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the paradox of thrift

February 8, 2009 Leave a Comment

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090209.paradox

"Risk aversion, prudence and frugality – these are rational short-term responses to a serious global recession but will in the longer term make it much worse."  This quote comes from an interesting management journal editorial that inspired this cartoon.  From a Baroness no less.

Like many of us, I've been playing armchair macro-economics lately.  I've been struck by the economic concept of The Paradox of Thrift, which has been in hot debate over the last few months.  Consumers are being pulled in both directions at once. 

As marketers, it's our job to find ways to increase demand (even in a difficult climate when demand is generally softening).  Short-term sale racks may work for a while.  But I think the only long-term sustainable way forward is to offer something meaningful.

This is a time when consumers are reevaluating everything they buy.  What isn't meaningful is becoming dispensable.  And the criteria for what counts as meaningful is in flux.

Filed Under: recession

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  • Paid licensing options include high resolution download.
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