I listened with great interest to a recent episode of Speaking of Faith, devoted to changing values in the economic downturn, and titled Repossessing Virtue. Instead of drawing conclusions about how nationwide values have changed, it offered thoughts about how individual values can change. I think there’s a lot to be said for considering the cultural moment on an individual level.
There were some great passages in the show, and since there’s a transcript, I can easily pass along this bit, which I found particularly good (with a little bolded by me). It’s from Dr. Rachel Naomi Remen:
The culture tells me in order to live, I need to have 43 lipsticks and 10 face creams and no wrinkles, right? But those things cost a lot of money. And because I can’t buy them now in a knee-jerk way, I find myself recognizing that I really don’t need them. I need something else.
And I think that the economy is a pointing finger to a spiritual emptiness that has been among us for a long time and that we have an opportunity to fill it now, and that’s very, very exciting stuff. You know, in just thinking about all of this money, money itself, physical money, densest form of human energy. That’s what money is, stored energy. Now energy follows belief. The economy is based, I believe, not on scientific laws as much, but on peoples’ beliefs.
What is a good life? The answer to that drives an economy or other such questions or thoughts or beliefs. I believe that I’m alone and therefore I have to have something to be with me, to take care of me. I’m not safe. My whole life is about getting safe, so I spend money or don’t spend money based on these kinds of beliefs.
So another way of saying that is we got into this place because of the story, the story we tell ourselves about ourselves, about other people, about the world, that the goal in life is comfort, which is, I think, one of the most dangerous stories in the whole world, by the way (laughter).
But the opportunity here is to change the story.
Buying In readers will no doubt see immediately why I like this so much.
In a post back in November, I quoted a little from Robert J. Samuelson Newsweek article in which he more or less drew a link between American materialism, and American self-esteem (this in the context of the economic downturn that at the time was still coming into full view).
An interesting comment on that post came from reader Jonathan, who essentially said that material goods had already been fading in significance: “Generations Y and X place more value on social capital in establishing their self-esteem, as in how many Facebook friends they’ve got, how their love lives are going, etc. … The Internet provides more opportunity for inexpensive socializing (meetups, parties, conversation).”
While I can think of ways to rebut, or at least question, that assertion, I think the essence of Jonathan’s point is pretty interesting, and it’s stuck with me. I’ve been intrigued by what I guess I’m going to call immaterialism for a while, and I do wonder if there’s a sub-plot here to the question of what sort of consumer culture eventually emerges from this recession.
Here’s some more fodder. I apologize in advance for the long post, but if you have reactions I’d love to hear them.
Recently, Wired’s Underwire blog, in answering the hypothetical question, “what would you grab if you had just 20 minutes to save the objects in your home that mean the most to you,” replied: My USB drive. Obviously that answer has nothing to do with the object, but rather with the immaterial data it stores.
Similarly, on a SXSW panel, Tim Brown of Ideo said something about (if I remember this right) the data on his laptop being more important than the physical laptop.
Another variation: A couple of times Consumed I’ve dealth with virtual goods — in this October 16, 2005, column on EverQuest, and this October 1, 2006 column about Second Life. And I’m certainly not the only person to write about that (non)stuff — there are whole books about people making and spending real money in virtual worlds.
And finally: A more recent Consumed dealt with iPhone apps, even silly ones, that consumers will spend money on and presumably value, creating another vibrant immaterial marketplace.
Now, none of that is exactly what Jonathan was talking about.
But … Let’s say you go along with the basic premise that much of the material-object-buying of recent years (decades) is partly explained by consumer desires for more abstract ideas such as individualism, or connection, or progress, or status, and the self-esteem that Samuelson references.
Can these various immaterial offerings serve a similar function? If so, does that have a broad impact on consumer culture going forward, or does it just become another element of it? And how, in turn, does the recession affect our desires for immaterial goods — spending on stuff in virtual worlds, for instance?How does t
I return to virtual goods in part because I listened to a segment on DNA recently about an architect who has basically moved his practice to Second Life, creating “buildings” there for various clients. In that old EverQuest column, I noted argued that spending a few dollars on an (immaterial) Pristine Teak Strong Box isn’t that different from paying a few dollars extra for a (material) suitcase that happens to carry a luxury brand name: “Paying for the intangible is hardly exotic; most of us do it all the time.”
To take that another step: The immaterial object isn’t made in a dubious factory, and won’t end up in landfill. So maybe it’s even possible to argue that immaterialism channels consumer desires in ways that are, on some level, better.
