In my book on wealth, I espouse minimalism as the correct way to live life. It seems that many people around the world are starting to come around to that view. Take this article from the Guardian as evidence. The gist is that in the current environment with low interest rates and pent up demand from years of belt tightening, consumers should be flinging their wallets wide open.
On the face of it, the economic superpower that is the American consumer should be having a party. Low interest rates and unemployment rates, low oil prices, a high stock market, healthy property prices – nothing it would seem, to put off doing what comes most naturally to them – shopping.
Yet they’re stubbornly refusing to do it – or at least refusing to do it in predictable ways – leaving consumer experts to wonder, as fashion bible Women’s Wear Daily recently did, if the consumer psyche, “bombarded by digital messages, stressed financially and overwrought emotionally”, has “finally exploded”.
That’s the party line. Consumers, it is thought, have abandoned existing brands and are infatuated with the new, which retailers are failing to provide.
“The recession was the first step toward the complete shift in shopping,” says Yarrow. “Consumers are more wary and self-protective about finances, and they’ve never dominated the market the way they do today. They’re informed and wary, and determined to be in control.”
The unpredictability has caused chaos for retailers, which have seen their power over consumers begin to slip away. “Technology means they can shop however and whenever they want, or they can shop all over the world, and that’s why we see retailers collapsing and relying completely on price reductions,” Yarrow said.
“It’s taking retailers forever to realise that when people go shopping they want to see new things all the time. This is what technology has done to our brains. We want a lot more excitement and product turnover in our lives. If we don’t see new product, we won’t go there any more.”
But really, what’s happening is that consumers are finally realizing that buying all that stuff, whether it was spurred by advertising, impulse, or keeping up with the Joneses, didn’t really make them happier. Instead, they’re choosing to spend less, make existing products (which work fine, mind you) last longer. After all, there are so many other aspects of life (rent, medical bills, tuition) that are rising faster than incomes. There has to be a give from somewhere and discretionary purchases have taken the hit.
At the same time, people are spending more time and money on experiences, whether that’s a vacation, continued learning opportunity, sporting events, or dining out with friends. These are things that add lasting happiness.
But there are other factors feeding into consumers’ shattered psyches. For many consumers buying “stuff” just isn’t what it used to be. People are looking toward more “experiential” spending – holidays, concerts, plays – experiences that they can then share on social media.
Laurent Vernhes, co-founder and CEO of Tablethotels, a consumer website that specialises in high-end travel, told the Guardian “the more jaded you are the more you will seek experiential travel and beyond what you know.” And it’s not just holidaymakers – business people, too, want experiences.
This trend doesn’t seem to be abating. Instead, the children of the Great Recession who grow up may continue to live the frugal lives that were instilled in them during a time of scarcity.