Even Google can't escape economic crisis

Who would have thought that today's economy crisis would get its hooks into an internet search engine - but it's true, Google has been suffering as a result of our economic slump. With consumers having less discretionary income than ever before, it follows that as consumer purchases decline, so does the act of searching for information about products available. And as with all internet marketing, a host can only charge money for a company to advertise through it as long as people are clicking on the advertisements - something consumers are doing less of. As a result, Google's projected growth rate for 2009 fell in the past month from 19.7% to only 11%, a significant difference (although, nothing to turn your nose to).

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Google Encounters Frugal Customers

Breaking News: The US Consumer can actually do without Starbucks!

Coffee- and espresso-machine manufactuers have seen an big marketing opportunity in the wake of today's economy, marketing their products as a way for consumers to save money as opposed to spending money every day at Starbucks and its other coffee shop competitors. How big an opportunity is this? Well, according to recent research, 43% of current Starbucks customers report they plan to brew coffee at home more often - this can only be trouble for the coffee chain. Even if some of these home machines retail in excess of $1,000, consumers have begun purchasing these machines at a much higher rate than in years past, and with good reason - instead of paying between $3 and $5 per coffee drink, each homemade coffee drink can cost as little as 40 cents.

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Coffee Steeps in Value Marketing

Insurance Companies Hit Hard By Economic Crisis

The sub-prime mortgage crisis and rising unemployment have forced consumers to cut back on their expenses across the board, and that includes insurance coverage for homes and automobiles. Consumers are either dropping coverage or raising their deductibles in an effort to lower their premiums. Consider this: the number of uninsured motorists is expected to rise by nearly 3% from 2007 to 2010 The insurer Allstate saw a 4% drop in property liability insurance for fourth quarter 2008, and have experienced a 55% drop in their financial performance index (as seen from the graph). Market analysts can only further explain this turn of events with the idea that as a result of our current economic crisis, people are redefining what their discretionary income is.

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Consumer Woes Wallop Insurers

The Digital Coupon Revolution

I doubt it would surprise anyone to know that traditional newspaper coupons have a redemption rate of about 1% - however, I was surprised to known that the redemption rate of digital coupons is around 13%, a significant difference. If you've got 10 or 15 minutes to spare, you can either print out exactly what coupons you will use (no sorting or clipping needed), or better yet upload them onto a shoppers card to be redeemed when scanning the card at the register. Not only does this create goodwill on behalf of retailers who offer the service, it helps the customers who use digital coupons save as much as $50 per shopping trip, a real plus in these hard economic times.

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Coupons Are Hot; Clipping Is Not

Only in (Southern) California...

Only in southern California, whose market is so decidedly tilted away from that of the country as a whole, would real estate sales be up. Despite the high level of mortgage forclosure across the country, the sale of homes rose 41.3% in Feburary 2008, perhaps in response to a 38.7% decline in prices. Despite the region being ground zero of the sub-prime mortgage crisis, it seems to have bounced right back, perhaps an encouraging sign for the housing market nationwide.

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Southern California Home Sales Up Again

Paying Attention to the Paycheck Cycle

PepsiCo Inc. has found that paying attention to the paycheck cycle (the cycle revolving around receiving a paycheck), especially in today's economy, really pays off. Consumers buy more at the begining of the month when they first recieve their paychecks, and less at the end of the month when money is running low, and planning marketing strategies around this cycle has increased PepsiCo's profits. John Compton, CEO of PepsiCo America Foods, said "The first of the month we might promote bigger sizes and at the end of the month we might shift down to smaller sizes...it's worked well."

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Consumer-Goods Makers Heed 'Paycheck Cycle'

Cali Cracks Down on Internet Scams

We all know the routine of the get rich quick scheme, and it starts with something like this:

"Are you ready to claim YOUR share of eBay's annual $3.2 Billion in revenue? By attending our FREE 90-minute ‘eBay Entrepreneur Training' Conference

you will learn how eBay PowerSellers run successful Internet businesses and how an elite few use additional strategies to boost revenues way beyond the average seller. Learn how nearly half-a-million people create full-time incomes using eBay!"

For only a 'small' initial investment (in this case, between $2700 and $6,000), a company will claim that a investor can earn a full time income, all from the comfort of their own home. Obviously, claims like these are completely false, and investors always end up loosing far more on their 'business' than it generates. Do people really still far for this sort of thing?

Unfortunately, the answer is a resounding yes. In response to a recent scam (the example used above), the Califonia Attorney general is seeking restitiution on behalf of dozens of California residents duped by it. It's really shocking in today's age of information technology that ignorant, gullible consumers still remain an undying breed, but unfortuately, today's consumer seems just as uninformed as ever.

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California Cracks Down on Internet Get-Rich-Quick Scams

Creditworthiness: Appearance Really Does Matter (.....wait, what?)

