Filthy Commerce

Define necessity.

There's a photo going around on Facebook, which I've included to the left, where the emaciated forms of African children are contrasted with the chubby, Michelin man-like figures of frenzied Black Friday shoppers. While I appreciate the sentiment and I certainly think that more westerners could stand reminders of how easy we have it compared to the people trapped in climate-related or geopolitical nightmares, I think that photo's a bit facile. It assumes a lot about the fat Black Friday shoppers. It assumes they have any money at all.

Wages in the U.S. have not risen in line with consumer costs; in the last year, consumer prices rose 3.5% while average wages rose approximately half of that. People are feeling a little pressure in the wallet.

The logical thing to do when you have a lot of month at the end of the money is to tighten your belt and reduce expenses. But people have been doing that for a while. And Christmas is coming up.

I don't doubt that stores on Black Friday are happy hunting grounds for bargain shoppers. But I also think that those stores are where people go to stock up on the clothes their kids need (or they need). Those sales are where people go because if they didn't, they wouldn't be able to have Christmas at all. And although people can, and do, waggle their fingers about how the income-challenged should cut out non-essentials and just be grateful they've got the chance to work part-time for less than a living wage ... who among us really thinks that the working poor don't deserve the pleasure of watching their kids' faces light up when they behold presents under a tree on Christmas morning?

Not all Black Friday shoppers are mindless greedbots. Many are people who know if they sit out the sales, they sit out Christmas. Instead of stigmatizing the people who are scrabbling for sales merchandise, we need to realize that they're one front in a class war that's pitting the middle and working classes against one another. And we need to ask, "Who benefits from tsk-tsking the bargain shoppers and scolding the workers?"

Maybe they're the mofos who should be on the other half of that picture instead.

O wishlist, where art thou?

One of the smartest and most fiendish innovations in e-commerce is the one-click transaction, and two of the stores that do it best are Apple's iTunes Music Store (iTMS) and Amazon.com's Kindle store. In both cases, it is perilously simple to rack up a hefty credit card charge simply by pointing and clicking and pointing and clicking and pointing and clicking and ... you get the idea. It's budgetary death by a thousand point-and-clicks.

You never have the physical transaction that reifies the notion of exchanging money for a good or service, so you never connect "big stack of new things" with "dwindling stack of money." One minute you don't have season four of The Tudors on your laptop; the next minute, you do. The $19 charge will show up on a credit card later. Because you (as a shopper) never feel like you're spending money, it's very easy to just keep racking up the clicks and adding to your collection of digital assets.

This tidy chronological decoupling of buying action and financial consequence is a license to print money for purveyors of digital content. So why, oh why, hasn't Amazon.com found a way to link a Kindle owner to their Amazon.com wishlist in the Kindle store?

Control/ to get what I want/ Control/ I got to have a lot

We recently put down a new rug in the living room, prompted by the vague suspicion that good parents would find the prospect of an infant wiping out on a highly-polished hardwood floor to be less in the "hilarious" camp and more in the "horrible" one. The thing is, having a rug introduces a whole new dimension to housekeeping. With hardware floors, all one had to do in order to eliminate the cat-generated detritus was sweep. Now, however, we need to vacuum. Truly, this rug has spawned an unholy hybrid of Home Comforts and the Diderot Effect.

An outlet for all your retail impulses

While hunting for links to fill out my latest Dollars & Sense post, I came across this M.P. Dunleavy article on the rip-off potential of outlet malls. Oh, outlet malls. Why nobody's set a retro-80s movie in an outlet mall as a way of commenting on the socioeconomic tenor of the times is a mystery to me.

What Karen Hill's decor says about bloggers

I love Goodfellas and Casino for many, many reasons. Among them: Each movie features a swag scene, where the female-actress-with-the-most-screen time* proudly shows off the hideous yet expensive goodies her husband's ill-gotten wealth can provide her. In Goodfellas, Karen Hill proudly displays a living room out of Sister Parrish's nightmares; in Casino, Ginger McKenna coos over a jewelry wardrobe that even the fine folks at Iced Out Gear might find excessively gaudy.

