Retail shopping chains are suffering setbacks, and here's why, from the New York Times last month:
Analysts say a wider shift is afoot in the mind of the American consumer, spurred by the popularity of a growing body of scientific studies that appear to show that experiences, not objects, bring the most happiness. The Internet is bursting with the “Buy Experiences, Not Things” type of stories that could give retailing executives nightmares. Millennials — the 20- and 30-something consumers whom marketers covet — would rather spend their hard-won cash on out-of-town vacations, meals with friends, gym memberships and, of course, their smartphones, many surveys suggest.
That instantly reminded me of a post I wrote back in 2010 citing Edward Castronova, the academic who pioneered the study of virtual world economies, "Is the Virtual Economy Contributing to Our Real World Recession?" Because look:
Let’s construe the notion of “virtual economy” quite broadly: If you receive an experience by yourself through a machine that runs on digital technology, without doing or buying anything physical (other than press a few buttons), it’s virtual... People who spend time online don’t have to worry about what they are wearing. Suppose that some percent of a given day can be spent in pajama’s, the rest must be spent in decent clothes. For decent clothes, you need a whole and varied wardrobe. For PJ’s, you need a few comfy ones. Now increase the amount of time that can be spent in PJ’s. The demand for decent clothes falls, if ever so slightly.
So to the NYT's point about smartphone usage, most of the time spent and revenue earned there is from online games -- i.e. virtual goods through in-app payments. And we haven't even gotten to the point where VR headsets are widely and cheaply available on most smartphones.
Update, 11:25am: Another example of this trend is the popularity of saying "Netflix and Chill", i.e. stay home to consume virtual content and (hopefully) hook up.
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Hamlet wrote: " Millennials — the 20- and 30-something consumers whom marketers covet — would rather spend their hard-won cash on out-of-town vacations, meals with friends, gym memberships and, of course, their smartphones"
then Hamlet wrote: "People who spend time online don’t have to worry about what they are wearing. Suppose that some percent of a given day can be spent in pajama’s, the rest must be spent in decent clothes. For decent clothes, you need a whole and varied wardrobe. For PJ’s, you need a few comfy ones. Now increase the amount of time that can be spent in PJ’s. The demand for decent clothes falls, if ever so slightly."
is a disconnect between the first and the second
the first is true about Millenials. The second isnt. Millenials dont sit round in their pajamas all day. They are out of the house doing stuff. Like vacations, hooking up with their friends going out clubbing, concerts, dinner, parties, to the gym. Like the first guy said. Is what young people do. Sure they may play games and stuff, but they more out the house than in. Way more
and when they are in they more likely in the kitchen helping make a meal for their friends who are over and hanging out than anything else. And texting the chit out their phones and checking out their FBs and Tinders and Twits and that
Posted by: irihapeti | Thursday, September 24, 2015 at 10:34 AM
Smart phone takes care of a few purchasing paradigms. Music is one, no need for a walkman, no need for hi-fi, records etc.
Every generation likes going on holiday, socializing, dinner parties etc
Posted by: Cube Republic | Thursday, September 24, 2015 at 11:06 AM
What I've noticed about Millennials is how they socialize. They do so in groups and they marry later, at which point I suppose they'll be more likely to be together as couples. So the accumulation of stuff is deferred, and the phone does replace a lot of bulky electronics.
What a different 30 years make. I needed a van just for my record collection, stereo, TV, nerd-life gear (RPGs, board games, miniatures, etc.), and book collection when I was in my 20s.
Castronova's points from this book, which I taught in 2011, are well made but it's the in-person, not the virtual, socializing that the age-cohort craves. Gaming for the non-serious Millennial gamer is done socially and casually. Serious gamers remain a niche, if a lucrative one, in that demographic.
Yet it's early in the exodus. In 2006 I'd have never thought that half of my students would walk around ALL DAY with their noses in a phone, terminally distracted and somewhere else.
Posted by: Iggy | Friday, September 25, 2015 at 11:46 AM