Tag Archives: consumer goods

Americans in poverty have electronics, showing how ubiquitous they are

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This article is intended to suggest that Americans in poverty don’t have it that bad because of the items they have in their home. I would argue for a different interpretation: this shows how common and relatively cheap these consumer goods are.

American poverty just ain’t what it used to be. A new report from the Census Bureau found that 80.9% of households considered poverty stricken have cell phones along with their landline phones, and 58.2% have computers. 96.1% of those in “poverty” have televisions, and 83% have some sort of DVR.

The percentage owning refrigerators? 97.8%

Gas or electric stoves? 96.6%.

Microwaves? 93.2%

Air conditioning? Over 83%.

Washer? 68.7%

Dryer? 65.3%

Having these items is simply part of modern living. The adoption rate for new devices rises much more quickly today than it did a century ago. Take cell phones as an example. Here is one description about how quickly they spread in the United States:

Just a quick note for your next PowerPoint deck on megatrends: more than 90 percent of adults now have a cell phone, according to the Pew Research Center’s Internet & American Life Project. For people under the age of 44, that number is closer to 97 percent.

Pew calls the cell phone the fastest-adopted device in history. These things are subject to some variability because of when we start the clock, but the cellphone adoption rate is certainly up there with the radio and color TV, and far faster than computers or landline telephones.

Additionally, there is an important difference between absolute poverty and relative poverty. Sure, poverty in the United States doesn’t look like the most desperate poverty in the world but that doesn’t mean there aren’t clear differences and disadvantages between those with lower incomes and wealth than those with more.

In response to emergencies, companies seek out more distribution centers

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A number of companies are now pursuing a new distribution center strategy in order to be better prepared for disasters and other disruptions:

Major storms like Hurricane Sandy and other unexpected events have prompted some companies to modify the popular just-in-time style of doing business, in which only small amounts of inventory are kept on hand, to fashion what is known as just-in-case management.v

The shift has led retailers and logistics companies to alter supply chains by adding distribution hubs, according to the CoStar Group, a real estate research firm in Washington. In turn, the hubs are creating real estate opportunities in markets on and off established distribution paths, including growth in markets outside the traditional seaport hubs on the East and West Coasts…

Just-in-case is a response to the vulnerability of just-in-time supply chains, said Rene Circ, CoStar’s director of industrial research. Since the 1990s, just-in-time has made sense for many companies looking to reduce the cost of keeping large inventories on hand. Technology enabled retailers and manufacturers to closely track and ship items to replace merchandise sold or components consumed in production…

The tendency toward numerous distribution facilities runs contrary to a strategy that was common just after the recession, when some companies sought efficiency by consolidating warehouse operations, according to Bob Martie, executive vice president for the New Jersey region at Colliers International, a real estate service provider.

Consumers may not pay much attention to this distribution chains. In fact, they may only really notice them when major events disrupt them. However, the distribution system is incredibly important for the American consumer economy. The reason products are on the shelves when consumers want them is due to this. Companies argue more efficient systems help them keep costs down. Better planning can reduce truck traffic on local roads.

This article adds another twist to the distribution center story: there is money to be made in distribution center real estate. Perhaps quite a bit of money.

Leaving bookstores alone in the London riots

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Some people have noticed that the rioters/looters in London have ignored the bookstores:

While the rioters in England this week have looted shops selling shoes, clothes, computers, and plasma televisions, they’ve curiously bypassed one particular piece of merchandise: books. The Economist observes that while rioters have a centuries-old history of book burning, “books are losing out to high-end jeans and Apple-made gadgets” in London, with the Waterstone’s bookstore chain emerging unscathed and the WH Smith chain reporting only one incident (some stores closed as a precaution). In explaining that the store would probably stay open during the unrest, one Waterstone’s employee even felt comfortable enough to issue a dare to the rioters: “If they steal some books, they might actually learn something.” The exception to the rule is the gay bookstore Gay’s the Word, which had its front window smashed and its shopfront splattered with eggs (notably, no goods were stolen). “Our impression is that there are certain people who have an issue with a visible gay business and are using the excuse of chaos to cause anti-gay damage,” an assistant manager told PinkPaper…

So where does that leave us on the question of why the rioters refrained from looting and burning bookstores? The most likely explanation appears to be that the rioters were more interested in high-end clothing and electronics than books, for economic and personal reasons. But a Guardian article yesterday suggests the rioters may have been more principled about what they stole and what they didn’t than one might think.

