You’ve read what I think about the “bad economy” already, and how we alter our spending habits based primarily on what the media has been telling us. Unemployment is at a record high, companies are issuing furloughs and salary cuts, and forget about the holiday bonuses. But let us each think for a moment about our individual lifestyle changes. What major spending habits have you changed since Wall Street stocks plummeted in Fall 2008? My argument is that the general public (meaning middle 75% or so of Americans) is mostly buying the same products and services that they were buying three or four years ago, but just at lower price points.
As you may know, I work in the music industry; in particular the recording and audio
services industry. The studio in which I work is one of the premiere studios in Georgia; we have very high profile clients, and with that comes higher price points. While our studio is doing well and we offer customer service, equipment, and expertise that cannot be matched anywhere else, we still see clients spending less and less. OK, so in my line of work, a lot of the shift also has to do with technology – recording is much cheaper and more accessible to the individual with inventions like Pro Tools and digital recording. But the bottom line is that plenty of people – in advertising, marketing, film, music, etc. –are still recording, just at lower prices. Businesses are taking the economic downturn as an opportunity to trim their expenses by going to a smaller studio or building their own in-house facility. And the same rings true in industries across the board.
The REAL Question
I’d like to pose another, more important question now. When the economy recovers, what will happen? Will consumers return to buying goods and services at higher price points? When you get your fall bonus next year (hopefully), will you buy your Christmas presents at Crate & Barrel, like you did three years ago, or have you decided that your Seven for All Mankind jeans from Marshall’s are the same product as the ones at Bloomingdale’s for a third of the price? I am curious about the thought-processes of the masses of consumers and will be very interested to watch how our material society recovers as the economic situation does.
