Why Do Consumers Buy Crap?

I ran across this article a while back and it stuck with me. In a nutshell the author examined the shift from quality to fashion for consumer goods, and then examined some of the influences.

One part is particular resonated:

“As human beings we’ve been socialized to buy and save,” Nissanoff says. “In times not as prosperous as today, when we didn’t know where our next food or source of supplies would come from, our ancestors bought things with the notion of holding on to them for as long as they could and then passing them on to the next generation.”

In essence: Our forefathers were poorer than we are, and yet they had better stuff, relatively speaking.

But appreciation for quality craftsmanship has been swept aside by freely available consumer credit and high-end design on low-cost merchandise, says Dayana Yochim, personal finance writer at The Motley Fool.

“Credit cards let us instantly satisfy our retail desires,” Yochim says. “Our grandparents had to delay that gratification. They figured that if they had to save for it, they’d better get the best they could. Now retailers want to catch that fleeting desire.”

Obviously given the events of the last week it would be easy to pin consumer culture on cheap credit, an argument that could be extended by those who rail against these things, globalization. My point is about neither.

But first let me say two things, I’m not one who suggests that “in the good ‘ol days things were better” as a general rule. Some things yes, but I’ll take my 2008 F-150 over a 1968 any day, not only is it more reliable but also comfortable, better on the environment and a hell of a lot safer to drive around in. Similarly, many products, especially durable goods, not only feature extensive feature enhancements but also have better reliability… but obviously not all things.

The Maytag Neptune washer/dryer that we bought 6 years ago were crap and I just replaced them (LG Steam washer/dryer if you are interested) while my parents had their 25 year old Maytags running strong until last year. Technically the Neptune models were better than older models but failed well before they should have which means they were ultimately inferior and a bad value that soured me on the Maytag brand.

Secondly, I do not subscribe to the notion that made in China (or Korea or Japan or Indonesia or Thailand, etc.) is anything to scoff at. I’ve done a lot of business in that part of the world and my wife runs a company that manufactures in China for metals, plastics/resins, and stitch-and-sew, and her clients (name brand luxury fashion goods firms) tell her they simply can’t find domestic manufacturers that can meet her quality. If it can be manufactured it can be manufactured to high specs in Asia, and there are only a few categories where this does not apply.

However, there is a difference between quality in manufacturing and quality in design and on this point there many shortcomings in modern products. In their drive to reduce prices the designers of many products rely on inferior components that simply don’t hold up over time, but in a perverse demonstration of self-reinforcing logic these same manufacturers suggest that because the product is cheap you can just go replace it and therefore it’s a good value. Any product that fails because a cheaper part was spec’ed that causes a systems failure is a human failure that could have been avoided.

I am also somewhat curious about what point in time people stopped having things repaired. Is it a deep seated fear that once one part breaks you have crossed a precipice upon which repeated failures are a certainty? Why don’t many power tools have the ability to replace the motor brushes? Is it because people won’t do it therefore why incur the design and mfg cost to build it in, or is it because manufacturers don’t expect you have something long enough to wear out brushes?

Then there is a weird pricing dynamic that manufactures take advantage of, for example, I have an Milwaukee cordless drill that I use instead of the old power cord model that I’ve had since I was a teenager, but the cordless gave up it’s fancy lithium ion battery recently and the cost to replace is half of the cost of the drill itself. Given that one battery has died, it’s certain the other is not far behind but the cost to replace two batteries is almost as much as buying a new kit, therefore what I will do is discard the drill and two batteries (recycle them) and buy a new drill that includes 2 batteries. That’s wasteful and emblematic of what has gone haywire in our consumer culture, we throw away perfectly good things just because of expediency and bundle pricing strategies.

But consumers alone are not to blame on this issue, as I have no doubt that some fresh out of school Wharton MBA grad worked up a pretty compelling pricing model that Milwaukee uses to maximize total unit shipments. In other words, two batteries really can’t be equivalent in cost/price to two batteries and a complete drill, right? Beyond the cost issue, what good is cordless technology bringing the market in this instance if the technology isn’t capable of delivering more than 2-4 years of use?

I’m not sure what conclusion I would draw but I think we are at a threshold which will determine how we value products and brands in the future. Will we pursue low cost at all costs or deviate into a longer ownership expectation that runs counter to current culture trends. I have a glimmer of hope that consumers will once again value products on something more than what it costs to buy them. I believe, if not just out of pure hope, that what we are experiencing on Wall St. this last year will trickle down o to Main St. not with simply greater responsibility in how we use credit but also a greater appreciation for value.