On this Giving Tuesday, I have asked a close friend and colleague to share his thoughts. Kyle has been giving his time and treasure to worthwhile causes for many years. He has an excellent message, along with some eye opening statistics.
Giving versus Spending, By Kyle Alexander
Thanksgiving and Consumerism
Until this weekend, I have never actually had the inspiration to write down my thoughts on Thanksgiving consumption, spanning from Turkey Wednesday through Cyber Monday. Originally, I was going to write about the advancements in Supply Chain Infrastructure and THANK all of those who work to make it seem like magic for US consumers to enjoy an abundance of stuff during Thanksgiving. However, my emotions were so conflicted with excitement, stress, joy and the “baa humbugs” I wanted to share these thoughts. Let’s face it, we want to buy gifts for the people we love and the people who are important in our lives. And… Holiday expectations are real. I also chose to post it today, a Tuesday for a reason! – keep reading…
High Holiday of American Consumerism
This “spending weekend” continues to reign as the High Holiday of American Consumerism. Regardless of one’s viewpoint, can we agree that spending had nothing to do with the origins of Thanksgiving? It’s a modern adaptation of the original concept and interestingly has helped create many of the supply chain & logistics infrastructure and technology we now enjoy. This “consumer holiday” also evolved to include a new, positive event called Giving Tuesday which started in 2012. Giving Tuesday began as simple idea to give folks an easy way to be more generous with their time, resources, and talents. No doubt part of this movement came out of the recognition that our culture had gone kooky over spending for fun.
I Love a Deal
No one loves a screaming good deal more than I. Frankly, I get more out of the pursuit of the deal than the enjoyment of the things purchased. This is why I use coupons too. Yup, It’s a nerdy sickness where I apply some experience from Strategic Sourcing to the mundane activity of grocery shopping. The “thrill of the hunt” is clearly part of the reason people enjoy participating in our favorite Shopping Holiday. Saving money on a great deal delivers a quick shot of dopamine that enhances our positive memories and partially offsets college football overload and the tryptophan induced coma we expect after our Thanksgiving meal.
What Kind of Turkey Did You Buy?
In the ‘old days’, we just wanted to provide our family a tasty turkey to celebrate the harvest. Over time it has evolved into the desire to share the “hypoallergenic, free range, seed fed, Cornish-Hen filled with gluten-free, ancient grain stuffing from the outer plains of Mongolia”. Wow, could this be a wacky juxtaposition of emotions and behaviors that seems to have gone off the rails? (Logistics pun unintended.) Yep, giving thanks and consumerism are indeed a little like Clark and Cousin Eddie.
Qualitative Impacts from this Consumer Holiday
Despite these inconsistencies (and perhaps historical insensitivities), giving “Thanks” to our Creator for all the miracles we enjoy is an incredible reason for a Holiday. Strangely, it’s a Federally sanctioned event to actually gather with the important people in our lives, show some love, and share some togetherness. Yet, most of us, myself included, still unwittingly weave this “time to count our blessings” with consumerism and that tryptophan induced coma.
So, with these thoughts now swirling about, along with far too much gravy, and something made with pumpkin spice, it begs two questions and leaves us with a unique challenge.
- As a consumer driven economy, can we change this bizarre evolution of the Thanksgiving Holiday from “giving-thanks” to a “spending frenzy” into something truly positive for our society?
- Without this evolution of e-commerce technology, and the resulting supply chain infrastructure this Consumer Holiday helped to create, would we still have a platform to provide a “hand-up” so easily across the globe?
Interesting Facts
First of all, I know the next few paragraphs are full of naivety, but just humor me. Plus, I chose not to dive into the statistical details regarding cost of living, inflation, currency exchanges etc., to conserve the space we have available in this blog post. These stats are just to make a general point.
You probably know that Black Friday is traditionally the busiest shopping day of the year. According to “thebalance.com”, the average annual amount spent per shopper in 2009 was $681.83 with a total spent for the Holiday Season of around $503.2 Billion. By 2018, that number was $1,007.24 per person spent per shopper and $717.5 Billion with an average annual increase of slightly less than 3%.
So, let’s put this into perspective, people in the 28 poorest countries in the world live on less than $1,000 per year. By comparison, in the United States, the average income is around $62,000 per year. (Business Insider, 08/17/2019). What does this mean? Many people in the world live on less than we spend in the US, per person, during our High Holiday of Consumerism.
