“Full enough is a Feast.” How far we have truly managed to come it seems from that autumn day in 1621 where the 53 survivors of the Mayflower had their first harvest celebration meal which was the English custom in that time. We now call this event our Thanksgiving Holiday, and while we will remember it with some type of wonderful feast perhaps and time with family, it has taken on a different spin.
Thanksgiving now is followed most notably by Black Friday to careen us into the Christmas Holiday shopping season. Don’t get me wrong. I love the holidays and I love shopping, but I also LOVE the market economy. There is nothing like the Black Friday battle over endless sales to bring out the real Bulls and Bears so lets visit for a minute on this thing we call the Free Market.
The market economy is one of the basic economic systems in the modern world. When Adam Smith wrote The Wealth of Nations in 1776, traditional agriculture formed the heart of nearly all world economies. As industry began to dominate in the 1800’s particularly in Europe and the United States, Industrialists wanted to control their own businesses. Turning to Smith’s laissez-faire ideas, they pushed for free markets and an end to government interference. Laissez-faire put simply is the doctrine opposing governmental interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights. The free market, free enterprise, or as we affectionately call it “capitalism”, has at its heart a special trinity of elements. First is the battle of supply and demand, second is the desire for self-interest where producers and consumers only consider their own personal gain when making decisions and third is my personal favorite: competition. Dampen or temper any one of these three elements and you move down the slippery slope to mixed economies. Mixed economies can be seen quite frequently both in foreign and domestic trade where there is a blend of both government and private industry competing to make key economic decisions. Further down that slope is the more centrally planned economy, also known as a command economy or a socialist economy. At this end of the spectrum you will find a decline in not just the quality of goods, but also the availability of goods that you search out. We participate in this everyday from banking to health care to grocery shopping to songs that we download to our iPod.
Pause for a minute to think just how your opinion about the market place has changed since the economy sank two years ago. Call forward what you know about your grandparents and their view of money having lived perhaps through the Great Depression. They most likely represent a spendthrift culture with a high appreciation for being a frugal saver. While our recent down turn thank goodness has not been as bad as that, it has caused a measurable change in our shopping behavior or as Ellen Byron writing for the Wall Street Journal observes, we now have a new name: The Just-In-Time Consumer.
If I asked you to open your wallet, most of you could present some type of bulk shopping club card. For over two decades, Americans bought big, bought more, and stocked up with the confidence that bulk shopping, often on credit, would provide the best value for their money. It seems that this long recession with its high unemployment, plummeting home values, and depleted savings has altered the way that many people think about their future. Consumers are more likely to buy with the thoughts of do I “need it now” and will I “use it up” hence earning the moniker of the Just-In-Time Consumer. There will be a pause before a purchase with consumers asking themselves, “Do I really need this, can I really afford this?” says Thom Bischok, president of global innovation and strategy for Symphony IRI Group.
The lower sales volumes seen of late are attributed to “pantry de-loading.” People are just cutting back on inventory. Ladies, think about how many products you use from shower to hair to make up in the morning and ask yourself if you are now going without a few. Look at your pantry at home to observe that you have fewer product duplications and you stretch out store visits.
Just-In-Time consumption is disrupting long established purchase cycles as consumers buy when they need it, not way in advance. Put simply, we are getting by with what we have and doing just fine thank you very much. Or as the saying goes, “The rich man has enough.” Have a Blessed Thanksgiving!
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