I've been using "demure and mindful" in a lot of meetings recently. It goes down a treat, gets the laughs, and is on trend. But it also got me thinking. Could something as simple as a viral catchphrase be the economic 'canary in the coal mine'?
Is 'demure and mindful' a portent? In a climate of economic uncertainty, are consumers, especially the Gen Z cohort, signaling their intent to be demure and mindful with their money?
So many questions - lots of thinking.
If there is to be a significant shift in consumer spending (which we are seeing), this poses significant challenges for brands, (hopefully) compelling them to rethink their strategies to stay relevant and effective. Those of you who know me know I loathe the prevalence of 'quiet luxury.' And I do mean loathe - to the point that I'm concerned I will suffer a detached retina from the amount of eye-rolling that I do whenever I see the IG/TikTok/insertplatformhere 'millionaire lifestyle' accounts and influencers touting their quiet luxury GRWM reels. Quiet luxury does not scream, my darlings.
As a trend, it's failing. Fast. Brands have failed to consider the 'income of elasticity demand.' In a big way.
Says Law? Keynesian Economics? Where Does The IG Influencer Fit In?
You see, I think it's a mistake to underestimate the importance of the influencer economy as just trends or fads. Whether you're 'going viral' like the 'looking for a man in finance' girl, or just being, at best, 'fungal' like Toto Wolff with his 'demure and mindful' (* rolls eyes * there goes the retina), influencers have a lot to say, and I think, a lot can be used as a predictor of economic consumption.
Says Law, a classical economic principle, asserts that supply creates its own demand, suggesting that production naturally leads to consumption. Yet, this principle struggles during economic downturns when consumer confidence declines, resulting in reduced spending and a mismatch between supply and demand. In contrast, Keynesian economics emphasizes the importance of aggregate demand in driving economic activity.
According to Keynesian theory, underconsumption during times of economic stress or recession becomes critical as reduced consumer spending diminishes overall demand, worsening economic slowdowns. Keynes advocated for government intervention through fiscal policies to stimulate demand and mitigate the effects of underconsumption.
Influencer Economics
We're being told that inflation is slowing, with "lowest rates since March 2021," yet we're experiencing "highest prices since February 2020." This might very well be aligned with the principle of adaptive expectations; what we're not currently seeing is any form of adjustment mechanism from businesses or brands.
American economist Edmund Phelps introduced the concept of 'adaptive expectations' in the 1960's while studying the dynamics of inflation and unemployment. His work implied that individuals would adjust their expectations of inflation based on past experiences, which in turn influences their own economic behavior and the economy as a whole. This means that as information becomes available, expectations are adjusted gradually and that they, in some way, are reflective of past trends.
Trends, Influencing - See Where I am Going?
Robert Lucas expanded on this with the 'rational expectations hypothesis' emphasizing that individuals use all available information, not just past trends. It also assumes that this information is somewhat constant and that it can be processed incrementally.
I say the COVID-19 pandemic turned that on its head. The rapidly changing information from the scientific community and massive and frequent policy changes from governments meant that the speed at which information was released often outpaced the ability to mindfully integrate it into economic forecasting. We're only just getting started with creating models that can accommodate the extraordinary. REH may still be relevant, but economists should be looking at flexible and adaptable models.
Three guesses which generation doesn't have an issue with either scale or speed when it comes to information?
They may not be the drivers of the economy right now, but they will be, and they're listening right now. Influencer recommendations can drive or dampen consumer spending based on their perceived authenticity and relevance.
Based on the ability to rapidly parse data and information and quickly make exceptional economic decisions, the interplay between consumer behavior, economic theory, and influencer impact underscores the need for nuanced strategies from consumer brands.
The problem is that not enough brands are listening. Again, Gen Z is not the consumer cohort that drives economic indices today, but they will be. Their virality today is the global brand pandemic of tomorrow. And they ARE listening.
There are hundreds, maybe thousands of articles telling you how to market to the Gen Z cohort, but most focus on how to make the most of the latest trend that Gen Z is setting. That seems backward to me. It seems terribly shortsighted and is where many brands, including (maybe especially) the 'quiet luxury' ones, are destined to fail. (Did I mention that I hate 'quiet luxury'?)
Demure and Mindful Economics
Most of my work is with D2C brands, mainly in eCommerce. My heart belongs to data, analytics, and trends, translating into strategy and business efficacy. I'm not in marketing, though naturally, strategy is fundamental to successful marketing because it provides a roadmap for making informed decisions. I have a minor interest in economics and a major interest in bespoke tailoring. This roughly translates to... I spend a lot of time on social media. It also means that I'm watching and listening.
What I'm seeing and hearing is:
Value over exclusivity
Ethical transparency
Representational inclusivity
If I have any advice for brands on a macro-scale, it's that you've got to get real, not reel. It means you've got to start listening.
Because Gen Z is talking AND listening, mindfulness is a shift in priorities and economic values. It also implies economic resilience today that will impact the next decade. Economists should start modeling and integrating mindfulness into economic theory now.
Brands need to stop thinking like 'boomers' with their children-should-be-seen-and-not-heard attitudes, and start acting, frankly, more 'demure and mindful.'
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