Which isn’t to say there are no consequences (eco and otherwise) to our digital habits — more on that tomorrow. Because this is way too long.
For now, just sketching out these few thoughts, and curious if you have any.
I wish this bit in The Economist had been longer. It’s about excavating waste for information about how we consume.
A research programme at the University of Arizona conducted several studies comparing the participants’ own assessments of their habits with the record provided by their rubbish. It turned out that people wasted much more food than they realised, claimed to cook from scratch more often than they really did and ate more junk food and less virtuous stuff than they admitted.
A survey involving red meant consumption found:
Rich households, perhaps wanting to be seen to be eating healthily, claimed to consume less of it than they did, whereas poor ones, possibly indulging in wishful thinking, claimed to eat more.
Another interesting finding:
A well-publicised shortage of a particular product actually causes people to throw more of it away, perhaps because they have bought too much of it.
Great stuff. I read so much “data” about consumer behavior that is really nothing than polls. People can lie to pollsters — or, more to the point, lie to themselves. The upshot is rubbish. Maybe studying actual rubbish is a better idea.
I’m not sure how interested you are — or how interested I am — in Anna Wintour’s take on virtue, frugality, the new consumer, and all that. But I was amused by this:
I don’t think anyone is going to want to look overly flashy, overly glitzy, too Dubai, whatever you want to call it.
“Too Dubai.” I have to remember that .
A recent-sh installment of CraftyPod focuses on “Crafting Green.” What does that mean? That question is actually the theme of the episode, and if you’re into the whole handmade/DIYism world, and there’s any kind of consumption-ideology element to your interest, it’s worth a listen. (Especially, now that I think about it, if you have an interest in unconsumption. More on that soon.)
CraftyPodcaster Sister Diane has many useful thoughts on the subject — starting with a bit of skepticism of the overly simple word “green.” She notes that many crafters have been talking about buying fewer new craft supplies this year, and crafting from their existing stashes instead. This actually might be a legitimate example of converting economic reality (saving money in tight times) into something productive: The creative challenge of using what’s on hand. That’s Sister Diane’s take, and she has a point. She’s starting with an inventory of all her craft stuff so she knows what she has.
On the other hand, later in the episode, Sister Diane raises the point that it might make sense to budget a bit for occasional new purchases from retailers you want to support. Anyway, I’m generally a fan of the concept of appreciating — or at least evaluating — what you already have, rather than always seeking something new (including the buying of new “green” products, etc., as a way to participate in concern about sustainability. So I like her rather balanced take on the subject.
Anyway, she also has some interesting examples. At the more extreme end: Futuregirl pledges to “Use What I Have” in 2009 — and in fact is attempting to spend $0 on craft supplies for the year:
We recently shuffled around our apartment and I moved my crafting area into the bedroom. As I was moving and reorganizing everything, I realized I have TONS of craft supplies that I *really* want to use. Thanks to my blog, I know exactly when some of them came into my life, too … ugh! It breaks my heart that so many wonderful supplies have been sitting around ignored FOR YEARS.
This, coupled with the economic downturn, means it’s the perfect time for me to cut back on my crafty spending. The more I thought about it, the more I started to think that maybe I should try to spend ZERO on craft supplies this year.
Is that going overboard? Well, I’m not sure.
CraftyPod also suggests craft-supply swaps — see the show notes for links — and points out RePlayGround: “We’re recycling fanatics and just love finding new uses for old items. Your scrap is the raw material for our next design project.” Looks like a really interesting little company/design studio. Apparently they do design projects (furniture, packaging, etc.) for cleints, as well as sell kits to anyone interested in doing their own upcycling. Also mentioned: Lee Meredith, also known for making things from other things.
Plus she talks about “the craft potential” tied up in “unfinished craft objects (UFOs).” Perhaps, Sister Diane suggests, it’s time to confront those UFO projects — and consider giving up and reclaiming the materials for something new. Or combine that with a swap gathering. I’m trying to think about parallel behavior for the less-crafty among us.
All in all a very thoughtful discussion, and another example of why, when I talk to people about the book and they ask me what I’m keeping an eye on this year, I still say it’s this DIYism subculture.
According to Brandweek:
“There’s a financial cry in the country right now — and that’s going to translate into shopping,” says Karen Bard, the resident pop-culture expert for online auction site eBay. Bard’s not talking about how much people are spending so much as what they’re buying. Sales of just about anything related to the Great Depression have been surging since Christmas. In the last three months, eBay’s category “Depression Era” has seen a 15 percent increase in sales traffic, with specific spikes recorded for 1930s music (up 8 percent) and cloche hats (up 65 percent). At Amazon, December 2008 sales of Depression-related titles (including The Great Crash, The Forgotten Man and Ben Bernanke’s Essays on the Great Depression) were up by a whopping 750 percent (the company does not disclose unit sales).
