Friday, July 25, 2008

You Are In Control

In the book Buying In, Walker quotes the experts as saying that the "new consumer" is now in control of the marketplace. We have all the information, we have the power to choose rather than a brand being foisted upon us. Really?

Walker goes on to ask:

So what would constitute proof that the consumer is "boss" and "in control" in some way that's new and unprededented? Lower credit card balances? A conspicuous absence of logoed apparel on city streets and in malls? A disappearance of consumer fads, trends, and crazes? A decreasing amount of advertising? Shrinking landfills? Bigger and more effective boycotts of unhealthy or ethically suspect products? Increased saving rates? Maybe - but of course, none of this is happening. Instead, one thing did happen between 2000 and 2006 - right as the new consumer was said to be bossing corporate America around like never before - was that the profits of Fortune 500 companies soared; indeed, companies in the "consumer staples" category of that famous index saw their profits more than double. This despite the fact that the real wages of most Americans were, at best, flat. During precisely the same period, the personal savings rate actually fell into negative territory for the first time since the Great Depression.

I don't know about you, but that depresses me. I think I need to go buy some Twinkies, or maybe some new jump-man sneaker, to make me feel better...

But here is the thing - you are in control. No, really. I may not be the trendiest guy ever (probably not even in your top 25 trendiest people you know), but my guess is that buying practically may even be its own trend. In a future post, we'll chat about Walker's point that there really isn't much difference between the products, so then it becomes a matter of which brand do I want to associate myself with.

We have so many choices, that sometimes it can be paralyzing; this is the subject of the book The Paradox of Choice. Apparently, the thought never enters our head that we don't have to buy at all.

How many boxes of stuff do you have that you never use anymore? What if you got rid of everything you didn't use in the last month? Heresy! Next week we'll chat about how to decide to buy something.

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Shayna Willis said...

I know this wasn't the point of your post, but serious question, what is the deal with men wanting to hang on to useless boxes of stuff? I think this might be a gender specific phenomenon, but I could be wrong.

John Vaught said...

Is it just a man thing? I know I go through phases of keeping everything, and then one day I'm throwing or giving it all away. It would be an interesting poll to see how many ladies do the same. My daughter is the biggest packrat I know.

crazykarl7 said...

I don't agree with the assessment that if the consumer were in control there would be less spending. In fact, there should be a lot more.

Take for example a pair of shoes. You don't really need them as you have plenty of other shoes, and the ones at the store aren't the perfect color / make. You wouldn't buy them..but what if you could completely customize it for a marginal cost. You are the tell them what you want and they give it to have now purchased something you didn't need.

That is new and unprecedented. We've come a long way from the model T where you could have any color you long as it was black.

Shayna Willis said...

I am constantly going through my wardrobe and getting rid of things. I tried to get rid of Carl's outdated econ textbook and some other stuff and he'd rather have them in a box in the closet than give them away. I've talked to other women and they've said their husbands are the same. But maybe it isn't gender exclusive.

John Vaught said...

The author agrees with you, Carl. This isn't in this post, but he talks about 57 different ranges for your kitchen, hundreds of pairs of jeans, aisles of types of cereals, and stores that hold so much clothing that they have to be housed in warehouses that are multiple stories - all so you can have a choice. And if you don't like those, more are coming soon.

I like how he talks about the marketplace as a dialogue. And we know how the conversation is gong - landfills are getting bigger, not smaller. The author makes the same point that you do - how often do you buy something you probably don't need and just regret it later?

So why did you buy it? So if all these products have very little qualitative difference between them, then how are you making your choice? One point that the author makes (and a blog post is coming next week on this one) is that you really don't make most of your choices based on purely rational choices of quality, cost, need, etc. They factor in, but there are other forces at work. You'll have to wait till next week to see one of the biggest factors when you go to the market.

crazykarl7 said...

A) The econ textbooks are not outdated. The inforamtion they contain is just as true now as it was then.

B) I've at least read them...Shayna has shelves worth of books that haven't been read (and most likely will never be read) and yet purchases more.


Shayna Willis said...

We'll talk when I get home, Carl. ;-)

I think the problem is that we have a choice, but aren't we most effective en masse? If we aren't all making the same choice, how effective are we as consumers?

John Vaught said...

Shayna, apparently, there is no danger that we aren't going to buy something. Individuals aren't buying less; in fact, worldwide the marketplace is just growing. The job of marketing is to help us choose.