what my intuition tells me now: consumer habits have changed, signed the WSJPosted by Jason Apollo Voss on Nov 24, 2010 in Blog | Comments Off
The Wall Street Journal has an excellent story that has been running for the last two days, entitled, “The Just-in-Time Consumer. It tells a story of a U.S. consumer that has finally gotten more realistic about his or her spending. Specifically the article highlights a number of statistics and anecdotes that tell the story of a shopper that used to stock up on many goods for months, that now purchases things only as needed. Imagine that!
Food and toiletries are the major culprits. The story tells the stories of consumers who had many months worth of food in their pantry. One woman had about a year’s supply of makeup, that for the entire “kit” cost upwards of $1,000 (!). And on and on. Unfortunately, most of this wretched excess was financed with debt. In my “Best of the Blog” piece I emphasized that the United States had to wean itself of its spendthrift, debt-using, ways. I have also been saying that this process would be painful, but painfully necessary.
Additionally, this change in consumer behavior is believed to be permanent. Consequently, manufacturers and retailers are adjusting the way they produce goods and services in order to accommodate the “just-in-time consumer.”
My point in relating the WSJ story is that this is very strong evidence that one of the things I felt was needed in order to right the U.S. economic ship for the near and distant future, was that consumer behavior had to change. It is very likely a new and strange world out there, for consumers and those that supply them. For over 20 years the U.S. has shifted from a net-saving nation to a net-debtor nation. The savings rate was negative for over a decade. Thankfully the recession was severe enough to have a silver-lining: consumers are buying more of what they need, and less of what they don’t. Now the rest of the world needs to adjust, too.