Interesting. The image many people might have is that the rioters act indiscriminately, breaking and smashing things at will out of anger. But these different possible explanations suggest rioters follow some sort of logic. Yes, their actions fall outside the normal bounds of civil behavior but they are acting upon not-too-unreasonable logic (go for the high-end electronic goods). This reminds me of the work of Sudhir Venkatesh who suggests that gangs follow logical paths even though their actions may seem chaotic or unclear.

Perhaps I only think this as a sociologist or as someone who teaches research methods but it seems like these ideas about bookstores could be tested. Researchers could take different groups of people, perhaps split by socioeconomic status, and then give them a variety of free items that they could take including electronics, clothing, and books. Then, researchers could see what people would take and then could question them about their choices afterward. Of course, some of the same information could be obtained by asking this is a question or series of questions on a large-scale survey. These sorts of options could help provide some insights into where books fall among other desirable consumer goods. If I had to hazard a guess, I imagine American teenagers or emerging adults (18-29 years old) would also put books toward the bottom of the list of things they would desire.

The rise of granite countertops from a sociology of culture perspective

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Homebuyers today seem to want certain features in a new home: stainless steel appliances, updated bathrooms, and granite countertops. But how exactly did the granite countertops become so popular?

Granite is relatively new to the kitchen counter; back in 1987, it was pretty much available in only two colours, it was incredibly expensive and was not even considered good counter material because of its lack of resilience. Yet in less than a decade, it went from being luxurious to ubiquitous- it is in every new condo and apartment regardless of price. It became the cherry on top of the McMansion sundae. The price dropped so far and so fast that one can now order it online in Florida for $19.95 per square foot, almost as cheap as a laminate counter. (Although at the time of this writing no doubt there is a significant oversupply in Florida.)

Here is why it became so cheap: “it got globalized…containerized…computerized.” Here are a few details about these:

Granite used to be a very local business- if you lived in the Northeast you got it from Vermont, in the midwest from Minnesota, in eastern Canada from Quebec. It is heavy stuff, and the main market was architectural stone, cut by craftsmen to exacting specifications for the commercial building industry. Taking it out of the ground was dangerous work; granite quarries were often ecological nightmares. However the industry provided a local material, and well-paying skilled jobs…

But granite is found all over the world, and it is cheaper to dig it out in India and Brazil. The environmental standards are not quite as high either…

Unlike architectural stone used on the exterior of buildings, the stone for counters and floors is a uniform 3/4″ thick. By cutting the stone on site the flawed slabs can be separated before they are shipped, and can even be processed further into tiles, so that there is less transport of waste. Once sliced into the new standard, the 3/4 inch thick slab, it can be put into the standard solution for transport, the shipping container. So what if most of the container is full of air, the cost of shipping is more than compensated for by the low cost of the material. Suddenly granite was no longer just available in two colours, but in dozens…

Where cutting granite used to be a skilled craft working in three dimensions, as counters it became a simple matter of cutting the slabs in two dimensions. Often the slabs would be shipped from India or Brazil to shops in China with finishing and edging equipment. Now a kitchen designer in Toronto might send a CAD file to the shop in China where a computerized saw cuts the Indian granite into a countertop, which is then put into a container and shipped to Toronto and installed in a condo.

On one hand, someone could argue that Americans have developed a taste for granite and have made individual choices to have it in their homes. Americans became fed up with their old counter options, like Formica, Corian, or tile. They developed finer tastes and wanted to show off their kitchens.

On the other hand, one could utilize the production approach in the sociology of culture. Granite became an aesthetic choice because of technological change: it has become cheaper and easier to create and install. Through the process of globalization, granite became a better option for American consumers looking for a more durable and flashier surface. Perhaps granite became cheaper because there was some demand for it but Americans didn’t simply choose granite – it was a choice made for them.

It would be interesting to see figures that would show when homebuyers started looking for granite over other surfaces. And who had it first?

