Are spending patterns really changing forever?
When values change, when problem definitions change, options that were not longer part of the consideration set now become viable. What seemed like a bad trade-off yesterday, becomes a really good idea today.
The new story line is that the combination of high fuel costs, high food costs, general economic gloom, the housing upset . . . all that combines to create a permanent, long-term, secular change in consumer decision making.
As consumers muddle through all that is plaguing the economy, they have battened down the hatches and sharply shifted their spending habits, turning to money-saving options that run the gamut from transportation to health as they find ways to pay for dramatic increases in gasoline and food.
What emerges is a new paradigm of consumerism that some experts believe will live long after the economy recovers.
“Suddenly consumers are focused on buying what they have to have as opposed to buying what they want to have,” said Howard Davidowitz, chairman of Davidowitz & Associates, a New York retail consulting and investment-banking firm.
“This is a permanent change for Americans, who will face a declining standard of living over the next 20 years,” he added.
You can read the rest of the story for examples about how people are drinking coffee at home vs. buying at Starbucks, or riding the bus, or whatever. As an example of decision making behavior, it’s a fine little story. But the idea that six months of pain is enough to fundamentally change human behavior?
Tags: Inflation, food prices, starbucks, gas prices, decision making
