Dear Manager,

We’ve continued to address the ever-changing economic environment that we, as managers and business owners, now navigate. A better understanding of its evolution will spark creative thought, and bring greater clarity to our own evaluation.

In conversations with managers and organizations, I continue to be befuddled by those in complete and abject denial, that how they’ve done business in the past must be significantly rethought, if not completely overhauled. In review of lessons past we can find greater understanding of just how deeply this economic evolution has impacted our own (and very personal) economic arena.

One final time, past economic standards, assurances, expectations, climates, and scenarios are, for all intents and purposes, collectively in the toilet. If we’re still waiting for a failing sector to make a miraculous recovery, then we, as captains, are destined to go down with the ship. Compound this with a very challenging economic cycle, and I can almost hear the sucking sound of water rushing through the portholes.


Changes in purchasing power, options, habits, mentality, and motivation are all about thirty degrees off center. In fact, think in terms of this shift as having created a new point of center. This is how far we’ve come. What were the contributing factors, and how has it occurred at such lighting speed?

Years ago, when we “needed” a new bike or transistor radio, we’d head to the local hometown department store. This is where everyone made their “major purchases.” Selection may have been limited, and price comparison was somewhat of an option, but we could always find a bike or a transistor radio.

With amazing levels of expansion, and billions of dollars in discretionary income available, the retail industry became much more specialized in its product and presentation. Small, yet specialized retailers became the seed for the phenomenon we now know as the “big box.”

From lumberyards to video stores, if you can fit it into a profitable big box environment, we’ve either seen it, or are likely to in the future. You can bet your last dollar on it! Certainly there are industries that have been spared, often because the profit/service models haven’t yet been economized to scale. We’re only destined to experience further proliferation of this very successful business model.

This age of knowledge, instant price comparison, minimal profit margins, and flexibility has forever changed the average consumer. Combine the price points now available in these sectors, with the absolute worldwide exposure now available on a product-by- product basis on the Internet, and we can begin to see how far we’ve come from the local department store environment.

As discretionary income has increased, discretionary time has decreased. There can be no turning back. I spoke with an associate recently who summed it up nicely. “The two-income family simply no longer has the time for the former shopping experience, and the single-income family, either by choice or by economic circumstance, can no longer afford to pay a premium when shopping.”


We’ve all been economically educated, in fact spoiled, with ways to maximize our discretionary income. The low cost models of the big box and the Internet have effectively accomplished this task. I can’t fathom a more competitive retail and service environment than the one we find ourselves in today, with the exception of the great Depression. With profit margins of 6% to 10% now found at Sam’s and the like, do you really think “PANDORA’S PRICING” can ever be ratcheted out of the consumers’ psyche? Jeff Bezos will never step away from his model of free freight, even if he wants to. Pandora strikes again! The model, the expectation, the psyche, is set in stone.

How has this new, well-informed, well trained, price conscious consumer responded to these new found low pricing freedoms? The world has now become their oyster. If they can find this purchasing power in one sector, why not expect it in all areas of purchasing decisions? Are you going to buy a copy machine or big screen television at Costco, or Bloomingdale’s? As a culture, we now expect to receive similar price considerations, and are no longer afraid to ask! The economic training continues, moving us even further off center.


The earliest and greatest initial success on the Internet has come through the bidding process of purchasing both consumer and commercial goods and services. This exciting approach to purchasing has only taken the consumer further off center as it relates to their frame of reference and expectations relating to purchasing power. If I can bid for a car three thousand miles away, why not allow it to compete with one three miles away?

I’ve worked with construction contractors for over thirty years on both large and small projects. In years past, I would have depended on a contractor I trusted to subcontract and complete the entire project. I now have the time and motivation and efficiencies to “shop around,” meeting with a minimum of three trades’ people competent in their specialty. The savings have been nothing short of startling. On a recent project, custom cabinets from a new relationship netted $18,000 in savings. Pandora Rules!

There certainly have been occasions where my newfound purchasing freedoms were less than well received. Individuals (at times friends) who couldn’t bid competitively felt betrayed by my willingness to look beyond the convenience of simply asking them to do the job. I may like you as a person, but does this obligate me to pay significantly more to sustain the relationship? By nature, myself included, business gains enhanced margins out of convenience and long standing relationships. I respect this. I’ve also found advantage in not blindly accepting this.

As a culture, we now have an enriched perspective relating to value. There are simply too many rewards to appreciate and embrace. We’ve been conditioned to expect and deserve this value in all facets of our life. This reality will challenge all of us in business, in many cases for the better.

We must first accept the seduction of Pandora, enjoy her virtues as they benefit us, and accept the revised point of center. She’s not going to close the box.

Personal Regards,


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