If you enjoy the warm afterglow of bagging a bargain at your local big box store, then Cheap is the cold shower that might give you pause for thought. Many things are certainly a lot cheaper than they have ever been. From 1971 to 2003, as incomes rose, Americans spent 32% less on clothes, 52% less on appliances, and 18% less on food. However, over the same period mortgage payments increased 76%, health insurance 74%.So things are not cheap where it counts, and those things that are cheap are not sustainable, for they are cheap at the expense of skills, wages, the environment, human rights & culture. You would need half a dozen books or more to do this subject justice. Thankfully, Ellen Ruppel Shell provides extensive references for those wanting to explore, say, the insights gained from the studies of consumer behaviour in the chapter "Winner Take Nothing”.
Purveyors of cheap have turned traditional retailing on its head -
"Discounters shroud their offerings, selling virtually identical products as different brands, and B-grade versions of national brands. Or, like IKEA, they hide shoddy construction - and questionable practices - with clever image making and design. The cheaper the goods, it seems, the harder retailers work to keep us from knowing about them, and the more narrowly we focus on price, the easier we are to fool."
Product knowledge thus seems impossible in a world of commerce where it is difficult to know where a product came from or the conditions under which it was manufactured. And if consumers cannot buy based on knowledge of product, then price alone becomes the determinate. This triumph of cheap was abetted by television advertising which, the author argues, “was particularly vital for the low service discount chains that, with no experienced salesforce to push product, relied on the customer to come to their stores pre-loaded with wants."
Is there a solution? How to arrest price's race to the bottom, dragging living wages and the environment with it? Even with laws in place, there is still human nature to contend with. By way of a remedy of sorts, Shell takes her cue from Adam Smith's ideal of "enlightened self interest”, and gives us the closest to a working example in Wegmans Food Market. The key to company profits seems to be investment in well remunerated and looked after staff, which in turn attracts and keeps customers, qualities beyond mere price that support wages and profits.
An excellent book, even if the ideal marketplace of Adam Smith seems unattainable. Perhaps the user generated revolution of Web 2.0 will assist in greater product awareness amongst consumers. Or does the promise of instant gratification via online bargains just compound the problem?
