To some extent, the “new frugality” of consumers seems like it is here to stay. That doesn’t bode well for businesses that rely on the liberal spending of disposable income, or for the economy as a whole. So, in the hopes of getting Americans back in the buying mood, researchers and marketers are donning their lab coats to examine this new type of meddlesome, uncooperative, newly thrifty consumer, and they’re tweaking the sales pitch to fit the profile.
A front-page WSJ story offers a profile of this new profile, along with some of the ways businesses are trying to reach, and in some cases break, the new mold.
The new consumer is spending less on nearly everything: clothing, cars, restaurants, household furnishings, and so on. The one big stand-out exception? Health care. We’re all spending more in this department—because we don’t have much of a choice. It’s literally hard to live with the decision to do otherwise.
From the business perspective, one of the biggest concerns is behavior at the ritzier end of the consumer market. The examples cited include a Florida financial adviser who traded in his Jaguar for a Hyundai, a Vegas mom who has scaled back (or at least hidden, because she’s embarrassed) her two-designer-bag-per-month shopping habit, and a vast portion of consumers who are shopping at Wal-Mart rather than Bloomingdale’s, and who are now turned off by large, flashy logos from companies like Timberland.
So what are marketers doing to coax shoppers back into the buy mentality? For one thing, smaller logos, along with messages that acknowledge over-the-top conspicuous consumption is dead, while at the same time encouraging different consumption via appeals to a new combo of hip-eco-experiential-thoughtful priorities.
Timberland, for example, is introducing a boot with a rubber sole that can be detached and recycled. Will it save money and conserve resources? Who knows. It will, however, appeal to Timberland’s targeted hip, post-recession affluent urban male consumer, which is the real point. Says a Timberland merchandising exec:
“This is a person who has the means to buy whatever he wants. But he’s bragging to his friends he’s able to get this recycled shoe.”
In other words, he’s showing off: It’s different than conspicuous consumption as we know it, but this is still consumption, and it’s still conspicuous. The point, in fact, is to be conspicuous, albeit in a less blingy manner than we’ve seen in the past. The marketers are banking on a freshly tweaked, but still largely unchanged “keeping up with the Joneses” mentality—one that’s probably been around since the pyramids were built in Egypt and will probably always be a part of human nature.
This is all to be expected, but the coldness of the marketing approach turns my stomach. From the WSJ:
Financial giant UBS AG figures investors are dealing with what neurobiologists it consulted call “memory trace” — emotional turmoil that persists after a traumatic event. The market plunge a year ago left many investors afraid to take on risk, said Mike Ryan, head of UBS wealth-management research. “You have to be reconditioned to take on risk again,” Mr. Ryan said.
Reconditioned. Like battle-scarred soldiers, or like dissidents needing Big Brother- or A Clockwork Orange-style reeducation. Or like lab rats.
Certainly, taking no risks is bad for the individual and the economy, but taking stupid risks is worse, and we have the mortgage mess as exhibit A.
In some ways, marketers are in a battle against time, and against consumer habits that seem to be solidifying. A Harvard marketing professor, quoted in the WSJ story, says that the longer the recession mentality lasts:
“the more people discover more cost-effective ways to live, and those coping mechanisms become engrained.”
Marketers don’t want people to get used to saving, in the same way that luxury stores don’t want shoppers to come to expect discounts. But for a sizeable, newly wide-eyed chunk of the population, the cat is out of the bag.
They realize that they don’t have to eat out three or four nights a week, that they hate banks and credit card companies siphoning off their money with odd fees and soaring interest rates, that they don’t need to buy clothes they’re only going to wear once, and that they really really like having some money socked away in their savings accounts.