The fact is that American consumers are spending less, driving fewer miles and many in the retail sector are anticipating a lower fourth quarter earnings.



With new companies closing daily and the unemployment rate may top million in 2009.

How does it all affect the average home based online merchant? Many of whom have already seen a decline in sales and traffic. So what do you do?

Interestingly enough, the other day a friend of mine said something I thought was extremely profound and it totally re-framed my own outlook on what's going on in our economy and in many ways how we run our businesses.

Down the street from my office is a simple deli type bakery restaurant. And it seems that regardless of time of day I go stop in, it is always packed.

Which of course makes me wonder why? Now it's true that the owner is a very good marketer who knows what his customers want. He's built his stores brand; he's built rapport with his client base and this all ensures that they keep coming back.

But the reality is that the US is still suffering a recession and people just don't have as much spendable income, or are not spending as much as they did just a year ago.

With my curiosity peaked, I pulled the owner aside and asked: "What exactly is going on here? We are in the midst of a deep rescission, our economy is getting worse by the day and yet your restaurant is always packed! How do you do it?"

He responded with one of the most insightful replies. He said, "I've decided not to participate in the recession."

He was completely serious; I could it by the resolution in his face. It took me a second or two to grasp the ramifications of his reply.

It was a mindset that allowed his restaurant to flourish while others were locking their doors.

What he was saying was simple: It was that his mindset was such that because he was focused on his customers, built up loyalty with his customer base and sold a quality product, he was not going to be affected by the downturn in the economy because he had something his customers wanted.

The lesson here is clear. We can all see that the US economy isn't in very doing well at the moment, and certainly there will be periods of economic slowdown where our businesses may match that slow down curve.

However, this doesn't mean the end of our businesses.

In fact, it may be the very thing that prompts many online merchants to really start to focus on the foundations of their businesses. Things to focus on are building customer devotion and customer retention, offering and providing fantastic service and finding ways to deliver higher value for to their customers.

Many merchants will see new opportunities to provide value to their customers and be rewarded with new growth even while their competition dies on the vine.

Yes, the economic crisis is painful and all indicators tell that the US is officially in a recession, like my friend the successful deli owner, "I've decided not to participate in the recession" in the mindset of “doom and gloom.”

The sky may seem like it's falling, but those business owners that create new value for their customers will create new opportunities for the growth of their online business, or brick and mortar business.