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3 Consumer Trends on the Rise in 2020

StrategyDrivenConsumers can be picky, but there are some trends from years past that are still on the rise in 2020. While there are plenty to choose from, the three on this list are seeing big profits that don’t look like they’ll be on the decline anytime soon. So check out these three products that are likely to be everywhere this year.

CBD Products

The cannabis market has become a big industry. Now that CBD has been reclassified as a Schedule 5 drug, it’s legal to sell it to consumers and can most commonly be found in a health food or e-cigarette store. This development came after CBD as revealed to have properties that stopped seizures associated with Epilepsy. Now, it’s used to treat many different things, from muscle aches to anxiety. Due to its versatility, CBD is estimated to bring in $20 billion in profits by 2024.

Plant-Based Meat Alternatives 

Meatless protein options are gaining in popularity, and not just with people who identify as vegetarian. In fact, only 7% of people who consume meat alternatives say they’re vegetarians. The biggest shift in the alternative protein market was the switch from a need-based market to a want-based market. More people want protein options so they can cut back on eating meat, even just a few days per week. This shift may have come as a result of a more eco-minded consumer trend that’s predicted to increase in the coming decade.

Wireless Speakers

Portable speakers have been popular since they came on the scene in the 1980s, so it’s no surprise that Bluetooth and other wireless speaker types are on the rise. This industry is estimated to generate close to $32 billion by 2023. The success of Bluetooth speakers can also be attributed to their affordability. These powerful little devices start around $10 each, making them a great purchase for holiday gift exchanges at the office or tokens of appreciation. On the other hand, audiophiles can purchase high-quality portable speakers, too, offering a broad market for the product.

Predicting Consumer Trends

There is no such thing as a sure thing, but if you watch the trends, you can try to foresee how consumers will behave in the coming year. Doing so helps companies and individuals decide where to place their investments. Of course, there are a lot of consumer trends out there, so do your research on a product before making a purchase.

How 25 Years of the Internet Has Changed the World of Business

StrategyDriven Editorial Perspective Article | How 25 Years of the Internet Has Changed the World of BusinessMany things have changed in the world of business over the past 25 years; in fact, some would say that almost everything to do with business and the associated transactions has changed or been altered in a significant way with the advent of the internet, online purchasing, smartphones, and Wi-Fi. While it may be true that how business is conducted has been altered significantly, it is also true that who consumers are doing business with is sometimes a complete mystery, even to the consumer. Yes, the world of business has changed a great deal in the past 25 years and here are just some of the many ways you may have noticed it altering the way you do business.

Online Information

It may be difficult to comprehend, but there are 55 to 60 billion pages of web information that has been created by people using the internet, and that figure grows exponentially each year. In addition to that number of web search engine indexed pages of data, there are an estimated hundreds of billions of pages of information that are not indexed – including almost 700 million tweet posts each day. Add to that all the emails, government records, and constantly changing pages of products for sale, and you can see how massive the world of online information has become. As little as 25 years ago, that much information available to anyone that wanted to spend time locating it was unthinkable.

Internet Searches

Once upon a time, it was thought the internet held databases, and everything was a product of those databases. While that may have been true during the early years of the internet, it is not true today. Everything is a result of a search task in the modern world. What clothes to buy, what books to read, what restaurant to visit are all the result of a search. Additionally, you no longer need to wonder about something for longer than a few seconds because you can initiate a search and the answer is instantly at your fingertips. The consumer is such a curious group that they ask the internet to answer over three trillion questions for them every year on the search engines. There is no estimation of how many additional queries are made on travel sites for where to go on vacation, shopping databases to compare different items or other areas such as the United CPA Association for information on help in a business matter, but it must be upward of six to nine trillion or more. That means the average person makes around 1,500 search queries a year, or an average of 42 a day.

