A global financial crisis, a history-making presidential election, spiking commodity prices, massive layoffs and fears of a protracted recession. Looks like just another day at the office.
It has been a chaotic year, one that we’ll likely read about in our golden years and tell our grandchildren, “Oh, that 2008, it was a doozie.” While my teenage kids don’t yet have the perspective to judge the wildness of 2008, they’ll surely tell their kids about it.
Major industries are being tested, and it looks like we’re at the beginning of an industrial paradigm shift that will affect and dictate future government policy on energy, trade, economic investment and globalization. That’s the story on a macro level.
On a micro level, CE companies have all been greatly tested. We have watched consumers stay away from stores in droves and we have watched retail chains shutter or contract. But as we prepare for another CES, we approach the New Year with hope, which we always seem to do at this time each year.
For many of us that hope stems from the fact that the products we provide are fun, engaging and thrilling. They make us more productive, more informed and connected more than ever before. Having just returned from a sales trip to Europe, I am reminded about how people in other countries view Americans. Despite the fact that our reputation as a nation has been tarnished of late, Europeans still tend to view the American entrepreneur as that “can-do” person who possesses a spirit of possibility and is always open to new challenges.
That spirit is needed now more than ever as we enter what could be a year of consolidation and retrenchment, one of accelerating deflation in product pricing on the sales side and rising prices from Asian sources on the supply side. The “big squeeze on profits” meets “retail consolidation and price deflation” …well, you know how that movie is supposed to end.
So where do we as an industry go from here? We have these great products that everyone loves using, loves upgrading and loves accessorizing, yet we are having a tougher and tougher time getting them into consumers’ hands while still leaving some coin in ours.
Now more than ever we are forced to be smarter in our business decisions, more efficient and more productive in our business processes, and more creative in marketing and product development to ride out the storm. We have often been told that CE products are recession proof as consumers tend to stay close to home in tough times and invest in cocooning. Our marketing will have to emphasize that trend.
We should also keep in mind that the upcoming analog shutoff is just around the corner, and the possibility for pent-up demand for digital televisions and the wonderful accessories needed for those televisions should spur some sales activity in January and February.
Innovation should also continue to fuel the industry. With each new and product or category usually includes a wave of accompanying accessories.
The next groundbreaking wireless device, portable media player or 3D television will surely draw consumers into stores to test drive these new products.
In a sense, the can-do spirit that Americans are known for is going to have to be replaced by a must-do spirit, a feeling that our economic survival as a nation is dependant on the aggregate economic survival of our companies, and as companies we Must-Do what is necessary to get leaner and meaner to get back in black.
While I have always tended to be more of a pragmatist than a cheerleader, there is some value to having a can-do spirit in these tough times. We must share and celebrate a firm belief in the American entrepreneur and the American consumer, and build upon the validity that a collective optimism will lead consumers back to the store.
So where does business invest these days? We invest in long hours, in attention to detail, in the notion that improving our hearing will allow us to listen to our customers better, in focusing our vision so that we can see the oncoming trends more clearly and quickly.
Opportunity is staring us in the face during times of chaos and uncertainty. I can’t wait to tell my grandkids about how we climbed out of this hole.
Paul Sabbah is president of Stamford International and the chair of CEA’s Accessories Division Board.