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‘Simplifier’ paradigm favors utility and affordability

Almost overnight, people stopped spending the way we’d come to know. For the past 30 years, as the U.S. economy was generally growing, so did our appetite for buying everything in sight! But late last summer there was an abrupt reversal. Since then, even the “wealthy” have cut back on their buying. According to an article by Jenni Russell in The Guardian, many people are intentionally simplifying their lives. Among the reasons cited is the obvious financial crisis that has people frightened. When people are afraid, they hold on to what they’ve got and spend a lot less.

Harvard Business School professor John Quelch, writing in The Economist and also on his blog, has nicknamed these new consumers the “Simplifiers.” He notes that in this current atmosphere, luxury seems to be a dirty word. That’s why, for example, sales at Neiman Marcus dropped 30 percent while Wal-Mart’s rose. Sales of yachts and diamonds are down and showing up at a party in Manhattan wearing jewels, furs, and a $10,000 party dress is suddenly considered bad taste. Interestingly, America hasn’t seen such a complete reversal of attitudes since the Roaring Twenties gave way to the Great Depression.  Then, as now, conspicuous consumption was met with disgust, Quelch contends. 

That said, however, a recent study by the market research firm Harrison Group and American Express Publishing provides some significant clues on how we might approach selling boats these days. They surveyed people whose discretionary household income exceeds $100,000.  They concluded the shift appears to be only in people’s attitudes toward luxury, not in their ability to afford it. A solid 83 percent said they are still in good economic shape, despite the recession. But the percentage of those who say “a few luxuries are important to have, even in tough times,” dropped from 61 percent in June 2008 to 50 percent by October.

At least in the short term, then, we should consider changing our marketing to reflect the “Simplifier” paradigm. For example, we must emphasize the concept that a boat is not a luxury item at all, but an affordable addition to the quality of family life — something we’re doing with the Discover Boating campaign. But dealers need to bring it home!
This paradigm will favor utility and affordability over convenience, according to the editors of Trend Magazine. In this economic climate, consumers will be giving up over consumption, but will demand more meaning and fulfillment in their lives. Most importantly, consumers will not let themselves be defined by what they have, but rather by what they do and who they are, predicts Trends. Such a trend is favorable to boating.

 Finally, a longer view indicates we can expect the move from over consumption to shift again. If history is any indicator, spending on items like boats will pick up the pace as soon as the economy rebounds. While this recession seems unprecedented in many ways, past recessions have been marked by consumers pulling back from over-consumption only to spend wildly again as soon as the economy recovered. 

So, it is logical to anticipate that when consumers’ fears have disappeared, they will act on their desire for boats. What likely will carry over will be the increased buyer focus on quality and value.

Comments

10 comments on “‘Simplifier’ paradigm favors utility and affordability

  1. Jeffrey L. Frischkorn

    And do’t forget that as we grow older we tend to buy less and give more away… For us aging Baby Boomers that means we starting to question the value of going on spending sprees and collecting lots of “stuff…” The current economic times simply have brought it about sooner, me thinks…

  2. Captain Andrew

    Additionally I also think the future buying trends in this country will be different because the midle to upper-middle class prosperity that was enjoyed by the baby-boomers will not exist for the Gen Xer and beyond. A $100,000 dollars sounds like and is a lot of money today BUT, the costs of saving for retirement (especially after the past few months), health care and college savings are really going to put a crimp in the future boat market.

    I have said it before and I will say it again…The future of boating, and especially Sailing, is in fractional ownership and use like the programs Beneteau, Windpath, and Sailtime are employing.

    Good luck to us all!

  3. Douglyss Giuliana

    It is important to note that “Simplifiers” still do very much want the experiences, they just don’t want to be tied down to “heavy assets”. While spending on vacation homes is falling, spending on exciting and adventurous vacations is climbing. Programs such as SailTime’s fractional memberships allow boaters the opportunity to enjoy time on the water with family and friends, while still simplifying their lives. As the article points out, consumers are not so much cutting back on spending, but rather spreading the spending over more “smaller” pieces. They want to go boating, and drive a luxury sports car, and travel. Fractional programs in all of these industries are giving these Simplifiers what they want. More importantly, these programs also decrease the barriers to entry for new sailors, helping to bring in new consumers to the marine industry.

  4. Lou Sandoval

    Add to this the fact that our state governments are looking for opportunities to tax so called ‘luxury items’ and market contractions may continue.

  5. LARRY RODRIGUEZ

    I DON’T WANT TO SOUND TOO POSITIVE………..BUT I STILL BELIEF A LOT OF BABY BOOMERS COMING UP FOR RETIRING NOW AND IN THE NEXT 2 TO 4 YRS MAY LOOK AT “MOVING ABOARD” AS AN ALTERNATIVE, OR AS A RETIREMENT HOME, AT LEAST SOME ADVENTURIST WILL, AT LEAST FROM THE PERSPECTIVE OF FLAT FULL OWNERSHIP (there’s no giant state tax man waiting for you every year on your boat, just a small registration fee!) VS PAYING ESCALATING PROPERTY TAXES & INSURANCES FOR LAND HOMES DOWN SOUTH. SO I FORESEE A BOOM TO CONTINUE IN THE 30+ MARKET. NOW WHETHER THEY’LL BE BUYING “NEW” BOATS, IS ANOTHER THING!
    OF COURSE THIS MAY ONLY BE TRUE IF THEIR EXISTING, OR PREVIOUS HOME WAS NOT A VICTIM OF FORECLOSURE, OR THEY DIDN’T LOOSE THEIR BUNS DURING THE LAST 8 MONTHS OR SO OF THE MARKET BLOOD BATH.
    I DID SAY POSITIVE RIGHT?

  6. Candi Thayer

    My belief is that people are just scared. Scared of the “what if’s,” they are being bombarded with on a daily basis through the media. Currently, there are no positive stories being reported only “gloom and doom,” and the result is that Americans are reacting by shutting down spending. This only results in a worsening economy. It is going to take a lot of work and positive influence on behalf of the government, dealers, manufacturers and especially the media to allow consumers to re-open their wallets and spend freely. We need to push the media to write positive articles about our recovering economy, loosening credit offerings and proactive approaches to selling boats. As dealers and manufacturers we need to come together and be proactive in our approaches to moving product. We cannot be reactive and dump products to below cost creating avenues for the media to report more negatively about our industry. We need to focus on the positive opportunities available to us NOW and report on their benefits. We must look at the Inventory Sharing solutions like Marine Dealer Trader and report on how dealers are selling products amongst themselves helping to lower inventory costs, overhead and promote boating. We must create proactive approaches to sales, to each other we must insist on Positive reporting. We can create a positive buzz about the benefits of our industry if we work together. The is a Paradigm Shift taking place whether we like it or not and if we survive depends on how we act not react. I say lead by positive example but the choice is yours so either “get on board” or “abandon ship.”

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