"Live Solid, Bank Solid"

Major retailers have begun responding to recession-driven consumer pessimism by repositioning their advertising. Conspicuous consumption is out. Thrift is in. The best example we've seen so far comes from Target, which shows clever ways to save money by buying its products.

The question we ask at the Boomer Project is whether this corporate repositioning is purely tactical (a temporary response to a temporary downturn in consumer spending) or strategic (a long-term response to a profound shift in consumer behavior that will outlast the recession).

We've been making the argument that economic events have shocked American consumers, Baby Boomers especially, into a fundamental re-evaluation of personal priorities -- a trend that was already building momentum from (a) the embrace of environmental sustainability and (b) the life-cycle tendency of older Boomers to define themselves by non-material values. In other words, the United States appears to be entering a lasting era of frugality.

We find it reassuring that SunTrust, the Atlanta, Ga.,-based bank holding company, has reached conclusions entirely consistent with this interpretation. The bank has unveiled a branding campaign built around the tagline, "Live Solid. Bank Solid," which speaks to "a new era of thrift, security and financial responsibility." This campaign is especially significant because it was based upon months of consumer research that identified attitudinal trends that were gathering strength before October's financial meltdown. Among SunTrust's conclusions:

• Nearly 80 percent of those surveyed would rather be envied for spending wisely than for spending freely
• 83 percent believe it's not about how much money you have, it's about what you do with the money that you already have
• Eight in 10 believe that while having more money won't necessarily make you happier, feeling in control of the money you have will increase happiness

The "Live Solid. Bank Solid" campaign launched Nov. 16 with premiere spots airing during NBC's Sunday Night Football. It will include new primetime television advertising through 2009, as well as on the radio, in print and the Internet.

Said John Fitzgerald, president of the Winston-Salem, N.C., ad agency behind the rebranding campaign: "Consumers ... are moving to lives of more substance, reason, and long-term thinking, and feel a stronger sense of personal responsibility for the direction of their lives."

Now, while we've been talking about the new frugality as a result of the current Wall Street meltdown, our friend and "Ageless Marketing" guru, David Wolfe, has been predicting it for years. His hypothesis, now proving to be spot on, is that as America on the whole grows older -- the median age for the country continues a relentless march upward, almost at age 40 -- there will be fewer dollars flowing in the U.S. economy and a new frugality will emerge.

SunTrust, Target, and we suspect many more companies, will reach similar conclusions, creating new marketing messages that better connect with this changing mindset.

Boomers, Frugality and the Revolt against Consumerism

by James A. Bacon

Only in New York: Reeling from the financial catastrophe on Wall Street and fearing a collapse of the Sex in the City-style conspicuous consumption, fashion mavens have conjured up a new phrase, “recessionista,” to describe free spenders who are going down-market. Instead of buying $1,235 patent-leather satchels with golden accoutrements designed by Anya Hindmarch, reports the New York Times, these trendy young women are heading to Target (as in, tar-jay) to purchase similar purses by the same designer, but made of polyvinyl chloride, for $49.99.

Mass over consumption dies hard in the United States.

But New York may be not be typical. The rest of the country seems to be responding at a more profound level to hard times. In New Hope, Pa., the Ingram-Behre family overhauled a year ago its profligate lifestyle – dining out, shopping for entertainment, expensive cruises and trips to Disney World – with the goal of paying down debt and building its net worth. Predicting a “new age of frugality,” BusinessWeek described how the Ingram-Behres household now buys clothes at consignment shops, turns out the lights and often walks places instead of driving there. Earlier this year, the family saved enough money to pay off one of its auto loans.

The question is whether the new-found frugality is a temporary response to the shock of plummeting real estate and stock values, or does it foreshadow a fundamental shift in values and priorities? Are Americans going the “recessionista” route, in which extravagant spending will likely rebound as soon as the economy does, or are they following the Ingram-Behres by eschewing the ethic of “he who dies with the most stuff wins”?

Clearly, financial turmoil has filled Americans with a fear that impacts the here and now. The Consumer Confidence Index, updated Tuesday, stands at the lowest level since its inception in 1967. The Index plummeted to 38 in October from a reading of 61.4 in September.

But at the Boomer Project, we sense that there’s more to the story: Americans from all generations are turning their backs on the materialist, consumer-driven culture of the past. Read more.

("Viva the Vital" column republished from the Oct. 30, 2008, edition of the Richmond Times-Dispatch. Photo credit: The Great Dickens Christmas Fair.)