Depression momentum started building just before the holiday shopping rush-which was, not coincidentally, the same time that bad news about the economy began to feel merely like harbingers of far worse. Between September and October, Netflix recorded a 10 percent rise in rentals of The Grapes of Wrath.
I guess this WSJ “Outlook” column is available only to subscribers, but it’s pretty interesting. Writer Justin Lahart compares the current economic moment to 1980. Back then, Fed actions radically tightened credit in attempt to snap brutal inflation, and that medicine entailed a huge blow to consumer spending:
The credit controls had an immediate effect on behavior. Sales fell sharply and companies shed workers at an alarming rate, with the economy losing a million jobs between April and June. Final sales, a measure of overall economic demand, fell by an inflation-adjusted 7.5% in the second quarter — a drop even steeper than the 5.2% decline final sales registered in the fourth quarter last year.
The interesting part is that that when the Fed ligthened up a few months later, “economists had little hope that a recovery would happen anytime soon. The Fed agreed, forecasting that the economy would contract for the rest of the year.” But they were wrong. Almost immediately, pent-up demand spilled into spending: “With the credit crunch over, consumers and companies raced to buy what they had held off on. Final sales rose 5.4% in the third quarter, and a further 3.6% in the fourth.”
Such rebounds are actually the norm. Of the 10 largest quarterly drops in final sales over the past 50 years, nine were followed by rebounds the following quarter, with an average gain of 5.4%. The chance of any rebound in the current quarter seems far-fetched after last week’s dismal reports on January manufacturing activity, chain-store sales and jobs. Still, if the government’s coming stimulus package and bank plan are able to restore a modicum of confidence in the economy, recovery could come surprisingly quickly.
Is that an overly optimistic scenario? Perhaps. Savings rates were a lot higher going into that 1980 period than they were going into the fourth quarter of 2008. And there seem to be so many interwoven factors now, it’s just hard to believe in a quick rebound of any kind. Then again, people were pretty pessimistic back in 1980s, too.
Anyway, the truth is that Lahart’s comparison to the early 1980s isn’t really that optimistic.
The economic expansion that followed the 1980 recession was one of the briefest on record. Rampant inflation and overdependence on a manufacturing sector facing stiff foreign competition were still problems, and by mid-1981 the economy was careening into the longest downturn since the Great Depression. After years of heavy dependence on credit-fueled spending, a quick recovery for today’s economy could also prove fleeting.
Okay, so that’s not very cheery. But it’s nice to have some historical perspective just the same.
I don’t have an iPhone, and have no plans to acquire one. But I have to admit I’m becoming increasingly intrigued by some of the applications I read/hear about.
Here are two that seem to take, or aim to take, one of the most familiar notions of the American urge to acquire to new levels. The notion I refer to is: instant-ness.
Instant-ness example number one: Looking at an iPhone ad on the back page of a newspaper (I know it’s verboten to mention actually noticing an ad in the newspaper, but set that aside), I zeroed in on an app called Shazam. “Ever hear a song wonder who sings it? Just hold your iPhone up to the music and, in seconds, you have the name, artist and album, plus a link to iTunes so you can get it for yourself.”
Instant-ness example number two: A friend of Consumed dropped me a line the other day about the iPhone’s Amazon app. “You are supposed to photograph something and then Amazon searches for it… ( face recognition tech??),” he wrote. “I suppose leading to a time when you would see someone’s watch, snap a photo with your phone and have it delivered overnight? Or use Genius to find the range of similar things you would like? Shopping synapse.”
While I don’t know enugh about the app to know if that first part is an accurate description, I’m guessing the general direction in which the technlogy will move is much as my correspondent suggests.
Everybody loves instant-ness, I guess. But I would also suggest that the instant is the enemy of the special. Making an effort to track something down (a song name, a model of watch) has its own rewards. I think the process adds to the eventual value and meaning of the thing — at least in those cases when you stick with it, shaking off or forgetting those instances where the effort isn’t worth it, a winnowing process that is also its own reward.
But clearly the future seems to be: You hear it, you see it — you own it. And then what? You lose interest in it, that’s what. And you move on to the next new novelty that crosses your path. The pleasure of the new novelty from a few days, hours, minutes ago — well, that’s forgotten.
