What the End of Mass Consumption Means for Retailers
Marie Kondo has made the old adage “less is more” feel fresh again. In her popular Netflix show she helps people de-clutter homes by asking them to decide if the items they own spark joy. Anything that doesn’t meet this standard simply shouldn’t be in your home, she posits. The idea, one that resonates with many, is to surround yourself only with things that truly matter to you.
After decades of conspicuous consumption, living simply with fewer things is a natural turn. While Boomers grew up post-wartime and therefore craved abundance, younger generations have grown up with everything they could possibly want – but it’s not making them happy. Generation Z rank mental health and climate change as their top concerns and are even more stressed than Millennials. “Cheap and cheerful” is not merry-making any more. The cost of living, issues of social justice, climate change and a charged political atmosphere are driving a need for something other than stuff.
Rather than fear the loss of growth, retail brands need to think about how they can spark joy for their consumers. In order to do this, they need to understand why consumers are turning away from mass consumption towards thoughtfully selected purchase decisions.
Concerns About The Environment
Goods that are not sustainable represent more than waste to younger consumers: they represent a very real danger to their future. The younger an individual is, the more likely they are to be educated about climate change. Millennials helped drive the market to include more organic and sustainable choices. Generation Z, who are coming of age now, are even more devoted to making choices that align with a lower carbon footprint. This has implications for everyone, from foodservice operators to hair salons to banks.
What will spark joy?
Circular economies ensure products and services are not causing environmental harm. If you are not working on a strategy to become more than just friendly to the environment, it’s time to take this on. Companies like Loop, who help brands create circular economy programs, have shown that there is a market and value in embracing sustainability.
No Room For Stuff
Wages have not kept pace with inflation in North America, especially at entry level. Young people simply don’t have the same kind of disposable income they did 30 years ago. This means they have smaller homes and are less likely to own a car. While there will always be a market for the suburban family in North America, the population shift to an urban setting is significant and will require brands to approach the idea of owning space in the consumer’s home as an honour.
What will spark joy?
Ownership is no longer so keenly valued, and in some cases is seen as a hassle. Subscriptions are coming to every market and can replace ownership altogether: think car sharing, fashion subscriptions like Nuuly or Apple’s leasing service. Brands need to be proactive in figuring out a model that will work in their market. Brands should not fear this trend because those who get it right will win big.
All We Need Is Self-Care
The move to a more curated, even minimalist approach is also a bi-product of ideas about mindfulness and self-care. The wellness movement is resonating profoundly with younger generations who report mental health as their number one health concern, but also with the population more widely in response to turbulent times. Mindfulness teaches that a focus on the present moment rather than the past or future can bring greater contentment. It also teaches conscious action, which Millennials and Generation Z have increasingly integrated into purchase decisions.
What will spark joy?
Brands that can meet people’s values of thoughtfulness in product mix, omni-channel experience and social justice will be rewarded with their loyalty. Half-hearted efforts will be dismissed as marketing ploys and may backfire, so be sure you can walk the walk.
Another way consumers fill their need for self-care is through the purchase of a special treat, whether an experience or a product. Streetwear brands are the perfect example of how limited-edition items can create interest and even frenzied sales, but the trend extends to other categories: think Taco Bell’s Dorito Loco Tacos or the Unicorn Frappuccino. Limited edition offerings that are special, but still at a good value, will resonate with consumers.
How Will This Affect Growth?
Growth in North American retail will come down to excellence in the category. Consumers don’t have time, space or money for anything less, and they have options. Retailers must be at the top of their game when it comes to products, service and omni-channel experiences in order to grow in the age of thoughtful consumerism.