Nielsen reports a drop in American household TV ownership in America

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A new report from Nielsen suggests fewer American households have televisions:

The Nielsen Company, which takes TV set ownership into account when it produces ratings, will tell television networks and advertisers on Tuesday that 96.7 percent of American households now own sets, down from 98.9 percent previously.

There are two reasons for the decline, according to Nielsen. One is poverty: some low-income households no longer own TV sets, most likely because they cannot afford new digital sets and antennas.

The other is technological wizardry: young people who have grown up with laptops in their hands instead of remote controls are opting not to buy TV sets when they graduate from college or enter the work force, at least not at first. Instead, they are subsisting on a diet of television shows and movies from the Internet.

Nielsen suggests that affordability is really behind this drop in TV set ownership. But of consumer goods that are truly American, isn’t having a television at the top of the list? More than owning a car or a home (granted, these are more expensive) or a radio or a microwave (a lower ownership rate than TVs according to this), the television is a critical part of average American life. And with all of the purchases in recent years of nicer TV sets (LCD, plasma, 3D, LED, digital tuners), there are plenty of older TVs laying out or available for a low price at garage sales, consignment shops, and on Craigslist.

It makes sense that Nielsen is very interested in these figures. Nielsen’s methodology may not seem important to some people but these ratings are incredibly important for the TV industry. These ratings help set advertising rates which drive the industry and dictate which shows survive on the air and which do not. If ratings go up (whether that is because the show is more popular or because Nielsen can show that more people watch it), then networks can ask for more money.

If household TV ownership rates keep dropping, how might this affect the TV industry and TV networks?

Nostalgia for the early 1990s: McMansions, SUVs, and more

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The early 1990s are not that long ago but this comparison of the 2011 Ford Explorer and the 2011 Jeep Grand Cherokee is wistful for this earlier era:

The early 1990s are starting to seem like a long time ago. McMansions were barely a twinkle in the Toll brothers’ eyes. Apple stock was less than fifteen dollars a share. The Iraq war was going great. A tea party was something for little girls. And Justin Bieber hadn’t even been born.

In the U.S. car market, perhaps the biggest difference between then and now is that the SUV, as an automotive force, was in its infancy. Sure, Wranglers, Blazers, Broncos, Scouts, and the like had been bouncing along on the fringe of the American automotive scene for a while, but their numbers were small.

I am interested in this mention of McMansions, which has several connotations in these opening paragraphs:

1. It is not unusual to lump the McMansion in with other consumer objects. Perhaps its most common pairing is with the SUV, often considered an oversized and ostentatious vehicle.

2. The Toll Brothers, a large American home builder, are often tied to McMansions. This builder preferred to call their larger homes “estate homes” but critics ended up dubbing them McMansions. Read a quick summary of Toll Brothers history here. The term McMansions really started being used in earnest in the late 1990s.

3. There seems to be a growing idea that the McMansion might have been a blip in American history. This review pegs the McMansion as beginning in the 1990s and other recent commentators (see here and here) have suggested McMansions are done and will not return. The jury is still out on this one: the size of the average American home grew steadily from the 1950s until just a few years ago.

(4. An unrelated issue: can we already have nostalgia for a time just 20 years ago? Think of this in terms of “oldies” on the radio: it’s hard to even find 60’s music on the radio and now the 80’s and 90’s are considered old. How far can we compress the past in order to develop a prepackaged nostalgia?)

Hotbed for exports is…Wichita?

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The Financial Times reports that according to a Brookings Institution study, Wichita has the highest percentage of exports of any metropolitan region in the country:

Thanks to a cluster of aircraft manufacturers such as Learjet, Cessna and Hawker Beechcraft, the economic focus of Wichita – population 366,000 – is very different from the emphasis on services and consumer demand typical of 21st century America. According to a study published late last month by the Brookings Institution, a Washington think-tank, nearly 28 per cent of the city’s gross metropolitan product is sold abroad. That makes it the most export-oriented in the country, just ahead of Portland, Oregon – noted for its computer and electronics companies – and San Jose in California’s Silicon Valley.

Wichita is not who I would think is leading this list. But the article goes on to say that Wichita and some other places have figured out how to move beyond two lagging sectors of the economy, consumer goods and housing, to move forward. For the rest of the country’s economy to move forward, they may have to follow Wichita’s model.