The Wall Street slide, mortgage meltdown, jobless rate, etc. are obviously affecting our spending habits today, but what happens when all of the dust settles? Do we go back to our old ways of buying and selling in a post-crisis world that many feel will be characterized by a jobless recovery and more limited purchasing power? Or is this new economy creating a permanent shift in the way we evaluate and buy products and services.
That thought hit me this week as I was reading the just-published book, Spend Shift: How the Post-Crisis Values Revolution Is Changing the Way We Buy, Sell, and Live. Authors John Gerzema, Chief Insights Officer of Young & Rubicam Group, and Pulitzer Prize winning journalist, Michael D’Antonio offer an interesting perspective on what they term “a revolution in the making”. Their conclusions suggest that people are redefining their lives and reviving core values; things like hard work, thrift, fairness and honesty are enjoying a major renaissance. And that redefinition will have a lasting impact that marketers must take into consideration as they plan their post-crisis business strategy.
From mindless to mindful consumption.
To make their case, the authors draw on hundreds of interviews with social-science experts, CEO’s and entrepreneurs, as well as proprietary data from Y&R studies and their own observations and anecdotes from eight bellwether states. Their conclusion that the economic crisis has spawned a movement in society where the majority of American consumers are embracing both value and values isn’t really new news. We can see evidence in almost every business sector that purchase behavior these days is less about materialism and buying stuff for stuff's stake. The fact that our current economy has created a "less-is-more” impulse" among buyers has been well documented in the media.
The interesting part from a marketers’ perspective are their conclusions that consumers are also "voting for values with their dollars” and this rebirth of values is here to stay. In a well-written, insightful Foreword to the book, marketing guru Philip Kotler says this “values-led consumerism is not a small, isolated target market. Over half of the U.S. population is now embracing these value shifts”. He sees overwhelming evidence that consumers are buying into brands with meaning—brands with integrity, social responsibility and sustainability at their core. They are seeking better instead of more, virtue instead of hype, and experiences over promises.
The new consumerism is creating an unexpected side effect - optimism.
Despite declining economic power, consumers are actually wielding more power as these new attitudes require that companies improve their product quality and value to remain in the brand purchase consideration set. And an interesting side effect is a new found optimism and purpose for many people.
Seventy-eight percent of respondents from a national survey on “Changing Consumer Values” report they are happier with a more down-to-basics lifestyle. Eighty-eight percent report they buy less expensive brands than they used to, and report that possessions do not have much to do with how happy they are.
Interestingly, this sentiment of a growing aversion to status brands is higher among people who earn $100,00 or more who say that keeping up with the Jones’ has been a stress they don’t need or want. And I was surprised to learn that two very different generations - people aged fifty to sixty-four and the generation between eighteen and twenty-four- share the same aversion and interests.
A shift in spending is really a shift in values that marketers need to understand.
There can be no doubt that America is moving away from excess and debt-fueled consumption and towards savings and investment.
And from the scores of interviews and thousands of data points they have collected and reported on, the authors identify ten take-aways they believe the post-crisis values revolution has spawned that will change the way we buy, sell and live:
- We are moving from a credit to a debit society.
- There are no longer consumers, only customers.
- Industries are revealed as collections of individuals.
- Generational divides are disappearing.
- Human regulation is remaking the marketplace.
- Generosity is now a business model.
- Society is shifting from consumption to production.
- We must think small to solve big.
- America is an emerging market for values-led innovation.
- Everything will be all right.
Space limitations don’t permit me to expand on each of these points in this post. But I can tell you that I found each of these take-aways well reasoned conclusions from a very thorough and thoughtful approach to a complex issue.
And I believe, along with the authors, that all are changing the way we buy, the way we sell, and the way we live.