Here Come the Simplifiers

John Quelch, an associate dean at the Harvard Business School, foresees the rise of a new type of consumer in 2008: the "middle-aged simplifier." This group consists of well-off people who are turning their backs on conspicuous consumption and the accumulation of stuff. They don't define their social status by the size of their McMansions or the number of range Rovers in their garages. They value experiences over material possessions.

Writing in a Harvard Business Publishing blog, Quelch does not analyze this phenomenon in generational terms. But a generational dimension is implied. He notes that the group includes "empty-nester baby-boomers ... who are tired of heating unused spaces in cavernous mansions, now preferring smaller houses with architectural character and intimate spaces, more charm and less maintenance."

This analysis is consistent with Boomer Project research findings that today's Boomers define their self identities less by how they compare to others -- "keeping up with the Joneses," as it were -- and more by their own internal compasses.

Quelch identifies four salient characteristics of the Simplifiers:

• They have more stuff than they need. The temperamental opposite of pack rats, they want to purge themselves of excess possessions.


• They want to collect experiences, not possessions. They'd rather dine out, go on an adventure travel or learn a new sport than buy a vacation home, with all the responsibilities and headaches it entails.


• Their stuff embarrasses them. Big, gas-guzzling cars and big, electricity-guzzling houses convey conspicuous consumption, which in the era of rising green consciousness, is deemed irresponsible, if not downright anti-social.


• Their wealth is so assured it no longer requires conspicuous display. "They reject the marketer's continual pressure to spend more money on possessions rather than on education, health care and other social goods."

The Simplifiers pose a huge challenge to the marketers of traditional consumer goods. As the number of Simplifers grows, suggests Quelch, expenditures on stuff by this group will lag rising incomes. Consumer goods multinationals may find richer rewards focusing on emerging markets where "stuff" still has allure.

(Hat tip: Dick Stroud at 50-Plus Marketing.)

A New Age of Frugality?

Could Baby Boomers, notorious spendthrifts that they are, be leading the United States into a new age of frugality? BusinessWeek magazine thinks that may be the case.

The business pub profiles the Ingram-Behre family of New Hope, Pa., an all-American household of two 40-something parents with good jobs. (Technically, the Ingram-Behres are GenXers on the cusp of Boomerdom, but the article interviews several other newly parsimonious families that are in the Boomer cohort.) A year ago, the family was trapped in a lifestyle of mass overconsumption: dining out, shopping for entertainment, taking expensive cruises and trips to Disney World. They regularly busted their budget and ran up their credit cards, which they paid off by tapping the equity in their house. In sum, the Ingram-Behres epitomized the mighty American consumer who kept the global economy humming by racking up ever-mounting debt.

It didn't take the sub-prime mortgage crisis, or even the recent melt-down of their 401k plans to sober up the Ingram-Behres from their spending binge. Reality hit home a year ago when they sold a house that had doubled in value to $490,000 and netted only $60,000. "I was practically nauseated when I realized what our out-of-control spending had done," said Ingram, the wife.

In a remarkable turn-around, the family started eating more meals at home and reining in the shopping-for-pleasure habit. The Ingram-Behres now buy clothes at the consignment shop, turn out the lights and often walk places instead of driving. Earlier this year, they saved enough money to pay off one of their auto loans. Writes BusinessWeek:

Ingram and Behre are harbingers of a dawning Age of Frugality. People who overconsumed during the past decade are now rejecting extravagant lifestyles. They're spending less, and more wisely. Some are getting their finances in order. Others are fearful of losing their jobs, shocked by investment losses, or hunkering down amid the general uncertainty.

I've been a tightwad all my life -- at least that's what my wife and kids tell me. I pinched pennies while the rest of the country was on a credit-card bender. I guess I never understood the joys of mass overconsumption. I never saw why people bought so much "stuff" they didn't need, or didn't even want a week later: stuff that accumulated in closets, attics and garages. So much stuff that people rented self-storage units to hold what they didn't give to Good Will or cart off to the landfill!

The greens have been telling us that our addiction to buying "stuff" was ruining the world by consuming way more resources than we needed to. More stuff = larger carbon footprint = global warming. Economists have been telling us that the trillions of dollars of indebtedness -- much of it owed to foreigners -- eventually would be the ruin of the nation, as we nearly saw this past month. None of those jeremiads made much of an impression, but the culture does finally seem to be shifting.

If Baby Boomers have any sense whatsoever, they'll confront the yawning gap between their savings and their ambitions for later in life and realize that something has to give. As we have pointed out on the Boomer Consumer blog more than once, many Boomers have come to accept the idea that they'll have to work longer in life than their parents did to maintain a comfortable lifestyle. But staying solvent into old age may take more than hard work. It may require an old-fashioned virtue that has never been a big part of the Boomer ethic: thrift.