Stark Challenge for Retail: Shoppers May Not Want More 'Stuff'

A desire for time and experience vs. material goods

May 26, 2017

Retailers are dealing with digital disruption, a population still feeling fragile in the wake of a devastating recession, and an overbuilt infrastructure of physical stores. 

Add to that a growing sense among shoppers that it may be preferable to spend money on experiences, rather than material goods.

That attitude has contributed to the painful downward sales trend at many department stores and apparel chains, leading to shifts in spending toward health, wellness, travel, dining and other nonphysical categories.

A new global survey by GfK quantified this sentiment, asking consumers to weigh the value of experiences vs. possessions. In the US and many other markets, consumers at least paid lip service to the idea that experiences are more important than physical belongings.

It's reasonable to note, of course, that many people might claim to value experiences more than worldly goods, because stating a preference for possessions could make them feel shallow or materialistic.

But a variety of indicators suggest that these attitudes are playing out in terms of actual spending. For example, recent Euromonitor and NPD Group data showed luggage sales outpacing spending on handbags—putting pressure on some companies in the luxury sector.

Meanwhile, mall owners are shifting the mix of their properties away from retail outlets, increasing square footage for properties that offer experiences, such as dining, entertainment and fitness facilities.