2010-12-07 06:17:07
Schumpeter
Consumers are finding new ways to flaunt their status
Dec 2nd 2010 | from PRINT EDITION
KARL MARX began Das Kapital by noting that the wealth of capitalist societies
presents itself as an immense accumulation of commodities . He didn t know the
half of it. These days, supermarkets stock tens of thousands of different
products. Established brands breed new variations without cease. The problem
for companies is working out which of these products will become a hit and
which will gather dust on a shelf. To help them, an entire industry of
consumer-watchers has appeared.
These are the people who lurk in supermarkets to see which washing-up liquid
you put in your basket, or ask you to fill out a five-page questionnaire in
return for a chance to win an upgrade from cattle class. The market for
consumer-watchers is as crowded and competitive as any other. Established
giants such as Nielsen and Mintel strain to fight off upstarts and niche
players such as William Higham of Next Big Thing and Faith Popcorn.
Consumer-watchers of all sizes have several things in common. They constantly
coin annoying neologisms, which they would doubtless call annoyologisms . Ms
Popcorn chirps about manity (male vanity) and brailing the culture
(spotting trends). They hype passing fads as seismic shifts. And their
propensity to be spectacularly wrong seems not to damage their business at all.
Mark Penn, Hillary Clinton s campaign manager, argued that the American
presidential election of 2008 would be driven by micro-trends (eg, the voting
preferences of left-handed vegans) when it was clearly driven by a couple of
macro-trends (hope and change).
One of the trendiest trend-watchers is called trendwatching.com. A consultancy
based in London and Amsterdam, it is fashionably networked and global . Five
full-time employees pore over acres of data sent in by 700 trend-watchers in
more than 120 countries. Trendwatching.com is as irritating as any of its
competitors: its reports are littered with references to nowism (instant
gratification), maturialism (consumer sophistication) and tryvertising
(offering free samples). But the company has also produced a fascinating
argument, illustrated with thousands of examples, about the changing ways in
which consumers seek to flaunt their status.
Consumption is partly about pleasure: chocolate tastes good, silk feels soft
and so on. But it is also about showing off, and what is deemed bragworthy has
changed dramatically over time. In the 1950s it was about keeping up with the
Joneses amassing as much new stuff as your neighbours. Today everyone in the
rich world has a washing machine, so people increasingly seek to advertise
their hipness or virtue instead.
Rather than buying their clothes from predictable European fashion houses, they
trawl the world for exotic designs from Brazilian favelas or South African
townships. They customise their purchases to express their personalities. Bike
by Me, a Swedish firm, allows you to choose the colour of every part of your
bicycle. Trikoton, a German fashion house, allows you to buy clothes that
reflect the sound of your voice (a computer turns your speech patterns into
knitting patterns).
Possessions are plentiful; time is scarce. So there is cachet in being able to
boast about the places you have been to and the things you have done. Savvy
companies increasingly offer experiences as a way of hooking customers. For
example, Tiger Beer gives loyal drinkers access to concerts and gigs. Dunhill,
a luxury firm, promotes 1930s-style exotic travel, including hunting with
eagles in Mongolia.
Many people want to make it clear that they are deeply, deeply concerned about
the world s problems, so a growing number of goods are designed to convey this
message. Toyota s Prius hybrid car is not only green; it is also instantly
recognisable as such. Bed Stu makes shoes that look as if they are covered with
oil from the Gulf oil spill. Mango Radios are hand-crafted in an Indonesian
village using sustainable materials. And so on.
Another effective marketing tool is to help customers learn new skills. Kraft s
Triscuit crackers division has distributed 4m cards containing basil and dill
seeds, along with guides to gardening. Sheraton s Nha Trang hotel in Vietnam
has opened a purpose-built cooking school for guests. Seattle s Sorrento hotel
has sponsored a night school where guests can gather of an evening to discuss
the latest hit book.
Today s status-conscious consumers have a weapon that their predecessors were
denied the internet. Connectedness is now a crucial social signifier. (Social
Printshop, an American website, lets you create a high-resolution print of your
Facebook friends and hang it on your wall, to show how popular you are.) The
internet helps you demonstrate your virtue by buying products from the farthest
corners of the earth (if you are a fair-trade enthusiast) or from just round
the corner (if you are a locavore). Or both, presumably, if you are both. It
also helps you make friends with other people whose interests match yours, a
fact companies have been quick to exploit. Edelman, a PR firm, finds that 82%
of Generation Y have joined brand-sponsored online communities.
The customer is always righteous
In the long run, other trends may shape markets more. The rich world is rapidly
ageing. People over 50 will account for two-thirds of all growth in consumer
spending in France over the next two decades. Emerging markets are starting to
look like America in the 1950s: people are obsessed with acquiring their first
fridges and cars. The recession is forcing Western consumers to pay more
attention to prices than they used to. But people, like peacocks, will never
tire of displaying to friends and potential mates just how wonderful they are.
Firms whose offerings scream status will never want for customers.