Those scenes have always struck me because they are such elegant little dissections of the social signals you send when you show off your stuff. This is why the haul video phenomenon on YouTube intrigues me. In a nutshell: these are YouTube clips where adolescent girls and young women show off their latest clothing or cosmetic purchases. ("Tube Tops and Teddy Bears," NYT, April 22, 10) I find it striking that these videos tend not to focus on the transactive angle of the purchase -- rare is the girl discussing clothing budgets or spending parameters -- but cut straight to Lookit my new stuff!

Naturally, marketers have discovered the haul video phenom.  The Star-Trib reports in "Teen Shoppers Hauling It In" (May 19, 10):

Young fashionista haulers with thousands of online followers capitalize on their popularity as a way to score freebies or paid-endorsement gigs from clothing and cosmetics companies.

Of course they do. The story also notes how heavily gendered the haul phenomenon is; it's primarily a heteronormative female genre:

Louise Dengerud, an account director at Olson, a Minneapolis creative agency that uses social circles to promote clients' products [said], "It's a more female psychology to want to share that you don't find in the straight male culture, except around tools and electronics. Guys would probably watch that kind of haul."

I am always fascinated by a blogging (or vlogging) segment's cheerful rush into commodifying what had once been a facet of private life.

Mommybloggers are, of course, your most prominent example, but personal-finance bloggers are no less complicit, nor are housebloggers, and if the wifeblogging genre ever gains traction ("A New Generation of Female Bloggers Is Championing the Importance of Being a Good Wife and Partner," LAT, May 15, 10), I have no doubt marketers will be finding ways to work tie-ins to Sandals Resorts, KY Jelly or Victoria's Secret.

There was a miniruckus of Moe Tkacik's recent revelation that her blogging persona was a construct meant to please an audience, not an accurate reflection of who she "really" is. You mean it's not her? The brazen gall!

This sort of "You don't really know me! You don't really know my life!" defense ought not be surprising. It's a tidy dodge: Instead of admitting you're an unreliable narrator, you're merely choosing to keep the audience selectively informed. This doesn't reduce the appeal of the authentic -- which is, after all, a tremendously marketable commodity -- but reserves the opportunity for further market expansion as the blogger selectively reveals "new" facets to their commodified persona all along. It is the kind of strategic thinking any product development team would love to have in the office.

I look forward to seeing where haul videos are going -- when they stop being descriptive and start proscriptively defining a marketer's desired spending behavior. Then, we'll have moved from Karen Hill to Kate from The Joneses.

* There are no female protagonists in a Scorcese flick. Not even Cape Fear.

The mushy middle, ever shrinking

"Soft in the Middle" (New Yorker, Mar 29, 10) posits that ignoring the "middle market" of consumers -- people who can pay, but not too much -- is a tremendously lucrative business strategy. Here's why:

The products made by midrange companies are neither exceptional enough to justify premium prices nor cheap enough to win over value-conscious consumers. Furthermore, the squeeze is getting tighter every day. Thanks to economies of scale, products that start out mediocre often get better without getting much more expensive—the newest Flip, for instance, shoots in high-def and has four times as much memory as the original—so consumers can trade down without a significant drop in quality. Conversely, economies of scale also allow makers of high-end products to reduce prices without skimping on quality.

What is interesting to me about this strategy is how natural a progression it was from the masstige movement of the early Aughties, where companies simultaneously educated consumers on the definition of "premium" products, then shored up the lower end of their customer base by offering the perception of accessible luxury. I had pegged a rollback of masstige in correlation with a new emphasis on frugality and thrift -- generics over brand name, back-to-basics over whimsical extras, etc. Now, the perception seems to be that "you get what you pay for," and what you get is either a good-enough bargain or the satisfaction of a premium-version product.

The only thing the New Yorker article is missing is a tidy chart identifying the low-end, mushy middle and high-end versions of common consumer commodities. My kingdom for such a tidy list!