Social Networks

Social media site owners report that one account alone has more than 25 percent of the world population (1.1 billion people) checking into that single site alone each day. That means that billions of people talk about different products, shops, books, and businesses every day on their favorite social media sites, and some spend hours pasting on walls, sending tweets, and posting stories about their lives. During all that interaction with their keyboards, those consumers also spend time sharing information and pictures about products they love and products that have failed them. For some businesses, the word of mouth meant instant success, but for others, it meant the death of a dream.

Product Placement

Twenty years ago, if you had a new product for sale, you could request a product placement on a shelf or endcap that would entice the consumer to purchase your items. It was the biggest and best way to get the consumer to purchase your product once they were in store. In the past five years, however, it is estimated that millions of consumers no longer step into stores to purchase products, rather they look online for goods, place an order, and have it delivered to their car outside the store or delivered right to their home. This type of consumer purchasing power has done away with product placement, and for many retailers, it has come as quite a quandary as to how to counter the power the consumer has taken away from the advertising agency and distributor.

Commercial Overload

Long ago, there was a time that four or five commercials played in certain time slots between sections of television shows. When consumers complained and used the four or five minutes as a time to get food or take the dog outside, the time slot became known as commercial overload. Today, the consumer is constantly being bombarded by advertisements to sell him or her something using the cookies his or her computer stores; and just like before, consumers are ignoring the ads in record numbers. Not only has it become more difficult to catch the consumer’s attention, but researchers have noticed that ignoring the ad placement begins at a very early age now as children begin using the internet and learn to focus on what they choose, rather than having their attention reverted away by something colorful and flashy. That means the world of advertising is going to have to learn to capture the consumer’s attention in new ways, and it will be interesting to see what advertisers come up with.

The world of business has been forever changed by the internet over the past 25 years. Some say it has been good for the business world, and others claim it has been massively destructive. Only time will tell what the real story is.

Want to Start Making an Attitude Change? Take Attitude Actions.

I define attitude as, “The way you dedicate yourself to the way you think.” Think negative or think positive is a choice and a process. Negative is (unfortunately) an instinctive process. Positive is a learned self-discipline that must be studied and practiced every day.

To achieve a POSITIVE attitude, or as I have named it, a “YES! Attitude,” you must take physical, verbal, and mental ACTIONS. Here are a few short chunks of attitude “awareness and actions” that will help put you (or keep you) on the positive path.

1. Admit that attitude is no one’s fault but yours. The more you blame others, the less chance you have to think positive thoughts, see a positive solution, or take positive action towards solution. The opposite of blame is responsibility. Your first responsibility is to control your inner thoughts and thought directions.

2. Understand you always have (had) a choice. Attitude is a choice, and most people select from the negative column. Reason? Negative is more pervasive in society and media. It’s more natural to blame and defend than it is to admit and take responsibility. Ask any politician.

3. If you think it’s ok, it is…if you think it’s not ok, it’s not. Your thoughts direct your attitude to a path. If you think “this is crappy, why does this always happen to me?” You have chosen a negative path. If you think “WOW, this may not be the greatest, but look what I’m learning. And learning what NOT to do again.” You have chosen a positive path.

4. Invest time, don’t spend it. Ignore the media you cannot control – find a project, or make a plan to sell something, or meet with someone who buys (or teaches) instead. You will become a world-class expert in five years – the only question is: at what? Spend (invest) an hour a day working at or studying anything, and in five years you will be a world-class expert. Most people will become world-class experts at some kind of local TV news program and some kind of TV rerun. Me? I read and write while you watch TV. Business news is IMPORTANT. Who got killed or what burned down, unimportant.

5. Study the thoughts and writings of positive people. Read Napoleon Hill classic Think and Grow Rich, TWICE. Read The Power of Positive Thinking. They are priceless, timeless gems of wisdom that you can convert to your own success thoughts. The secret is to read a little each morning.

