tv Cross Talk RT December 1, 2013 9:29pm-10:01pm EST
she did lumbered tour. was to build these most sophisticated. doesn't do the doing about anything mission to teach really should why you should care about humans. this is why you should care only. on the welcome to the world that part before the shopping season just around the corner some of us can't wait to join the bargain hunting while all those ancient the idea of having to shop for how to survive the many temptations and pressures of the holiday season without causing it to your finances onto your relationship well to discuss that i'm now joined by environmental psychologist and consumer behavior
guru on the hill thank you very much for your time sir now the tradition of giving gifts is usually thought of something voluntary something that is mounting social relationships social interactions but i think it is it's almost become an obligation if you fail to come up with gifts for a new year all christmas you may suffer a certain social consequences i wonder how much of that is due to the moguls of consumerism. i guess would benefit from filling this pressure to buy something even if it's something that is still. being a good gift gift giver is giving the tokens of your feelings toward someone else. it isn't the amount of money that you spend it is the thought that goes into the purchase yeah i agree with you but i think if you go around. hoping malls.
you know pretty much all around the world in a couple of weeks prior to christmas or the new year you see a lot of people who are really stressed they feel this pressure to come out with a gift they want this gift to be in a very special for their loved ones but ultimately they are just down to a very heavy burden of. getting anything rather than offering i think what the what the problem is is that many many people would like to spend rather than think. and it is. fullness of the gift that often has the most emotional impact but what if you fail to come on nice present for you know a person that you care about and you know it could be due to the lack of time due to the lack of. money of whatever of but i think that person would be. i think what is important in our gift giving process is.
the palette of choices that it isn't just giving something that could be giving an experience it could be giving something that's consumable hopefully you're giving something that somebody is actually going to use and. but yes certainly in our modern era people are often spending money that they don't have and spending it on things they don't need to accomplish what they haven't really thought through i think what you've been talking about is primarily from the position of somebody who gives the gifts and will receive that gift but i think there is also one very important player here these are merchants who need us to spend that money and if i'm not mistaking those weeks between thanksgiving and christmas in the united states account for roughly twenty percent of annual mall traffic and why. experience has been that during that period of time people are much less
rational when they shop precisely because of all the pressure they don't have the time to do their homework they don't have the time to compare prices and i think this hype was certainly benefit. we think of the act of being a merchant in the twenty first century is being a player in a bar fight where everybody is competing with everybody else for the customers discretionary expenditure what makes the holiday season so interesting being a merchant is that many of your most important customers are novices were it where where it comes to your product in some very challenging season for merchants and marketers i wonder if you could talk about this tradition of giving gifts in the first place is it still relevant. to the present day reality is pretty much everybody can afford to buy whatever. for himself i mean is
the goal of the purpose of giving gift as a trend as a tradition still the same as it used to be in the past well let's look at the origins of gift giving which is that giving a gift is a way of showing somebody and emotion that you have trouble to kill leading to them in an era where many of us are coming on the catering by email and text we often don't have the opportunity to look at somebody and i care about you i respect you i love you and we look to an icon as a representation of that. notion. in a time where we are more physically and emotionally separated. that concept
of an icon has imminently more power and minutely less relevance to the reality of the situation now but on the other hand there is the traditional gift certificates and it's especially popular in the united states that has made some inroads in russia but so far no very successful and when you look at that from a psychological perspective it's essentially i think it's the to me of the child that we discussed previously is that you simply have to come out. that a certain time it is often recognizing you're in articulateness to be able to pick something out and wreck a good guys in that you need a place keeper speaking about other choices if i found that one of the most popular gifts in europe. it's not a perfect you. when you think about it seems like a safe option but at the same time from consumer behavior we know about people have
a very high sounds the flow of oil to this magic so i wonder if it's after all such a good idea to give somebody the magic so or her fair without knowing what they were tougher insofar as someone who does a lot of business for the medics in the street we know that our relationship to fragrance is changing. as women spend more time working the habits of wearing a heavy fragrance are claiming as more of us who work in open as opposed to closed offices and as people are much more conscious of their allergic lease responses to such we tend often to bond with a early in our lives and stay with it even even though.
