Consumers in the US are shunning conspicuous consumption in favour of shopping that gives meaning to their lives
I was casting about for clues on the economic outlook, specifically the consumer's state of wellbeing and his willingness to spend, when a pitch from marketing consultancy Yankel- ovich Partners caught my eye.
'Why is the consumer mood not reviving?' was one of the questions I hoped to have answered when I dialed in to participate in a Yankelovich conference call. Perhaps I needed to look beyond traditional measures of consumer fundamentals, such as employment, interest rates, personal income, confidence and debt burdens, to find the answer.
I learned that the American consumer is undergoing a huge transformation. No longer are we content to shop for stuff. Now we are shopping for meaning. (Who said we could not buy meaning?)
We are living in a 'post-accumulation marketplace' where quality is more important than quantity, intangibles top tangibles, and time is a more valuable commodity than money. Our guide through the maze of marketing mumbo-jumbo, Yankelovich President J. Walker Smith, did not explain how we find the time to pursue 'meaning' without the wherewithal (money) to support the search.
I also learned that we crave 'comfort and connection.' Cocooning is out; 'hiving' is in. Cocooning is a retreat from engagement. Hiving is not a retreat. It is not defensive. It is not self-indulgent.
Instead, 'hiving is an embrace of others in a safe setting abuzz with activity and engagement,' Smith said. The bees figured this out centuries ago. Higher up the food chain, we Homo sapiens are just coming to this realisation.
Consumers prefer hiving to cocooning by two to one. Can one cocoon in a hive or is that passÃ©?
I was made aware of the 'new context in which people are making decisions'. No longer are a Porsche in the driveway, a country club membership and high-speed Internet access considered 'necessities'.
Instead, the list includes time with family and friends, a happy marriage, time each day for oneself, a job that you love and a stress-free job. (It is unclear whether to love a job it has to be stress-free, or whether each is a separate job prerequisite, favoured by a different group of consumers.)
'Luxuries' include a digital camera, a cell phone, new clothes each season and a vacation every year. No wonder the airlines are going bankrupt.
Lest you think the American consumer is abandoning the mall, rest assured we are not becoming a nation of savers. We are just discarding conspicuous consumption in favour of shopping that gives meaning to our lives. 'We want different satisfactions from the marketplace,' Smith said. 'Our connection with shopping is being transformed.'
Now I was really lost. So I called Smith back to see if he could translate the marketing jive into macroeconomic terms I could understand.
Apparently the consumer's search for meaning predates the war with Iraq and even the terrorist attacks of 11 September 2001.
'What we're seeing now is a crystallisation of trends that have been going on for two years,' Smith said.
I was starting to get it. It was all about the stock market bubble and bust. When the family stock portfolio was soaring, we partied hard and spent like drunken sailors. When the boom went bust, we could no longer afford to be indiscriminate acquirers and were left searching for new meaning in our lives.
All this contextual framework and post-accumulation marketplace nonsense was just a fancy way of saying we are not as wealthy as we used to be. Our behaviour changed, and along with it the level of economic activity. So I was back to square one. Maybe Smith could help me go deeper.
'The anxiety the consumer is feeling has a lot to do with the economy,' Smith said. The number one worry, gleaned from five different Yankelovich surveys (phone, internet and door-to-door) since the start of the year, is job security. 'The consumer mood is not going to turn around until jobs are being created,' Smith said.
Finally he was talking my language. The deleterious effect of unemployment was something I didn't need Yankelovich's marketing gurus to explain.
The Bureau of Labor Statistics reported that jobless claims rose 8,000 to 455,000 in mid April, the highest in more than a year. Claims are not about to dwindle until businesses have sufficient demand for the goods they produce and services they provide to require additional employees to produce and provide them.
So all this talk about a new context for shopping and a search for meaning in the marketplace really boils down to jobs, jobs, jobs. If I had known, I could have saved enough time (a necessity) in a job that I love (another necessity) to look for meaning in the marketplace.
Bloomberg newsroom, New York
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