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August 10, 2012 4:55 PM

Business, Retail

Come On Consumers, Get Happy

How's the consumer? It's a question that economists and corporate bigwigs ask each other all the time. Is she buying? What's she buying? What's the latest consumer confidence number? Is unemployment rising? How much are families spending on gas?...

How's the consumer?

It's a question that economists and corporate bigwigs ask each other all the time. Is she buying? What's she buying? What's the latest consumer confidence number? Is unemployment rising? How much are families spending on gas? Kids' clothes? Cable? IPhones? Where are they going to shop?

And yet it's a question we're not really prepared to answer.

Interestingly, Federal Reserve chairman Ben S. Bernanke gets this.

In a little-noted address this week to the International Association for Research in Income and Wealth, Bernanke noted: "Textbooks describe economics as the study of the allocation of scarce resources. That definition may indeed be the 'what,' but it certainly is not the 'why.' The ultimate purpose of economics, of course, is to understand and promote the enhancement of well-being."

Bernanke said even as consumer spending and disposable income point to recovery, many people are struggling. He argued that we should start to measure happiness in order to better promote it.

"Income and wealth do contribute to self-reported happiness, but the relationship is more complex," he said. "Other important contributors to individuals' life satisfaction are a strong sense of support from belonging to a family or core group and a broader community, a sense of control over one's life, a feeling of confidence or optimism about the future, and an ability to adapt to changing circumstances."

My first reaction, of course, is to be flip and say we're in big trouble when the bankers start telling us, "Hey, you know, money isn't everything."

But there's something here, even if it's just rhetoric, that's very powerful -- a willingness to reexamine priorities and get at what's truly important.

The best retailers seem to do this naturally. They aren't just selling stuff, they're offering their customers ways to express themselves. They aren't just asking how the consumer is, but contributing to that consumer's life. And when they do that right, the money seems to work itself out and shoppers are, well, happy.
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