By
Bob Phibbs
Buying less is a concept that seemed out of style for consumers, beginning with 80s pop culture and yuppies and continuing until a few years ago.
During those thirty years, the size of the average American home mushroomed, even while families were getting smaller. In Los Angeles, where I lived for much of that time, smaller houses were razed, and the term McMansion was coined to refer to the outsized homes replacing them.
But then, in 1998, architect Sarah Susanka published a book called The Not So Big House, which offered an alternative to McMansions. It suggested emphasizing quality over quantity and doing more with less physical space. That book is widely considered the match that lit the fire under what is now called the tiny house movement.
A tiny house doesn’t have a fixed definition, but we are talking about TINY - anywhere from 100 to 1,000 square feet. It has primarily caught on with Millennials, who can be seen towing their tiny houses on the back of their trucks on TV shows like A&E’s Tiny House Nation or HGTV's Tiny House, Big Living.
Proponents of the tiny house movement use phrases like extreme downsizing to illustrate how they choose to live.
Even Baby Boomers jumped on the bandwagon with books about simplifying.
Both generations are looking to own less, which means they buy less. They choose to get rid of things rather than acquire new ones.
This is clearly a problem for retailers.
What can you do proactively about this?
There are two solutions. The second one will seem natural and intuitive, but this first one might hurt a bit: sell fewer items.
If you read any books on frugality, you will see one consistent theme: Buy fewer things but higher-quality ones. Books like 1993’s Your Money or Your Life emphasize spending more money to get a quality product rather than waste money on an inferior one.
Most Millennials respond positively to this approach; they might scoff at anything from K-Mart, but they will pay a premium price to get a cast-iron skillet from Williams Sonoma, which they perceive to be of higher quality and expect to keep and use their whole lives.
So, for retailers with massive amounts of SKUs on their shelves - consider simplifying.
I’m here to tell you that you can make more money by stocking less - but more high-quality - items for which you can charge more.
Look at your SKU list, sort it by price and margin, and I’ll bet you’ll see the bottom 20 percent are not making you any money.
Premium items today include more features that consumers can personalize; they are less mass-market. Look at all the build-your-own and design-your-own concepts in retail today, from bedspreads to furniture and shoes to backpacks.
Let’s look at an example of a business that emphasizes quality at every turn.
Case Study: The Levenger Experience
Levenger was started in 1987 by Steve Leveen. A passionate reader, Steve wanted to create products that resonated with people like himself.
That started out being mainly pens and journals but soon expanded into all sorts of lifestyle products that thinking people would enjoy: furniture, end-tables, suitcases, folios, and yes, more pens and journals. Today, his company’s mantra is simple, clean, and elegant; he wants to sell you objects pleasing to the touch, rewarding in their function, and made to last for generations.
Look at one of Levenger’s signature products, the Circa notebook.
Now, let’s be honest: It’s a notebook with seven little ceramic circles and pieces of paper with holes punched in them. You pick the color of your rings, your cover, and your paper texture. This notebook suddenly becomes less about taking notes and more about you.
Sure, you could just as easily have bought a 99-cent spiral-bound notebook at Walgreens and captured the same information just as quickly, but Circa? That’s a lifestyle choice!
Take it further and examine how the Levenger empire wants you to write in your journal. A cheap pen from a dollar store? Nonsense!
They sell a fountain pen that will stay with you all your days! How many pens have you lost in your adult life? How many would you have lost if they had cost you hundreds of dollars?
Now I get it. Some of you ask, Who would use a pen and pad versus a tablet?
That is not the point...
He knows his niche. The value proposition for any customer is clear:
The more consumers invest in a product, the more they care about it. The less they invest in it, the easier it is for them to say, “I’ll think about it,” and walk away.
I’m not just talking about price here. I’m talking value.
But also, when you carry more expensive merchandise, you need to have well-trained salespeople who give a damn and can sell value over price, or shoppers will just scoff and walk out empty-handed.
After the fall of 2008, it was easy to focus on keeping the lights on and the inventory stocked. But as I said last week, we’re in the new normal now.
It’s been easy to look at retail sales training for your employees as a non-essential cost. But when you stock your store with fewer, more expensive products, you must upgrade the soft skills training of your staff, or your merchandise will still sit.
You must also ensure you have someone who knows how to merchandise your store accordingly.
Employees have always been the glue that helps you match your products to your customers. It’s no different now.
If you are selling to Millennial generation shoppers particularly and have to skimp on anything, don’t skimp on retail sales training.
Products don't sell themselves. See also, Selling Luxury Products Without A Discount
In Sum
The very kind of person who would downsize extremely and move into a 500-square-foot house is exactly the kind of person who values care, attention to detail, and quality.
Going further, many other Americans who are not extreme are finding that they want to buy fewer things as well. They have the money. They have just become more discerning about where they will spend it.
In short, customers will buy the better merchandise and opt to buy from the retailers who take the best care of them. That means they’ll buy from a retailer with a curated collection, not from one who settled for a truckload of merch. They’ll buy from a retailer with a well-trained sales team and not from one saddled with leftover, lazy employees.
It would help if you reached out to this newly frugal consumer with quality merchandise displayed and sold by quality, well-trained employees. This new shopper will be intrigued by your simplicity and learn about value over price through your employees. They will say, I’ll take it, not I’ll wait.
And that's real money you can take to the bank...
