Retailers bemoan recent trends where people are buying less than they did before. Given the recession and its consequences, economists point to issues of confidence as the reason for this. But what might be the root cause of the problem?
Information from a poll conducted in New Jersey about the lack of consumer confidence gives some recent figures about business worries. Employers were asked their opinions on the future of business for the next 12 months. Most respondents said they wouldn't be hiring during the next year and that their expectations for the economy bouncing back soon was low. The following are the numbers as reported on the blog by Bob Ingle called the
Politics Patrol today.
By the numbers:
– 7 in 10 companies said their sales revenue shrank in 2009
– 7 in 10 said their profits fell in 2009
– 7 in 10 spent less on purchases in 2009 with 2/3 of the group reporting double-digit declines
This follows a number of news stories about the lack of consumer confidence.
The Dallas Morning News reported in October how this has kept a lot of investors on the sidelines. The problem, according to this report and others, is that people worry about the future and whether the economy will change for the better anytime soon.
But that lack of confidence comes from somewhere and pointing to the economic numbers might not tell the whole story. For at the root of all this appears to be a lack of trust. The lack of trust pervades the culture. These days people question their government leaders, their doctors, policemen, lawyers, the media and other aspects of the culture. The lack of trust may be the reason why voting percentages have been relatively low for government elections for many years. When asked "who do you trust?" most people find it difficult to answer the question, unless they point to a given individual, often a member of the family.
Part of this lack of trust, I believe, comes from the number of errors made in business, government and social service organizations that rather than being addressed instead are swept aside or ignored. In many ways there appears to be an effort to cover up one's mistakes rather than admit them and go on. But what creates that behavior might also give insight into the lack of confidence people have in so many ways.
Certain leaders in the culture set standards of behavior for the rest of us. We are raised to respect our parents, our elders when we are young, our government, our church leaders and those people responsible for the most important facets of our world. When a President, however, declares, as Bill Clinton did, "I didn't have sex with that woman" and denied any aberrant behavior with respect to his personal life, he left a message for the rest of us. That message was that it was better to deny a wrong then admit it and go on. And further a strong response could have been not only the admission but an acknowledgment that it might be possible to make human mistakes and still be competent in most aspects of a job, including the Presidency.
Another message, loud and clear and hurting as well, came from the statement there were weapons of mass destruction from President George W. Bush who also maintained he didn't make mistakes and listened only to his Father in heaven when it came to the major decisions of the day. When it was discovered there were no weapons of mass destruction in Iraq at the time of the US invasion, the President continued to hold fast to his first declarations. It took many months and much persuasion for this to change, but in the meantime Bush continued to explain the Iraq War as related to the 9/11 bombing of the World Trade Towers and the weapons of mass destruction as the impetus for the war. Again there was virtually no admission of error and an effort instead to cover up rather than admit mistakes. This behavior, from the top leaders in government, especially when repeated and reported provokes a lack of confidence or trust in voters. It also sets the pattern for behavior for many others when they see it is possible to make big mistakes and continue on powerfully in spite of a lack of admission or taking responsibility for error.
The Ripoff Report examines and reports on poor products and service. Recently it had an article about Haier America claiming it had poor products, poor service and poor response time.
The report reviewed issues about a new but broken refrigerator and the delays and problems in getting it serviced. It is a story I could identify with when researching issues of consumer confidence recently.
After moving into a newly-purchased condo in Portland, Oregon, my husband and I decided to update some of the appliances. We also had limited our movement of goods from Louisiana to a minimum in order to save on the costs so we proceeded to look carefully at price, product and service. Our decision was to buy most of the items we needed from Best Buy in the Tanasbourne shopping center in Hillsboro, Oregon. What happened after that showed once again how poor product and service response can create a lack of confidence in consumers and an unwillingness to continue purchasing following a number of errors.
We first bought a refrigerator. It was delivered with a broken fan belt, the back corner chipped off and a dent in the back. The delivery personnel also dmaged our kitchen floor when they moved the refrigerator toward the wall. The following day, a handyman whom we had hired to install the ice-maker noticed the damage when he pulled out the refrigerator to do his work. We all could see the damage was apparent. It took days of delays, problems with service personnel and trips to the store to finally have a working refrigerator. A stove delivered one week later also came damaged, rusted in places, dented and with a gaping hole in the front. This was on top of other small purchases, such as a camera bag, with the strap missing from the inside. The manager told us these things seldom happen. Another visit to the store brought the manager himself with an assistant, delivering the merchandise. Despite that we aren't sure mistakes are not a pattern in certain places. Our trust has been affected because my husband and I now find it difficult to buy anything anywhere without worrying about whether or not it will work.
To explore the issue of consumer confidence and lack of trust as a reason for it, I interviewed Myrna Allen, a woman of a certain age and long-time resident of Portland to get her take on why consumers lack confidence and whether or not she considers trust to be an issue.
Allen represents that average consumer in the Portland area who needs to maintain a home, get proper medical care and have services and products that can be trusted since she is a widow and doesn't have the resources to rectify continuous mistakes.
Allen said, "I think there is a lack of trust. I don't trust everyone easily these days. I think that's because people have had bad experiences. What I do is to be cautious, take my time and get to know the people I am dealing with. I think trust is important, but these days you have to be careful."
How can trust be reestablished, I asked Allen. She thought for a moment then said, "I think how to do it is to follow that old saying, do unto others as you would have them do unto you. If everyone thought and behaved that way, a lot of problems could be solved."
Old advice but good for everyone on the eve of Thanksgiving. How does one begin to reverse the trend of poor consumer confidence coming from a lack of trust. The simple method many of us learned but may have not integrated with our behavior is still the best path to getting things done in a way that moves the culture ahead. Allen's advice that echoes that of the sages for generations becomes the way to move forward, and as the country celebrates Thanksgiving tomorrow we can be thankful there are those who remind us of the wisdom we need to do things right.
