As part of my job for the Boomer Project, I survey the media and blogs for emerging trends. One unmistakable trajectory is the increased commentary on what EMR and I would call the “end of the era of mass overconsumption.” Others have given catchier names to the phenomenon, but it all amounts to the same thing: The era of unsustainable, debt-fueled consumption in the American economy is over. In contrast to the past two recessions, consumer spending will not rebound stronger than ever. Consumers are fundamentally re-evaluating the idea that accumulating more stuff is the path to happiness.
Matt Thornhill, a principal of the Boomer Project, sees the rise of what he has labelled “responsible consumerism” and, alternatively, the “new fru” (for new frugality). Personally, I find the second term more memorable. Responsible consumerism sounds like more people reading Consumer Reports. New Fru sounds like people embracing frugality as a positive virtue, which is, in fact, what I think more and more people are doing.
As Matt elaborates the concept in a Times-Dispatch op-ed piece, “Age of Responsible Consumerism Begins,” the spreading rejection of mindless consumption will persist beyond the cyclical tightening of credit. Writes Matt:
We saw this seismic shift coming a generation away. Members of both the G.I. and Silent generations, those now ages 63 and older, led the way by reducing their own consumption of goods and services as they grew older. Their desires shifted as they reached 50 and then 60: fewer material goods, more enriching experiences. Fast on their heels comes the largest, wealthiest, and most important demographic group America has even seen. Boomers, raised in front of television sets, a target for marketers from age 5 upward, are now reaching 60 at the rate of one every eight seconds.
That’s right. The generation that put the mass into consumption is now at the stage of life where people naturally shift focus from the material to the ethereal. What’s fascinating (or worrisome, if you’re in a retail or consumer-products business) is that the impact of this shift on America’s consumption-driven economy is just beginning.
But wait, there’s more: This shift away from spending by our largest demographic group coincides with a larger societal trend toward sustainability. Consumers of all ages are thinking more about the environmental impact of their purchase behavior and consumption patterns. In a national study we conducted among all adults in late summer, before the economic meltdown, 80 percent of all consumers told us they think or act in a “green,” or environmentally responsible fashion. Green is mainstream, and here to stay. Today’s consumers want to be responsible in their consumption. They crave sustainability, not planned obsolescence. They focus increasingly on “needs” and not “wants.”
- As the retail sector shrinks, there will be fewer retail jobs — an entry point for many Virginians into the workforce.
- As retail sales shrivel, so will revenues from the sales tax. Government services that depend upon the sales tax for funding will be more fiscally challenged than services that rely upon, say, the income tax for a funding stream.
- As retail chains contract, demand for retial space in malls and shopping centers will evaporate. Vacancies will rise. Investment in retail development and re-development will plummet. That, in turn, will hurt municipalities that depend upon their commercial property tax base for revenue.
These changes are bearing down on us like a freight train. There is no wishing them away. Governance practitioners have no excuse for getting caught off guard.