Article

Rethinking retail in the age of the grounded consumer

New research from a cultural anthropologist offers timely advice for retail.

February 23, 2010

Many business owners, especially those in the retail sector, were happy to bid farewell to 2009 -- a year defined by high unemployment rates, decreased consumer spending and myriad financial uncertainties. The onset of 2010 brought hope and perhaps a proverbial light at the end of the tunnel. While the end of the recession may be in sight, our culture is undoubtedly forever changed due to this economic crisis.

Some believe that as the economy continues to improve consumers will return to their old spendthrift ways, forgetting the lessons learned during these difficult economic times, but I strongly disagree. I believe a permanent cultural shift has occurred as a result of the downturn and a new “grounded consumer” has emerged.

My company, Context-Based Research Group, a consumer anthropology firm with cultural anthropologists around the world who observe human behavior to uncover the reasons behind why people do what they do, conducted two studies during the Great Recession to uncover insights into the changes in consumer behavior.

The first study, “Grounding the American Dream,” used ethnographic research to identify a five-stage process people were undergoing at the close of 2008 and through 2009:

Stage 1: Goodbye Homo economicus “I no longer want to be defined by what I buy.”

Stage 2: My Life is Not a Loan “I cut back my credit and started to save.”

Stage 3: From a Me to a We Economy “Transacting life is not as valuable as building relationships."

Stage 4: unSTUFFing Our Lives “I’m getting rid of value-less things and surrounding myself with people and things that matter.”

Stage 5: The Grounded Consumer “Now I’m more strategic and smarter – connecting my emotional, rational and social senses to how I live and consume.”

Our latest study, “Coming of Age in the Great Recession,” validates findings and predictions from the original research by using a quantitative approach. It also provides updated and more detailed insight into post-recession attitudes and behaviors.

One of the most attention-grabbing findings from the recent research is that 78 percent of survey participants agreed the American Dream has died. Once synonymous with home ownership and a better, richer, happier life, the new American Dream is now being defined by ideals rather than material possessions. We’re moving into an era during which we measure the quality of our lives in social terms before economic ones. As an anthropologist I define this as a shift from a “me” to a “we” economy. According to our research, 43 percent of Americans believe the recession has positively affected their lives. Yes, you read that correctly. People are emerging from the worst economic climate in recent history more joyous and ready to live a more meaningful life.

The “Coming of Age in the Great Recession” study goes even further to differentiate this post-recession mindset from the conspicuous consumption mindset that existed prior to the recession. We identified four subsets.

Rational: Understanding true value and how things fit into your life (26 percent)

Relational: Putting social relationships over transactions (23 percent)

Balanced: Spending with thought and care, but with some fun too (26 percent)

Joyful: Experiencing true joy often from non-consumer spaces (25 percent)

These subsets give us a more nuanced understanding of today’s grounded consumer. So what does this change in thinking mean for retailers? First of all, marketing tactics and sales incentives from the previous decade will no longer resonate with this new consumer. People are scrutinizing every purchase they make and they’re seeking more significant experiences when they do spend money. Based on our research, we believe retailers need to:

Focus on joy and creativity. This doesn’t just happen magically. Retailers will need to think this one through in order for it to truly resonate. Retailers need to develop creativity-enhancing spaces and activities – for example, offering jewelry making workshops or providing areas where aspiring artists can learn to use oil paints. There’s a deep, intrinsic need among this group to feel creative and retailers who recognize this will certainly benefit over the long-term.

Arm people with the tools they need to fulfill their dreams. Bookstores have used this approach quite successfully. Bring in experts on a regular basis and your customers will reward you. Parenting, fitness/dieting and financial planning seminars are just a few examples of the types of services retailers should consider hosting.

Help shoppers make more meaningful purchase decisions. The grounded consumer will no longer live a life on credit. Therefore retailers who continue layaway programs will remain popular. Also retailers who donate a portion of sales to charity will be highly regarded among this new group. Retailers aligned with Upromise will continue to be popular.

Grounded consumers are interested in enriching their lives and not merely acquiring more “stuff.” This is not to say that we’ve suddenly become an austere society. We will still spend, but spending will be more calculated than it was prior to the recession. From our research we found that virtually all Americans (93 percent) have become more strategic in their spending habits, evaluating how purchases fit into their lives rather than purely seeking instant gratification. So as we emerge from the Great Recession, it’s important for retailers to pay close attention the behaviors of the new grounded consumer. Understanding this ever-evolving group can help retailers of all shapes and sizes navigate this new terrain.

Dr. Robbie Blinkoff is the founder and principal anthropologist at Context-Based Research Group, and chief anthropologist at Carton Donofrio Partners, in Baltimore. Under his direction, Context has worked across multiple industries with a broad range of clients, including American Express, Fisher-Price, Nike, Wyeth and Procter & Gamble. Dr. Blinkoff also teaches consumer anthropology at Goucher College.

Photo by lululemon athletica.