As the effects of the global recession linger, consumers everywhere are changing their purchasing patterns, paying greater attention to what and why they are buying, and from whom. While many feel rampant spending is hard-wired into the modern psyche and that we will be back to our wasteful ways soon enough, there are clear indications of a permanent shift in the way we shop. Even before the economic downturn, consumers' definitions of value had begun to change. People were becoming more mindful about their purchases and more attuned to the social and environmental implications of their choices.
To better understand this important evolution and its ramifications for business, Andrew Benett and Anne O'Reilly launched a groundbreaking study on the New Consumer and the escalating dissatisfaction over hyperconsumerism. Here, for the first time, is an in-depth look at the new face of the global consumer, showing that:
• A significant majority in the seven markets surveyed are deeply worried about the direction in which our consumption-obsessed society is moving. They believe people have become both physically and mentally lazy, and that, as a society, we have lost sight of what truly matters.
• Two-thirds believe they would be better off if they lived more simply, and a quarter say they would be happier if they owned fewer things.
• Half of Americans surveyed are deriving a sense of satisfaction from reducing their purchases during the downturn, and three-quarters are feeling good about cutting back on the amount of waste they create.
• A majority of Americans have no intention of going back to their old shopping patterns, even when the economy rebounds.
Now, as the consumer voice signals its changed priorities, forward-thinking companies are responding by rejecting excess and artificiality in favor of products and communications that offer authenticity, substance, and interconnectedness—all values today's more mindful consumer craves. In this book, the brand experts look at corporations as diverse as Glenmorangie and Wal-Mart to see what lessons they can offer to businesses attempting to grow in the postconsumerism era. They also spoke with corporate leaders in a variety of industries to learn how they are recasting their businesses and brands in order to prepare for the changes ahead. Through cutting-edge research and a sharp look at new industry models, Consumed provides real direction for marketers and managers.
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About the Author
Andrew Benett is co-CEO of marketing communications agency Euro RSCG NY and global chief strategy officer of Euro RSCG Worldwide. In 2009, Andrew was named to Crain’s New York Business’s "40 Under 40." Bennet is the coauthor of The Talent Mandate: Why Smart Companies Put People First, Good for Business: The Rise of the Conscious Corporation, and Consumed: Rethinking Business in the Era of Mindful Spending.
Ann O’Reilly is both a strategic planner and editorial director of Euro RSCG Worldwide’s Knowledge Exchange with nearly 20 years’ experience in marketing and publishing. She is co-author of Good for Business, The Future of Men, and Buzz: Harness the Power of Influence and Create Demand.
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Rethinking Business in the Era of Mindful Spending
By Andrew Benett, Ann O'Reilly, Stuart Harris
Palgrave MacmillanCopyright © 2010 Andrew Benett and Ann O'Reilly
All rights reserved.
THE BIRTH OF CONSUMERISM
We used to build civilizations. Now we build shopping malls.
Everyone consumes, even the most impoverished of humans. Strictly speaking, Homo sapiens could not exist otherwise. Our physical organism survives by taking in food and drink and extracting what it needs. We must consume natural resources, such as trees and coal, to shelter us from the elements and keep us warm. At the most basic level, we consume oxygen to breathe.
So, in a literal sense, we have always been consumers. We have not, however, always lived in a consumerist society. What is the difference? Consumerism is not about the fundamental, inescapable need to gather resources in order to survive. Rather, it refers to the act of consumption as a behavior in itself: consuming not to live but for other, less functional and indeed less rational ends.
Nonfunctional consumption is not entirely a new phenomenon—it exists even in nature. Scientists theorize that fancy phenotypic displays, such as the flamboyantly shimmering tail of the peacock, have evolved as proof that the displayer is so fit and healthy, he or she can afford to invest resources in superfluities. (A diamond-encrusted gold chain sends the same message on city streets.) In human communities in which scarcity is the norm, ostentatious consumption conveys a message of high status—hence the exorbitant sums emperors spent on gladiatorial combats in ancient Rome and the profligate giveaway of goods at potlatch festivals in the Pacific Northwest. Such over-the-top, status-driven behavior received a name from Norwegian American economist Thorstein Veblen at the close of the nineteenth century: conspicuous consumption.
