Chapter 5: What Things People Buy that They Don t Need


Chapter 5: What Things People Buy that They Don't Need

OVERVIEW

Now that we have explored why people buy things they don't need, let us look more closely at exactly what categories of discretionary products they are buying. In 2000, 2001, and 2003, Unity Marketing conducted a nationwide survey of 1,000 U.S. households representing a statistical sample of the country's population, thus providing statistically reliable and projectable information. These surveys were also conducted at the same time in the year, during the third quarter, to provide reliable trend information. But what's really special about this survey data is it provides a snapshot of the consumer market in the last week of August 2001, just about a week before the 9/11 tragedy and resulting consumer turmoil.

A period of two years spans the previous survey and the final survey conducted during the fall of 2003, a period of tremendous political and economic upheaval at home and abroad. These ensuing two years give us some needed distance and perspective with which to evaluate the real impact of September 11 and its aftermath on the consumers' psyche. Personally I believe September 11 will prove to be a defining moment for all Americans alive at the time, but especially among the generation of younger Americans. It will be a turning point in the course of economic and political history in this country and the world. This twenty-first century is a very different kind of world than the post-war years from 1950 to 1999. It is my hope that September 11 and its aftermath will never reach the comparable cost in American lives and resources as World War II. But its impact on the soul of America and Americans, I believe, will be just as profound. Why? It's the CNN effect. World War II was fought at a distance and viewed in carefully edited movie reels of black & white. Soldiers like my father fought and fully experienced that war; everybody else just saw shadows. But we all lived and experienced September 11 together, thanks to 24/7 cable news. It was virtual reality at its most real.

September 11 will prove to be a defining moment for all Americans alive at the time, but especially among the generation of younger Americans.

In this marketing research survey of consumer purchases within 37 different categories of products most people describe as extras and things we simply don't need, we can begin to see and measure how September 11 and its aftermath have influenced and changed the consumer's mind-set and thus their shopping behavior. In the 2003 survey, we added a few additional categories, most notably apparel and clothing as well as window curtains and coverings and musical instruments, that were either intentionally omitted or overlooked in the previous survey. In 2003, we continue to exclude from our discussion discretionary consumables, or food and drink people buy that they don't need, because so much of the food we consume is extra and unnecessary. My apologies in advance to the candy, cookie, cake, and snack producers, as well as the beer, wine, and distilled spirits industry.



AFTER RISING IN 2001, CONSUMER PURCHASES RETREATED A NOTCH IN 2003

Long before the Internet, omnibus telephone surveys, and mall intercepts, Benjamin Disraeli said, "There are three kinds of lies: lies, damn lies, and statistics." So let's just forget about the worst of the three, statistics, and talk a little about the limitations of consumer surveys.

Consumers are notoriously fickle and what they remember buying one day may be different than what they remember buying the next. So when analyzing the results of this or any other consumer survey, we must recognize that the resulting data is only as good as the answers that go into it. In other words, no survey will ever give you the REAL answer, only an approximation of reality within the scope and limitations of the survey methodology and sample that is used.

There are ways to gather really precise and accurate consumer purchase data that involves large panels of consumers willing to record their purchases daily or weekly in consumer diaries. And those types of surveys cost bucket loads of money. That isn't what we have here. Rather, we asked a similar group of people during a similar time of year about their purchases of various consumer products using the same wording and the same telephone fielding company and methodology. The result we trust is a similar result that allows for general comparisons from year to year. Any survey, even those most precisely conducted, has a margin of error, which means the real answer is somewhere within a range of 2 or 3 or 5 percentage points above or below the stated result. So we also must consider those margins of error when we look at the purchase incidence data that follows.

The consumers have taken a step back in their purchase of most discretionary products after September 11.

Given those limitations, one could argue that most of the ups and downs noted year after year in these surveys of consumer purchase incidence of discretionary products falls within the margin of error and so in reality are meaningless. But my researcher's highly refined sense of the data says that this is not so. We see a notable upward trend in the purchase incidence of just about every discretionary product category from 2000 to 2001, just prior to September 11. In 2003, on the other hand, the overall direction is downward, with many categories falling back to pre-2001 levels or even lower in some instances. While my reason tells me most of these ups and downs can be attributed to margin of error, my intuition says otherwise.

The consumers have taken a step back in their purchase of most discretionary products after September 11. These changes are meaningful to every consumer retailer and marketer in the country. If we compare the average percentage point change in purchase incidence from 2000 to 2001 and 2001 to 2003 for comparable categories, we find the average change in purchase incidence is positive 10 points for 2001, while it is negative 2 points in 2003. The only product categories that posted meaningful positive increases in 2003 over 2001 were sporting goods, exercise equipment, and supplies in the entertainment, recreation, and hobbies category, and aromatherapy, Christmas and other seasonal decorations, art, prints, and lithographs, and wall décor in home. Everything else either remained the same as in 2001 or declined. See Figure 5.1 for the results in each category.

 

2000

2001

2003

Entertainment, Recreation, and Hobbies

   

Audio equipment and stereo systems

31%

35%

26%

Books, magazines, and newsletters

68

78

74

Computers and software for home use

40

50

47

Crafts, sewing, knitting, and needlework supplies

33

39

29

Musical instruments[*]

  

10

Pet accessories

35

42

41

Photography equipment and supplies

38

51

43

Prerecorded video, music, DVD, etc.

66

79

62

Sporting goods, exercise equipment, and supplies

36

43

48

Toys, games, and dolls

45

54

50

TVs, radios, VCRs, DVD players, etc.

38

46

38

Home and Home Décor

   

Aromatherapy and scented household products

39

42

49

Arts, prints, and lithographs

21

27

42

Baskets, boxes, vases, pots, and decorative holders[*]

  

42

Candles and candle accessories

54

65

62

Christmas decorations and other seasonal decorations

 

55

61

Collectibles

31

34

36

Figurines and sculpture

20

19

22

Florals and greenery for indoor use

38

43

41

Flowers, seeds, shrubs, and trees for outdoor landscaping

50

59

56

Furniture and occasional furniture

35

41

41

Garden equipment and decorative items for garden and patio

41

47

42

Greeting cards and personal stationery

 

72

83

Home textiles and rugs

51

60

52

Kitchenware and accessories

46

58

56

Lamps and lighting accessories

24

33

30

Picture frames

40

52

48

Tabletop china, crystal, silver, sterling flatware, and other dinnerware

16

26

16

Wall décor, such as sconces, mirrors, shelves, and tapestries

22

25

38

Window coverings, blinds, curtains, and other window treatments[*]

  

37

Personal Luxuries

   

Fashion accessories such as handbags, wallets, belts, shoes, etc.[*]

  

63

Infant's and children's clothing and apparel[*]

  

36

Jewelry and watches

40

48

46

Men's clothing and apparel[*]

  

55

Personal care products that are more "special" or "exclusive" than everyday brands

50

71

64

Teen and tween clothing and apparel[*]

  

24

Women's clothing and apparel[*]

  

65

[*]New categories added in 2003


Figure 5.1: Discretionary Product Purchase Incidence

As we stand back and assess these differences, there are two things that have been brewing in the culture that change what we buy. Everything about shopping and the way we shop has undergone titanic changes since the early 1990s. And the cocooning trend that has dominated our consumer culture has come to an end only to be replaced by the new connecting trend with paradigm shifting impacts on the consumer culture. Let's look more closely at each of these trends.