Experiences, not stuff

Last night SmartCompany consumer and retail expert Emily Ross sent us a great piece from the New York Times with a proactive title But will it make you happy? which examines some of the key trends in global retailing, with a focus on the latest research around consumer decision-making.

The central argument of the piece is that the new frugal consumer in the US does not want to buy new stuff – partly because they can’t afford it – but are instead investing in “experiences”.

At a simple household level, this includes home movie nights, family board game nights and “staycations” where the family pitches tents in the backyard and enjoys the simple pleasures of barbecues and a quiet drink.

But there is also an argument that this seemingly new focus on experiences over stuff – or as one expert quoted says, a new holiday over a new couch – isn’t just related to poor economic conditions, but is actually rooted in science that shows that experiences make us feel happier than goods.

One lovely bit of research cited comes from Thomas DeLeire, an associate professor of public affairs, population, health and economics at the University of Wisconsin in Madison, who recently looked at nine major categories of consumption and found that the type of spending that made people happier was related to leisure, a category that included items such as holidays, entertainment, sports and equipment like golf clubs and fishing rods.

This trend presents both challenges and opportunities, particularly for retailers, and goes some way to explaining why retailers are finding that discounts are not really working.

Entrepreneurs particularly should start thinking about how they market their goods and services. While companies don’t necessarily need to start changing the product ranges and start selling experiences directly, they might need to think about how they present their products.

Selling computers or computer games? Emphasising the more family-friendly games that could be enjoyed an on electronic family games night might be a way to go.

Selling furniture? Displays and promotions that play to the continuing “cocooning” trend might work well.

The key message is that consumers will no longer simply buy stuff because they like to buy stuff – but they will buy goods and services if they are tied to an experience that they really value.

In this post-GFC world, entrepreneurs need to work harder to help customers make those connections.