6. Attend seminars and take courses. The hardest part of taking an attitude course is FINDING one. Look at any school or university in the world and try to find ONE course in ANY of them. I’ll save you the time. The answer is (and has always been) ZERO. Find a Gitomer Certified Advisor in your city (call my friendly office for recommendations – (704) 333-1112) and take YOUR attitude course TODAY.

7. Check your language. It’s just words, but they are a reflection of how your mind sees things, and an indication of how you process thoughts.

8. Avoid confrontational and negative words. The worst ones are ‘why,’ ‘can’t,’ and ‘won’t.’

9. Say why you LIKE things and people, not why you don’t. I like my job because… I love my family because… Say things from the positive side enough and it becomes a habit you will revel in for life.

10. Help others without expectation or measuring. If you think someone ‘owes you one,’ you are counting or measuring. If you give it away freely, you don’t ever have to worry about the measurement. The world will reward you ten times over.

11. Think about your winning and losing words. Be aware of ‘loser’ phrases and expressions. Lose with: “They don’t pay me enough to…” or “That’s not my job.” If you say, “I’m not ’cause he’s not,” who loses? If you say, “Why should I…” who loses? Think ‘learn,’ ‘lessons,’ ‘experience,’ ‘help,’ and ‘solutions’ before you make a statement.

12. Think about your mood, and your mood swings. How long do you stay in a bad mood? If it’s more than 5 minutes, something’s wrong. And your attitude (and your relationships, and your results, and your success) will suffer.

13. Are you the head of the complaint department, AND the chief complainer? Many people slip into cynicism day-by-day. They become bitter because of their jealousy or envy of other people or their own misfortune. BIG MISTAKE. List the lessons you can learn from those you have bitterness for and the results will turn your thinking towards your own success and away from theirs.

14. Celebrate victory AND defeat. In my early days of selling I would go to a department store and buy myself something every time I made a sale. It made me feel GREAT! When someone told me to celebrate victory AND defeat, I started to buy myself something after I lost a sale, too. It felt GREAT. After a while I was feeling GREAT all the time. Winning and losing are part of life and apart from attitude.

15. Visit a children’s hospital. Get comfortable with the plight of others, and feel good about the minuteness of your problems compared to theirs.

15.5 Count your blessings every day. Make the list as long as you can. Start with health if you are fortunate enough to have it. Add the love of children and family. From there it’s easy to build the list.

Oh, and then there are the ‘Attitude Aha’s.’ Many (many) years ago I was riding down the road listening to a tape by Earl Nightingale (one of the founding fathers of personal development). On tape four of his legendary, but unavailable, series “Direct Line,” the topic was enthusiasm. “Enthusiasm” Earl said, “Comes from the Greek “entheos” meaning the God within.” AHA! All of a sudden all the other quotes and advice made sense. The strength of self-belief is within your own spirit, if you hunger for the feeling.

And these words are food for yours. In the words of the Jefferson Airplane rock anthem White Rabbit, “Feed your head.”

Want an instant lesson? Go out and buy a copy of “The Little Engine That Could.” Or go to your kid’s room and get the copy full of crayon marks. Read it regularly. It’s not a book for kids, it’s a philosophy for a lifetime.

Positive attitude is a self-imposed blessing. And it is my greatest hope that you discover that truth and bless yourself forever.


About the Author

Jeffrey GitomerJeffrey Gitomer is the author of The Sales Bible, Customer Satisfaction is Worthless Customer Loyalty is Priceless, The Little Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting Your Way, The Little Platinum Book of Cha-Ching, The Little Teal Book of Trust, The Little Book of Leadership, and Social BOOM! His website, www.gitomer.com, will lead you to more information about training and seminars, or email him personally at [email protected].

StrategyDriven Editorial Perspective – Good Intentions, Bad Results: Learning from the Panic of 1826

Good Intentions, Bad Results: Learning from the Panic of 1826They say the road to hell is paved with good intentions. In 1825, to deal with the “Indian Problem,” the US Congress formed a region known as “Indian Country,” lands West of the Mississippi (today Oklahoma). Their intentions were good.

