How Katrina changed the consumer marketplace

By David L. Rawle

Our new millennium is only five years old, and yet we have already seen 9/11, the tsunami and now Katrina.

While each has altered the consumer marketplace, Katrina is likely to have the greatest impact.

We’re seeing some of the same consequences of 9/11:

People are focusing on their families and their homes, cherishing each moment more than ever. They want to build strong memories together.

That means we will see an increased interest in anything that makes the home more comfortable and helps bring families closer together. After 9/11, pet sales went up. So did sales of flannel pajamas. We’ll probably see that again.

In the wake of a disaster, consumers turn to what matters most; what is real; what is authentic.

We will no doubt see a boom in tourism in Charleston. Not only is Charleston considered an attractive alternative to New Orleans, but it is also known as an environment that is authentic and genuinely rooted in our nation’s history.

I expect that we will also see more people traveling in groups and more family reunions, as people cling closely to what they value most.

As they were after 9/11, people are going to be more concerned about their security and safety. They are going to want better cell phones, expanded wi-fi access and better back-up systems for everything from the digital photos they take to the complex computer networks in their offices.

After 9/11, most people thought they could depend upon the government to help them through a disaster. With the Katrina foul-ups, this may no longer be the case. So consumers will be more inclined to take responsibility for their own security and safety.

Remember all those products that popped up as safeguards to the Y2K threat? Things like long-lasting foods that can be stockpiled for disasters. They may be back. Post Katrina, there is a lack of confidence in our government.

There are three post-Katrina consumer marketplace trends that I think go well beyond what happened after 9/11.

The first is our new awareness of the power of Mother Nature and, with it, recognition of the brutal reality that our environment is fragile and our natural resources limited.

We had an energy crisis before Katrina. Now we have a major energy crisis.

Some people will have trouble paying their utility bills this winter. Some may even quit their jobs because they cannot afford the gas they need to commute.

There will be a tremendous consumer marketing opportunity for products and services that are energy efficient and environmentally friendly.

Whether it is a hybrid automobile or home insulation packages, we are going to see a big change in what matters most to American consumers. Marketers need to think about how their product or service can be more environmentally friendly and how they can communicate those advantages.

The second consequence that sets Katrina apart is the extraordinary outpouring of generous support, the willingness to do more than write a check. People all over this country are hosting displaced families and getting directly involved in the needs and lives of the hundreds of thousands of people affected by Katrina. This sets up a sense of community throughout this country that has not existed for a long time…perhaps not since World War II.

That sense of community and caring for one another will no doubt be reflected in marketing and communications programs. And I think it will even result in a new breed of leaders throughout our country, both in corporate and governmental environments.

And the third consequence unique to Katrina is the colossal economic changes. It starts with gas prices, which affect almost everything. It continues with the prospect of the housing market bubble bursting, and the risk of having another disaster like Katrina, or 9/11, cripple our economy for good.

All of this may make consumers squeamish in the months, and maybe years, ahead. As consumers feel vulnerable, they will hold back on spending. And the spending they do will be focused on the areas previously discussed. Those are the areas of opportunity.

The post-Katrina consumer marketplace is dramatically different. We may think we understand it, but, like Katrina itself, it is likely to change course along the way.

David L. Rawle is chairman of Charleston-based Rawle Murdy Associates, Inc.

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