The conventional picture of Americans shopping is of a large, mindless, army of consumers tramping through malls and big-box stores, acquiring things in huge volumes – a horde of locusts munching their way through a field of grain. Not a pretty picture.
But the consumer attitudes and behavior that image caricatures may be changing. If the business of America is business, then consumer spending, which makes up about 70 percent of our economic activity, is central to our economic health. We need to pay attention to what happens in that sector.
And recent trends appear to be good news.
A 2011 book titled “Spend Shift,” by advertising executive John Gerzema and former Newsday journalist Michael D’Antonio, reports on consumer behavior and attitudes over several decades. A lot of the changes they report are encouraging. Among them:
People are shopping more carefully, buying less and focusing more on what they need, less on what they want.
Young adults are more comfortable than any other group in “reordering priorities and adapting,” whether we’re talking about shopping, living style or career choices.
Millennials – the generation born between 1980 and 1998 – “want to learn more skills, take responsibility for their own well-being, and tackle problems and projects on their own.” This makes them more independent and discerning as consumers, and more engaged as citizens.
Consumers have developed a sense that they can “align their values with their spending” and “force capitalism to not be just about more but about better.”
The shifts in attitudes observed over just the past few years suggest that consumers, particularly younger ones, are paying more attention to how and where the things they’re buying are made and the values of the companies that are selling to them. If they know that the company selling a desk chopped down a rain forest to make it, they won’t buy it. The data behind these attitudes suggest they are linked to a generational change as a new group of consumers comes of age, and as such were under way before the financial earthquake of 2008-2009.
A good reality check for these observations is to look at the reactions of the high priests of mass consumption in the United States: Walmart stores. The world’s largest retailer has embarked on an intensive effort to make sure that what it sells is produced in environmentally and socially responsible ways. For example, the chain has told suppliers they will be dropped unless they reduce their carbon emissions and use energy more efficiently. My suspicion is that Walmart executives didn’t wake up one morning with a sudden concern for global warming, endangered species or tropical forests. My bet is they have been studying consumer attitudes and figured they were going to lose customers unless they shaped up.
These broad consumer trends may help at the margin to redress several imbalances that had become excessive. In the United States, manufacturing has declined; cheaper production overseas has made some American businesses uncompetitive. The shift toward buying less and using it more efficiently helps in part to compensate for some of that lost economic activity; rather than continuing to buy more things made overseas, the new generation buys less and repairs and services what it buys here, which keeps some money in our economy.
And when Americans started saving more and charging less on their credit cards after the recent financial crisis, that also strengthened the American economy.
Walmart’s effort to clean up its act environmentally requires it to focus on China, where the majority of its suppliers are. Talk about odd couples: Walmart and the Chinese government are working together, because there is no place in the world that more desperately needs less pollution and more conservation of clean water than China. If China, Walmart and young consumers are all singing the same song, that’s a tune that’s here to stay.
Peter Goldmark, a former budget director of New York State, is a member of the State Budget Crisis Task Force.