“The removal of the tribes from the territory which they now inhabit would not only shield them from impending ruin, but promote their welfare and happiness,” President James Monroe told Congress on January 27. He went so far as to say that without a defined Indian country “their degradation and extermination will be inevitable.”

It’s heartening to know that at least some of the President’s contemporaries could see through his good intentions. New York County District Attorney Hugh Maxwell and twelve other prominent New Yorkers wrote in a pamphlet published in1825 that “the American Indians, now living upon lands derived from their ancestors and never alienated or surrendered, have a perfect right to the continued and undisturbed possession of these lands,” and the “removal of any nation of Indians from their country by force would be an instance of gross and cruel oppression.”

History was not on Mr. Maxwell’s side, nor with his attempts to reform the financial industry a few years later. His prosecution of the Life & Fire Insurance Company, whose owners Jacob Barker, et al perpetuated a fraud that led to the Panic of 1826, resulted in a hung jury. (Eventually, Mr. Maxwell’s efforts did lead to comprehensive reform, including: financial reporting requirements, accounting standards, and defined roles & responsibilities for directors, according to Professor Eric Hilt in a paper about the Panic of 1826.)

Mr. Maxwell’s rationality was no match for his era’s good intentions. For what lead Life & Fire’s directors to commit fraud in the first place was in part driven by a desire (so they claimed) to extend credit to high-risk borrowers being ignored by traditional banks. When those borrowers started to default en masse, fraud appeared to be the only way to repay their investors, but unfortunately, even that didn’t work.

Why was an insurance company doing a bank’s work? In the 19th century, banking was the most profitably industry in America, and incumbent banks fought hard to protect their profits. To open a new one involved special-act charters and bitter legislative battles. Would-be owners required both political and financial capital, which few had in equal measure.

Enterprising merchants like Mr. Barker started circumventing these laws by forming insurance companies whose charter empowered them to lend their capital. In so doing, they created a new financial product called a post note. A typical post note transaction went as follows: a borrower approached an insurance company and requested a six-month IOU of $1000, minus a discount of say 3%. The borrower would then sell the discounted $970 post note on the money market, also paying a discount to the post note purchaser of say $30, receiving $940 in cash.

After six months, the borrower would repay the insurance company’s IOU of $1000. The insurance company would repay the money market investor’s post note of $970, yielding a $30 profit for both the insurance company and the investor.

While rates and terms varied, it was not unusual for post notes to trade at yields of 2 percent per month or more, compared to banks that were lending at yields of five percent per year, Professor Hilt’s research found. Needless to say, these products were very profitable as long as default rates were low.

But higher yield meant higher risk, since borrowers who sought out post notes did so because they did not qualify for the less expensive credit from traditional banks. Despite their dubious quality, the corporate guaranty by the insurance company created a sense that the investments were safe. This combination of high yield and seemingly low risk sparked a credit boom.

“The judge the lawyer the doctor the clergy the widow the trustee of orphans all fell into the common vortex of investing in these bonds,” Life and Fire Insurance Company director Jacob Barker wrote in a letter in 1827.

Like post notes, what made sub-prime mortgage-backed securities (MBS) so attractive to investors during the boom years was their high yield and perceived low risk. Unlike 1826, where the secondary market was created by the private sector, our government in many ways created the secondary market that gave sub-prime loans both the cash and perceived safety they needed to expand.

This was all done with good intentions. Looking to increase the homeownership rate and “foster affordable housing,” the Housing and Urban Development (HUD) department issued regulations that required 55% of all government sponsored entities (GSEs) to purchase “affordable” loans from banks, either directly or through packaged MBS.

Most of these “affordable” loans were in fact sub-prime, “for persons with blemished or limited credit histories,” and “carry a higher rate of interest than prime loans to compensate for increased credit risk,” according to HUD.gov. In 2009, forty percent of mortgages were sub-prime according to Forbes.com.

