Author: Kristin Mooney.
Consumers are transforming in a difficult economy from a mindset of buy, buy, buy TO sell, sell, sell. The are becoming “Sellsumers,” and it makes a lot of sense given the economic state we’ve been stuck in for a while. The “Sellsumer” is a consumer who is selling his or her old electronics, shoes, clothing, anything and then using that money to upgrade to the new version of what was sold.
People in the Western counties like the US were not always like this. They threw away TVs, music system, all sort of electronics that did not work. Fixing things was considered more expensive them just buying new ones (it was easier, especially when credit card was seen as FREE MONEY). Clothes and books were meant to be given to stores like Goodwill for charity (if not trashed). On the other hand, people in eastern countries like India and China, nothing was ever thrown away. Everything could be fixed and re-used.
US-based Guitar Center is a good example for a company that promotes users to trade-in and get a 10% discount of up to USD 500 on new products.
So what has changed?? According to trendwatching.com, consumers actively selling old stuff is fueled by nextism, statusphere, and excusumption. In case those words sound like nonsense, here’s how trendwatching defines them:
- Nextism – We always want the ‘Next’, the newest, the best product available (Apple has sold millions of iphone 4S in the first month). So with constant upgrade of products, consumers need to sell their not so old products to afford the newer version (Apple iphone 3G can still be sold for $150+ on ebay.com even though iphone 4 and 4S are out).
- Statusphere – ‘Status’ is now partially defined as finding the best deal and being environmentally aware. According to trendingwatching.com, “growing numbers of consumers get their status fix from being shrewd and savvy, rather than through conspicuous consumption.” Big, fast and flashy is not the only criteria for status. Consumers want new products that make them come across as ‘green’ and environment friendly.
- Excusumption – Even though consumers are short on cash and credit has dried up, we still need to satisfy our desire to buy (unnecessary products). So yes, they just need ‘Excuses’. Consumers that have a tight budget are getting creative with ways to fund buying new products. Selling, trading, or exchanging old/unused items are perfect excuses for guilt-free purchase (Also, they think it makes them look smart and green).
So what are the outcome of these new consumer behavioral trends?
- Retailer Realisation: Retailers have picked up on this trend and are making it even easier for consumers to become ‘sellsumers’. They realized that many consumers don’t want to deal with selling everything on sites like ebay or craigslist so they made it easy for them. Take Best Buy for example, when you want a new phone, you can expect to pay about $200 if you have an upgrade available. That’s a lot of money for most people but ‘nextism’ explains that they feel they have to have it. So BestBuy created a trade-in-program: Bring in your old phone and get money toward your new phone. This is easy for consumers because the hassle of selling the old phone is removed. The consumer gets their new phone immediately (and instant gratification is always a plus).
Levi’s Singapore offered customers SGD 100 when they brought in their old jeans and bought a new pair: a SGD 50 discount and a further SGD 50 in vouchers. This makes Levi’s look environment friendly, helps them catch consumer attention and also increase sales.
Another good example for a company that is capitalizing on this new trend in the US is Gazelle.com. User can enter the name of the product they want to sell, rate its condition and get an automated bid based on their inventory and success rate of resale. Gazelle will probably take almost anything!
- Value conscious consumer: The impact this is having on consumers is that they are now considering resale value on more products than just expensive items like the traditional car or house. Price sensitive consumers may be willing to spend more money on quality products if they know they can get some of their money back later (example: buying a $200 book which has a resale value of $150 after a few months of use might be seen as a great deal.)
- Cool to be Green: Consumers also feel more environmentally aware because the products turned in to retailers are usually recycled or donated. This feeds in to the ‘stratusphere’ defined above. Supporting ‘green’ is now seen as something to be proud of and not just one of those hippy things to do (it’s a major change in consumer attitude).
A good example that sums up the above points is GAP’s promotion. In May 2011, GAP stores in the US and Canada collected clothes for donation to Goodwill. Consumers who brought in old clothes got vouchers entitling them to 30% off GAP purchases. This encouraged donation, made GAP look good, got them lot of publicity and helped consumer connect with them.
So consumers are morphing, at least for the time being, into much more creative consumers. They are finding ways to save money or get money back like never before. This is due largely in part to the internet allowing consumers to interact with each other and not just retailers. Consumers can save money, recycle products, and keep up to date with current trends better than ever.
To read the article from trendwatching and to see more examples of retailers offering trades, go to trendwatching.com/briefing/
Photo credit: feature image – http://www.geeksugar.com/Cash-Gadgets-Ebay-11613719
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