In his book Culture and Consumption, cultural anthropologist Grant McCracken describes the "consumer boom" in sixteenth-century England, just as the little country was beginning to strike it rich from overseas trade. Landed gentry began to spend ruinously on housing, hospitality, and clothing. McCracken points to the abetting role of Queen Elizabeth I, who expected the nobility to pay for spectacular ceremonies at her court in order to earn her fickle favor. The upper classes went to ridiculous extremes to maintain the appearance of wealth—regardless of how destitute they were all the while becoming. As Veblen noted in The Theory of the Leisure Class (1899), "Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure." Paradoxically, the more wasteful an Elizabethan gentleman could afford to be, the stronger his reputation.
WE'VE COME A LONG WAY, BABY: FROM SCARCITY TO THE SCIENCE OF PLENTY
In recent decades, conspicuous consumption has been on near-constant display, with blaring media accounts of celebrity excess and CEO profligacy, from multimillion-dollar weddings and Learjets to the buying up of Caribbean islands. But this is not the form of consumption that most interests us, nor is it the focus of this book. Rather than conspicuous consumption (the squandering of scarce resources available to a select few), we have chosen to examine everyday consumerism (the steady gobbling up of mass-produced goods readily accessible to most). Over the course of the last century, consumption managed to go from demand driven (businesses producing goods to meet people's genuine needs) to supply side (people buying goods to support business growth). This shift has had a monumental impact not just on business but on society as a whole, right down to how we interact and what we value and how we perceive ourselves. In the book The Golden Cow, John White decries the developed world's frenzied worship of material goods:
Our grasping arms are being crammed with the produce of an age of abundance, our eagerness to grasp being more than matched by the zeal of the people who shower such produce upon us. Abundance in the West has become a menace threatening to inundate us under mountains of television sets, houses, clothes, flowery toilet paper, cars, snowmobiles, books, furniture.... We need food, clothing and shelter. Even abundance and comfort are gifts of God. But we are no longer his creatures accepting and distributing the goodness he pours upon us but the feverish and slavish worshipers of abundance itself.
Hyperconsumerism was no fluke, nor was it inevitable. Instead, it was conceived and promoted precisely as a means of growing wealth, primarily for the benefit of governments and corporations. As long ago as 1924—in another precatastrophe era in which the stock market seemed inexorably to rise—journalist Samuel Strauss first trumpeted the merits of supply-side consumerism. In an Atlantic Monthly essay, he fervently argued that civilization would perish unless citizens could be persuaded to purchase more and more of what modern-day factories were churning out:
Through the centuries, the problem has been how to produce enough of the things men wanted; the problem now is how to make men want and use more than enough things—"the science of plenty," it has been called.... Consumptionism is the science of compelling man to use more and more things. Consumptionism is bringing it about that the American citizen's first importance to his country is no longer that of citizen but that of consumer.
Strauss's consumptionism is today's consumerism. The dynamic and logic are the same: in Strauss's prophetic words, "not how to produce the goods, but how to produce the customers."
Over the eight intervening decades, consumerism has become so thoroughly embedded in our way of thinking and talking that the words people and consumers are now used interchangeably in numerous contexts. Consumerism is what we do; it is what is expected of us; it is our singular contribution and almost the chief reason for our existence—that is, if you believe Rudy Giuliani, whose post-9/11 mayoral exhortation to the citizens of New York was "Take the kids to the park, buy a pizza, see a show." A few years on, in the face of growing world turmoil, people began to rein in their spending, and governments were desperate once more to stimulate consumption in order to stave off massive economic contractions. President George W. Bush's call to action at a 2006 news conference:
As we work with Congress in the coming year to chart a new course in Iraq and strengthen our military to meet the challenges of the twenty-first century, we must also work together to achieve important goals for the American people here at home. This work begins with keeping our economy growing.... And I encourage you all to go shopping more.
Much has changed in the years since Bush delivered that heartfelt appeal. We now face a situation in which the producer-side forces driving consumerism still apply but the conditions that made consumerism possible and desirable in the first place are unraveling. Before we look ahead to what is next, it is helpful to understand how we got to our current state of affairs. We look now at the origins of the strange alliance between government and retail.
THE POLITICS OF CONSUMERISM: MAINTAINING A STABLE SOCIETY
Be glad that you're greedy; the national economy would collapse if you weren't.
