Not only are consumers moving faster than ever before, they are fueled by a new sense of empowerment in their commercial affairs. Most Americans, even the poorest, participate at some level in the twenty-first-century luxury lifestyle. Where else in the world do you find households that live below the median income level owning cars, color television sets, video recorders linked to cable, air-conditioning, and cellular phones? With the infectious spread of discount retailers like Wal-Mart, Costco, Sam's Club, Dollar General, factory outlets, and the rest, consumers every-where find more and more options for buying everything they need—and don't need—at unthinkable discounts. Their consuming choices have exploded and they don't need to buy your "widget" anymore. They can choose from thousands of perfectly acceptable alternatives sold at any price point in hundreds of different retailers accessible directly from home or within a five-mile proximity.
The fulcrum of power in the consumer marketplace has shifted from the marketer and retailer to the consumer. Too many companies across the commercial landscape have yet to discover that they no longer hold all the cards. Today the consumer, rich and poor, is in control and it is never going back to the way it was before. Just open any edition of the Wall Street Journal and you'll find story after story of companies in their death spiral because they failed to understand the new consumer balance of power.
In only the first couple of years of the twenty-first century, marketers have felt the effects of this dramatic shift in power. The tragic events of September 11 sent businesses into a tailspin and the economy into a mild recession. This was followed by the war in Iraq, which created more confusion and uncertainty in the consumers' mind-set. These events, totally beyond anyone's control, have a dramatic and long-lasting impact on consumers and how they behave. Businesses dependent upon consumers need better tools to help them predict and prepare for the future.
Ever since the unexpected attack on September 11 and the question of what our leaders really knew about the presence of weapons of mass destruction (WMD) in Iraq, we've all learned, thanks to the CNN effect, the critical importance of "human intelligence" in the political and military arena. Many analysts and pundits have laid the blame for the terrorist attack and our subsequent intervention in Iraq on the fact that our country allowed its human intelligence capability to decline, while relying more and more on satellite, communications, and technically oriented data collection.
Like the government, many businesses and marketing executives have let their "consumer intelligence" slide, while relying too heavily upon factual point-of-purchase, real-time, computer-generated and supplied data. They want to see the future, yet they ignore the very information—the consumer intelligence—that will enable them to see it. Why? Because it doesn't graph nicely, and it requires a human being—an expensive, intelligent one with some real-world experience—to process it instead of a computer.
In this book, Why People Buy Things They Don't Need, you will gain insight and understanding about why consumers behave the way they do. By understanding the why, your business strategy will be grounded and supported by consumer intelligence, not just historical facts and figures. You'll find a lot of statistics, facts, and figures here, but you will also discover a new way to look at your consumers, not as a point on a data graph, but as real, complex, irrational but strangely predictable human beings who love and fear and strive and feel pain. They are wonderful. They are frustrating. They are awe-inspiring. They are fascinating. Moreover, they are our customers. We desperately need them. And we must respect them. That is why you as a business and marketing executive need this book, because without the consumer your business is destined to become history.
By understanding the why, your business strategy will be grounded and supported by consumer intelligence, not just historical facts and figures.