Lee Eisenberg, author of 'Shoptimism' on why we shop
We're going to shop our way back to prosperity, he says
Depressed by the downturn? Frustrated by financial faults
Cheer up, says Lee Eisenberg. Americans are going to shop
their way back to prosperity just as they have for centuries. It's in our DNA, he
says. We are what we buy. We are why
Lee Eisenberg, author of "Shoptimism"
Excerpt: "Plastic provides the jet fuel for consumer spending; it's the engine that powers the Consumers' Republic. Cards level the playing field, sort of, between haves and have-nots. They give the have-nots a taste of the have -- even if it takes over 20 years and $2,300 in interest to pay off a $1,000 had-to-have, which assumes that the have-not works off the debt with minimum monthly payments. Champions of revolving credit follow the same logic as law-abiding members of the NRA -- credit cards don't break people, people break people."
For his wide-ranging new book, "Shoptimism: Why the American Consumer Will Keep on Buying No Matter
What," the former editor-in-chief of Esquire magazine and senior executive
at Lands' End spent three years surveying the retail landscape, interviewing
shoppers, quizzing industry experts and even pulling a shift as a floor walker
His conclusion: Our love affair with the BOGO, the bargain
and the little black dress is alive and well, even in these tenuous times.
view the current "Great Recession" as a game-changing wake-up call that is
ushering in a new frugality. You maintain that America's appetite for shopping
and spending remains insatiable. On what do you base such "shoptimism"?
Lee Eisenberg: Nowhere
do I characterize our shopping appetite as "insatiable." The subtitle of the
book, "Why the American Consumer Will Keep on Buying No Matter What," refers to
the fact that we will continue to buy, yes, but not necessarily with the same
fever as prior to the economic collapse. Indeed, I believe there's something of
a reset happening in the consumer's psyche -- before we shopped with our hearts
and let our emotions take control, today we're using our heads more, meaning we're
being more thoughtful, rational, methodical when we make our decisions.
and to what degree have credit cards built the United States of consumption?
What's good and what's bad about plastic?
cards are good is that they indeed boost higher levels of consumption, which of
course is the engine that in turn drives the overall economy. They're also
highly convenient -- who'd want to fill out a credit application every time you
buy groceries? Used sensibly -- meaning without running up a ruinous balance --
they afford those on the lower end of the socioeconomic scale an opportunity to
make discretionary purchases they would otherwise not be able to enjoy.
The bad, of course, is millions of Americans don't use
cards sensibly, and card companies and banks haven't exactly kept an eagle's
eye out for creditworthiness. Another bad, which you hear all the time from
behavioral economists and neuroscientists, is that cards mask or anesthetize
"the pain of paying" -- that is, there's evidence to suggest that the
ability to whip out a card may interfere with the workings of a region of the
brain that signals discomfort or warning.
accompanied your wife on the mythic quest for the perfect little black dress.
What did you learn from that experience?
[C]ards mask, or anesthetize, the 'pain of paying' -- that is, there's evidence to suggest that the ability to whip out a card may interfere with the workings of a region of the
brain that signals discomfort or warning.
Eisenberg: I saw
-- as up-close and as personal as you can get, i.e., trapped in a women's
changing room -- the variety of hurdles one needs to surmount when buying
clothing. Is it flattering? Is it appropriate to an occasion? Is it too young?
Is it too sexy? Does it make my butt look big? You name it. What was most
interesting though is that, when I turned my firsthand observations over to
various experts -- an anthropologist, a psychologist, a marketing professor -- I
was delighted by how each of them had a very different and provocative take on
what went on in that changing room. Which promptly sent me off on the longer,
adventurous journey in search of what I called a "Universal Buy Theory."
all-encompassing, tidy theory that explains the human impulse to shop and buy.
My conclusion: There isn't one.
suggest that both cheapskates and spendthrifts are not only born that way, but
tend to dislike their inherent trait. Do credit cards factor into these two
certainly reasonable to assume that spendthrifts would spend less if stripped
of their cards. But cheapskates are cheapskates -- they already have easy
access to plastic and rewards programs and promotions but turn a deaf ear. You
mentioned that both spendthrifts and cheapskates don't like being spendthrifts
and cheapskates, which indeed research has borne out. The interesting thing is
that they therefore have a tendency to marry their opposites, which I don't
have to tell you is not a recipe for a happy union.
point to a major commercial real estate adjustment in the coming months. Many
Americans were alarmed by the sudden closure of major Main Street brands
Circuit City and Linens 'n' Things. Will brick-and-mortar return to its
previous vitality or is it morphing before our eyes into something new, and if
fact is, and most industry people agree, the nation was highly over-retailed
and due for a reckoning, which the recession provided. Indoor mall development
had ceased before the economic downturn, for example. That said, I think we'll
see a rebound sooner or later, but not the kind of explosive growth in shopping
venues we witnessed over the prior decade and up until three or four years ago.
In addition, the rapid growth of online shopping will also keep something of a
damper on brick-and-mortar recovery.
on your analyses of buy-side and sell-side dynamics, consumers today seem at a
heavy disadvantage because research, money and technology all are enabling the
buy side to target us in ways we never dreamed of. What will the future retail
environment look like, and what do you view as positive and negative about it?
cuts both ways. Yes, it enables the sell side to better target us and keep
track of our purchases, behavior, vulnerabilities, etc. But technology -- meaning
the Internet, smart phones, etc. -- also makes for greater price transparency,
allows us to shop globally, provides us with heaps of consumer-generated
reviews of products and stores. Consumers are thus far more empowered than they
used to be.
Let's end where "Shoptimism" begins:
Why does buying make us happy?
Eisenberg: The right
kind of buying can bring happiness. As I conclude in the book, it's
possible to buy happy memories, usually as the result of buying experiences: a
romantic getaway, a family vacation, a journey to a place that feeds the
spirit, etc. Buying is also an outlet for creative expression, which is why I
don't automatically condemn those who spend money on clothes or grooming
products, so long as they don't break the bank doing so.
See related: Credit card addiction: How to break the spending cycle, Take steps to prevent bipolar card splurges
Published: January 26, 2010