It’s easy to look at the recent downturn in retail expenditure in Australia and dismiss it as a temporary blip as a more cautious consumer attitude arises out of the Western financial crisis.
But what if consumers are not merely re‐thinking their attitudes towards debt and credit? What if the real driver of this decline is a fundamental shift in how society perceives consumption and materialism?
The rise and dominance of Materialistic values in Australia over the past 25 years has delivered the Age of Want – An age where consumers have felt compelled to accumulate, renovate and update to an unprecedented level. It was a period which saw social expectations evolve from lay‐by (delayed satisfaction) to buy now, pay later and 48 months interest free purchasing.
Even better for retailers, it was during this period that a more fundamental shift in the consumer psyche occurred. Whereas previously it was products that came with a physical obsolescence which forced consumers to replace goods when they broke down, the materialistic age has seen the rise of a mental obsolescence which exists in consumers’ minds. The consumer now sees product obsolescence where none physically exists.
With retailers and manufacturers preying upon this social urge for newness, the materialistic consumer mindset has become such a powerful driver of retail and economic growth over the past two decades.
However, mindsets change on the basis of different circumstances or different information; for example, the circumstances in which we find ourselves today. As the debates about climate change, global warming, and carbon taxes abound, Australians are being shocked from their position of mindless consumption (“That’s just what we do around here”) to a position of awareness ‐ we are becoming aware of our consumption lifestyle. And with this awareness comes a whole new set of questions many are asking.
We’ve already seen questions like “How did it get here?” and “How was it made?” being given greater consideration as consumers broaden their interest beyond the retailer’s shelf. However, the paradigm shifting questions are “Do I really need this?” or “Do I really want this?” These questions represent a clear shift in consumption attitudes and will have a profound impact on the future of consumer expenditure in this country.
And if such an attitude shift were taking place then it would make sense that declining retail figures would be an early indicator of the changing consumer perception. Due to its heavy reliance on stimulating want, retail is the canary in the coal mine for all industries of the coming new age – the Decline of Want.
The most dangerous aspect of planning is to carry trends forward in the false assumption that the future will repeat the past. To avoid this mistake, retailers should prepare for a new consumption paradigm; a post materialistic landscape where a substantial and permanent decline in the want to consume becomes the norm.
Forget the proposed carbon tax, or even the loss to internet sales; this new consumer paradigm represents the greatest challenge to the existing planning models of Australian businesses going forward.
Read more about how consumer perceptions are the essential source of foresight.