Tag Archives: consumerism

The expansion of warehouses in sprawling locations

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While the example here is from Georgia, this describes a lot of development in the United States today:

An announcement this week says that the Goodyear Tire and Rubber Company will anchor a new industrial park being developed on the property. The company will occupy 1.5 million square feet of warehouse space, in what the Atlanta Business Chronicle calls the “largest build-to-suit industrial space under construction in metro Atlanta.” Goodyear is expected to employ about 150 Georgians in the facility.

Individually, headlines like this represent wins. Jobs are created, and local tax bases are fortified. Warehouses, in particular, tend to bring in significantly more in property taxes than the businesses that occupy them demand in county services such as public safety. Their byproduct, however, is traffic. Specifically, truck traffic…

The middle stage of both manufacturing and distribution requires warehouses, and Georgia’s geographic position and our ports and airport logistics hubs make the warehousing industry a logical fit for the state. This extends from the Port of Savannah all the way down I-16, up I-75 into metro Atlanta, and all the way around the metro area and into North Georgia. It’s truly a statewide issue.

And much like the projected cascade of new residents, new warehouses are coming. There is a proposal to build out 1,400 acres with 18 million square feet of warehouse space in Butts county, about half way between Atlanta and Macon. Seven hundred acres adjacent to the Budweiser brewery in Cartersville, northwest of Atlanta, have also been sold to be developed as warehouse space.

To make a world of Amazons, Walmarts, and Walgreens possible, trucks are needed. Lots of trucks. The warehouses need to be in strategic locations near growing populations so that the time between warehouse and store or delivery is reduced. To make one or two day delivery possible or have real-time inventory, there need to be locations that have a lot of goods ready to go. Black Friday or the Christmas retail season cannot happen as easily without warehouses.

As noted above, warehouses provide jobs and property taxes. They are not often aesthetically pleasing as the primary goal is to store goods, not interact with the public. They often occupy key sites in and around intersections and highways. They contribute truck traffic. I would guess few people would want to live right next to one given the noise and lights involved.

All of this connects to sprawling development in the United States. American communities tend to be spread out as people seek out single-family homes of a certain size and with enough distance from communities they might find problematic. Decades of sprawl fueled by the American Dream, the federal government, and numerous other actors means that warehouses are a common part of the landscape. Outside any major metropolitan area, there are rows upon rows of warehouses.

For another example of how this all plays out, see the rise of intermodal facilities (and the negative effects these can have on communities).

Can you sell a product with the main pitch that it will help consumers “keep up with the Joneses”?

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Comcast is currently running an advertisement titled “The Joneses” that makes an explicit connection to keeping up with the consumer’s reference group:

It is regularly stated that consumers want to keep up with others around them. Reference groups matter as look to others around them as they consider what to acquire.

So, can you run a successful advertising campaign based on (1) regular human behavior (2) that is regularly maligned? “Keeping up the the Joneses” is not often a positive term. Instead, it implies striving to be like others. These strivers are not content; they have to earn approval through acquiring what others have. All of this can lead to conformity if everyone is chasing some trend or perceived advantage. Suburbanites have heard this critique for decades: they are trying to look like the leading middle- to upper-class suburbanites. In the Judeo-Christian tradition, perhaps these people are viewed as violating the tenth commandment.

Perhaps this is all meant to be ironic. “Keep up with the Joneses” while winking or doing something unusual with all of that high-speed Internet. But, this commercial does not seem to have that tone. The goal does seem to be to have the same high-speed connection as everyone else. Maybe the true story is something like this: “keep up with the Joneses’ and everyone can use that Internet to hide in their private residences and do their own thing online and in social media.

Separating the ills of suburbia from the ills of the United States

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The critiques of the American suburbs are common and persistent. But, how many of them are unique to the suburbs as opposed to multiple American settings or American society as a whole? A thought experiment with a number of the ills of suburbia:

  1. Consumerism. Present everywhere with displays of wealth such as expensive housing, cars, and technological goods alongside just having a lot of stuff. Certain suburban symbols may catch attention – such as McMansions and SUVs – but these are present all over the place. Excessive or wasteful consumption is not solely an American problem.
  2. Sprawl. This may seem like a uniquely suburban problem. Yet, numerous American cities have varying levels of density and lots of single-family home neighborhoods (even if these homes are closer together).
  3. Driving. Suburbs may be more dependent or designed around automobiles but so are most American cities and urban neighborhoods. And  rural areas would be very different without widespread access to cars.
  4. Conformity. Mass culture is everywhere, even if cities are often regarded as having more diversity and cultural experiences. This is related to consumerism as many Americans are thoroughly immersed (just see the figures on how much media Americans consume a day).
  5. Inequality. Across categories of race, class, and gender, American communities of all kinds experience problems. They may manifest differently in each context but addressing inequality in the suburbs would not solve the problem in the entire country.
  6. Lack of true community. Social ties seem to be more tenuous across the United States as a whole and the influence of and trust in institutions of all kinds has declined. Americans are famously individualistic, whether in suburbs or other settings.

