In her blog post, “American Consumption and the New Normal,” Nancy Koehn discusses how Americans are going through the greatest changes in how they spend since the Great Depression. It’s one of the many references I’ve seen in the last year to how today’s economic situation is like the Great Depression.
Koehn, who teaches business history at Harvard, sees that as we head into a new year and new decade, we’re starting to see what our “new normal” would be like. Consumers’ recent flight to Wal-Mart and other deep discounters is over in favor of value brands. Then this sentence stopped me:
“Going forward, consumers today are looking to brands — new and established — that are worthy of their trust (think Apple or Hyundai or McDonalds).”
I read it twice and then again. Hyundai. That should be a major celebration in Korea, I thought.
That triumvirate of value brands would have been unthinkable in the 1980s. When the American auto industry was punch-drunk from the quality blows dealt by the Japanese manufacturers in the mid ’80s, the Korean auto industry wasn’t even on our radar. Apple was making a splash with the Mac and its 1984 commercial, to be sure. And McDonald’s was then, as now, the golden brand. But a Korean car manufacturer. Hyundai?
I thought of Blake, the supercilious sales manager in the movie version of David Mamet’s play Glengarry Glen Ross, with Alec Baldwin delivering the classic motivational sales rant.
In lording his status and skills over the “loser” salespeople he’s lecturing, Blake points out, “’Cause you drove a Hyundai to get here tonight, I drove a eighty thousand dollar BMW. That’s my name!!”
That’s who Hyundai was then. Now it’s a trusted value brand.
I love it.
Times change. The movie version of Glengarry Glen Ross came out in 1992. In 18 years, the Korean manufacturer is trusted, and the American auto manufacturers are, well. . . not exactly trusted brands.
Brands rise and fall—and not with the times, but through diligence and focus and the ability to change.
Koehn in her article writes that “the online medieval village has the power to revolutionize key aspects of getting and spending (and marketing!) in ways no one could have predicted even as recently as 18 months ago. So despite the immediacy of the internet, the ‘new normal’ actually means that consumers are abandoning the ‘next new thing’ mentality that powered so much spending for the past 20 years, in favor of more enduring priorities.”
What we’ve also seen over the last 18 months is that today’s enduring priorities are tomorrow’s failed companies. And yesterday’s chumps can become champions.
By the way, the “new normal” is also a phrase I saw a lot of in the last year. We wrote about the idea as “Normal Redefined” in our May 2009 newsletter. Just for the fun of it, here’s how the phrase grew in popularity over the last year, according to Google Trends:
Finally, Blake’s speech in Glengarry Glen Ross is totally classic, even though the language is offensive, and it isn’t exactly the way you’d want your salespeople to act in serving customers. Watch it anyway.