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Consumerism in terminal decline as millennials stay away from shops
CHRISTMAS may seem like a distant memory, but retailers won't forget it in a hurry: it was the worst on the UK high street since 2008.
Marks & Spencer and Debenhams saw sales fall, while the likes of specialist retailer Halfords and discounter B&M also struggled. Even that most Christmassy of stores, John Lewis, is forecasting a dive in profits after discounting to keep up with competitors.
Put simply, the British high street is a horror story just now. Debenhams, founded in 1778, has seen its share price drop more than 90 per cent over the past year. HMV has gone into administration for the second time in six years and is seeking a buyer. M&S is closing 100 stores, with the latest tranche just announced. An estimated 93,000 UK retail jobs were lost in 2018, and 2019 could well be even worse.
Economic stagnation, unfair online competition and global warming are all cited for the malaise - and certainly not for the first time.
Brexit fears are said to be dampening the economy, for example. British brand Superdry blamed its poor autumn results on unseasonably warm weather reducing demand for its jackets. And it has not gone unnoticed that Amazon's UK business rates tax bill for 2018 was significantly less than smaller high street rivals.
Though online sales have in fact also struggled in 2018, poor business practice is probably also playing a part in the wider problems. Many retailers are overburdened with debt, focused on cost-cutting rather than reinvestment, have poor stakeholder relationships, or simply lack vision.
WHSmith, to take just one example, came bottom of a 2018 survey of British shoppers by consumer magazine Which?, criticised for its overpriced and out-of-date stores. Its latest results are due later in the month.
Yet there is another crucially important culprit that is mostly overlooked. It happens to be the one that poses the most serious long-term threat to traditional retail - more than Brexit or even Amazon.
Consumerism is arguably in terminal decline, with millennials leading the change, not only in the UK but in many other leading economies around the world.
Consumer studies academics have been picking up on changing habits for a number of years. This includes an increased ambivalence towards consumption itself: people are buying less often and less overall. This is particularly true in the clothing industry, where research shows that millenials are especially unforthcoming - even after you factor in the shift to online retail. A lack of bricks and mortar did not, for instance, prevent online fashion retailer Asos from shocking the City with a profit warning shortly before Christmas.
The American car industry is another harbinger of generational change: sales are stalling because younger people seem less interested in ownership. The average age of a new car buyer in the US was 50 in 2015.
Or to give one more example, witness Apple's recent trading problems. People are not only opting for cheaper smartphones, but they are keeping them for longer. If the world's first company to pass the trillion dollar value mark is showing signs of struggling, we ought to take note.
Some of this shift in consumption may be ideological. Researchers have suggested that environmental concerns might be pushing some people to consume less. Economic drivers are also probably involved. Since the 2008 financial crash, for instance, alternative consumer communities have emerged. They are more collaborative and self-sufficient; doing things among themselves rather than buying in from outside. The rise of the swapping movement is a good example.
Yet more broadly, lifestyle changes are seeing us moving away from the consumer model that has dominated post-war capitalist economies. Buying more and more things as a source of identity and meaning seems to be gradually but consistently falling out of favour. People are increasingly interested in experiences instead; the priority is making and sharing memories - interacting with other people and places, attending events, undertaking adventures and so on. We could be talking about the era of the post-consumer.
To fit this new ethos, it has repeatedly been said that the future of the high street lies in providing experiences. Retailers have tried to incorporate new, interactive and surprising experiences into their offerings for years now. Success stories include the bath bomb and politics-peddling cosmetics retailer Lush; or the revitalised bookseller Waterstones, which promotes books using everything from huge in-store murals to themed events.
Experiential marketing is not a panacea, however. The casual dining sector, for example, once held up as the answer to the woes of struggling shopping centres everywhere, has itself had a difficult 2018. The problem with selling experiences is that it is easier for someone to create them themselves. We buy things because it is convenient or we don't have the skills to make them. But some of the best experiences, such as going for a walk or meeting a friend, are free.
In short, there's not necessarily an easy answer for this long-term decline. We're talking about a growing dissatisfaction with the idea that passive consumption equals happiness. The reasons are certainly varied and complex, but if consumption is increasingly passé, we must start thinking about how to respond.
The retailers that survive will be the ones that genuinely understand what is happening; the answer is likely to lie in offering objects, services and experiences that feel genuine and enriching. In many cases, it will be about building a long-term relationship that forgoes selling things now and perhaps, say, provides a space where people can make meaning for themselves - French beauty chain Sephora looks like a pioneer here, with its very casual, try-before-you-buy approach to retailing.
Whether such initiatives can sustain economic growth is another question, however. Consumerism has been the beating heart of Western economies for generations; if it can't be resuscitated, it raises profound questions about how society will function in future. THE CONVERSATION
- The writer is senior lecturer in marketing, University of Huddersfield