Factors Influencing Consumerism in USA

IMG_20151025_085435263_HDRI landed in USA on the 29th of September, 2015, and have been staying in North Brunswick Township, New Jersey for two and a half months now. This period has included multiple trips to New York City, and a bus trip along the roads of the Eastern States of New York, Maryland and Pennsylvania. I am penning this article based on my experiences, observations and general conversation with people around me.

Contrary to how outsiders look at USA, the country is not all about big cities with insanely terrific skylines. Most of the country resides in towns or cities that you would read about in a Stephen King novel or watch in shows like Smallville. This, I feel is the driving force behind the consumerism culture of the USA. This is the main reason why so many brands are competing for attention in a market that is nearly saturated. These two factors are driving innovation not only in USA, but the world over.

The Strip-Mall Phenomenon

Sun-City-Center-Plaza

A typical strip mall. Photo courtesy: suncitycenterphotos.com

People in USA mostly live in independent houses with a front and back yard. These houses, instead of being cramped in order to accommodate lots of people in a limited space, are spread out and often greatly interspersed. This has caused numerous strip malls to spring up. For those who are not aware, a strip mall is a commercial area within a city or town with 8 to 10 stores. These stores may include departmental stores, restaurants, saloons, tutoring centers, and everything else that serve the purpose of fulfilling a person’s day-to-day needs. Everyone has to travel to a strip mall if they want to buy anything because there are no other local stores nearby.

Automobiles

Automobiles aren’t a luxury; they are a necessity. Imagine you wake up one morning, and realize that you have run out of toothpaste. The nearest strip mall is 1.5 miles (2.4km) away. If you don’t have a car, it’s a 30-minute hike for you to get something as simple as a toothpaste. That too, without having brushed your teeth yet. Not a favorable prospect I assure you. However, if you own a car, it’s a 5-minute drive, and you’re back in time for breakfast.

• Largest automobile markets worldwide   new car registrations   2015

The public transport system is evolved enough to support commutation to and from certain places, but it would not give you access to every place very easily.

Automobiles are a factor that, I believe, leads to a high disposable income as well. The fact that cars are a necessity means that everyone has to be able to afford a car without getting strung out on the financial aspects of the purchase. This translates to the average disposable income of the people being above the average disposable income of the people in other countries for the same job.

 

Rankings by Country of Average Monthly Disposable Salary  After Tax   Salaries And Financing

Rankings by country of average monthly disposable salary (After Tax). Image Source: numbeo.com

 

Internet Infrastructure

According to Akamai, USA has an average internet speed of 11.2 MBPS, and 19% of the country has adopted IPv6. Most of the country has quick and easy access to information due to the extremely good internet coverage.

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These are three things that I believe influence the consumerism side of USA, and make marketing to the people of USA an attractive and often challenging prospect for all marketers. Here’s how:

People are always driving to places

What that means for marketers:

  • Large demand for cars. The domination once had by Ford and General Motors is now overridden by European and Asian brands, and every brand has to do its best to stand out among the competition and get the attention of their target segment.
  • Varied cultural backgrounds means varied taste in music. To address this, there are a large number of radio channels, translating to a large number of platforms, each with its own kind of dedicated audience

Strip-mall culture

What this means for marketers:

  • People from a specific area will usually turn to their nearest strip-mall for addressing their day-to-day needs. Having your brand in a strip-mall is the best way to increase local awareness. If I have a premium detergent brand, I would want to find shelf space in convenience stores of every high income locality. If I am starting an Indian restaurant chain, I would want to have a presence in every strip-mall which is close to a large South Asian community. Strip-malls are the easiest way to connect to people living in the American suburbs and make them remember your brand.

Good Internet Infrastructure

What this means for marketers:

  • People are always online, and while they have easy and quick access to information, marketers also have quick and easy access to data. Every move a person makes is stored as a statistic on the giant virtual cloud. Targeting is getting more and more precise as technology evolves, and marketers can show their products to the very person who they want as a customer.
  • When travelling to a strip-mall is inconvenient, online shopping satisfies the need. Virtual shelf space with any major retailer gives immense visibility. Good SEO and SEM means that your product will show up on the top ranking of any search result, guaranteeing visibility and allowing brands to be at the right place at the right time with the appropriate search.

I would like to close out this article with the disclaimer that I do not claim to be an expert about the country and its people and have just penned down my thoughts based on my experiences, and it is open to debate. The thing that I did realize, though, and I can say this with a high degree of certainty – the consumerism culture here is driving the world of innovation. Every brand is trying to outdo each other by providing that extra reason for people to buy. Toyota is competing with General Motors to give people the best car in its segment; Samsung is toe to toe with Apple to provide people with the most convenient phone; Adidas is constantly improving its products to beat Nike be the best brand in the sports goods industry. These immense innovations in so many varied product categories are taking every industry to new heights and forcing every company to perform better. Life is getting better and easier for consumers, and marketers are always in the game for their next big adventure.

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