Tag: consumerism
The Joneses Win: The Why Of Weak Consumer Spending

The Joneses Win: The Why Of Weak Consumer Spending

A new report on consumer spending shows that consumers are not spending. Economists thought that the savings from cheaper gasoline — hundreds of dollars a year for most — would be hauled to the stores. But non-gasoline retail spending didn’t budge last month, flat after falling a bit in December, according to the Commerce Department.

The strengthening job market and expected wage gains should also be making American shoppers feel more exuberant, but no. That’s a concern in a country where consumer spending accounts for two-thirds of the economy.

Here’s my explanation for what’s happening. There’s been a growing aversion to the shopping way of life. There’s a sense that the consumer culture has been a con job, epitomized by the sucker punch of last decade’s real estate bubble (and attendant mortgage scams).

There’s also a feeling that one traditional motive for buying stuff — the competitive race to “keep up with the Joneses” — is futile. The famous 1 percent are pulling away so fast from the other 99 percent that there’s no point in trying. Even the “merely affluent” can’t compete.

A study in Britain found that money only makes people happier when they have more than their neighbors. It’s more about social rank than the number of zeros behind one’s personal wealth. A millionaire feels poor in the presence of the super-rich.

Thus, the ever-inventive American culture has found a new way to rank people socially. More of us are replacing price tag display with the hip alternative of living in small spaces with fewer, but more curated, possessions. Rather than hire experts to make our closets accommodate more stuff, many are deciding to simply have less stuff. We are driving fewer miles, and many millennials are forgoing car ownership altogether.

The Commerce Department reported that the personal savings rate rose to nearly 5 percent in December, up from 4.3 percent the month before. Interesting.

The new social ranking system may be influencing some for whom the money race is theirs to win. The Wall Street Journal publishes a weekly section called Mansion, which centers on luxury real estate that tends to be enormous in size and astronomical in price. But in the aesthetic of minimalism chic, the architectural hulks — with their onyx bars, guest villas and ionized lap pools — seem dated.

So the recent Mansion section had a feature on “little getaway houses,” small homes for those who live big. These were not your worn cabins in the woods but spectacular little places, often on lots with primo views.

“Keep it simple,” said an investment manager who has a smallish house on the Maine coast — but owns several other homes, where the art is kept. Small, in this case 1,200 square feet, need not be inexpensive. The house is built on reinforced fiberglass piers that let the waves roll under it. (If you’re going to do waterfront, do waterfront.)

Another small house, 1,000 square feet on Washington state’s Padilla Bay, has a glass cover and hand-planed cedar floors. “The more intimate the house, the more it supports the need for connection,” said one of the proprietors, who also owns a hacienda in Chiapas, Mexico.

To keep some perspective on what constitutes small, note that families of six were quite content living year-round in their 800-square-foot Levittown houses. But one can appreciate the desire of the wealthy to escape their toad halls for some cozy time in a badger cottage.

Many Americans of more modest means, however, are dispensing with the mansions altogether. You don’t feel behind in a race you don’t enter. And if these weakened material aspirations are here to stay, things won’t be looking good for the consumer economy.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com.

AFP Photo/Scott Olson

Apple Unveils Two Big-Screen iPhones

Apple Unveils Two Big-Screen iPhones

San Francisco (AFP) — Apple on Tuesday unveiled two new versions of the iPhone, boosting the screen size of the iconic smartphone to 4.7 and 5.5 inches.

Unveiling the iPhone 6 and iPhone 6 Plus, Apple chief Tim Cook said the company was launching “the biggest advancement in the history of iPhones.”

Apple senior vice president Phil Schiller, speaking in Cupertino, California, said the new iPhones were “simply stunning” with polarized glass displays and bodies that are “thinner than ever before.”

“These are the best phones ever made,” Schiller said, as he described the new devices at a major set-piece event streamed live online.

The new iPhone 6 will start at the same price of existing iPhones at $199 for U.S. customers while the iPhone 6 Plus will be at $299 with a two-year contract.

Schiller said the devices would be available in at least 115 countries by the end of the year.

Apple will cut the price of existing iPhone 5S and 5C with the launch.

Apple’s move, expanding the latest iPhone with a four-inch screen, comes as consumers are switching to handsets with bigger displays to watch videos and browse the Internet.

Observers say the timing is right for Apple to introduce a generation of iPhone 6 models with screen sizes stretched to tap into users’ love for “phablets” that combine the features of smartphones and tablets.

AFP Photo/Justin Sullivan

Interested in more news about technology? Sign up for our daily email newsletter!

Twitter Tests ‘Buy’ Button For Posted Ads

Twitter Tests ‘Buy’ Button For Posted Ads

San Francisco (AFP) — Twitter on Monday began testing “buy buttons” that let people make purchases directly from marketing posts fired off at the globally popular one-to-many messaging service.

The move comes as Twitter works to ramp up its appeal to people curious about what is happening at any given moment and to advertisers eager to connect with them.

“This is an early step in our building functionality into Twitter to make shopping from mobile devices convenient and easy, hopefully even fun,” group product manager Tarun Jain said in an online post.

“In our test, the entire purchase can be completed in just a few taps.”

The test was limited to a small group of Twitter users in the United States who access the service from mobile devices powered by Apple or Android software, according to Jain.

Users will have the option of having payment and shipping information encrypted and stored to speed up future purchases.

“We’ll be starting the test with a group of artists, brands and nonprofit organizations, so follow them now and look out for great products over the coming weeks,” Jain said.

The list of launch partners included Home Depot, Burberry, The Nature Conservancy, Soundgarden and Twenty One Pilots.

– Tapping into e-commerce –

Advertisers will be able to pay to “promote” Twitter messages featuring buy buttons the same way other marketing tweets can be more prominently displayed.

Financial terms of the buy button arrangement were not disclosed.

In July, Facebook began testing a feature that lets users of the leading social network make purchases by simply pressing an on-screen “Buy” button.

The test was limited to a few small- or medium-sized businesses in the United States.

“People on desktop or mobile can click the ‘Buy’ call-to-action button on ads and page posts to purchase a product directly from a business, without leaving Facebook,” the California-based Internet titan said in an online post.

The intent was to gauge the potential to drive retail sales through the Facebook newsfeed or on pages at the online social network, the post indicated.

Social networks are eager to seize the potential of tapping into e-commerce, especially as purchases using smartphones or tablet computers grow increasingly common.

AFP Photo/Leon Neal

Want more updates on technology and national news? Sign up for our daily email newsletter!