—Mignon McLaughlin, The Second Neurotic's Notebook
How did leaders in Washington and elsewhere come to be so interested in the contents of shopkeepers' tills? It all comes down to maintaining social order. Today, most people in developed countries have little experience with dramatic political or social turbulence. This is a far cry from a century ago, when civil unrest, riots, and revolutions were commonplace. To corral these dangerous forces, many countries established dictatorships; the United States and European capitalist democracies followed a more enlightened approach. In 1928, President Herbert Hoover became perhaps the first American politician to spell out the notion that producing and consuming should be the great driving forces of our national life. He told an audience of advertisers and public relations men, "You have taken over the job of creating desire and have transformed people into constantly moving happiness machines, machines which have become the key to economic progress."
Hoover's reasoning, shared by forward-thinking economists of the day, was that the steady production and consumption of goods and services would spur ceaseless economic growth, which, in turn, would usher in universal prosperity—ever-greater joy for myriad "happiness machines." Basking in an improved quality of life, the everyman would never consider building a barricade, bombing a bank, or attempting to overthrow the state. What would be the point? This gospel of happiness through consumption was interrupted by an economic depression and war but flowered again during the Eisenhower years. World War II temporarily brought product scarcity and deprivation, but ultimately it boosted the standard of living thanks to the creation of new jobs that served the war effort. Between 1940 and 1947, the number of employed Americans expanded from 47.5 million to 58 million, and vast numbers of citizens were yanked out of poverty. At war's end, Rosie the Riveter had cash to spare, as did returning soldiers, who benefited from low-interest loans available under the GI Bill of Rights. Corporations had been enriched by wartime profits, which they now plowed into new plants and equipment that churned out shiny consumer goods. As the 1950s unfolded, the goal of corporations and governments alike was to sustain throughout peacetime the same—or even higher—levels of production as during the war, for the benefit of all.
In a Journal of Retailing essay in 1955, economist Victor Lebow underscored the heightened imperative of consumption in postwar America and the extent to which consumers had already begun to internalize their purchases—deriving a thoroughgoing and satisfying sense of self from the material goods that filled their ranch-style suburban homes:
Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfactions, our ego satisfactions, in consumption. The measure of social status, of social acceptance, of prestige, is now to be found in our consumption patterns. The very meaning and significance of our lives is today expressed in consumption terms. The greater the pressures upon the individual to conform to safe and accepted social standards, the more does he tend to express his aspirations and his individuality in terms of what he wears, drives, eats—his home, his car, his patterns of food serving, his hobbies.
These commodities and services must be offered to the consumer with a special urgency. We require not only "forced draft" consumption, but "expensive" consumption as well. We need things consumed, burned up, worn out, replaced, and discarded at an ever increasing pace. We need to have people eat, drink, dress, ride, live, with ever more complicated and, therefore, constantly more expensive consumption.
We need, we need. For business leaders, the imperative was clear: Take every measure available to turn citizens into full-time consumers. Make them see the link between consumption and happiness, between material goods and social status, and even between consumerism and good citizenship.
Turning sober citizens into hard-charging "happiness machines" required transforming the old exchange of goods and services for money from something purely practical into something far more pleasurable and enticing. It would mean creating an entire culture geared toward the promotion of shopping and spending, with all their thrilling concomitant delights. The first step in that process was already well under way (indeed, it had begun a century before): the reinvention of the retail experience from merely functional to extravagantly seductive.
"THE HAPPIEST PLACE ON EARTH": BIG STORES BRING OUT THE FUN IN FUNCTIONALITY
When a customer enters my store, forget me. He is king.
Long before big-box stores were common, before shopping malls spread everywhere, customers visited local markets or specialty stores such as bakeries, butcher shops, perfumers. Take a look at re-created Colonial Williamsburg in Virginia, where numerous tiny shops (apothecary, silversmith, gunmaker, wigmaker, and a dozen more) are scattered along a dusty commercial street. The experience of shopping may have been sociable and a pleasure in itself; it may have been regarded as an important aspect of community life, much as going to church or synagogue was; but its primary purpose was functional. And retail was very much small scale and local, like the no-nonsense hardware store Jim Lowe ran in North Wilkesboro, North Carolina, sixty years ago—the seed from which eventually would sprout the modern Lowe's chain of more than seventeen hundred big-box stores.
