The End of the age of Stuff

In the decade after the end of the Second World War many material possessions, from clothing to building materials, were in short supply. Through the 60’s and 70’s availability gradually freed up. The necessity for overseas funds in order to purchase a new car was eventually eliminated and over time import licences were gradually freed up. And then in the 80’s import licencing was totally removed and we were approaching the golden age of stuff. Imports from China, the establishment of The Warehouse (and similar) saw a veritable flood of goods coming into the country. You could buy virtually anything you wanted to. And it was cheap. And got cheaper. And people bought it. Having stuff became an objective. You could drive around a subdivision with 5 bedroom houses with 2 car garages, and the cars would be parked outside. Because the garages were full of stuff.
 
But we are sensing a subtle shift in the attitude to the acquisition of goods – or stuff. And that change in attitude is likely to have ramifications in a number of areas, real estate included.

We are sensing that attitudes are changing to where we allocate our discretionary spend. Articles in the press are appearing with increasing regularity advocating the decluttering of our lives – that having the largest collection of stuff does not necessarily denote us as the winner. Plus, articles such as “the science of why should spend your money on experiences not things” are encouraging people to change their spending habits.

The studies are starting to show that the feelings of satisfaction that come from experiences are very often greater than the satisfaction from purchasing hard goods.

The struggles of many retailers of products are well documented. While there is a still a market, and will continue to be, our feeling is that the tide has turned, and increasingly the balance of discretionary expenditure is likely to be on experiences rather than goods.
 
So how does this impact on real estate?  Already there has been a less than subtle shift in the retail environment, as retailing becomes more experiential and less product driven. Shopping malls are destinations for eating, recreation (although we admit we find this hard to believe), movie-going etc, and less for actual purchasing of goods.
Increasingly we are seeing experiential businesses taking up industrial space. Look around the industrial suburbs and you will see go-karts, trampolines, indoor cricket and churches, amongst other experiential businesses.

We feel that the tide has turned. The future will see a greater proportion of our discretionary spend going on cruises and events and activities. That will necessarily impact on the facilities needed for them.