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Vail Valley: Recession has changed consumer behavior

Bob Berwyn
Vail, CO, Colorado

New consumer behavior emerging from the ashes of the worst recession in a century will require Vail and other mountain resorts to change the way they reach out to customers, said Dr. Lalia Rach, speaking during last week’s Mountain Travel Symposium.

Rach, an expert on future trends, branding and marketing strategies, said consumer behavior has changed fundamentally in the past few months and that businesses need to recognize the changes and learn how to respond.

Rach said Western Europe is going to experience a worse recession than the U.S.



“They loaned all the money to Eastern Europe and Eastern Europe is now in the bottom of the barrel,” she said, explaining that Europe matters to the United States now because of the new global economy.

“Let’s turn to the U.S. economy ” This is the broadest recession we have seen since before the ’70s. No states are continuing to grow. The only bright spot is D.C. because the only bright spot is government spending,” Rach said.



And things may get worse before they get better. Unemployment is forecast to climb above 10 percent next year, she said.

“Even if we have jobs we are worried. We know someone who is affected, our wages frozen and we’ve been asked to cut back and furlough. Collectively in the U.S. we lost $11 trillion in economic value. That exceeds the combined output of Germany, the U.K and Japan. It should tell you what a rich country we are, and we are still standing. That’s what I wish all consumers would recognize,” Rach said.

She said businesses that don’t lose money this year can be considered big winners. If you are 15 percent down from last year or less, you are ahead of the game, she said.



Rach pointed out that there are people with money and that they are spending. But the balance of the equation has shifted.

“People are demanding value and quality, and everything is negotiable,” she said. Consumers are lookingto find bargains on luxury items. More important for the mountain travel industry, they also want bargain prices on their vacations, she said.

“What happened in the ’80 and ’90s is, we changed our aspirations. Ninety-five percent of the people who bought a flat-screen TVs bought it because they wanted it, not because they needed it.

“We are now repairing, not replacing. We are, for the first time, telling our kids, ‘You don’t need 10 pairs of sneakers.’ We are cutting back,” Rach said.

Rach suggested a few ways that businesses can respond.

“Are you offering a coupon? Don’t make them clip it, send it to them. Don’t make them suffer, make it easy for them. Consumers are saying, ‘Show me your loyalty before I give you mine,'” Rach said.

Establishing intimate, direct communication with customers could be one key to success, Rach said. To do that, businesses must buy into the concept of tech-mobility, offering customers customized information in bite-size chunks.

Rach said the latest Internet technology ” commonly called Web 2.0 is all about mobility and blending social and professional communication with portable communications. She said consumers increasingly want their information delivered to handheld devices, and businesses need to be on-board with a portable Web site that’s “visually dynamic, uncluttered and useful, with prominently placed contact information.

“You have to have a mobile web site within 18 months, because of Web 2.0,” she said, referring to networking tools like Facebook and Twitter as electronic word-of-mouth.

To illustrate the importance of the new technology, she described the success of a Korean-Mexican taco van in Los Angeles that communicates with its customers solely via Twitter. The business is apparently growing rapidly and recently set up two new vans to meet demand.

Rach re-assured the audience about the prospects of the mountain resort industry.

“This will end. Not as fast as you want, and not with a bang,” she said. Rather than seeing an explosion of pent-up demand, the recovery will be a gradual, incremental return to confidence and some growing level of spending, and that will include travel.

“The obituary of the travel industry has been written too soon. When we realize how much we’ve lost by not traveling, we will find ways,” she concluded.


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