The New Age of Frugality
Since we've been in a recession since December 2007, much of the news has been that obvious consumption is out and thrift is in.
According to the Boomer Project:
Modern marketing since the emergence of TV has been all about consume, consume, consume. The more you consume, the better a citizen you are.
The recent economic events have shocked American consumers, Baby Boomers especially, into a fundamental re-evaluation of personal priorities. This is a trend that was already building momentum from the embrace of environmental sustainability and the life-cycle tendency of older Boomers to define themselves by non-material values.
Matt Thornhill of the Boomer Project pointed out that a recent Wall Street Journal had three items that prove it:
1) Full-page ad by DeBeers on the back page of the front section with the headline "Here's to Less." The short copy is all about our misguided interest in possessions that "we do not treasure." Enter the diamond, something that can be "passed down for generations."
2) Article about the dramatic fall-off in luxury car sales in October and the first half of November. The reasons given are the recession, as well as a lack of desire by those with enough money to buy a luxury car to be so showy these days. Maybe this is a trickle-up mindset the very rich are learning from the rest of us.
3) Essay about the rediscovery of a class of Americans who have been shunned for decades: those prudent Americans -- the ones who pay their credit card bills and save money.
Major retailers have begun responding to recession-driven consumer pessimism by repositioning their advertising. The best example we've seen so far comes from Target, which shows clever ways to save money by buying its products.
The New Age is a permanent shift in consumer behavior, driven by the "Perfect Storm" of a variety of factors:
- The "Great Depression"-like recession we're in is certainly the kick-start to this shift in consumer behavior. If you don't have much money to spend, you spend much less.
- The emerging "Green" movement away from consumables and more toward renewables is another factor. Fully 80% of Americans in our recent "Green Matters" study either think or act in environmentally responsible ways. Our grandparents and great-grandparents never threw anything of use away. They couldn't afford to. In short order, our kids and grandkids will be doing the same. It's a life lesson they won't forget.
- Boomers, the consume-now-and-pay-never generation, have reached that stage of life where the goal is less about acquiring more materials things and more about acquiring better and more enriching experiences.
This New Age doesn’t mean Boomers will stop spending. It just means they’ll do it more wisely. The Boomer priorities: to prove that growing old doesn’t mean growing feeble by maintaining their health, to make their home comfortable and enjoyable, to find items that allow them to enjoy their life and balance the demands on their time and to still take that vacation to an exotic place have not changed.