A lot of consumers might be upset to know that a recent study revealed that consumers who are perceived as being physically attractive are more likely to be given a loan by a bank. Now, this can't really come as a surprise, we've always known that people are often judged (usually unfairly) based largely on their physical appearance.

However, consider another recent study that sought to empirically prove whether or not people could accurately judge people's creditworthiness based on physical appearance. 25 subjects were given only the photographs of a group of loan applicants, and were asked to judge each applicant's ability to repay a $100 loan on a scale of 1 to 5. Researchers were shocked at the correlation between the perceived trustworthiness of each applicant and the ratings on their credit score. So, as far as this study goes, it turns out that a person's perceived trustworthiness really is predictive of creditworthiness.....who would have ever guessed?

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Is Creditworthiness More Than Skin Deep?

Consumers struggeling to make payments, according to TransUnion

According to TransUnion, consumers aren't just falling behind on their mortgage payments, but their auto loan and credit card payments as well. The credit agency reports that in the fourth quarter of 2008, the number of auto payments more than 60 days past due rose by 8.9%, and the number of auto payments more than 90 days past due rose by 11%. At the same time, the average amount of credit card debt rose by .33% in the past year. However, TransUnion did state that these numbers are not as alarming as they sound, as auto loan delinquency actually decreased by about 11% in the past year, and the difference in the amount of credit card debt amounts to around $19 on average.

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Consumers Falling Farther Behind on Payments

Second Homes: A Buyer's Market

Anytime someone says "It's a buyer's market," I'm immediately skeptical. However, in the case of second or vacation homes, it couldn't be truer. Considering the mean price for vacation homes in Florida fell a jaw dropping 33% from last year, any consumer interested in purchasing a vacation home (plus the necessary financial backing) would be wise to consider jumping on this. Think about it: in five years, you'll could very well be able to tell your friend who tells you how much he just bought the vacation home next to yours for, "I paid half that" (and that's something just about any consumer likes doing).

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2nd-Home Market Offers Bargains

When it comes to your credit, if it sounds too good to be true, it is

These days, consumers are more concerned than ever about their credit score and credit history. As such, it's not surprising that any consumer with a less-than-perfect credit history would jump at the opportunity to have negative information on their credit history removed - an that's just what a few companies advertised that they could do (for only a small fee of up to $2,000).

Unfortunately, it was too good to be true - not only is removing any information from a credit history not possible, it is also seriously illegal for a company to advertise that they could provide such a service. Seven companies who have advertised such a service have been charged by the FTC of violating federal law, and will seek restitution for the unlucky consumers swindled by this scam.

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Feds Charge Seven Credit Repair Companies With Deceiving Customers

This is what happens when you don't read the fine print.....

A consumer in Oklahoma is suing AT&T Wireless over a bill in excess of $5,000, claiming that she was intentionally misled concerning the terms and conditions of the contract for her wireless internet card. Namely, the contract specified (yes, in the fine print) that AT&T reserves the right to impose additional charges if a customer's monthly usage exceeds 5 GB of data - a condition listed in the fine print that the women claims she was never informed of. (To put this in to context, that amount of usage is the equivalent of downloading between 5 to 7 full length movies, which seems a little excessive for any consumer.)

Should this unfortunate women be punished for failing to read the fine print? Speaking as a former AT&T Wireless employee, I know that sales reps are obligated to inform customers about this stipulation, and failure to do so could be construed as intentional deception. On the other hand, it is my belief that it is ultimately the responsibility of the customer to read any legal contract of this nature from beginning to end, and I know for a fact that this condition is stated on that contract. This issue could certainly be debated from either side, and I'm genuinely curious to see what the ruling will be.

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Radio Shack, AT&T Face Class Action Suit

Capital One hikes customers' interest rates across the board

Capital One recently made a "business decision due to the current economy," raising their interest rates for each and every one of their customers. Put yourself in the shoes of a consumer with a high FICO score (say for example, 790) who has never missed a payment on their account, or any account with a creditor. If you were this customer, how would you react to a notice in the mail that your interest rate would be increasing from 8.9% APR to 17.9 APR (nearly double) - to say that you wouldn't be all that happy would be an understatement. From the view of any consumer, I can't see how Capital One thinks that this won't lead to a serious backlash, not only during the current recession, but down the road when the economy has regained its former health - it certainly doesn't create good will.

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Capital One Interest Rate Hikes Anger Customers

"I might be broke, but at least I look good"

Despite the dreary condition of today's economy, some consumers seem to want to still look good, as evidenced by the $1.6 billion rise in sales during 2008 of anti-aging skincare products. In a way, this makes sense - people often feel better when they look better, and there are plenty of reason's for consumers in today's economy not to feel to great. The article cited below states that for women (obviously) and baby boomers in general, looking good isn't something these consumers are willing to sacrifice, no matter how tight their budgets may be.