Another way to think about it: did these problems begin in suburbs or are they amplified or exacerbated by suburbs? Imagine the United States where only 30% of American lived in suburbs: might driving and sprawl still be an issue? Would the problems of inequality be alleviated?

Can you tidy up with Marie Kondo in a McMansion?

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A review of the new show Tidying Up with Marie Kondo contrasts organizing with purchasing a McMansion:

Stylistically, Tidying Up is gentle. Marie Kondo is a soothing presence—never soporific, somehow, but always engaging. She is twee, almost unbearably so, which is an affect not really seen in American television personalities. About 15 minutes into every episode, Kondo takes a moment to commune with the house, selecting a spot in the residence and kneeling in silent reverence. This goes on for longer than feels comfortable; sometimes the subjects join her, and sometimes they seem like they’re enjoying it. Conflict, when it happens, feels softer than it would on House Hunters, where couples routinely argue with increasing venom over the necessity of a mudroom in the home of their dreams.

The beauty of Marie Kondo’s world is that tidying is not punishment. She subverts the chore of cleaning by imbuing it with a radical sense of self-improvement. Unlike the underlying economic status anxiety that colors all of HGTV’s offerings, Tidying Up is more self-help than self-defeat. The home improvements, and by extension, life improvements, come not from buying a McMansion in Indiana, but from clearing life’s detritus out of your home to make way for something else.

The end of the review posits a dichotomous choice: either buying a McMansion to assuage status anxiety or tidying up to feel better.

But, I imagine many Americans would want to try to do both: purchase the McMansion or a large home and find a way to organize and declutter that home so that they feel better. Yet, this path seems to go against the path Kondo and others would prefer where Americans can’t have it all and have to make choices about their lives to prioritize well-being. Having a large home helps people feel like they can purchase and acquire more stuff. Having a bigger home is part of a consumer culture where buying bigger and more is a good thing.

One important step to the Kondo life would then be to not purchase the biggest home possible. How many Americans would be willing to do that or is it simply easier to buy into a tidying strategy that could be utilized in any home?

Ads showing giving a new car as a Christmas gift

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Given the American love of driving and American consumerism, is it a surprise to see lots of car commercials at Christmas suggesting people are gifting others new cars?

But traditionally December means steep discounts for cars, and with annual dealership goals and sales quotas knocking, people buy cars in December for a lot of reasons. More than 17 million new cars and trucks were sold last year; 1.6 million were sold in December. Some were gifts, some necessary purchases that conveniently doubled as gifts. Said Akshay Anand, executive analyst at Kelley Blue Book: “The thing that isn’t talked about much is that the big luxury manufacturers are all competing in December to claim they were the ‘luxury brand sales leader of the year.’ ” Which is partly why Lexus, BMW and Mercedes’ Christmas ads are so frequent.

At McGrath Lexus of Chicago, “it’s our busiest time of the year,” said Heather O’Malley, the sales manager for new cars. She said McGrath sells about 120 cars each December at its dealership on Division Street. Maybe five or six are Christmas gifts. “And I have done the whole surprise car-gift thing like in the ads. A husband takes his wife to breakfast and arranges for us to leave the car in the driveway with a big red bow when they return — I love doing that.”…

Cynthia Tenhouse, general manager of product and consumer marketing for Lexus, is aware of the years of grumblings: “There is a lot of cynicism out there — this is never meant to be realistic.” The goal was aspirational (the agency that makes the commercials is Los Angeles-based Team One, which specializes in premium brands like Haagen-Dazs and Ritz-Carlton). In the 1990s, when the “December to Remember” campaign began, “we just wanted to be a part of the holiday culture without having to do just another ‘car sales event.’ ” But they do recognize “we need to be sensitive to what is happening (in the world), and so every year we make small changes because of what is happening.” This year the message is, a Lexus delivers throughout the year — it’s not just a holiday gift anymore….

He’s president of the Car Bow Store outside Philadelphia, which bills itself as the largest manufacturer of oversized car bows in the country. (Yes, there are others.) The Lexus commercials, he says, are a boom for his business. He sells 25,000 giant bows a year, most during the holiday season, to both dealerships and car buyers. “It’s staggering how many people out there are actually giving cars as Christmas gifts.” That said, he never received a car as a gift, “and I don’t know anyone who ever has.”

The formula: people want to buy new cars at the end of the year because of discounts/new models available + lots of spending at Christmas + dealers and manufacturers looking to do well at the end of the year = opportunity to push big-ticket items like cars through advertisements.

