How consumerism has gone through "spend shift"

Marketplace Staff Jan 1, 2011

How consumerism has gone through "spend shift"

Marketplace Staff Jan 1, 2011


Tess Vigeland: A new consumer has supposedly emerged in the wake of the Great Recession. One who’s more price-conscious and selective about purchases. John Gerzema calls this post-crisis shopper a “spend-shifter,” and businesses are taking notice.

Whether this new consumer is in it for the long haul is open to question. But Gerzema profiles them in his book “Spend Shift.” John, welcome to the program.

John Gerzema: Thank you Tess.

VIGELAND: We’ve been hearing about this shift in consumer behavior for the last couple of years, really since the economic collapse. What do your findings tell us that perhaps we haven’t heard?

Gerzema: One of the more interesting things that we began to tease out during the crisis was that there was this sort of societal value shifts that we could see through spending, where people were actually more akin to wanting to support companies whose values matched their own. Things like self-reliance, community thrift, hard work and stewardship. And those are the things that consumers were looking for. They were actually realizing that even though they find themselves less rich today, they actually have their pocketbooks as a form of power and influence over corporations to sort of serve their marketplace.

VIGELAND: And it seems like that has kind of become, how do you put it, de rigueur — that this new anti-consumerism is almost an activism.

Gerzema: It’s a little bit of declasse consumption I guess you could say. But really that fact that 55 percent of Americans are part of this movement, it’s very inclusive. You’re just as likely to be a Democrat or Republican or an Independent or make above or below $75,000. But the important thing here I think is that people are now feeling culturally it’s permissible to be thrifty, it’s permissible to be sort of a smart shopper, whereas before you might have been seen as cheap.

VIGELAND: So how are businesses responding to this? You went to cities across the country to kind of find out what the response was — tell us a little bit about what you found.

Gerzema: One of the more exciting things was that despite the downturn, there’s this tremendous sense of optimism and entrepreneurism in many small markets around the country. We went to places like Detroit, where the average price of a home is $18,000, and yet we found some really interesting entrepreneurs that were rebuilding the neighborhoods. We met with one of 50 urban farmers, Patrick Crouch, who runs Earthworks Urban Farm, and he’s helping to provide food for these emerging restauranteurs.

VIGELAND: And I have to say one of my favorite examples that you cite of this whole spend shift is the emergence of the taco trucks here in L.A.

Gerzema: Oh, Kogi.

VIGELAND: Yeah, exactly.

Gerzema: You spend an afternoon chasing around a Kogi truck and try not to get into a traffic accident.

VIGELAND: So tell us how that fits in with the pattern that you discerned?

Gerzema: What’s happening is that you see the power of social media to take these old, core American virtues and actually amplify and make them really resonate in culture today.

VIGELAND: How much of this spend shift do you think would have happened regardless of the economic collapse?

Gerzema: I think it’s an interesting question. What the crisis actually did is it sort of amplified what were building concerns over many years, the disparity of wealth in our country, the long-term desire for neighborhoods to sort of rebuild themselves. What we started to see was that this recession cut across demographics and it cut across different parts of the country, to the point where people really felt they needed to make a profound change.

VIGELAND: We’ve been using the term “consumers” a lot in this conversation, but you argue in the book that there are no longer consumers, there are just “customers.” What’s the difference?

Gerzema: The word consumer we’re going to look back in a year or two, hopefully as sort of a term of ignorance and disrespect. It’s almost implying a mindless, gobbling beast of indifference that’s simply going to ingest anything you put out there on the marketplace. What we see are very, very saavy customers that have all these access to these social media tools and are able to sort of scale themselves. We spend time with Andrew Mason, the founder of Groupon, who’s built a multi-million dollar business on the fact that people are coming together to get lower prices. So the customer is definitely the king.

VIGELAND: So I have to ask you, how did your own spending shift, if it did?

Gerzema: Well the first thing I did is I was thinking about a car but I’ve had a 10-year-old Volkswagen and I’ve decided to stick with it. But the other things I’ve tried to do is pay down debts, I joined a time bank, which is you donate services into a community and in exchange you get back services. So I’m trying to be part of this spend shift.

VIGELAND: John Gerzema is the co-author of “Spend Shift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell and Live.” Thank you so much.

Gerzema: Thank you Tess.

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