A report in the Wall Street Journal today focuses on how even the affluent are reining in their spending, but what I found most intriguing was that the well-cultivated American habit of shopping as self validation appears to be undergoing a sea change.
From the Wall Street Journal:
The twin currents of an economic downturn and rising concern about the environment are merging in a shift in consumer psychology. After a decade of conspicuous consumption, many middle- and upper-income Americans are no longer comfortable showing off $300 Gucci sunglasses and $8,000 Hermes Birkin bags. They are developing a distaste for extravagance that promises to affect spending on everything from cars and travel to electronics, fashion and household goods — and to last at least as long as the recession.
“Our retail and manufacturing clients are seeing almost an aversion to consumption,” says Todd Lavieri, chief executive of Archstone Consulting, which tracks retail spending patterns. “In previous downturns [such as in 1991 and 2001], we have often seen shopping as therapy.” Now, with credit conditions so tight, Mr. Lavieri says, “people aren’t shopping to feel better. They actually are not shopping to feel better.”…..
Over the past year, some affluent Americans have simply “given up the fight to keep up with the Joneses,” says Pamela Danziger, president of Unity Marketing, a research firm in Stevens, Pa., while others have decided that “spending money on luxury is a poor use of resources in a climate of high gas prices and rising carbon footprint.”
Ms. Danziger is already seeing a significant change in behavior. In a Unity Marketing survey of 1,200 affluent consumers in early October, more than half of the respondents, whose average annual household income was about $210,000, said they had shopped less frequently in the past year and were cutting spending by shopping at outlet stores or at sales.
At a panel last week, Peter Boneparth, who was chief executive of Jones Apparel Group Inc. when it owned the upscale Barneys New York chain, said, “The luxury business is in for a really hard time” and that it would be “the slowest to recover.” Mr. Boneparth said the global financial crisis had triggered a fundamental change in wealthy consumers’ psychology and that “it’s no longer chic to be spending” as in the past.
The shift began even before the credit markets broke down and the stock market plunged. Many Americans had already begun to question their “freewheeling consumption” and move toward “a culture of responsibility,” says J. Walker Smith, president of global trends researcher Yankelovich, a unit of the Futures Company. For many, he says, environmental concerns were an important factor in this shift.
Environmental consciousness has often been associated with added expenses such as solar panels and organic food. But Wendy Liebmann, chief executive of consulting firm WSL Strategic Retail, has noticed that the economic downturn is accelerating mainstream acceptance of the thriftier behaviors of the green movement, like cutting out bottled water and growing vegetables….
Lindsay Lefevere, a 31-year-old book editor in Carmel, Ind., has been economizing by cutting out weekly shopping trips to Target and daily coffees at Starbucks. Ms. Lefevere, long an avid recycler and crockpot user, has now begun canning apple butter and cherries for holiday gifts, recycling household items as wrapping paper and consolidating her errands to conserve gas. The economic crisis “is definitely making me more conscious about the environment,” she says.