The Need For A 12-Step Program

Its up.  Is down.  Up. Down.  Up… yes, up… oh wait…it’s tumbling back down.

The news media has a passion to be forecasters of the future… not simple reporters of the news, but instead, the source that can see into the future. 

In the last decade, I have spent a lot of time, energy and talent working with clients in the house and home market.  From mortgages to plumbing to flooring to paint to appliances to homebuilders to television networks.

Leading into the 2009 Great Recession, everyone from the media to house and home manufactures believed that unlimited potential was evolving.  All facets of house and home were “low hanging fruit.”

And then… BAM. 

The market collapsed.

Mortgage money became hard to get. Negative home value and bank-owned real estate became the norm.

There’s still remains a belief among many that the market will revive and turn-around.  That the days of the real estate past becoming reality again are just right around the corner.

This morning, there’s an article in the Wall Street Journal about a “Housing Rebound.”  They even go so far as to observe… “Healthy spending in an improving market… especially among high-end homeowners.”

It is said that a picture communicates a thousand words. 

A picture can go even further and play the role of Paul Harvey… and tell the rest of the story.

The picture featured in the WSJ article is of a late-40s woman shopping at a Home Depot.  She’s wearing a leather jacket and high-heel boots.  There’s a guy standing next to her talking on a mobile phone.  He’s wearing a heavy jacket and blue jeans. 

She’s got a shopping cart and is loading a set of 1 x 4 boards onto the top of the cart.  Note… she’s not having the guy do it, nor is she using one of the larger carrier carts that the builder’s use. 

She’s probably shopping at a nice Home Depot located on Long Island. Maybe over in Arlington outside of DC.

She’s the “Blue-Blood-Turned-DIY-To-Keep-The-Wine-Bar-Stocked” high-end homeowner.

That housing market re-birth is not. 

Folks having to make Do-It-Yourself improvements to stop water running, heat escaping, outlets operating and flooring functional that's become worn out… that’s taking place and perhaps even seasonally now that folks finally have dug out of some heavy snow falls this year.

Another article in yesterday’s Wall Street Journal reports that more new housing is being built. 

But when you read the article, you quickly learn that the vast majority – more than 70% of what is being tracked as “new housing” is actually apartment developments.

With the surge of Millennials being kicked out of the home complete with little-to-no savings and negative credit ratings to match, apartment housing right now is the only option to keep the head dry when it rains.  

And thanks to the Millennials use of social media, its not too difficult to find “friends” to be roommates to help disperse the high rental rates.

On the inside front page of today’s Wall Street Journal is an article titled, “Cash Crunch Is, For Many, A Monthly Problem.”

This article gets down into the heart of what’s really happened to the marketplace. 

It talks about how households making $100K-$175K are experiencing more financial volatility than many might think. 

The article cites… “Insecurity isn’t driven by unexpected events, but instead by volatility that has become a normal part of life.” 

The article goes on to describe how many individuals that report on paper higher household incomes, go through some good times when there’s income coming in, but also many times where jobs are cut, financial costs come in – healthcare being one of them – and budgets become very tight.

The marketplace right now is volatile. It’s not stabilizing. There’s a lot more uncertainty than certainty. 

Boomers are struck with the reality that “peace, love, harmony” is more of a nice song than reality.

GenXers are struck with the reality that the kids soon leaving the home and heading off to college is not leading into a revival of romance… but further pressure on the checkbooks.

Many Millennials are finding that replacements of the helicopter parents of the past are not easy to find.

And ZOOMERS now entering their teens are perhaps the most realistic of all.  They never interacted much with the fantasy world leading into the Great Recession. They walk out of places like Abercrombie & Fitch because they find it way too much of a fantasyland.

I write this Bloglogue simply to put context around the marketplace. 

In terms of the house and home market, I applaud publications like HGTV and Better Homes & Gardens.  I sit amazed that publications like Architectural Digest and Veranda can still survive.  I am distraught when I see a publication like Dwell decide to feature eco-responsible furnishings like side tables that bear price-points of $3,000+. 

Its not just house and home brands that are being challenged.  Organic food brands and HBA brands have to become much more mainstream.  Automotive brands shouldn’t dismiss Ford, Fiat nor MINIs.

Macy’s announced its going to swing more upscale. 

My bet is that if we went into the private bathrooms attached to the Macy’s management team offices; we would find Architectural Digest, Cosmopolitan, the NY Times and Town & Country magazines.

Maybe we should create a 12-step program for journalists and marketers alike that still believe a booming economy is just around the corner in which the first step requires admitting that market of the past is past and that the market of today is a different stage set for brand development and success.

When we face reality… creativity and innovation ignites!