Experiences > Stuff: Why the Retail Slump is not Just Amazon Prime's Fault
May 25, 2016
by Tammy Sachs, CEO
It's fascinating to read articles like Bloomberg’s Consumers Want to Spend, Just Not in Your Store that tie the steady decline in retail sales to the rising trend of “experiential” spending.
When we did a national ethnographic study in 2009, the handwriting was on the wall. Many Americans associated “too much stuff” with unnecessary credit card debt, losing your mortgage, forgetting to step back and smell the flowers or take long bike rides with your kids. Loud and clear, across generations, we heard that having a lot of stuff doesn’t equate to a lot of happiness. All the damage from 2008's downturn (which many Americans have yet to recover from) led to a huge awareness of the pleasures that experiences can bring. It's no surprise, as many consumers got their jobs and homes back, discretionary spending went from a bike ride in the park to a bike ride through Tuscany. A backyard barbecue with friends and Two Buck Chuck became a $200 dinner with those same friends at Per Se.
In 2009, we heard an affluent Boomer describe his own remorse about his excessive "stuff" when he said, "America, how many motorcycles does one family need?” Today, it’s a 27 year old who’d rather splurge on a great dinner than a $150 dress. Even after the rebound, buying stuff often equates to spending less to get more (which might explain why TJ Maxx's stock isn’t hurting a bit). People are proud to hunt down promo codes even on luxury items, and find the same dress online for 1/3 less than it is currently selling at Nordstrom. Most of all, there is the growing trend and mentality that less (stuff) IS more. Stuff weighs you down. Experiences expand your horizons AND enrich your life.
Gathering experiences rather than "things" is not a new trend. In 2006, before the financial crisis, Trend Watching.com published a piece on "Transumers" –a moniker for consumers who collected experiences they way they used to collect stuff.
The article describes these consumers as being lustful of "collecting as many experiences and stories as possible." While the term "Transumers" never really caught on, this idea still holds true nearly 10 years later. Experiences have become tangible memories of what a person accomplished on their life’s “bucket list.” I remember an ethnography participant in his 20's from our 2009 study echoing this mentality when he said, “I’m going to make sure I experience Oktoberfest in Germany before I’m 30."
It will be interesting to see how brands across all categories can tap into the endless desire to spend on what provides deeply immersive (and often shared) experiences. While Amazon Prime is getting a big share of the sales of “stuff," lots more is going to experiential purchases that translate to feeling good, being healthy, learning, sharing, playing, pampering, exploring and living life more richly.
Here are some interesting takes on this theme:
US Retail Brands Are In Turmoil, And it’s Not All Amazon’s Fault Posted May 13, 2016