- MINSIDER PERSPECTIVES
The expression “your eyes are bigger than your stomach” refers to more than eating and appetite. Just as more than 1 billion of the world’s population is suffering from what the U.N. gently terms “overnutrition,” our economies have run aground after an age of irrational exuberance—or what popular culture has more colloquially tagged as Living Large. We see now that even on an individual or household level our recent appetites for spending were unsustainable.
With the downturn of the economy, consumer spending has taken on a disciplined focus. Today’s consumers must relearn how to spend money. While we might disagree whether or not the stimulus package is too little a fix or too much of a tax burden, it does redirect our thinking from material acquisition to the task of spending purposefully.
The depth and breadth of the About.com community gives us insight into consumer micro-trends. Looking at the last six months of activity, as well as internal research findings, we see a new breed of consumer emerging. While we cannot say if they will be here for the duration, or merely until a recovery takes hold, we have learned that they are deliberate, thoughtful, slow and responsible in their spend.
This April we surveyed our users to find out what big ticket items were they saving up for. We found that many are no longer acquisitively focused: 54% were saving for a rainy day and 39% were earmarking funds for retirement.
A February survey by AARP/International Communications Research echoed our findings: 86% of its respondents were padding their emergency funds. As a consequence, the personal savings rate has climbed. While the savings rate wavered between zero and 1% from 2005 to early 2008, by January 2009 the rate rose to 5%, a 14-year high. Bankrate.com’s financial analyst Greg McBridge, as quoted in The New York Times, is sanguine: “If American consumers are less indebted, live within their means and have more money in savings, they are better positioned to spend on a sustainable basis for years to come.”
Following a “rainy day” and “retirement,” the third big ticket item that About.com users are saving for is “vacation.” Disney theme parks, in particular, have been offering unprecedented promotions. Theme Parks Guide Arthur Levine reports a sizable increase in page views for Florida park deals with offers including “Kids Fly Free” and “Get a Fourth Night Free When You Stay for Three.” In March the Florida deals page was up 42% over last year. Our Theme Parks page views have increased to 46% over the past six months to 2.2 million; while Cruises page views have increased 52% over the past six months to 2.3 million. Some of the Florida Disney parks have even reached capacity during spring break. This isn’t uncommon, notes Levine, “but it’s certainly noteworthy this year of the Great Recession.”
If savings is a forecast of future spending, leisure pursuits are a barometer of how we actually live—and spend—now. We see rising interest in ways to spend our leisure time at home, with more modest leisure dollars. The trip to the mall that was a regular weekend event for many may be replaced by D.I.Y. and hobbyist pursuits. First Lady Michelle Obama has inspired a nation of green thumbs by planting a South Lawn organic vegetable garden. Page views for our Organic Gardening Guide site reflect this, with an increase of 146% over the past six months. Roughly half of our users are cooking more at home, and in a testament to the collective psyche, there’s a particular interest in traditional comfort foods. There seems to be an emerging market for at-home family activities: 25% were doing more arts and crafts projects.
We also see a new, long-range thought process behind a purchase. Users tell us that they consider the end cost of a given purchase before deciding what to buy. For example, despite the rising interest in generic household products, they would spend more for a laundry detergent if they believed the detergent would help their clothes last longer. Quality, price and utility are actually the top three influencers of purchasing behavior in the category of clothing—that’s a contrast to the style-based positioning that has dominated the retail and fashion categories for years.
The designer Charles Eames once proposed the concept of the “New Covetables,” favoring the raw products from which end-user items were made over the consumption of manufactured goods. The intent was to support the creation of things (furniture, textiles and even toys) as well as experiences that we might pass down as heirlooms. With a renewed emphasis on seeing each expenditure as an investment, the Great Recession just might result in value regaining its rightful place in the ecosystem.
Cella M. Irvine is president and CEO of The About Group.