Last year, Switzerland had the 20th largest Nominal Gross Domestic Product at $703.75 billion. (IMF’s World Economic Outlook Database, April 2019). So that means, there are significant, wealthy nations in the world whose Nominal GDP is less than what we spent as a nation on all 2018 Holiday Season purchases.
A Moment of Clarity
Perhaps then, the answer to question #1 (about shifting the consumer driven economy in a more positive direction) is, Yes! If US citizens took half of what we spend during our Thanksgiving Shopping Weekend and invested it in the basic needs of others, we could make the world a better place and eventually, “all boats would rise”. Please, don’t feel guilty about this, it’s just a different point of view.
What if we still spent all this money to fuel our consumer driven economy, but spent half of it on the people who need the basic products and services that we take for granted? Would the net impact to our US GDP change since we are still spending the same amount of Money? What if other cultures of abundance followed the same philosophy during this season of giving? Instead of buying a gift for someone who doesn’t need any thing what if we provided a person we don’t know who could use a hand up with:
- healthcare services: https://donate.doctorswithoutborders.org/
- shoes for kids: https://www.samaritansfeet.org/donate
- agricultural support: https://www.heifer.org/gift-catalog/give-where-needed-most.html
These are just a few worthy examples, but over a decade of choosing specific causes and/or target regions to be recipients of this redirected generosity, I’d wager it would make a huge impact on the standard of living across the globe. My guess is the US Economy would grow as more people received the basics and new markets for our stuff opened.
Interesting Conclusions
In-store traffic during our last Consumer Holiday fell 9% between 2017 and 2018 in favor of on-line purchases. CNBC reported that Cyber Monday sales surged 19.3% between 2017 and 2018 to a total of $7.9 Billion while most consumers were also “at work”. Furthermore, Amazon reported last year that the 2018 Cyber Monday shopping day was the biggest shopping day in its history. (CNBC report, 11/28/2018).
Question #2 (about infrastructure and technology platforms to support other people) is a loaded “chicken and egg” issue. The e-commerce cycle of growth and technological advancement has just begun. Regardless, the evolution of e-commerce has forever changed global economies, our domestic consumer behavior, and the Supply Chain Infrastructure. So, the answer to this one is probably, NO. At least not with the level of speed and efficiency we enjoy today and their compounding innovations.
One might infer that cyber-shopping did result in more consumer spending for personal gratification. This is not necessarily a bad thing as success breeds the desire for more, which can perpetuate economic growth. Historically, a country’s standard of living also improves as its supply chain infrastructure grows. Likewise, an effective E-commerce solution drives more global trade, it creates the need for a better trained workforce, and the economic incentive for people to strive for those careers. It also requires capital, such as larger and more distribution centers. It demands information systems that can ensure order flow, customer service, effective inventory management, analytics and good communication. It forces innovation such as drone deliveries, autonomous delivery vehicles and other efficient last mile solutions. It requires ongoing maintenance and new roads, bridges, ports, or other international trade technology. E-commerce platforms also make it very easy to deploy scarce resources to those truly in need any where across the globe.
As you count your blessings this Holiday Season, you may have an epiphany. The advancements in supply chain technology seem to always follow commerce and greed. Perhaps the strange bedfellows of Thanksgiving and Consumerism has unintentionally given the world the basic infrastructure to improve our overall standard of living? This Giving Tuesday, think about how you can play a role in the economic fortunes of someone who truly needs your help. Use the technology enhanced by e-commerce and consumerism to contribute to a cause you believe in and get those resources to a person you might never meet. Finally, thank your Creator for the ability to do these things and ask how you can use your time and talents to do more! If you change your perspective, chances are it will forever alter your take on our High Holiday of Consumerism to one of real Thanksgiving. You might also receive the true joy that comes from serving others and giving from the heart. Have a blessed Holiday Season!
About BEI Global
BEI Global is a Supply Chain and Logistics consulting firm focused on implementing solutions that drive improved value and profit. Learn more at www.BEIGlobal.com. If you have a response to this blog, please let us know what you think by e mailing: jim.matcham@beiglobal.com or kyle.alexander@beiglobal.com.
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