There's been increasing talk about the economy, recession (is it just me or is just over the past 6 weeks that the new war is our war against recession?), and the public mood and confidence. I discovered an interesting NYT article about what it really means when higher-end consumers start talking about scrimping on the nice to haves (e.g., $160 dog grooming appointments) and then doing it:
"for consumers with disposable income, the act of pinching pennies on everything from toilet paper to yoga classes has less to do with actually saving money and more to do with emotional health....Sure, being thrifty can help people save a few thousand dollars a year, but it can also help them regain some sense of control when the world seems topsy-turvy — with stock markets around the world falling last week, brokerage firms announcing billion-dollar losses and those ubiquitous For Sale signs....when these dollar-stretching consumers cut back, they do so in ways that make them feel good and enable them to maintain their status."
So scrimping is all restoring a sense of control in a turbulent world. I buy it.
Why scrimp instead of cut outright? The article quotes Joe Priester, an associate professor of marketing at the Marshall School of Business at the University of Southern California and the president of the Society for Consumer Psychology: “In a way, a lot of these brands have become safe harbors for us,” he said. “People build attachments to brands over time, and those are very much like friendships or buffering devices in our world. You don’t hear people saying, ‘I’m not going to Starbucks.’ It would be like saying ‘I’m going to cut off this friend.’ ” In a working paper under peer review, Mr. Priester and colleagues write that “consumers see brands as part of themselves” and the greater the attachment to the brand, “the more difficult the behavior the consumer is willing to enact in order to maintain the brand relationship.”
Just the first in what I predict will be a long series of similar articles as the economic doldrums close in on us.