While these ads may seem more obvious at Christmas, car commercials are all over the place at other times of the year too. I can’t think of a similar big-ticket item that receives so much ad space. Houses cost a lot more – and it is hard to sell individualized homes through a mass commercial. Smartphones are all over the ads too but even the most expensive models available to the public come nowhere near the price of a new car. All of those car commercials viewed over a lifetime must have some effect, even if it simply reinforces that cars in the abstract are desirable and we need them in society.

I would be interested to know what the effect of giving a new car as a gift is in the long run. It is a large item. It is a necessary item for many people in order to get to work and other places. Because a new car is both expensive yet necessary, does it feel like a gift longer or does it become mundane just as quickly because it is used regularly?

 

McMansion owners giving thanks for their homes on Thanksgiving

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I recently watched Kate Wagner, of McMansionHell.com fame, deliver a TED Talk titled “I hate McMansions – and you should too.”

Yet, with Thanksgiving here, I thought about all the Americans who live in such homes. How many of them are giving thanks today for their McMansion?

On one hand, the McMansion is viewed as a monstrosity, a destroyer of neighborhoods and land, a caricature of quality architecture, and perhaps the ultimate symbol of American turn-of-the-21st-century greed and consumerism. On the other hand, the McMansion is a shelter and genuine home for millions of Americans. This is a tension that is not easy to resolve. There are numerous critics of McMansions and a variety of reasons to dislike the homes (and prefer other kinds of dwellings). And numerous Americans might enjoy their McMansion (and perhaps for the same reasons critics dislike them).

Perhaps we can be thankful for the free discussion about McMansions and having the resources that would make a McMansion purchase possible (even if we personally would not make such a choice). On a related note, with all of the advice this year about how to avoid turning Thanksgiving dinner into a political battle, I would recommend that everyone celebrating Thanksgiving in a home that could be considered a McMansion would be better off not commenting on the faults they see in such a home while they are there. Of course, if while they find themselves later in the day traveling somewhere in a SUV to acquire Black Friday items, making a connection between McMansions, shopping, and American acquisitiveness might be apropos…

Owner wants his shopping mall to be a community space and have a giant monument to The Ten Commandments

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Shopping malls are interesting spaces as they are devoted to consumption and yet often operate like public spaces (though they are not). One Texas mall owner has some interesting ideas for his renovated mall near Dallas:

Odessa businessman John Bushman wants to turn the mall into a community space where people can find some “peace and love” in the Ten Commandments, hear some local musicians perform live and take in a giant wave of a 30-foot-by-60-foot American flag outside.

All of Bushman’s other businesses — hotels in Texas, Colorado and New Mexico, other shopping centers and a Chickn4U restaurant in Odessa — display the Ten Commandments engraved on 800-lb stone tablets. In Dallas, he owns the MCM Elegante Hotel and Suites on W. Northwest Highway…

He wants Vista Ridge to be a “wholesome family place” and he said, this time of year that includes Santa who will arrive at the mall on Saturday with free family photos to the first 100 customers. The mall has new Christmas decorations…

Bushman agreed it’s unusual for a mall to display religious messages. But he thinks it will work in the big city as well as it does in West Texas.

Only in Texas? Only in America? Perhaps it is fitting to mix essential tenets of the Judeo-Christian tradition with America’s other great love: shopping.

More seriously though, shopping malls are going to extra efforts these days to bring in visitors and shoppers. This is one way to go: provide family-friendly entertainment and regularly host community groups and events. The second option is mentioned later in the article by a local detractor (who seems to think this strategy is not one befitting of a nicer suburban area): go for upscale stores and trendy restaurants to create a vibrant and glamorous scene.

If shoppers had the opportunity to go to a mall like this with giant Ten Commandments versus shopping elsewhere, how many will go out of their way (in practice and not just intentions) to go to the mall with the religious objects? How much will this boost sales?

Do “real-life millionaires” buy McMansions?

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The spending habits of millionaires tends to be a popular topic but few people discuss exactly what kind of house they live in:

A millionaire is a person with a net worth of $1 million or more. Net worth is the value of everything a person owns, minus all debts…

Such an individual could have a negative net worth, yet they drive a Range Rover and live in a McMansion. Meanwhile, the millionaire next door lives in a three-bedroom house and drives a Hyundai…

Although it’s a common misconception that millionaires spend their money on luxury vacations, clothing, houses, and cars, what I’ve learned in growing my own net worth — and speaking with other millionaires — is that after a certain point, money stops mattering as much as it once did.

This seems to line up with the accepted wisdom that many American millionaires are relatively frugal and made their way to that wealth through saving and hard work.

But, if millionaires are not buying all those McMansions, who is? The flip argument expressed above that there are plenty of people living a millionaire lifestyle or above their means does not apply in all cases either.