By 2007, Fannie Mae and Freddie Max held $227 billion (one in six loans) in nonprime (aka subprime) pools, and approximately $1.6 trillion in low-quality loans altogether, according to Forbes.com and the Congressional Budget Office (CBO).

“That was a huge, huge mistake,” said Patricia McCoy, who teaches securities law at the University of Connecticut. “That just pumped more capital into a very unregulated market that has turned out to be a disaster.”

Nonetheless, when the crisis hit in the Fall 2008, the financial world seemed to be blind-sided. “It’s a new financial world on the verge of a complete reorganization,” said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

But was it a new financial world? In many ways, looking back to the Panic of 1826, we see ourselves looking back at us. Both were defined by financial innovations that seemed to defy the natural law of risk and reward, by promising a high yield and low risk. Both crises fooled investors into believing that transferring risk is the same thing as removing it. Both crises were made worse by the good intention that lending money to people who can’t pay it back is good for society. Both crises proved it’s not.

In our time, the implosion of the subprime lending market “has left a scar on the finances of black Americans,” the Washington Post reported in 2012, “that not only wiped out a generation of economic progress but could leave them at a financial disadvantage for decades.” (HUD.gov studies reveal that African-Americans are one-and-a-half times more likely to have a subprime loan than persons in white neighborhoods.)

Like the comprehensive financial reforms made after the 1826 panic, we can be reasonably sure that the numerous reforms issued after our own will fail to avert another crisis. This is because financial regulation cannot address the cause of financial crises that lives in our mirror. As long as there are borrowers who can’t see through good intentions, and take on more debt then they can repay, there will be financial crises.

Real financial reform means living within our means, and abiding by the natural law of risk and reward. With the rising default rate on student loans, the increasing popularity of sub-prime auto loans, I fear that we have not yet learned our lesson. I’m confident we will eventually, but like our predecessors, it may have to be the hard way.


About the Author

Cara WickCara Wick writes about American financial and political history at www.bankersnotes.com. She holds a BA from Williams College and an MBA from the University of Iowa. Cara can be reached at [email protected].

StrategyDriven Editorial Perspective – Panic of 1907 vs Great Recession of 2008

Panic of 1907 vs Great Recession of 2008This year, 2013, marks the 100th anniversary of the Federal Reserve System, and central bankers are taking a historical perspective. That is “good advice in general,” Fed Chairman Ben Bernanke told attendees at the Fourteenth Jacques Polak Annual Research Conference, in Washington, D.C earlier this month.

“An appreciation of the parallels between recent and historical events greatly influenced how I and many of my colleagues around the world responded to the crisis,” Mr. Bernanke said.

He went on to describe the similarities between the banking crisis of 1907 – the one that inspired the formation of the Federal Reserve – and the more recent 2008 financial crisis.

Both fit the archetype of a classic financial panic, Bernanke said. Both crises started in an economy in recession and both suffered from a sudden lack of liquidity.

In 1907, money was tight in part due to the rebuilding of San Francisco. After the Bank of England raised its discount rate, causing more gold to flow out of the US, New York was left with unusually low monetary reserves just as it entered the cash-intensive harvest season, explained Ellis Tallman and Jon Moen in a 1990 article about the Panic in the Atlanta Fed’s Economic Review.

In the more recent crises, Bernanke explained, liquidity started to dry up when housing prices declined, and subprime mortgage defaults rose in 2007. As the underwriting weaknesses of subprime portfolios became known, banks stopped lending to each other, paralyzing credit markets. By 2008, losses from these portfolios were causing banks to fail.

In both crises, a tinder-dry credit environment made them vulnerable to sparks. In 1907, the fire started when F. Augustus Heinze and C.F. Morse tried and failed to corner the stock of the United Copper Company. The investigation into the scam revealed an intricate web of corrupt bankers and brokers. (Heinze was president of Mercantile National Bank, and Morse served on seven New York City bank boards.) When the president of the second largest trust in the country was implicated in the copper cornering con, depositors started a run on Knickerbocker Trust.

