August 19, 2014

The Markets

Hopes of economic recovery in Europe were put on hold when gross domestic product figures across the region showed no – nada, zero, zip – growth overall during the second quarter of 2014. First quarter’s growth (0.2%) hadn’t been all that impressive either, but at least it was headed in the right direction. The strongest second-quarter performers were Netherlands, Spain, and Portugal, according to The Economist. However, some of Europe’s largest economies (Italy, Germany, and France) contracted during the period.

Geopolitical unrest prompted the Euro area’s poor showing. Turmoil in the Middle East, violence in Ukraine, and sanctions against Russia have, among other things, led to a slowdown in demand for luxury goods that has negatively affected European economies. After delivering strong performance in 2013, the MSCI Europe Textiles, Apparel, & Luxury Goods Index was down more than 10% in the month of July and down 4.75% for the year. China’s anti-bribery and corruption campaign also has reduced demand for luxury goods, according to Bloomberg.

The Euro area’s economic growth (or recent lack thereof) has also sparked fears of deflation in the region.

The good news is that the poor European data put a shine on markets in the United States, according to Reuters. Major U.S. stock markets finished the week ahead and benchmark U.S. treasury yields finished the week at a 14-month low.

Here are a few business and marketing trends that may change the way baby boomers think about things. It’s no doubt technology is changing our lives and consumer habits.

• Where words fail, music speaks. Athletic shoe companies, fast-food retailers, and luxury brands are using digital music services to amplify their brand identities and engage with customers. For instance, a well-known cruise line’s playlist includes tunes with fun summer vibes, while a shampoo brand’s list embraces singing-in-the-shower songs.
• Have a commercial with that commercial. A popular music identification app is helping television networks and advertisers connect with consumers’ second screens – their smart phones and tablets. The app’s logo appears during commercials and TV shows. If viewers interact with the logo, then the show or product has opportunities to re-market to viewers through their mobile devices.
• It’s a meal ticket, literally. Some of the hottest restaurants around aren’t taking reservations anymore. They’re selling tickets in advance. It’s a business decision that eliminates the cost of last-minute cancellations which may lead to better prices for diners, according to experts cited by National Public Radio.
• Want to attract a crowd? New and growing businesses have a lot of options when it comes to raising capital. If a business wants to borrow money, in addition to traditional sources, they can turn to peer-to-peer and social lending platforms. If a company wants equity investors, they may pursue equity crowdfunding. In fact, a recent study reported:

“Today, it’s apparent the crowdfunding phenomenon has indeed affected the VC (venture capital) ecosystem – as a complementary force. With thousands of consumer-oriented hardware campaigns looking for financing for everything from smart watches to beacon technologies, crowdfunding platforms… have provided VC investors with a valuable source for dealflow.”

Whether you’re a consumer or a businessperson, it’s important to remain aware of the ways in which the world is evolving and take advantage of opportunities that can make your life easier and/or your business more successful.

Weekly Focus

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”
-John Quincy Adams, Sixth President of the United States

Image used was taken by Avij and released into the public domain.