Part of the trick here might be disconnecting income from wealth. Having $1 million plus in wealth does not necessarily mean you have the kind of assets to put down a sizable down payment or make sizable payments on a large house. (Think of the people who have paid off their mortgages and have a lot in retirement and savings accounts – this is not always easy to access.) Some people might be willing to buy homes based on whether they can afford the monthly payments – does it roughly fall within 30-35% of my monthly take-home pay – while others would be unwilling to splurge on a McMansion.

To be honest, I have not seen a convincing article or set of data regarding McMansion owners. I would guess a good number are in the top 20% of earners in the United States but probably a good portion are also living paycheck to paycheck.

More remodeling, less moving, and uncertainty

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Another trend that is the result of the current housing market: fewer people are moving and more homeowners are remodeling what they already have.

Now, according to research, homeowners are eager to hold onto the ultra-low mortgage interest rates they were able to get after the crash, and they are leery about taking a chance on a move. Many also lack the financial wherewithal to upgrade to a larger, pricier home. They own houses that haven’t recovered enough of their value in the wake of the crash to generate the down payment needed to buy a new place.

The percentage of homeowners moving up to their next home is the lowest in 25 years, said Todd Tomalak, vice president of research for John Burns Real Estate Consulting. Instead of moving, people are deciding to make starter homes permanent and are expanding and repairing them for the long term, he said…

From 1987 to 2008, homebuyers stayed in their homes six years on average before selling, according to the National Association of Realtors. The number of years homeowners expected to stay in their homes started increasing during the housing plunge and has been at 15 years since 2010…

Last year, people spent about $320 billion on remodeling — a 5 percent increase over the previous year, Tomalak said. This year, they are expected to spend $350 billion — a 9 percent increase.

Interesting data yet there are some conflicting things going on here. This raises a few questions for me:

  1. If you aren’t moving soon, remodeling can make sense. At the same time, how does the remodeling square with homeowner’s interests in making money on their home? Many remodels do not recoup the money put into them – unless people are hoping that the tight market will keep housing values going up and up.
  2. Does the same animosity some have toward big box retailers like Walmart also carry over to Home Depot and similar stores? I know some things can vary tremendously from retailer to retailer – such as wages and benefits – but all big box stores have some similar effects including knocking out local businesses (who goes to the local hardware store for all their remodeling needs?) and contributing to an automobile culture with massive footprints on commercial stretches.
  3. On one hand, fewer people moving suggests the housing market is sluggish and this may not be good for the housing industry and the economy at large. On the other hand, people staying in the same house longer means they are more rooted in their communities (combats the critique of the soulless suburbs or the image of Americans just wanting to move up) and are avoiding senseless consumerism (just chewing up new house after new house). Is this an example where the consumer driven economy doesn’t really work in the long-run? (Or, maybe enough homeowners can be convinced that they need the newest item for their home – concrete countertops! wi-fi enabled refrigerators! – that the remodeling can pick up some of the slack.)

Pick the wrong suburb and you can try again

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Keep trying and you might just find the suburb that suits you:

Switching suburbs after you’ve plunked down a hefty down payment and settled your children in school seems infinitely challenging, and indeed some recent transplants who have doubts about their new communities resign themselves to the idea that there is no such thing as a perfect suburb.

But for others, the gnawing sensation that something is not quite right pushes them to keep searching for another suburb, a better suburb, a place where they might actually feel at home. Maybe it’s the commute. Maybe the schools are too big or too small, or the town is too quiet or not quiet enough. Maybe what they thought was important — the big yard and the birds singing out the windows — was not so important after all….

Even if a possibility looks great on paper, one person’s idea of a great place to live can be another person’s nightmare. “The suburbs are not the same; the subtleties of their personalities are so different,” he said. “Just like someone living on the Upper East Side won’t fit into Williamsburg, someone who likes Maplewood may not fit into Short Hills. You can end up in a place that really doesn’t suit you.”

Moving to a new suburb may be the way to recapturing your identity, whether it’s somewhere where you can walk to dinner or a place with more like-minded people. But first, you should give serious thought to who lives in the town and what types of things go on there. Whom will you encounter when you walk your children to the park? Whom will you drink a beer with at the neighborhood block party? What do the mothers wear to drop-off, or will you see only nannies?

I get that the American suburbs are often about finding individual happiness. And buying a suburban home is a significant investment. The consumer is king. But, does this go too far? How many times can the average family move? Is there any concept of contributing to a suburban community rather than just finding people like you or that you enjoy?

One of the side effects of encouraging individuals to find the suburb that suits them is that it encourages further geographic sorting. Residential segregation is already a major issue in the United States and further moves for psychological or social fit likely allows those with more resources to pick their preferred setting.