Friday, 25 February 2011

Consumers Hold On to Products Longer.

February 25, 2011.


Consumers Hold On to Products Longer.

By MATT RICHTEL

Throw away the cellphone after two years? Not so fast. Ditch the flat-panel TV for an even thinner model? Maybe next year. Consumer spending has picked up, but for some Americans the recession has left something behind, something Americans had never cared about: a greater interest in making stuff last.


For a number of products — cars, phones, computers, even shampoo and toothpaste — the data shows a slowing of product life cycles and consumption. In many cases the difference is mere months, but economists and consumers say the approach just may outlast a full recovery and the return of easy credit, because of the strong impression the downturn made on consumers.


Whether a broad, long-term shift in consumer habits is under way is a question tickling economists and analysts. Some insist that, as with the Depression, the recent downturn has made a lingering impression on how people view the propriety of, say, stuffing a still-working cellphone into a desk drawer in favor of a newer model.


But other experts and historians argue that as spending and credit return, so will yearnings to favor brands, fashion and novelty over practicality.


With some products, the upgrade cycle is actually accelerating. According to NPD, a market research firm, consumers in 2010 reported spending more to upgrade major kitchen appliances like refrigerators than they did in 2008 or 2009, when such spending fell. The firm found similar trends at work in smaller kitchen and personal care appliances.


But in some important categories there are indications of slowed upgrades. Consumers are holding onto new cars for a record 63.9 months, up 4.5 months from a year ago and 14 percent since the end of 2008, according to Polk, a research firm. In fact, the firm said, when used cars are included, the average length of car ownership stands at 52.2 months, also a record.


Industry analysts also report that people on average upgrade their cellphones every 18 months, up from every 16 months just a few years ago. They hold onto their laptops an average of 4 years and 4 months, a month longer than they did a year ago.


The changes reflect in part the fact that business fell with the economy, but also a reassessment of the need to constantly have new things: “It’s a question of shifting values.”


In a few cases, consumers who are inclined to discard less are getting some positive reinforcement from an unlikely corner: companies that profit from upgrades.


Levi Strauss is telling customers to take steps that will actually lead them to buy fewer pairs of jeans. The Levi’s sustainability campaign urges customers to wash their jeans less often and in cold water, a move that the company says reduces water use.


“And they absolutely will last longer,” said Michael Kobori, vice president for social and environmental sustainability at Levi’s. He said the message was part of building trust with consumers and emphasizing the durability of the company’s products.


There are other motivations too: “Personally, avoiding waste and using things until they’re used up seems like a common-sense way to live.”

source:
http://www.nytimes.com/2011/02/26/business/26upgrade.html?_r=1&hp
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