retail news in context, analysis with attitude

Fascinating story over the weekend in the New York Times about the notion of “calculated consumption,” which might be another way in which the post-recession, so-called “new normal” reflects shifts in consumer behavior.

The Times writes: “The practices that consumers have adopted in response to the economic crisis ultimately could - as a raft of new research suggests - make them happier. New studies of consumption and happiness show, for instance, that people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo the Joneses.

“If consumers end up sticking with their newfound spending habits, some tactics that retailers and marketers began deploying during the recession could become lasting business strategies. Among those strategies are proffering merchandise that makes being at home more entertaining and trying to make consumers feel special by giving them access to exclusive events and more personal customer service. While the current round of stinginess may simply be a response to the economic downturn, some analysts say consumers may also be permanently adjusting their spending based on what they’ve discovered about what truly makes them happy or fulfilled.”
KC's View:
In essence, the Times argues, we may be moving from a “whoever dies with the most toys, wins” mindset to a world dominated by a “whoever lives and has the best, most varied experiences, wins” attitude.

While this might suggest to some that we could be entering a phase in which people spend less money - which isn’t a good thing for companies that define success as selling stuff and then more stuff - it may actually be an opportunity for marketers that understand the actual premise ... that people are willing to spend money on things that they perceive as improving their lives, providing a positive/memorable experience, and helping them make connections with other people.

One example, suggested by the Times story, is that people will place a premium on having a wine tasting party with friends, as opposed to going out to dinner and spending a lot of money on a bottle of wine. If you’re in the retail wine business, that’s an opportunity - to create experiential offerings that allow people to host a wine tasting party (which can also include bread, cheese, crackers, etc...)

It is all a matter of looking for opportunities and then acting upon them.