The Frugal Consumer (2008-2009)

The Frugal Consumer's lifetime was brief, yet eventful and filled with contradictions.

Two follow-ups and one new item

1-- Those shelves that were allegedly in such high demand that my correspondent couldn't possibly accept less than $150 per set? Relisted on Craigslist last night.

And right above that listing was another one offering three sets of the same Metro shelves for $150. I'm blogging about this because it's slightly more mature than writing the guy back with links to that Metro listing and asking if he still wants $150 for one set.

2 -- I had a dream about receiving a package in which dozens of sample-sized products sprang out of the box. I credit Polly's insight on how luxury retailers can define a premium experience online via the giveaways.

3 -- When you get a chance, read "Do We Inherit Thrift Rather Than Learn It?" (NYMag, Oct 5, 09)

George Loewenstein, a professor of economics and psychology at Carnegie Mellon University, devised what he calls the "spendthrift-tightwad" scale and postulates that it all comes down to "the pain of paying," as in spendthrifts feel no pain while tightwads are actually aching every time they're forced to part with their money.

Although I am of the mind that a lot of us slide back and forth along a continuum depending on the transaction (I resent the hell out of paying my AT&T iPhone bill, but have no problem forking out an equivalent amount for four hours of rafting on the Rogue river), it is interesting to see how people are studying the link between our typically non-rational thought processes and our resultant economic behavior.

Watch out -- consumers, not producers, are defining value

The headline is amusingly inaccurate --"Waiting for Deep Pockets to Open" (WaPo, Sep 9, 09) -- because the article is about how six-figure households aren't worshipping at the altar of consumption anymore, and I'd argue that many households making $150K or so are probably not rolling in dough. But the main point is worth noting: people are getting picky about what they buy -- not because their budget constrains them but because they are truly skeptical about whether a purchase is a good idea.

It's an interesting data point, made even more so by the "High Fashion Faces a Redefining Moment" (NYT, Sep 10, 09), which argues that H&M-glutted consumers just don't appreciate the time and effort that go into a $2000 dress. I love those articles, much like I love the inevitable annual WSJ piece on what justifies spending $1750 on a cashmere cardigan as opposed to the $298 model at J. Crew. (Mass-market buying peasant that I am, I stoutly maintain that Lands End's cashmere tees -- even cheaper at $50 to $89.50 -- provide an excellent return on value.)

It seems like we're about to have an extended consumer-marketplace meditation on how one gauges the real value of a good. Dana Thomas started the conversation in Deluxe. And now, Ellen Ruppel Shell's continuing it in Cheap: The High Cost of Discount Culture. I read the book recently, and what struck me was her insight that shoppers commonly use the perception of "a deal" as justification for buying things -- not any real need for the item, not any thought toward its durability or its aesthetic merits, but because it's so inexpensive, why not? Besides, if you don't like it, you can pitch it.

In that consumption model, the prevailing consumer value was low-cost opportunity, both on the front end (it's so cheap!) and on the back end (and if I get tired of it, I'll pitch it). It seems like this year has been an education in opportunity costs.

The greatest retailing koan of all time

Well, um, actually a pretty nice little Saturday, we're going to go to Home Depot. Yeah, buy some wallpaper, maybe get some flooring, stuff like that. Maybe Bed, Bath, & Beyond, I don't know, I don't know if we'll have enough time. -- Frank the Tank

Scenes from an outlet mall

I was jaded on the idea of outlet malls early on: my mom used to take me back-to-school shopping at the Williamsburg Pottery outlets, and I finished high school near Potomac Mills. As a snotty middle-schooler, I quickly twigged to the observation that most outlet stores were not what you'd call fashion forward. It took me until the middle of high school to notice that the typical outlet store gimmick -- displaying the manufacturer's "suggested price" as the Goofus price to the Gallant outlet bargain price -- disguised how scanty the savings actually were. Merchandise that didn't sell well in regular retail outlets or that was custom-manufactured for an outlet -- all for approximately what I'd pay if I just stalked the sales racks at my favorite stores? No thank you.

