Looking for an alternative? Explore the sharing economy
Seventy percent of the United States’ Gross Domestic Product (GDP) is based on household consumption. In comparison, household consumption in China represents only 35 percent of GDP. For the United States, what we buy truly defines who we are.
Are 147 million Americans wrong?
Holiday shopping starts on Black Friday. It will attract 147 million Americans to retail and cyber stores searching for a bargain buster or that perfect gift. This time period is critical to the financial success of most retailers that win 20-40 percent of their entire annual revenues during just the four weeks between Thanksgiving and Christmas. To ensure their success, retailers will bombard us with advertising and doorbuster promotions encouraging us buy more to enhance our self-image and how people perceive us.
One down side from all this hyper-consumption is that as much as 25 percent more household waste is generated during this four-week time period than during any other four-week period during the year. This waste includes 30 million Christmas trees that end up in landfills. It also represents the almost three billion holiday cards that end up in landfills, an amount equal to a football field 10 stories high. To produce those cards requires cutting down 200,000 trees. Then, there is e-waste resulting from holiday purchases of electronics, including batteries where 40 percent of all battery sales occur during the holiday season. Finally, there are the house slippers, socks and sweaters given as gifts that were never needed or wanted, that we hopefully will give to those in need.
Millennials challenge conspicuous consumption
Conspicuous consumption is defined as the buying of goods to display a person’s success. Think Donald Trump. Or think about how the Boomer Generation has propelled brands like Polo, Coach and Gucci into logos for demonstrating personal success.
The Millennial Generation is challenging conspicuous consumption. One of their favorite retailers is Patagonia, who advertises, “Don’t buy this jacket.” Other favorite brands like Nike are pioneering the use of sustainability scorecards in evaluating suppliers and product procurement. Millennials are the economic driver behind the growing “circular-economy” deployed by England’s Marks & Spence department stores that now boasts that 35 percent of their products are eco or have an ethical feature.
Millennials are also re-engineering the car industry through their focus upon fuel economy and emissions. Fifty-seven percent of the Millennial generation want to buy a hybrid car. More telling is that they are delaying or even potentially avoiding the purchase of cars. Rather than buying a car, they are using sharing-services like ZipCar. They are choosing urban living that offers walking and mass transit alternatives. They are cutting costs and emissions by moving past the Boomer Generation’s love affair with gas guzzling SUVs, cars and trucks.
The Millennial generation customer is challenging the restaurant industry. One third of millennials are overweight. This is a hot button issue for a generation that views aging as beginning at 25 years of age. They are seeking menu items that are healthier. They are seeking diversity in the food they eat and in their dining experience. When choosing a restaurant, they deploy a social consciousness with concerns about making the world a better and safer place. While attracted to $1 menu items, they are a key consumer segment driving the rapid growth of the more expensive Chipotle Mexican Grill built around the principal that “good food wins.”
Concerned caregivers seek socially conscious consumption
Moms are another mega-demographic group shifting away from conspicuous consumption. They are worried or concerned about the wellness of themselves and their loved ones. Their focus is on finding healthier products. They read product labels, searching to avoid chemicals, fats and sugar. They are concerned that air emissions are tied to the increase in autism and asthma among children. In response, they are joining social media sites like Care2 to find alternative information and to find a path for connecting with like-minded, concerned caregivers. Retailer should be especially aware of this trend because it is estimated that concerned caregivers control $8 billion in annual U.S. spending.
A trend is emerging this holiday season that is an alternative to conspicuous consumption. Cone Communications just released a survey reporting that 80 percent of consumers are looking for products that demonstrate Corporate Social Responsibility results. Eighty percent of consumers say they will buy the more sustainable product compared to a less sustainable product if their prices were just equal. The emerging retail opportunity this holiday season is to satisfy customers by offering “cost less, mean more” products.
Defined by the sustainable solutions we buy
Key consumers like the Millennial generation are moving from defining a person by what they buy to defining themselves by how they live, including how their behaviors impact others. This does not mean the end to holiday shopping. It does mean that retailers have a tremendous opportunity to win customers by aligning with the Millennial generation’s search for common-good answers. Another opportunity is to offer concerned caregivers the products they seek that will enhance the health of people and the planet. The potential is there for retailers and customers to return to the original principles of the holiday season. In so doing, the United States has the opportunity to be branded not by how much we buy, but by the sustainable solutions that our buying creates.
Bill Roth is an economist and the Founder of Earth 2017 He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.