Consumer Confidence
Consumer confidence is a measure of how consumers are feeling about the future. When they feel fearful they cut back on spending and begin to save. When they feel confident they spend and take out debt. When they feel excessively confident they take out too much debt and take too many risks leading to problems that reset the cycle back to fear. Historically, economic conditions were mostly explained with theories that focused on fiscal policy, monetary policy and the business cycles of producers. In a developed country with a large middle class, consumers play an large role in economic conditions and arguably dominate.
Social Status
Consumers commonly use goods to signal or countersignal desirable social traits such as wealth, intelligence, coolness and youth. Social status is traditionally a process of earning respect through social interaction. However, status symbols have always played a role in signalling positive traits. Modern markets fill this need by providing brands, products and services that consumers demand to signal an individualistic image or fit into a group.
Fear of Missing Out
People tend to compare themselves to others to determine how well they are doing in life. When they find that someone is doing better it can trigger an intense feeling of angst. This can be managed with a sour grapes attitude or can lead to strong motivation to copy others. A fear of missing out causes massive and fast moving consumer trends whereby suddenly there is strong demand for a desirable product, service or experience that may quickly fade.
Attention Economics
In a consumer society, producers compete to get attention from consumers. Any product that consumers don't recognize and feel good about is likely to do poorly in the market. The most obvious type of attention economics is the market for advertising.
Dollar Voting
In a consumer society, consumer choices have a significant impact on people and planet. In theory, environmental and social problems caused by producers could be solved by dollar voting where by consumers only buy things from firms that have demonstrated responsible environmental stewardship and fair dealings with communities. Alternatively, if consumers purchase goods without any concern for how such goods are produced or disposed, the economy may produce unsustainable levels of economic bads.
The Last Man
The last man is a criticism of society by philosopher Friedrich Nietzsche. Nietzsche was primarily concerned with the rise of nihilism, the belief that life has no meaning or purpose. With no purpose in life, Nietzsche feared human civilization could simply focus on avoiding pain with comfort, convenience and risk reduction. Nietzsche called this condition The Last Man because he saw it as a return to an animal-like state of existence. Criticisms of consumer society often resemble this last man argument. For example, the animated film WALL-E that depicts a future humanity that has destroyed the planet and is on a spaceship hurdling through space. The residents of the ship don't know why they are there but are fully obsessed with their daily consumption routine.
Consumerization
Consumerization is the process by which product categories that were once designed for businesses become dominated by products designed for consumers. This can be viewed as a continuing process whereby less and less things are specialized for business customers. For example, energy infrastructure was once designed solely for utilities but newer infrastructure such as solar panels are more often designed for consumers.
Prosumer
Prosumer is a contraction of the words producer and consumer. This is used to describe the increasing ability of consumers to take over parts of the production process. At its extreme, this can be viewed as a future without producers centered around advanced technologies that allow consumers to design and build whatever they want at home. For example, an advanced design tool that allows anyone to create efficient solar panels at home without any engineering knowledge.
Consumer Culture
Consumer culture is culture that evolves around products, services and brands that is well beyond the control of the producer. For example, the fan culture that surrounds a media series. Consumer culture can grow larger than traditional cultures such that they represent a shared experience at the level of a society that gives people common stories, symbols, norms and expectations.
Human Experience
The modern human experience increasingly revolves around packaged experiences sold as products and services such as films, video games, tour packages, restaurants, musical theatre, theme parks and commercial events. As such, the human experience itself is becoming a consumption activity.
Commoditization
Commoditization is the process by which a product, service or experience that used to be viewed as unique becomes standardized in the eyes of consumers such that they buy on price alone and do not reward producers that improve quality. In this situation, all producers must accept a market price and have no incentives to improve their offerings. This also gives producers strong incentives to reduce price as consumers always buy the cheapest thing resulting in a race to the bottom whereby products become low quality. For example, consumers who don't care how many chemicals are sprayed on their fruit because they almost always buy the cheapest juice on the shelf.
| Overview: Consumer Society | ||
Type | ||
Definition | A large social system that is organized around spending by individuals. | |
Related Concepts | ||