So it was weird to see all my suspicions quantified in the Slate article "How Outlet Malls Rip Us Off" today. (The article's an excerpt from Cheap: The High Cost of Discount Culture by Ellen Rupell Shell.)

Alice, wondering

Our local "music for square white people who secretly hope they're not square" station is called  Alice. The name Alice has enjoyed a slight upswing in popularity in the past few years. And there is a new online household-goods site called Alice.com.

My test drive with the site went thusly:

The grocery games get grim for some

I read two different and interesting stories regarding brand loyalty and packaged goods this morning.

At last, my e-commerce addiction pays off

Warning! Girly shopping-type post ahead! With pictures!

Free! Go check it out!

The day I had my surgery, I checked into the hospital at 11 a.m. (on time, I add) and ended up cooling my heels until nearly 3 p.m.

 "Cooling" might be the wrong word for it, as San Francisco was in the middle of a record-setting heat wave, UCSF is mostly un-air conditioned, and I hadn't been permitted to drink anything from midnight the day before. However, I managed to actually enjoy much of the wait because there was a copy of Scott McCloud's 572-page Zot! The Complete Black & White Edition.

Zot! is special -- it's thoughtful, dreamy, poignant. And I'm telling you all this now because Harper Collins is letting you read the first 100 pages for free. In this economy, why not take advantage of free?

When e-commerce falls short

My poor mother celebrated Mother's Day by breaking her left wrist and her left ankle. I'll be flying out to D.C. as soon as a) my doctor clears me to fly, and b) we find out exactly how many bones she broke in her ankle and if she requires surgery. But I wanted to send her flowers in the meantime, so on Monday morning, I went to FTD.com, clicked on the "Send Flowers Delivered Today" tab, and ordered a bouquet. All praise e-commerce, that it lets us transcend the bounds of geography!

Or does it?

America, I have seen your shoe taste ...

... and it is horrifying. Watch real-life sales trends as they unfold across the country, courtesy of Zappos.

(Hat tip to MaryLynn for this one.)

More on "think about the money in this approach"

So I swiped a copy of the March 30, 09, Newsweek -- in part because the cover line promised "The Thinking Man's Guide to Populist Outrage" and I wanted to see if my feeble woman's brain could handle the masculine sagacity within -- and what actually stuck with me was the Raina Kelley column "The Zen of Cleaning."

Think about the money in this approach

 [A]s serial readers of books on this subject learn ... organization is not a one-size-fits-all proposition. Just as people’s differing appetites, metabolisms and capacities for exercise mean that a given diet will work well for some, not at all for others, differences in work styles can run deep, and often call for customized approaches to the home office. And yet, the experts say, few of us take (or even believe we have) the time to figure out how we really work, or what kind of system is likely to work for us.

-- "Custom Solutions to Office Clutter," NYT, Mar 26, 09

It occurs to me that one way big-box stores like Bed, Bath and Beyond (BBBY) and Target (TGT) can pump up sales is to offer a quasi-customized approach to home organization. Start with a Web and print campaign to determine your organizational "type" -- which people will take because many folks love taking those self-diagnostic tests -- and then serve up purchasing suggestions and best-practices tips with the results. The prospect of being sold an organization system that works for you should be compelling to a shopper who's already in the market for this sort of thing.

I love Stacks and Stacks, the Container Store and Organize World as much as the next compulsive categorizer, but even I get overwhelmed when trying to assess which products fit my needs and habits. Offering people the what and how of organizing will move product effectively, especially if you position it as "We're you're budget-friendly alternative to hiring a personal organizer."

Someday, I will be hailed as the prophetess I so clearly am

How many years have I been saying that premium chocolate is a consumer niche waiting to explode? Nearly three, as it turns out. I've kept an eye on the consumer deals, and tracked how people are buying their schmancy sweets.

Now, at last, more people are buying into my theory:

Why couldn’t a quick-serve score a hit with, say, a small dark chocolate parfait cup, or a high-quality, bite-sized dark chocolate ice cream pop?