Without a central bank, the availability of liquidity depended on the discretion of firms and private individuals, Bernanke explained. The Lehman Brothers moment of 1907 came when New York’s financiers, led by J.P. Morgan, were unable to value the trusts, and refused to ‘bail out’ Knickerbocker. (Unregulated and a relatively new innovation, trusts were the ‘toxic assets‘ of the 1907 crises. Trusts, however, were financed by consumer deposits, while the toxic asset of 2008 were securities contracts held by investment banks.)

Their refusal prevented other institutions from offering aid, and depositors started a massive run on banks and trusts, exacerbating the liquidity crises. (In 2008 a loss of confidence in the banking system did not turn into a consumer run on banks primarily because of FDIC deposit insurance.)

Morgan et al realized that a failure of the trusts could spread to the entire financial system, and they ultimately convinced John D. Rockefeller and others to pony up enough cash to stabilize the markets.

Similarly, American lawmakers eventually agreed that failure of the nation’s largest financial institutions was not an option, and passed the $700 billion Trouble Asset Relief Program in October 2008 (reduced to $475 billion by the Dodd-Frank Act). This program was designed “to strengthen market stability, improve the strength of financial institutions, and enhance market liquidity,” according to the Federal Reserve.

A major difference between the two crises, that I can see, is the popular perception of these liquidity liberators. In 1907, Senator Nelson Aldrich called the actions of JP Morgan and crew heroic. In his arguments for centralized banking reprinted in the New York Tribune, he warned that without it “men may not be found in another emergency with the patriotism, courage and capacity of those who in this crisis rendered such inconspicuous and invaluable service to the financial interests of this country.”

But in the 2008 crisis, when taxpayers rendered this very same “invaluable service,” people stormed the streets in protest. From the tea party conservative to the Wall Street occupier, hatred of the bailouts was met with bipartisan vehemence.

So why is it that when a handful of wealthy individuals restore liquidity to a broken system they are courageous patriots, but when it’s taxpayer’s, lawmakers are voted out of office? Perhaps the vehemence comes from how the money was used. In 1907, it was to save consumer’s retail deposits, in 2008 corporate wholesale funds.

As Bernanke explains in his speech, seeking to stem the panic in wholesale funding markets, in 2008 the Fed “extended its lender-of-last-resort facilities to support nonbank institutions such as investment banks.” This had little direct impact on consumers. As Fed governor Daniel Tarullo recently said “the savings of most U.S. households are generally not directly at risk in short-term wholesale funding arrangements.”

In 1907, on the other hand, ending bank runs meant “widows on the corner” could cash their checks, shop-owners could feed their families.

Another problem with the 2008 solution, from the popular perspective, was the moral hazard it created.

Senator Aldrich worried that courageous individuals might be hard to find in a financial emergency, and it appears he was right to worry. Senior executives in 2008 were not interested in rendering an inconspicuous service to the financial interests of the country. They didn’t even want to forego their bonuses. But in trying to account for the rarity of courage, lawmakers in 1913 may have created a system that prevents it from emerging.

A July 2013 Congressional research report articulates a challenge for today’s central bankers. “Although ‘too big to fail’ (TBTF) has been a perennial policy issue, it was highlighted by the near-collapse of several large financial firms in 2008… If a TBTF firm believes that the government will protect them from losses, they have less incentive to monitor the firm’s riskiness because they are shielded from the negative consequences of those risks.”

In 1907, the wealthy elite pooled their resources to prevent the failure of banks and trusts, saving millions in consumer deposits. In so doing they bore the brunt of the consequences of their risks, and Americans considered them heroes for it.


About the Author

Cara WickCara Wick writes about American financial and political history at www.bankersnotes.com. She holds a BA from Williams College and an MBA from the University of Iowa. Cara can be reached at [email protected].