U.S. consumers have an abiding weakness for the new—which is why retail sales are inching back up
Three years ago, I took a stroll down Michigan Avenue—the Magnificent Mile, as it's known to Chicagoans and credit-card-wielding tourists. The sidewalks and shops were jammed. I wandered in and out of a few stores, not to buy, just to look. Shopping as entertainment, remember? At a department store, I eavesdropped as a hulking man—in flip-flops on a very cold afternoon—inquired about Tom Ford's new fragrance. He was "dying to check it out."
A few days later, I read about Tom Ford's impending launch: an eau de parfum assault Ford was calling "Private Blends." They included Tuscan Leather and Tobacco Vanille. Each would cost $450 for a 250-milliliter bottle—pricey, yes, but excusable if they indeed delivered "hope in a bottle," as Revlon founder Charles Revson famously put it. As for Ford's marketing campaign, it lived up to what we had come to expect back in the fat and happy years: sensual, surreal, pretentious. Tobacco Vanille "unfolds with creamy tonka bean, tobacco flower, vanilla and cocoa, and finishes with a dry fruit accord"—which led me to wonder if it went better with meat or fish.
A few months later, I visited Paco Underhill in New York. Underhill is a much admired "retail anthropologist," a consultant best known for two best-selling books, Why We Buy: The Science of Shopping and Call of the Mall: The Geography of Shopping. As intriguing as Underhill's insights on the relationship between store design and shopping behavior—e.g., a woman's innate fear of "butt brush" in too-narrow store aisles—they were not what I had come for.
I wanted to know what Underhill saw coming. He had been circling the globe for decades, observing consumers from Sheboygan to Shanghai. And what he was seeing, he told me, was not the Tom Ford world. "The picture we've gotten of how and what people buy has been grossly exaggerated," he said. "Take the kids in this office, some of whom have six-figure incomes. They can't afford this city. When my father bought his house, it cost roughly his annual salary. Today, it's different. Take monthly expenses. We have a mobile phone bill, an Internet bill, a cable bill. A significant part of the population worries about downward mobility, which is why the Dollar Stores of the world are winning."
The day he said that, the Dow was at 12,190 and would go 2,000 points higher. Then the economy took a giant markdown. Among the bankrupt retailers: Circuit City, Eddie Bauer (EBHI), and Crabtree & Evelyn. Within weeks of Lehman Brothers' collapse, Vogue sent out a reporter to scout the "aisles and aisles of inexpensive finds" at big-box discounters. Women's fashion blogs recommended the "70/30" rule: Stock your closet with 70% tried-and-true items, meaning old, and 30% new—presumably from H&M or Target (TGT).
Which brings us to the $54—reduced from $64—question: Where does the U.S. consumer go from here? Having studied this fickle and put-upon species, I can offer the following: The American buyer has an abiding weakness for the new and the novel. If not Tobacco Vanille, then a pair of striped socks. We're nothing if not intrepid and resourceful. So while the American shopping cart is smaller than it was, and will remain so for a time, it's not surprising that there are now green shoots along the Magnificent Mile. Retail sales have been inching back up since August, and so has consumer confidence. Those pushing the carts are chastened—but don't count them out. Where there's a will to shop, there's a way.
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