[...]

Meanwhile, coffee chains have already gone to town with hot cocoas and mochas, but they haven’t necessarily delved into the realm of premium milkshakes made with higher-quality chocolate syrups and premium chocolate ice cream.

There’s no question that when times are tough, consumers go looking for small comforts in familiar places. Tapping into premium chocolate’s mass appeal during rocky economic times could make sense for quick-serve chains intent on cementing customer relationships by strengthening their emotional connections—and value propositions—with legions of solace-seeking guests.

-- "Choc Full of Potential," QSR, Mar 09

Do you know what is nearly as tasty as a Nibby Bar? Seeing this.

The tyrannical time-suck of free shipping

A tale of time wasted:

I needed to get two Girl Scout handbooks, and because my local council is apparently under the impression that all volunteers associated with Girl Scouts do not have day jobs*, there is no way I can pick them up from the local Girl Scout store. So I went to order them off Amazon.com, and when the total for $21.49 came up in my shopping cart, so did a little tag noting that all I had to do was spend another $3.51 and I'd qualify for free Super Saving shipping.

Very well, I thought. I'll see what I can do.

My first stop was to go to the Amazon Filler Item Finder, a search engine that lets you type in the dollar amount you need, then spits out the results. I applaud the idea. The execution had two small flaws: There is a lot of crap that's priced at $3.51 and above, and the pricing isn't accurate. When I clicked on a wooden spoon that was allegedly selling for $3.95, the Amazon page had it priced at $4.99. My total order would have been $26.48 -- not exactly bank-breaking but not exactly the $25.44 that I would have preferred.

I futzed around looking for items that I wouldn't mind spending $3.51 on, when it hit me: my time was probably worth more than $3.51. Besides, I wondered, how much is the standard shipping going to be?

It was $4.98 -- a penny less than the only order-filler I wanted.

I'm sure there are people who would have rather had the spoon and the free shipping. However, I don't need a spoon. I needed the books, I need an uncluttered house, and I need to use my time productively.

It is true that shoppers love it when there is free shipping. But I'm thinking that occasionally, free shipping still costs too much.

And in tying the preceding two posts together ...

According to research sponsored by Bazaarvoice and Richrelevance and based on the JupiterResearch Consumer study, the percentage of shoppers who are making impulse purchases online has risen since 2004. More interesting to me:

Only 33% of online shoppers had made their mind up in advance about the price they were willing to pay for the purchase. Even fewer began their research having made up their mind on all other purchase considerations, including the item or title to choose (31%), which store they would use (16%) or when to make their purchase (13%).

[...]

42% of shoppers who plan to reduce spending visited three or more sites to research their most recent purchase.

Online buyers seem to be using the Internet for research and comparison shopping. However, the flip side to being a consumerist tableau rasa is that the potential for impulse purchases goes way up too -- you see something in an email for "only" $30 with free shipping and think, "Why not?"

Why this may not be a reason to go for that Zero Inbox badge

According to a recent survey by marketing firm Epsilon, receiving an email from a retailer made consumers 50% more likely to buy something from them.

The survey results show that the email missives do a great job of fixing the "buy something from this vendor" message in recipients' heads, with 67% of respondents purchasing products offline as a direct result of an email promotion.

I am wondering, however, what types of retailers were defined or included in the survey, and what sort of items are being purchased later. Here's why: "60% of women and 49% of men regularly save email in their inbox to refer to it later when making purchases."

What this suggests to me is not that email turns us all into brainwashed retail fodder, but that consumers are signing up for these emails because they perceive value in them -- getting special deals, notification of sales, or online-only offers. Since a lot of women are the ones who are spending the family dollar, it follows that they're the ones who are holding on to bargain emails to see how to best deploy the household money.

Again: this survey's being positioned as proving email marketing's effectiveness. I wonder, however, if the results are less about the message and more about the motives recipients have when handling their mail.

(Image above comes from the Nerd Merit Badges site, where you can actually get an Inbox Zero badge, perfect for the GTD junkie in your life.)

