Are We Entering a Post-Consumer Society?
Before we try to answer the above question, we must first define what I mean by a post-consumer society.
Generally, when the term post-consumer society is used, it is by aesthetics or intellectuals who despise modern culture as crass or by professional luddites that hate and fear capitalism and technology. That is not what I am talking about here. I am not talking about a post-market, post-capitalist, or post-technological society; personally, I don’t think such a culture is possible. For better or worse, the free market, capitalism, and technology are here to stay for the foreseeable future.
No, what I mean here is a society in which the primary economic activity of the average person is no longer the acquisition of consumer goods. A consumer society is one in which a large percentage of the population devotes most of its time shopping for and acquiring consumer goods. In such a culture, consumer goods determine an individual or a household’s status and place in society.
Consumer society arose in the 19th and 20th centuries because industrial production created large surpluses of goods. A market was needed for those goods, so a means of marketing and advertising those goods to average people were developed. This led to the creation of retail, advertising, mass media, and other means of telling consumers about those goods. In that situation, the average person became the consumer.
Perhaps the ultimate symbol of consumer society was the shopping mall, which celebrated consumption as a recreational activity. The mall appeared in the 1950s and 1960s America – a consumer society par excellence.
The defining characteristic of the traditional consumer society was that the consumer was assumed to be passive. Media and advertising existed to manipulate consumers into buying. Retailers existed to provide the times that the media told consumers what they were supposed to want.
The defining characteristic of a post-consumer society is that the consumer is extremely active. A classic example of consumer society media was network television, in which advertisers and executives essentially decided what programs what the viewers or consumers should watch. An example of post-consumer society is Netflix (NASDAQ: NFLX), in which consumers pick what programs they want to watch.
Advertising and the media played defining roles in consumer society by telling consumers what to buy. During the consumer age, roughly 1945-2005, advertising and the media it supported played a defining role. The major retailers of the era such as Sears (NYSE: SHLD), Kmart, Safeway, Kroger (NYSE: KR), and Walmart (NYSE: WMT) were heavy buyers of advertising.
Welcome to the Post Consumer Age
Now during the post-consumer age, 2005-?, advertising plays a very limited role or none at all. For example, America’s second largest retailer, Costco Wholesale (NASDAQ: COST), famously does little or no advertising, except for direct marketing to existing customers. Yet Costco reported a TTM revenue of $114.49 billion on Nov. 30, 2014. Costco’s revenue increased by nearly $7 billion during the course of 2014 and it does not advertise.
Other major retailers that do little or no advertising also saw their revenues grow. Whole Foods Market (NASDAQ: WFM), a supermarket chain that refuses to advertise, saw its revenue rise by nearly $1 billion in 2014. Online retail giant Amazon.com (NASDAQ: AMZN) saw its revenues grow by over $10 billion in the course of 2014. Amazon.com generally ignores advertising, instead concentrating on internet searches.
The privately held Trader Joe’s, which engages in such minimalist advertising as sending out a simple publication called The Fearless Flyer, reportedly has sales of $1,735 a square foot, according to the investment firm JLL. In contrast, Whole Foods has sales of $930 a square foot. Trader Joe’s might be a perfect example of a post-consumer retailer. It has a limited selection, rejects name brands, and sells a few specific goods at low prices.
Okay, consumption is not down in the post-consumer era. People are still buying and selling as much as ever before. They’re just doing it in different ways. For example, they are shopping at Costco, which treats shopping as a chore to get done fast, rather than at Sears, which treats shopping as recreation.
Sears, which also owns Kmart, is planning to close 235 stores in the next few months. Between January and Oct. 31, 2014, Sears’ revenue fell by nearly $3 billion.
People, it seems, no longer regard shopping as recreation. They no longer hang out at the mall or go to the store for something to do. Indeed, many people now seem to regard shopping as a chore to be avoided.
They’re also empowered and active. The modern consumer goes online to compare prices and might order directly online and schedule a delivery if they cannot find what they want. A service called Deliv is even trying to give consumers the power to schedule the time of delivery.
Post-consumer society then is characterized by an abundance of goods, highly active and engaged customers, and a tendency to treat shopping as a chore to be avoided. Hence, the popularity of Amazon.com and various delivery services such as Google Express and Kroger HomeShop exist to take the work out of shopping.
Basically, shopping is no longer a defining activity of the middle class or the average person. That, of course, raises interesting questions for many businesses, in particular for media; as traditional consumer society declines, so does advertising. We’ve already seen the carnage in the newspaper industry, and I imagine television is next.
So what will post-consumer society be defined by? My guess is it will be defined by a lot of choices, and a few giant retailers that provide those choices. An example would be Amazon.com.
The other defining characteristic of post-consumer society is that the consumer or the buyer is in the driver’s seat. Amazon.com’s really low prices and free shipping are an example of this. Another example is that retailers are more willing to come to the customer in the form of delivery.
Consumer society is dead. Long live post-consumer society, and invest accordingly.
Disclosure: The author has a long position in Kroger (NYSE: KR).