In an instant.
Lurking in my bookmarks is this article summarizing recent research on false memories and consumer behavior. I’m not sure where I got it from — I’ve forgotten! — and it looks like it was posted in October and has gotten around, so maybe you’ve seen it.
Still, this is an area of great interest to me, so I thought I’d pass it along just the same. The piece describes a study with two phases. First, subjects answered questions that supposedly created a “food and personality” profile related to childhood eating experiences.
A week later two-thirds of the participants were told in this profile that they had got sick after eating egg salad at an early age, while the remainder — the control group — were not. … Using questionnaires [researchers found] that almost half of the experimental group had taken the bait and created a false memory. …
Then, phase two: Four months later, participants were contacted by a different researcher. (Who was actually working with the original researchers, but the participants were led to believe there was no connection.) This study was supposed to be about food preferences, and involved some sandwich-choosing.
The folks who had accepted a false memory of childhood illness from egg salad sandwiches tended to avoid such sandwiches in this study.
What this study clearly shows is that not only is it possible to instill false memories in a significant minority of people, but that these false memories can have a marked effect on behaviour.
I’m not sure that’s actually news, but it does seem in line with other research I’ve read about false memories, whether in the realm of consumption or elsewhere. More on false memories and consumer behavior in this article about retro-branding that I did for the Times Mag, and also of course in the third chapter of Buying In. You may have known that but I’m just … reminding you. (Also: You really liked what I had to say and resolved to tell all your friends — remember?)
One last thing before we* head out for the long weekend, a weekend potentially including holiday shopping:
I read this article in The Economist, about whether or not the U.S. is falling behind in innovation. The guy who makes that case the U.S. still has innovation advantages makes several interesting arguments, but the one that most intrigues me is this:
The extraordinary willingness of its consumers to try new things. Mr Bhidé insists that such “venturesome consumption” is a vital counterpart to the country’s entrepreneurial business culture.
That’s definitely something I’m going to look into. It’s a pretty fascinating argument, given that everybody’s talking about The New Frugality and everything. Could it be that America’s much-questioned (including by me) relationship to consumption is actually our secret weapon??
A more serious follow-up on this to come. (Among other things, seems to Americans are perfectly willing to buy innovations — or novelties — regardless of what country they come from.) Your thoughts appreciated.
[* When I say “we,” mean “possibly you.” The Murketing Organization does not observe holidays. Nor does it go shopping for holiday gifts, as its non-gift-receiving friends will attest.]
A friend passes along this announcement from a trend-declaration firm with its predictions for 2009. At the top of the list:
Buying Out — Motivated by a trifecta of dire economic pressures, changing sustainability beliefs and a growing indie aesthetic, leading-edge consumers are redefining what it means to consume, from upcycling to victory gardening to the radical rethinking of household finances.
Hm. As the author of a book called Buying In, I’m not sure how to take that trend title.
But the truth is, one of the primary goals of Buying In is to educate consumers about both the commercial persuasion industry, and their own behavior, hopefully leaving the reader in a place where s/he can make better decisions — and, in fact, to redefine what it means to consume. So I’m interested to hear about newfound interest in things like upcycling and victory gardens (the latter being something I actually alluded to in this book-related essay).
I am not, however, particularly certain that such change is afoot, or at least not in a particularly widespread way.
I’m a little more convinced by Penelope Green’s take on how consumers are adjusting their spending in this article from today’s Times. Here’s an interesting bit of that:
When Best Buy announced its latest sales figures last month, the company reported “an unprecedented drop in consumer buying of items like flat-screen televisions,” said Ori Brafman, a business expert and an author, with his brother, Rom, of “Sway: The Irresistible Pull of Irrational Behavior,” out since June from Doubleday Business. “But when Wal-Mart released its report last week, there was a surprise. Consumers had increased their flat-screen purchases. Somehow, because Wal-Mart feels like a bargain store, shoppers who have deprived themselves of luxury items elsewhere rationalized their purchases at Wal-Mart as ‘getting a good deal,’ ” Mr. Brafman continued. “Granted, flat-panel TV’s at Wal-Mart might run a little cheaper than elsewhere, but no financial adviser would include one on his or her list of Items to Buy During Tough Times.”
And another:
Kathy Peel, a Dallas-based family manager (that is, a life coach whose niche is training families to run their homes like businesses), said that incidences of feckless budgeting and bad math seem to be on the rise, at least judging from the reports of coaches trained in her system. Leslie McKee, a Peel-trained family manager in Pittsburgh, has noticed a pattern of “people signing up for discount stores that sell in bulk and over-purchasing ‘bargains’ that are so enormous they will not live long enough to use the item,” she said. “Then they call me and spend more money to help them organize it all into mini-malls inside their homes.”