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Anti-Aging Become Top Facial Skincare Seller in 2008

"Mr. Stevens, I can't come to work today....my fridge is on fire"

Can you actually see your boss believing this one? Well, as big of a whopper as this may sound like, Maytag recently issued a recall of 1.6 million refrigerators due to fire hazard concerns. According to the article cited below, this has actually been a problem with many different brands of refrigerators for years, yet as a consumer myself, I was not aware of this whatsoever. Again, as a consumer myself, I might think twice about buying a Maytag brand fridge now that I know that over a million and a half of these fridges have been recalled for this reason.

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Maytag Recalls 1.6 Million Fire-Prone Refrigerators

Honda's Hybrid now less than $20,000

As gas efficient and environmentally friendly as hybrids are, the one knock on them has always been the relatively high price - until now. Honda has just announced that its Insight hybrid will now retail for $19,800 - not a bad price for a car that gets 40 miles per gallon and has a cruising range of up to 400 miles.

Furthermore, this turn of events can only mean that other car makers will soon be pressured into featuring their own comparably priced hybrids. As more and more consumers are becoming environmentally conscious, a hybrid selling for under $20,000 can only mean good things for the future of the hybrid vehicle market.

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Honda To Sell Hybrid For Under $20,000

FTC Cracking Down on Rebate Fraud

Recently, the Federal Trade Commission (FTC) charged an Atlanta-based telecommunications company with 'deceptive marketing', alleging that the company knowingly misled its customers with the promise of receiving mail-in rebates within eight weeks of submitting the forms. In reality, some customers had to wait a year or more to receive their rebates - pretty ridiculous, right?

Well, it's definitely good to know that the FTC is cracking down on this type of thing. Personally, I have worked for AT&T Wireless on and off for the past three years, and have had plenty a customer come to me to complain about the long wait time to receive their rebate. I can only hope that companies like AT&T will take notice of the FTC's actions in this regard, and make a better effort to ensure that their customers receive their rebates in a timely manner.


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FTC Settles With Atlanta Company Over Untimely Rebates

Nokia In Trouble

We all knew that consumer spending today is bleak, but the credit crisis has limited Nokia's ability to maintain handset inventories. Although a foreign company, Nokia is still effected by the US econcomic crisis, and even the foreign suppliers of parts for its handset devices will experience trickle-down effects as a result. This would also appear to be a big sign of caution toward any investors in the telecommunications industry.

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Nokia Paints Bleak Picture

Last Sunday, the American people saw the coming and going of what turned out to be a spectacularly thrilling Super Bowl. While I utterly loathe the Pittsburgh Steelers with every fiber of my being, I can still appreciate that seemingly impossible touchdown reception by Santonio Holmes inside the last two minutes to decide the game.

But I digress. By definition, the Super Bowl isn't quite like any other football game of the year - it's the culmination of an entire season in one final championship game. But that's not the only reason that millions of viewers tune in each year, not by far. For many people, Super Bowl commercials are a major part of the attraction to watch the game. Especially popular are the many new beer commercials shown, and just about anyone would agree that it wouldn't quite be the same without them.

During these trying economic times, a beer company like Anheuser-Bush may have had every fiscal reason to scale back its ads during the Super Bowl - however, fortunately for viewers, this year was as cram packed with Budweiser ads as ever.

The logic behind going as all out as ever was two fold. First, marketers knew that associating Anheuser-Bush products with enjoyment and fun times with family and friends was especially important during these gloomy economic times. Second, as I alluded to before, marketers felt the need to remind people that despite our country's economic trouble, the things people love and have grown accustomed to (in this case beer commercials during the Super Bowl) still remain as much a part of our lives as ever.


The New York Times, "Is Star Power Enough to Sell Beer in Hard Times? Two Brewers Hope So."

Less mall traffic means less mall food

Cheesecake Factory. Red Robin. P.F. Chang's. Ruby Tuesday. Can you guess what these dine-in style restaurants have in common? Well, if you said they're all overpriced, you're not wrong (in my opinion), but that's not the answer I was looking for. These four eateries have one big thing in common, namely a seemingly ubiquitous presence in our country's malls and shopping centers. While those are not the only places you'll find them, the majority of these restaurants' locations exist in these consumer meccas.

And why is this important?

Well, the answer is simple - these restaurants are highly dependent on the traffic brought by the nearby or adjourning retail shopping centers. Given that, it's reasonable to assume that if there is a decline in traffic or spending at a given shopping location, traffic at the neighboring Ruby Tuesday (or whatever) would suffer as well.

According to an article in The Wall Street Journal, this is exactly what is happening now. What was once a symbiotic relationship between your nearby mall and the adjoining Cheesecake Factory has definitely gone sour in the ladder's mouth during the past few months. In October alone, Red Robin's sales declined by eight percent.

And just like the state of our economy in general, this situation is likely to get worse before it gets better. Well, the night is always darkest before dawn. Insert similar cliche catchphrase.