Frugality is Fashionable in a Down Economy
Forget about keeping up with the Joneses. In this unsettled economy, conspicuous consumption is about as fashionable as a Nehru jacket, and frugality is now the new black.
The Boston Globe reports that cash-strapped consumers are postponing purchases and making due with what they have now—and that includes everything from clothes to cars to computers. The big winners so far? Repair professionals, including cobblers, tailors, auto mechanics, and even Best Buy’s Geek Squad. In fact, the Globe reports that Best Buy’s Geek Squad has seen a double digit increase in computer repair service calls in the past few months, and has even created an online “Fix or Replace” online app to help consumers figure out if they’re better off getting a home electronics product fixed or buying a new product instead.
An even more troubling trend for retailers, perhaps, in the short term, is that teenagers—once considered a stalwart of consumer spending—are spending about 14% less this spring than they did last spring, reports Ad Age. Citing a study from Euro RSCG Discovery, Ad Age reports that 92% of females between the ages of 13 and 21 are somewhat worried about the economy, while 87% of males are. Questions that have historically been of little concern to teens, like “do I need that?” and “Can I wait to have that?”, are now rearing their ugly heads.
The Globe reports that consumer spending, which typically accounts for nearly 70% of the US economy, is down 0.2% in February 2009, as consumers continue to delay purchases that they may have given little thought to when the economy was strong. “Before, newness trumped everything,” said Marshal Cohen, a retail analyst for NPD Group, as quoted by the Globe. “When a washing machine broke down, you wouldn’t get it fixed. You’d go out and buy a new one and a dryer that matched it in a new color. The disposable mentality is what helped drive the economy. Now, consumers are looking at ways to keep products alive to save money.”
Consumer-spending wise, the economy may have to stomach some of that delayed gratification mentality itself. While consumers are now looking to repair things like washing machines, shoes, clothes, and cars to save money in the short term, in the long term, those products are eventually going to break down, and consumers will need to replace them. And that spending, when it eventually happens, will help drive the economy—if not this year, then perhaps next year. When, or if, that comes to pass, we’ll discover if today’s frugality was just another flash in the pan, or if, indeed, some seismic change occurred in the attitudes of consumers.
By Robert Pothier
