How the Global Economy is Shaping Consumer Habits
It’s human nature right? We all want good value for what we buy. The hunt for the best deal is on now more than ever! We have been gradually conditioned by the merchants around us to expect the best price on everything from a pari of socks to a vehicle.
I can remember when Consumers Distributing first opened in Canada when I was a child (1957-1996). Wow, this was a great concept-just come in to the warehouse, look through the catalogue, grab a pencil at the front counters and order the items you want at wholesale prices.
Remember, this was before the Internet so people flocked there for a chance to get a good discount without an apparent middleman. In the end, they just couldn’t provide the stock in a timely manner for the demand. Getting a good deal is one thing but actually getting the item in your hands was a bit more important to their customers.
Next, the onslaught began with the invasion of Walmart, Costco, and Sam’s club-the list goes on and on. Warehouse style atmospheres with wholesale no frills prices. Very soon the cost conscious consumer forced North American manufacturing overseas. Globalization took hold and companies were forced to compete with the rest of the world! Deflationary pressure began to take its toll and now there seems to be no bottom to prices.
But here‘s where a very interesting paradox comes in. I hear it all the time in stores, at malls and on the streets- “I won’t buy anything from China anymore.” But these are the same shoppers who pushed manufacturing offshore in the first place by demanding lower and lower prices. Pretty ironic don’t you think?
In the end, will consumers spend the extra dollars to buy locally made goods? Actions speak louder than words and when push comes to shove, the majority of these savvy consumers end up putting aside their beliefs and end up buying imported goods.
Will there be a successful resurgence of manufacturing in North America? Just look at the retailer American Apparel whose niche was offering “American made” clothing. After closing all 110 stores in 2015, now under new ownership, they have resurfaced opening only one store in Los Angeles. Guess where most of their inventory is being manufactured now? No, not North America but Central America! You tell me, will it ever be cheap enough?
Written by David Adelman, Founder and Owner of The Adelman Group