More Than Money
Patricia Aburdene is a business journalist and trend forecaster who collaborated with author John Naisbitt on Megatrends 2000, a New York Times bestseller that famously predicted the rise of the “Information Economy” we know today. More recently, Aburdene’s book Megatrends 2010: The Rise of Conscious Capitalism, predicted an economy based on ethics, values, and spiritual awareness. Conscious Money, Aburdene’s latest book, continues her research into economics and human values, sharing important new insights for today’s independent retailers about what shoppers are looking for in this second decade of the 21st century.
Molly Trimble, Publisher of Retailing Insight, recently spoke with Aburdene to learn more about the values-driven consumer trend.
Molly Trimble: Your book Megatrends 2010: The Rise of Conscious Capitalism, describes the values-driven consumer as a market force to be reckoned with. Could you share more about this significant and growing consumer trend?
Patricia Aburdene: When you start talking about values-driven consumers, you have to start with a basic economic reality: Consumer spending represents 70 percent of the GDP (U.S. Gross Domestic Product), an enormous amount when you think of all the money the government spends or you take into account business-to-business spending. Still, the absolute giant in the room is consumer spending.
With the trend of the values-driven consumer, more and more consumers are taking their values to market and determining their spending patterns and choices based on those values. For each industry, whether gift retailing, auto-making, clothing, cosmetics, or food stuffs, a consumer value is driving it.
Many of your retailers might be in the Fair Trade gift sector and sell crafts produced in a village for the fair market price instead of what we typically call the free market price. The Fair Trade market price appeals to the growing number of consumers who say, “Yes, I want to buy crafts, but I want to know that the craftspeople have been fairly paid for their services. I’m not interested in supporting another conglomerate that’s just trying to get goods for the cheapest possible price.”
The Fair Trade trend illustrates a longing for integrity. When we make a purchase, we want to feel good about it. That is so fundamental. Values-driven consumers insist there be some alignment between the money they spend and the values they hold in their heart. What could be simpler?
Trimble: How does shopping with your values square with the challenging economic environment of these past few years? Isn’t price the determining factor now, by necessity?
Aburdene: People want to have a positive relationship with values, and they want to have a positive relationship with money. When values aren’t part of your shopping decisions or part of your financial decisions in general, you don’t have peace of mind or the confidence you really need in tough economic times. People need their values now more than ever.
The conundrum is that mainstream money thinking says values should have nothing to do with your financial choices whatsoever. But that’s completely invalid, because our values shape our decisions, and our decisions write the story of our lives and our money lives. How can anyone possibly say that values aren’t important? You may not realize your values are shaping your financial choices, but they are!
Trimble: How many values-driven consumers are we talking about, Patricia?
Aburdene: Estimates range, but according to research, the LOHAS (Lifestyles of Health and Sustainability) segment is a 290-billion-dollar industry of tens of millions consumers.
The LOHAS consumer is not a tiny market niche. Remember, consumer spending is 70 percent of the GDP. As more consumers move into the natural and sustainable arena—and more than 50 million consumers or 19 to 25 percent of us fit into that category—it becomes a potent force in mainstream consumerism. There’s just no question about it.
Trimble: Are the many millions of baby boomers, now middle-aged, at the center of this new economy based on values?
Aburdene: Yes, but more importantly, we baby boomers have inspired our children, the Gen X and Gen Y generations who took these values in with their mothers’ milk. They’re standing on our shoulders. They’re the young entrepreneurs who are making and selling the nontoxic cosmetics, who are writing the books about the future, who are creating the sustainable fashion lines.
My new research for Conscious Money shows that the revolution we saw in the organic food industry is coming to the cosmetics and cleaning products sectors. Hundreds of untested chemicals are in products on the market in the U.S. today. This is scary because skin is the most permeable organ of the body. For instance, did you know a lot of lipstick is loaded with lead? We’ve banned lead from paint for decades, but it’s perfectly fine for lead to be in lipstick? Johnson and Johnson only recently decided to remove a carcinogen from their baby shampoo. It defies belief!
Activists have been working for years to make the public aware of these consumer issues. These kinds of issues are driving and influencing consumer spending and will continue to be increasingly important as we move forward.
Trimble: What does it mean to independent shop owners and buyers that more and more people want to take their values shopping?
Aburdene: What I do in my work is try to show owners and managers that conscious capitalism is a superior business model. You will make more money in the long term, because you’re creating a sustainable business.
Trimble: Our readers need to distinguish their stores from the big corporate retailers of the world. What better way to position themselves than to let shoppers know they can come to their stores and find lead-free candles and lipstick, lotion with no parabens, Fair Trade gifts, and other products made with integrity?
Aburdene: Exactly! That’s exactly the future for your retailers—distinguishing themselves from the big box stores, from the Targets and Wal-Marts, by appealing to the growing numbers of values-driven consumers.
Your audience of stores has got to be out front about what they offer. In these economic times they’ve also got to be competitive in an economic sense. They’ve got to deliver a value message to people that says, “OK, we’re never going to be the cheapest, but we can show you where the economic value is in what we do and what we sell.” Then they must demonstrate the truth of that to their customers.
Trimble: Independent retailers today are challenged by the ease of ordering on the Internet and by the low prices at chains and big box stores. We encourage our retailers to create that special shopping experience for their customers, to offer exceptional customer care and products shoppers won’t find at Costco or Walmart. Any advice for them?
Aburdene: The most important megatrend in my books is the megatrend of “high tech, high touch.” The more technology we have the more people yearn for the human touch. You can’t get that ordering a book at Amazon. It may be great when it’s 10 o’clock at night and you want a book and you can download it on your Kindle. But that’s not the whole experience. The experience of shopping is “high touch,” the unique personal approach, the warmth of the shop owner, the idiosyncracies of the kinds of things you might find in that shop, such as a CD of interesting kinds of music or a book the shop owner happens to like. People want the experience you can only have in a unique, locally owned shop.
Many shops become the community gathering place, the third place, as they say—not home, not work, but someplace else, a community place. Just walk into any retail store and you immediately feel the vibe. People either want to stay there or they turn around and leave, because the values of an organization are palpable. This is where your readers have a strategic advantage with their more personal approach to business.
Trimble: Thank you so much for talking with me today, Patricia. Do you have some closing words of advice for our audience of store owners and buyers?
Aburdene: As a consumer yourself and as a shopkeeper, every single financial transaction you make offers the potential for you to vote with your values, to move us toward a more conscious economy that can sustain the evolution of humanity now and into the future. Know that your work is very important.
First published in Vol. 27 No. 1 of Retailing Insight. © 2013 Continuity Publishing Inc. All rights reserved.