Does Recession Mean Increased Interest in Technology?

I have said many times that, in a recession, consumer electronics is likely the one category that won't suffer as much as the others. Today, a study commissioned by Blockbuster reports the same. Why? When people don't have as much disposable income, they stay home. What do they do at home? Watch TV or movies, play videos game, and surf around on the 'net.

So while the restaurant, vacation, and other like recreational industries are suffering, consumer electronics are becoming more central to people's daily lives. Granted, while people are watching more TV at home (87% of survey respondents said they would be using their home theatre more often in the coming months) they aren't exactly spending more money: your cable/satellite bill doesn't go up if you watch more TV, unless you opt for pay channels. But this means that consumers might become more aware of new technologies as they place more focus on digital entertainment. They might learn about channels they don't have and look into subscribing (I'm saving hundreds of dollars by not eating out every Friday anymore, so what's another $5/mo. tacked onto my cable bill?)

As lagging consumers stare at the old clunker of a TV in the middle of the living room that they didn't spend so much time with before, they might even start thinking of upgrading. If you're watching it more now, that justifies the purchase, right?

Of course Blockbuster hopes that this increased interest in "staying home" will also amount to lots and lots of movie rentals. It probably will. And hopefully once the recession has passed, consumers will look to invest in a fancy new home theatre so that they can enjoy these movies, as well as regular TV programming, and even video games, in all their glory.

Analyzing the Gen-Y Worker

There have been tons of studies in magazines, newspapers, and Websites trying to analyze the true nature of the Generation-Y worker, which, according to Wikipedia, characterizes those born between about 1980 and 1994. Many say they're arrogant, others claim unprofessional, and others still report that many hang on to their parents for dear life, scared to get out into the "real world". Is this all true? U.S. advertising agency JWT set out to find out by surveying 1,250 Americans, 238 of which fell into the 21-29-year-old age group.

What JWT found was that some claims are indeed true. For instance, Generation-Y employees do like to "play" at work, engaging in activities like video games, and just plain joking around. Is this such a bad thing? If you ask me, a lightened up office environment can help foster more productivity than an uptight one any day! It was also revealed that millennials, as JWT calls them, pay more attention to the work-life balance than their older colleagues. "They want to schedule work around the rest of their life, not vice versa," said the study. Finally, according to JWT, millennials do in fact want their employers to adapt to them rather than the other way around. Interestingly, however, those in the 50-something age category weren't far behind, with 51% of them agreeing to this sentiment as well versus 46% of millennials.

Although these perceptions were deemed true by JWT's study, a few others were squashed as just myths. For example, although the perception is that many Gen-Y kids return to live with their parents after school is over, in actuality, only 15% of them do. In fact, 25% live with a spouse and children, and 18% and 19%, respectively, with either a spouse or "partner". Do Gen-Y workers feel like they should be able to wear whatever they want to the office? Not quite. JWT's study found that 67% believe that formal appearances are important, which was higher than any other age group! Forty-somethings ranked attire the lowest, with just 54% saying that dressing up is required.

One of the most interesting findings was that, despite popular belief, millennials rank employer loyalty high on their moral scales. Sixty-six per cent agreed that an employee owes loyalty to his employer, versus just 60% of 30-somethings, 67% of 40-somethings, and 72% of 50-plus. Another popular belief is that the young 'ens are just downright disrespectful to corporate America, and want to do things their way. Not so much. JWT found that 42% of Gen-Y workers have a high degree of respect for corporate America; compared to 36% of 30-somethings, 31% of 40-somethings, and 32% of those 50 and up.

Despite the rumours that may be squashed by this study, there's still no denying that there is a significant generational difference between Gen-Y (and even Gen-Xers!) and the older generation. The youngest workers of the lot can't imagine a world where a picture you just snapped doesn't instantly appear on an LCD screen for review, or when you couldn't "Google" something you needed an answer to right away. Likewise, the older generation doesn't understand the unjustifiable perceived sense of entitlement or increased focus on technology. Either way, based on the results of this study, it appears that there's plenty that every generation can learn from one another.

Canadians Aren't Happy With Cell Service

It seems Canucks can't make up our minds about whether we're satisfied with our cellular services or not. In 2006, J.D. Power and Associates reported that our level of satisfaction with both service providers and handsets improved from 2005. But the 2007 study is singing a different tune, citing that our satisfaction has decreased "considerably" over the past year (18 points, to be exact).

What's the reason? J.D. Power suspects customer expectations, in general, which I'm not buying. We've seen tons of new 3G technology offerings from every carrier, plus sleek and sexy handset designs. Rogers Wireless even introduced video calling this year, a North American first. What more do customers want? Maybe Canadians are upset because we don't get to snag the coveted iPhone just yet, but there's still tons of other neat options out there!

The other reason cited is cost. "Although an array of new service plan features, bundling options, and ways to reduce package prices have been made available in 2007, customers indicate that they are dissatisfied with the cost of these services," explained Charles Schade, Senior Director of Research at J.D. Power and Associates. That reason I might buy.

Although industry pundits have tried to convince me that service in Canada is actually cheaper than it is in the U.S., any Web search I conduct brings up tons of results from bloggers, consumers, or third-party research sites that beg to differ. The Canadian Wireless Telecommunications Association (CWTA) references an Organization for Economic Co-operation and Development (OECD) study that claims Canadians in fact do have the lowest wireless prices in North America. But, as I mentioned in the October issue of Marketnews Magazine, this excludes "high-usage" customers. I'm no statistical analyst, but I'm pretty sure the high-usage customers represent a significant chunk of the Canadian customer base. In fact, a recent CWTA study reveals that Canadians chat for, on average, 400 minutes per month.

Customer dissatisfaction aside, there are a few carriers and handset manufacturers that received kudos. For the first time in the history of J.D.'s study, Fido topped the list, fueled mainly by its attractive service plan options and pricing structure. Sasktel and Aliant followed at a close second and third spot, respectively. In 2006, Sasktel was first, Fido second, and Aliant fourth (Telus snagged the third spot).

When it comes to prepaid service providers, Sir Richard Branson's company Virgin Mobile took top spot for the third year in a row, followed by Telus and PC Mobile. (Aliant and Telus were second and third, respectively, last year).

What's interesting is that the average monthly fee a contract customer pays per month descreased by $7, from $74 in 2006 to $67 in 2007. Either customers are opting for cheaper plans, or simply not using their phones as often as before.

Congrats to Sony Ericsson, which climbed to the number-one spot in mobile phone brand satisfaction, all the way from fourth place last year. LG, which was ranked number-one in 2006, oddly fell to number-five. Blackberry ranked second, followed by Sanyo, and Samsung, in that order. Blackberry received a gold star for operability, while Sanyo can puff its chest in the durability race.

If mobile phone carriers can get anything out of this study, it's to place greater focus on satisfying customers, both existing and new. Number portability (this is the ability to switch carriers but still keep your existing number) + customer disstisfaction + expired contracts could = lost business. As for the handset manufacturers, keep pumping out those neat and sexy designs, and please run extensive hands-on tests of the phones before they're brought to market: I'm floored sometimes with how the most advanced phones don't get simple functions and button-design concepts right!