There’s nothing like getting a missive from the alternative reality where neoliberalism works and all consumer problems can be solved by more diligent shopping (and remember, since we are all consumers first and citizens second, the corollary is that pretty much any problem can be solved by better shopping).
The current sighting is a story in the New Yorker by James Surowiecki, The Twilight of Brands, that tries to tell us, in all seriousness, that companies now have to be on their toes because consumers are more vigilant and less loyal. He starts with the backlash against yoga clothes maker Lululemon when quality fell sharply, and states his thesis:
It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos. “Absolute Value,” a new book by Itamar Simonson, a marketing professor at Stanford, and Emanuel Rosen, a former software executive, shows that, historically, the rise of brands was a response to an information-poor environment. When consumers had to rely on advertisements and their past experience with a company, brands served as proxies for quality; if a car was made by G.M., or a ketchup by Heinz, you assumed that it was pretty good. It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk. As recently as the nineteen-eighties, nearly four-fifths of American car buyers stayed loyal to a brand.
This is utterly backwards. The reason “brands have become more fragile” does not not reside in demanding, disloyal customers, but in short-sighted corporate behavior. Surowiecki does point to the early 1980s as the beginning of the sea change, but the driver was a shift away from businesses focusing primarily on good old fashioned success in the marketplace (via matching product quality/price attributes versus customers needs, improving manufacturing processes, looking for new product/technology opportunities, etc) to focusing much more on financial results as the key determinant of success. That orientation arose as raiders, later rebranded as leveraged buyout firms, and now private equity, took over companies, sold unproductive assets, piled on debt, and pushed hard to wring out costs. While many companies were so fat that a lot of overhead could be reduced without affecting production and marketing, the pressure to reduce costs soon moved into areas that involved manufacturing and product quality. Companies began subtly, and then more overtly, lowering product quality and running on brand fumes.
And even though Surowiecki talks about quality, it’s important to remember that branding is about consistency: you are providing a consistent set of product attributes at a certain price level. Dollar Stores is a brand where everything costs a dollar and you can find a broad range of merchandise. That’s a straightforward proposition. Volkswagens (the old beetles and iconic vans) were light-weight, simple to maintain, no frills cute cars at a modest price.
What Surowiecki is talking about is that consumers are engaging in a long-overdue and largely futile backlash against the crappification of almost everything. I’m not a car buyer, but I understand some high-end brands like the Lexus and Prius have stayed true to their consumer promises. But the trend overwhelmingly is the reverse. Let’s give some examples:
Consumer white goods. Washing machines, dishwashers, and stoves all used to be good for forty years absent a leak-induced short or other unusual mishap. Now you are lucky to get ten. I have a little no-name brand gas stove that the astonishingly capable cleaning woman I had when I moved in pronounced to be good. It is. I’m sure you can’t find an inexpensive gas stove that comes close these days. Similarly, in the days when I was more flush and a tenant destroyed an Electrolux, I bought another good (but not as good) vacuum cleaner, a Miele. The engine crapped out in eight years, one beyond the warranty. And remember, I live in a small New York apartment, so it was not as if this machine got heavy use.
Tools. Readers lament in comments about how Sears Craftsman tools were terrific and the current tools under that name are poor imitations and it’s hard to find anything comparable to the old Craftsman line.
High end clothing. In my old days in investment banking, I dressed to look the part. By the mid 1990s, the deterioration in women’s clothing was evident. The tailoring and materials were markedly worse. I regarded shopping a chore rather than fun, and so tended to shop like a man (I have a uniform so I am very focused and am normally able to case the very short list of stores that carry my sort of thing in minutes to see if there are any candidates) and used to find my brief furbishing missions efficient and more pleasant than I anticipated (I’d either score quickly or not waste much time). As everything got subtly shoddier, I had to look wider and would not find things I liked.
And I’ve had this confirmed by people who actually like shopping and are serious about fashion. For instance, one stylish LA matron (A list on the charity circuit in her younger days) has a tailor altering her clothes. He worked at Hermes for 30 years and says the quality of the materials and the manufacturing is markedly worse.
Mid range clothing. In the winter, I live in cotton turtlenecks, black jeans, and pullover sweaters. Cotton turtlenecks have been systematically cheapened over the years. The length is shorter (and I prefer a hip-length shirt, both for warmth and to tuck more securely into pants). They are uniformly more fitted (which I don’t like), which uses less fabric. The turtlenecks themselves are shorter (I had a huge and unproductive argument with Land’s End when they shortened the necks by one inch and have never bought from them since). The cottons are thinner weave.
Mattresses. Josh Kosman, in his book The Buyout of America, discusses at length about how the private equity ruined mattresses. Once the industry became a duopoly, the incumbents could foist crappy products on customers with impunity. Two sided mattresses (which last longer, not just because flipping them lets you wear both sides, but flipping is also better for the mattress for reasons not particularly worth explaining) were replaced with one-sided makes. Customers have been migrated away from spring mattresses to foam, which are cheaper to produce (Kosman has even more examples of how mattresses have become a Soviet-level product). Yet the prices are higher in real terms despite the degradation.
But apparently Surowiecki lives only in the Lexus/iPhone market and has somehow managed to miss how the overwhelming majority of manufacturers seem perfectly willing to adulterate their good and risk consumer rejection. But since so many are willing to join them in the race to the bottom, the Lululemon-esqe rebellions are few and far between.