Anyway, it’s worth reading the whole article. And of course if you have thoughts on what’s changing in our consumer habits — particularly what’s short-term and what’s likely to be more lasting — I’d love to hear them.
Are we, in fact, redefining what it means to consume? Or making short-term, reactive adjustments?
The WSJ has a story about lux brands cutting prices. It would appear they have room to do so:
Luxury-goods companies don’t disclose margins for their individual brands, but Louis Vuitton, one of the world’s most profitable labels, is estimated to have a margin of 45 cents on every dollar.
That’s not additional cost due to design or materials or other quality-related expenses in the production process that are passed along to consumers. That’s the markup. That’s profit.
That’s amazing.
Honestly I’m too busy to say this well, but just a quick word or two about a recent Wall Street Journal story about improved sales of private-label products as proof that “frugality trumps branding.” (Mentioned also here and here.)
First, private-label sales have been rising steadily for many years. This is not a break with recent trends, it’s a continuation of it.
Second, while many people still describe private-label products as “generics,” the fact is that the broadest trend in the private-label business has been to make such products more brand-like. I get the feeling that some of the people who write about this think you can still walk into a store and find the kinds of totally brand-free generic products, like cereal boxes marked simply Corn Flakes, available in the 1970s (and preserved forever in Repo Man). Obviously, you can’t. Moreover, the familiar tactic of crafting packaging that simply apes brand-name goods, but clearly bears the name of whatever store is selling the stuff, has increasingly been supplanted by strategies that seek to position private-label goods as brands.
It happens that I’ve dealt with this subject in various ways in Consumed:
- In a 2004 column about Ol Roy, a Wal-Mart private-label product that is the nation’s top-selling brand of dog food
- a 2005 column about private-label products at Wegmans, which are actually invented by that chain, and don’t knock off any brand-name product at all;
- a 2006 column about the package-design strategy for private-label goods at Publix, which quite intentionally pop from the shelf as something much more like a unique stand-alone brand than an echo of traditional branded merch;
- and, finally, a 2008 column about Safeway’s O Organics private-label brand, which the chain has actually supported with traditional advertising, and is selling in venues other than Safeway. (Target has also supported some of its private-label goods, such as the Choxie line, with traditional advertising.)
What unites all of these things is that they’re all very much branded goods. They were simply branded by a retailer, not a manufacturer.
Are they cheaper than manufacturer-branded goods? Often. And yes, that’s partly because, in general (I’ve just noted some exceptions) the brand-building isn’t done by way of traditional advertising, which can be expensive. But they’re also cheaper because there’s no middleman: Stores are dealing directly with production facilities to get this stuff made.
So, sure, private-label goods are probably doing great because more people are being “frugal,” but it’s not just about competing on price alone, or about improvements to the quality of private-label goods. I am certain that the profit margins work out quite nicely for the retailers — and much better than they did back in the days of “generic” goods — precisely because private-label goods today increasingly include something very much like a brand premium.
Some brief follow-up material about the price of oil, consumer behavior, and energy alternatives. (Earlier mention here.)
Steven Mufson of the Washington Post wrote about the issue on October 20, and more recently talked it over with public radio show Word of Mouth.
And, on Marketplace yesterday:
Already, U.S. pickup demand is back on the rise, after collapsing earlier this year. Their sales share is nearly what it was before oil prices hit their high-end tipping point. [GM research executive Tom] Kloza says, so much for the buyers being changed forever.
Similar themes all around: The fear that weak oil prices, leading to cheap gas, can end up meaning that innovation-searching slows down, because consumer demand (and thus the profit motive) aren’t sufficient.
I wouldn’t say we’ve actually hit that point. Actually in some ways the number of stories on this proves we aren’t.
But what I want to add here is that I kind of think this GM guy gets off the hook a little too easily: If GM believes it’s important to sell smaller vehicles with better mileage, then make them and sell them. It’s disappointing if it’s true that consumer behavior change on this is so easily susceptible to backsliding, but whatever. Toyota didn’t need $100-a-barrel oil to develop the Prius.
The other day I was reading some random news story on a newspaper site — I think a Philadelphia paper, and the article was something about the McCain campaign.
At the bottom was this:
I’m interested in the stuff at right. People who read this article also bought a Movado watch? Or a portable DVD player? Really? How many people? And how is that useful information?
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