Which one of the 8 new shopping types are you?

Advertising agency M&C Saatchi says the downturn has created eight different spending personalities:

■"Scrimpers", who are trading down and going for cheap stuff.

■ "Crash dieters", who have cut spending on all non-essentials.

■ "Treaters", who buy themselves special gifts from time to time, especially as a reward for their frugality.

■ "Justifiers", who like spending but need an excuse.

■ "Ostriches", who behave as if nothing has happened.

■ "Abstainers", who put off buying items until they can afford it.

■ "Clothcutters", who reduce their spending on some items to buy stuff that's more important to them.

■ "Vultures", who thrive in an economic crash because there are so many bargains.

-- "Frugality Is Back," The Age, Feb 6, 09

The article goes on to talk about the challenge retailers face in trying to reach so many different spending types at once. And it points out that in terms of consumer spending categories, it's like it's 1991 all over again.

This chocolate is dark, like my repressed rage

Perhaps I should be fretting less about how Hershey's gutting the distinctive aspects of the Scharffen Berger business and worry more about what it says when I want some schwanky cocoa. Acccording to "The Sweet Payoff" (NYT, Feb 8, 09):

[T]he little boost of, say, pricey chocolate, might not be solely about mood but about responding to threats to status or competence, [Northwestern University's Derek] Rucker told me. Ideally you would respond to such challenges directly: standing up to a boss who is pushing you around, demonstrating skill to silence skeptics and so on. But often the sources of undermined confidence are more abstract. “What’s happened in modern society under capitalism is that people have found consumer products as an outlet, a safety valve for addressing these threats in a very indirect fashion,” Rucker contends.

Oh, consumer consumption. Is there no sublimated emotional state you don't reflect?

What your fellow (non)shoppers are doing: the newly non-rich edition

OK, now that we've had a little time to recover from the news that many of our nation's bankers might have to forgo the annual family ski vacation, fire the private driver-cum-security guard, bypass the three new designer ballgowns required for charity galas, and pare the annual grocery bill down from $15,000 ("You Try to Live on $500K in This Town," NYT, Feb 8, 09). What about those of us who don't have to fret about trying to live on a mere half-a-mil?

January's retail numbers: Smells like cheap teen spirit

I apologize for not getting these out earlier -- Internet blackout at home, work deadlines, blah blah blah. Let's see who the big winners and losers were in January ...

Smart crowds are neither smart nor crowds. Discuss.

This morning, the SF Chron gave a substantial portion of its op-ed section to Yelp.com CEO Jeremy Stoppelman, who argued:

To create the Yelp site, we've ceded unprecedented power to consumers, but this simply means power once wielded by an elite few is now in the hands of all.

-- "The Web Amplifies the Power of the Consumer," Jan 26, 09

Putting aside the fact that the entire piece should be titled "Yelp Is Actually a Great Marketing Tool, So Stop Trying to Sue Us, Businesses," Stoppelman hovers close to raising a point: It is now very, very easy for people to get first-person reviews of businesses. In his view, this is great. You no longer have to rely on who you know for in-the-know tips.

Naturally, I take a completely different view.

Hey, ladies! Feel targeted to yet?

Because of insights like this:

Moms will keep shopping. They have to. Moms control 85% to 90% of household spending on everyday, Warren Buffet-advocated items, according to a BSM Media Study, which also projects household spending to be $3 trillion in 2012, up from $2.1 trillion today.

-- "Can Moms Save Us from the Recession?" Advertising Age, Jan 13, 09

Prepare to see a lot more of the following in media campaigns: selling the "You put your children first, don't you?" idea; appealing to the "Finally, Mom, an indulgence for you -- that doesn't make your children pay too" angle; emphasizing that your brand provides a restaurant- or spa-quality experience at home; stroking the "You're a smart shopper, yes, you are!" ego; providing an on-ramp to products that offer DIY experiences for formerly-outsourced stuff (from dry-cleaning to pizza); banging the eco-friendly drum.