The original, highly circumscribed retail scene already had begun to change by the mid-nineteenth century, with shopping becoming a more alluring, all-around experience in major cities. Established in 1838, Bainbridge in Newcastle-upon-Tyne, England, is one of several claimants to the title of "oldest department store in the world." In Paris, Le Bon Marché was founded that same year, offering shoppers an environment so attractive it spurred, in the words of one historian, the "arousal of free-floating desire." In New York City, A. T. Stewart, housed in the flamboyant Marble Palace on Broadway, was America's first department store. Built of shining white marble amid a streetscape of dull red brick, it devoured an entire city block—and caused a sensation. Inspired by the innovations of Mr. Stewart's dazzling retail emporium, other businessmen followed suit, soon creating an entire district known as Ladies' Mile—an exciting arena where the top-hatted and bustled well-to-do could come to shop and socialize.
The contrast between these palaces and their general-store precursors was stark. Where goods once were mere lumps of inert matter to be sold and bought, now they were romanticized and elevated to an almost ethereal status. As described by historian Richard H. Robbins:
The department store evolved into a place to display goods as objects in themselves. When Marshall Field's opened in Chicago in 1902, six string orchestras filled the various floors with music and American Beauty roses along with other cut flowers and potted palms bedecked all the counters. Nothing was permitted to be sold on the first day, and merchants in the district closed so that their employees could visit Field's. Later elaborate theatrical productions were put on in the stores, artworks were displayed, and some of the most creative minds in America designed displays that were intended to present goods in ways that inspired people to buy them. The department store became a cultural primer telling "people how they should dress, furnish their homes, and spend their leisure time."
And so it grew, with the notion of shopping as entertainment and spectacle spreading around the world. In 1909, American-born Harry G. Selfridge opened an exceptionally plush department store in London, paving the way for Oxford Street to become the world-class shopping destination it remains to this day. In Paris, the Galeries Lafayette of 1912 sported a memorable steel-and-glass dome and twisting Art Nouveau staircases. That same year, the Bijenkorf in Amsterdam threw open its doors. Many landmark department stores date from this period, including Harrods Buenos Aires (1912), Karstadt on Hamburg's Mönckebergstrasse (1912), and Saks Fifth Avenue in New York (1924).
By the time motion pictures flickered to life, big stores and the notion of shopping for pleasure were already firmly implanted in the public mind. Several classic movies were actually set in them: In 1923's Safety Last, star Harold Lloyd (who famously dangles from the hands of a giant clock) is employed as a clerk in De Vore's Department Store. The Marx Brothers' 1941 romp, The Big Store, takes place in Phelps's. And who could forget Natalie Wood in Miracle on 34th Street, set in Macy's in 1947?
In many respects, big department stores achieved that modern goal, the industrialization and "massification" of retail. By virtue of their size, they were able to offer a gigantic selection of goods and services compared with traditional stores, and this enhanced selection meant they needed to be organized and managed in a far more systematic way. At the same time, they ushered in a deeply enriched, enhanced retail experience. They offered a cornucopia of wonderful stuffs laid out enticingly; they invited random wandering among the goods, exposing shoppers to things they may never have seen before—or even imagined. They offered firsthand epiphanies of abundance, luxury, and service that aligned with the ever-growing expectations of upscale customers (and anyone who aspired to be upscale). Most important, they made shopping a delightful activity in its own right.
Excerpted from Consumed by Andrew Benett, Ann O'Reilly, Stuart Harris. Copyright © 2010 Andrew Benett and Ann O'Reilly. Excerpted by permission of Palgrave Macmillan.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Acknowledgments * Preface: All Maxed Out? * Part I: Unleashed: The Shopper Within * The Birth of Consumerism * Eating the World * Consumerism Hits the Wall * Part II: The Four Paradigms of the Mindful Shopper * Embracing Substance * Rightsizing * Growing Up * Seeking Purposeful Pleasure * Part III: Marketing to the New Consumer * Triggers for Change * Satisfying the Substance Shopper * Speaking the Language of Mindful Consumption * Beyond Consumption: What's Next? * Appendix: Findings from Euro RSCG Worldwide's The New Consumer Study