You don’t have to scroll too far through one of our Market Intelligence Reports to get a clear picture of the struggles that manufacturers are facing.  Overwhelming uncertainty has caused consumers and businesses alike to find new ways to extend the life of the products that they already own, delaying purchases and creating huge drops in demand.  I know that this is not new news and I’ll leave the economic rebound timelines to someone else, but I thought I would share a story from back in the day that includes a promise of better things to come.

For nine months while in college I visited the gas station just about every day.  Although I squeezed pretty decent MPGs out of my little four cylinder sedan, my front right tire featured one of the most prolific “slow leaks” since the Apollo 13, making the need to refill my tire far too common.  Nearly every day I would pull into my neighborhood Shell, give the attendant the “turn on the air switch” gesture, fill my tire, and go on my way.

Nine months!!! Between the time my tire started leaking and when I finally gave in, the Patriots won their first Super Bowl, China joined the WTO, Enron dissolved, Pope John Paul II sent his first email, and I filled up my tire about 250 times.

 

 

These days I would put up with that level of inconvenience for about nine hours (nevermind months), but those were lean times.  Eventually summer rolled around, I was able to take on more hours at work, and by the time my own personal economic downturn subsided I was rolling on four new wheels.

The moral of my story is that even the most durable of goods are only usable for so long and any suppressed demand will almost always result in a future surge of purchases.  Right now millions of purchasers are cursing their camera’s stuck shutter, rebooting their crashing servers, and trying to figure out why their MFP isn’t responding to their print request. And most of them are avoiding a replacement purchase this year if at all possible.  However, like me and my tire, these purchasers may be able to put up with these issues for the time being, but as soon as the money starts rolling-in most won’t wait long to trade-in and trade-up.  Meanwhile, owners of products that naturally expire or decline during the expected rebound period will have far less reason to delay their purchases, combining to create an unprecedented increase in demand for durable goods.

Returning to my tire analogy, this may be a good year to be in the air machine business, but it would be advantageous for manufacturers to make sure they are prepared for the imminent surge in tire demand.  This goes for printers and cameras too…