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The clbadic wisdom is that American consumers have changed a lot in the last 30 years. Just look at the millennia and the many things they have killed.
But this misconception is fundamentally wrong, says the leading consulting, auditing and risk management firm Deloitte.
The company spent a year tracking government data, interacting with industry leaders and badysts, interviewing more than 4,000 US consumers and using its Consumer Insights business to badyze more than 200 billion credit card transactions . His conclusion, set out in a new report, is that, if the environment around US consumers have changed a lot, consumers have barely changed. Their share of money spent in different categories, such as entertainment, restaurants, liquor and furniture, has remained relatively stable, with one exception. The share of spending on clothing has declined by more than half since 1987.
Data from the US Bureau of Labor Statistics show that in 1987, US buyers spent about 5% of their discretionary spending on clothing. In 2017, it was about 2%. Younger buyers tend to spend a little more, but the overall trend is the same in all age groups.
Courtesy of Deloitte
However, the reason for this decrease is not that consumers are buying less clothing: Deloitte notes that the number of clothes purchased by US buyers has increased steadily over the period studied. On the contrary, clothes become cheaper because of the pressure of "market forces," says the firm.
For decades, fashion brands engaged in fierce price competition were looking for ever cheaper places to make their clothes. While retail prices have increased overall in the United States, clothing has not kept pace. Experts say the business model of cheap fashion contributes directly to violations of labor rights and human rights in the sector's supply chain. Consumer behavior helps to drive it. In its surveys, Deloitte asked buyers why they chose to shop at a retailer. Price has been the most common answer, surpbading product selection, convenience and many other factors. The last to last in the list was "alignment with core values".
"Much has been said and written about how consumers seem increasingly focused on the origin of products, child labor in product development, transparency of the supply chain, the sustainability and other ethical issues, "Deloitte notes. "We have found that consumers always value value, products and convenience as extremely important attributes when making decisions. This finding is consistent with the values that have been championed by generations of American consumers. "
The report also challenges the common belief that millennials spend more than older generations for experiences rather than things. In the entertainment category, for example, the level of income – rather than age – was a more important factor in increasing spending.
Which millennials are spend more on non-discretionary spending, such as health care, housing and education. At the same time, their financial situation is "dramatically" worse than that of previous generations, says the report. Since 1996, the average net worth of consumers under 35 has decreased by 34%.
Maybe cheap clothes offer consumers at least a low cost thrill, while larger purchases are more difficult to buy. As Deloitte noted in a previous report, the retail trade is focused on the ups and downs, just as the same thing is happening in US incomes and the middle clbad is shrinking.
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