The Global Market

Is it a truism that the value of any product or service has a shorter shelf life in today’s economy as consumers become more sophisticated?

For many years reports have been published indicating that customers are now more ‘market and product savvy’ than at any time over the last fifty years.   Today the consumer intuitively knows what is a good deal and when an interesting proposition has limited value.  As a consequence product life cycles  is becoming shorter  with the buyers experience moving from ‘Must have’ through ‘Got that’ to ‘What’s new’ much faster. This in turn pts increasing demand on time and response.

Consumer Behaviour

As consumers we now take new technology for granted, as the gadget generation becomes more adept at intuitive value selection.  Companies are adopting more sophisticated tools and resources to attract the right type of customer into their retail space.  With more and more companies experiencing increased revenues from the web, the financial reasoning for retail outlets is becoming ever more marginalised, as we the consumer visit the shops less frequently.

Bricks and Mortar

To increase footfall retailers are investing in brand promotion, product innovation and speed of service to capture the ‘shopper dollars’.

e-Tailing

On-line retailing has made a significant contribution to how we all shop, with the trip to the shops now becoming a pleasure activity. More significantly is that on-line shopping after many years of hype is starting to deliver the type of numbers to the bottom line that makes the high street take notice.  The emergence of the on-line grocery shop is evidence of the change in fortune as we become less fearful of fraud helped by the credit card companies underwriting on-line credit transactions. Increased consumer spending has been made available by the cheap credit rates available from banks , which in turn has been fuelled by competitive global money supply.

 Credit and confidence

In such markets banks growth is centred on market expansion, new product development and entry into new territories.  In the mid 90’s, banks took advantage of cheap money supply with a raft of consolidations and mergers, enabling them to influence a larger global client base, across wholesale retail and business banking sectors.  Financial vehicles have been developed stimulates the growth in global property markets, which were in turned fuelled by the expansion of industrial China and India.  The release of cash from these emerging industrial nations to western companies released large cash deposits which were channelled into bonus, tax and profits.  Western industrial expansion in turn put pressure, and therefore increased value, on global raw materials, such as steel, lead and gold.  This is exemplified by the ten year high prices experienced in the global gold index.

Excess profits have subsequently been channelled into the mergers and acquisitions market which in turn fuelled the growth of hedge funds and private equity operations.

Over the last 10 years many domestic markets have expanded quickly with individual gross domestic product (GDP) increasing by 3 – 5 % as a minimum in the case of western economies, with the emerging markets of eastern Europe,  growing at faster rates in the case of Russia, Hungary and Poland.