sources: www.msnbcmedia.msn.com, www.usm.edu, blog.nielsen.com).
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