your nose is actually bald as we get older so it doesn't make sense to actually. perform as a gift it seems to me a very risky option a potential candidate for great gifting i want you to wreck a good sized at the giving of a fragrance isn't just about the smell it does often about the symbol of the bottle that sits out in the public place and you may look at that bottle and not use it very often but you remember where it came from and the occasion that you got it i already mentioned americans are some of the most generous gift givers. and i was surprised to find out of that some of the most frugal christmas shoppers leave in the north atlantic at the relatively high for first but they are people spend less than two hundred per person on various gifts and when they think about that the netherlands is the lift to the country that is
one of the most socially progressive in the world they are the first to recognize gay marriage they believe to be at the forefront of social change around the world so it doesn't mean that sooner or later have to adopt this very practical no attitude to giving gifts. trends follow housing trends and that when you live in smaller spaces and smaller houses you have to be much more careful about what you bring in the front door and what you take out the back door one of the issues with. americans is that often we we have the luxury of space big houses we have big houses we have big storage areas in our basements and the typical bourbon home where we can put all of the junk that people have given us over the years if i'm dutch and i'm living in. amsterdam there's
a premium on space and therefore i have to factor in that space to buy shopping seasons but it may mean also that the way i recognize somebody else's sake. maybe not just the giving of things but the giving up experience since we have to take a short break now but when they come back as the power shifts from the merchants to consumers how is it going well consumer habits that's coming up in a few moments on the part of. this is the place that has been consecrated to god for almost a thousand of years people jam here twenty some years ago it's very established and i stick life on the silence. and people feel the love of christ working. people say you can. come
and something happens on this island that makes them return to it's again and again they say the below saves them. join me james brown on a journey for the soul. only see. quite often countries rich in natural resources are the poorest africa is a colony it's a colony of the big corporations it's a colony of some its own leaders who are under the thumbs of the big corporations so they have to beg from the world bank's development of social programs goes to pay back debts country is drowning under the amount of debt that they had and so every year they would borrow money. and they would use that same amount of money to pay back oh this can all that money really help. the wages of
debts. the war is probably the most complex and difficult to. answer. not. in the phenomenon of friendly fire probability extends back to the invention of gunpowder. just killed a bunch of people you know don't know what they're up their families there are of us people. right i'm writing. this son of a shoots my brother in the leg not intentional because of it because it was night times four in the morning even the best given the pouch sold. are going to make mistakes does this whole idea of brotherhood an author and camaraderie in this
sense it was in this context it has absolutely no place. welcome back. all of the parties will be discussing global shopping habits. mr underhill before the break we were talking about a big winter shopping and i think it's part of a much larger phenomenon of consumer as you know base drive to buy more goods and services in ever increasing numbers and i think when you think about consumers really usually think about americans you mention because this be cars but if you look at the recent consumer studies it says that americans and europeans are actually pretty disciplined. and it is other parts of the world.
come get enough shopping we passed over a very magic moment in the mid one nine hundred ninety s. . where previous to that the. global wealth came in the form of old money but starting in the mid one nine hundred ninety s. and russia is a very good example of that the overwhelming majority of global wealth now is is in the hands of people who have earned it in the course of their own lifetime and the scale of the money that they have earned. gives them the ability to consume at a probe to just rate and that has. both created opportunity and challenge particularly for the luxury luxury goods merchant who is selling to an audience that often doesn't know exactly what it is there are but we can buy
houses if we have new money just as we saw the russian. billionaire buy a seventy five million dollar apartment in new york city we have people who can buy yachts here. but how do we sell them the more subtle things whether it's an expensive watch. whether it's understanding the difference between a suit that costs. two thousand euros and a suit that costs ten thousand euros. now you've been talking about. people for going after luxury items but i think this translates far broader it's not just you know the after class it's the middle class as well and according to the most recent nelson's global study i think it's chinese and indians who are the most impulsive and brand driven shall for us and your company and of ourselves. has
a. mentality that is really interesting i wonder if you are actually trying to spread the same culture of runaway consumerism buying more than you need. stop stop stop stop right there we teach our children about hygiene we teach our children about the colleges we also need to teach our children about responsible sumption i run a research and salting from that works with merchants and marketers all over the world what what we are focused on is them putting their best foot forward because in the twenty first century it is no longer a polite war where l'oreal is competing with estée lauder it is a bar fight where everybody is competing with everyone else absolutely but i think part of your job also involves using sound says and sometimes maybe advising
merchants on how manipulative senses of that consumers to encourage more and more sales. obviously many people in western countries the now more sophisticated many of those consumers are calming to the fore in their developing emerging markets and also experience then i wonder whether these overseas markets will have to go through the same cycle of. excessive consumption that some of the western countries have to go through well let's look at it in a broader. text if i look at an eight year old girl. in the. show and i look at an eight year old girl in the suburbs of moscow and i look at an eight year old girl in the suburbs of detroit all of them have the same. caviare brains that they have been exposed to television they've been exposed to media they've been exposed to. magazines and all of them have an interest because
