The economic oxymoron that we are living in continues to present unprecedented opportunities for sports marketers. In the March 12 Marketing Insider, we look at the reasons why along with how we can sustain the increased category spending.
The economic oxymoron that we are living in continues to present unprecedented opportunities for sports marketers. Nearly two thirds of Americans continue to express high levels of concern about inflation — the most serious issue among 20 that we regularly track.
Concurrently, February saw 72% agree that “it has become very expensive to feed my family,” while a similar percentage continue to report higher prices for consumer goods and services, relative to where they were four years ago.
Yet at the same time, we are seeing no slowdown across multiple categories of leisure spending, and a continued escalation in the desire to actualize in the short to medium term.
And while the data points to a very somber mood among Americans, we are spending with what could be construed as reckless abandon. In a recent presentation, we dubbed it a “vibecession.” Our outlook on things remains at the depths, yet consumer behavior isn’t reflecting this, particularly on discretionary leisure purchases. Naturally, the popular questions, then, are, what is driving this ostensibly contradictory behavior, and how sustainable is it?
To the first question, there appear to be several factors at play. The impact of post-COVID “revenge spending” is still prevalent. As I outlined last month, in this space, there is an increased urgency to live for today rather than tomorrow. I see this being driven in part by a heightened need to find escape valves from the pressures of the day to day.
But there’s another, often-overlooked dynamic: what Merrill Lynch and others have defined as the greatest wealth transfer in United States history. An estimated $84 trillion is forecast to change hands over the next 20 years, with nearly half of it going to Gen X, the often-overlooked cohort that is now entrenched in the lifecycle stage that typically sees a peak in career earnings. This is a generation that remains committed to optimizing unique experiences, while concurrently revering tradition, with a soft spot toward nostalgia.
As to the second question on how to sustain things, it makes sense that sports marketers continue to focus on delivering unique experiences through enhanced and often premium access points to maintain and grow the relationship with older core customers, while not eschewing the past. There’s also a need to continue to embrace change, building out social spaces at live venues and repeating the never-ending cycle of reinvention and the creation of aspirational superstars – while pandering to the next generation with a heightened pursuit of digitally driven quick hitting soundbytes and attention-seeking clickbait.
This two-pronged approach may sound inherently contradictory, but I see it more as reflective of a need for a highly segmented marketing strategy that plays to multiple audiences with different types of messaging and distinctively targeted offerings. It milks the cash cow, while being mindful of a less-assured future audience.