the marketing engines. of media are focused on the younger and younger and sooner you and i have reached a point in our lives where we know that there are very few products that are trance for missional but our marketing engines are focused on a younger and younger consumer who is vulnerable to that message in terms of something merging market. consumers are stepping out from a history of depth. and they are coming into it with a with an appetite for newness and appetite for sumption that is product of their of their pasts and we certainly hope that they learn to become better and more frugal and more focused simmers simply because the world cannot afford to consume in the same way that we as westerners have
done over the past fifty years we can't afford it and yet if you look at the studies again it seems that even though as you said the world cannot afford to sustain such consumption many people especially in those developing markets are in danger china. often via more things than these and i think that the sundays in asia is around forty of percent of people on their feet and bases by more than they need their impulse shoppers this is much higher than in the west and yet you don't have to recognize that this is is the name driven by environmental psychologists let's just look at it from a couple of different ways here when i visit my office in shanghai. i'm guessing that a third of my pulleys still live at home. they live with their with their families which means. is that everything that i am paying them is
discretionary income if i visit my offices in new york nobody who works in my office at that same age is living at home meaning that they have to pay rent they have to pay for their own maintenance one of the issues of modern consumption is that it is often driven by housing. and then if you go to india and china where living unit is very different than it is in north america part of what it does is put discretionary expand the chair in the hands of a younger kind sooner who doesn't have to pay for four costs that that same customer in the west would have to spend. income is also lower the price of the brands that you may be after is comparable to. oh and
this is part of what is a very interesting challenge for a chinese merchant or a brother zillion merchant is knowing that that middle class customer is questioning the fact why does this prada bag cost one price in song. and cost a very different price in my the and we are moving to a global global market and that has implications for us everywhere they don't and here in moscow adults are saying that there is almost a porch mistake drive on the part of. business and some financial institutions to have to wisen this vastness consumer appetite in emerging markets even knowing that you know the base may not be sustainable in the long run just using these. trying to get out of. one of my last columns written for goldman sachs talked about what the potential. impact is if we have
a global financial belt. we are seeing it in two zones across the world first of all china if the real estate bubble bursts we have a chinese population with a long history of being savers. and it will not take much to have that chinese wallet shut well maybe they will become more like americans who i know are now increasingly reliant shopping least sixty percent according to nielsen and they also point out that eighty eight percent of americans are very good at collecting in using that discount coupon so it seems that americans after all actually have the art of shopping and shopping in their rationale well let's let's recognize something speaking as an. american who researchers you know shopping.
for american merchants we are facing the fact that in the enormous percentage of americans face the prospect of being downwardly mobile meaning that there are many. realize that they will not live the same way that their parents did. and that they may have similar appetites and have made similar longings for goods but are simply not going to be able to afford them this is one of the challenges of our mature western. culture there are many americans who will not live better than their parents have and that's something that hasn't happened ever and that part of that contrast be between china and india and russia where there are so many of your children who. no with
some surety that they are going to live a better life than their parents did for course it has to be recognised that be living standards in both russia china and india are still much lower than the living standards in the united states we are just trying to reach the bar that you have long ago now we've been discussing the spread of the small culture around the world the spread of consumer culture and i know that in the united states the construction of malls is actually declining very steeply and more and more consumers they're shifting towards only line retailers to buy whatever they need and i think it will be your own line environment you have more control over what you how much time you need to consider any particular purchase how is it going to change the environmental psychology because part of your job
again was she used the senses of consumers to encourage sales but in the online environment it is the concern my ultimate control of the of the environment of the shopping environment let's take a step back and look at why is ball culture prospering in merging markets first is because shopping mall security. and this is something that in the u.s. is no longer an issue. the shopping mall offers a controlled environment. it is one in which i'm not only going to shop but i'm also going to look and be seen by other people in the u.s. retail trends follow housing housing trends so we are watching. several things
happened first is the repopulation of some of our cities and as people come back into a city they are shopping a city. second is is that we are seeing a much more concerted effort at channel which which means that i am not separating the bricks and mortar world from the online world i am using online as a way educated myself before i go in to look at product in the. right and the separate silos that have. done this is catalogue this is bricks and mortar and this is all mine are just not existing and email doesn't mean that the ability. or potential for profit markets. decreasing for all the. brick and mortar shells part of what this means is
a couple of things first is using our supply our supply chain better to be able to differentiate products so i'm not seeing the same product in stores i'm seeing online second is. that many products may be a comedy product but all of the things that i use with it are things where i build my margin so that if i if i have a smart apple phone. that may be a product but that case that i put that phone on or the cords in wires that i use to be able to make sure that it's charged in every place that is the place where i earn my margins part of what it's been to is a challenge for us to be more creative and a challenge for us to manage both our inventory and the expectations of our customers better doesn't mean a better future for the consumer or for the various. who do you think will emerge
as the ultimate winner. if we thought about the twentieth century marketers led somebody could create trends in london or paris or new york. in the twenty first century is a very important that we are good followers because often our shopping and comes and fashion trends come up the street and therefore it's very important for us to stand up and pay attention and our health thank you very much for your time and please join us again same place same time here in the world the part of.
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