DROP HOW YOU SHOPOUR SPENDING CAN'T DRIVE THE ECONOMY FOREVER.
LET'S LEAVE THE MALLS BEHIND.
By Paco Underhill
Sunday, November 29, 2009

We are a society of shoppers. We have been since we were prehistoric huntersand gatherers. From the souks of the Middle East to the night markets of Asia tothe concourses of Tysons Corner, human beings come together to browse,
bargain and purchase. Shopping isn't just about the acquisition of goods -whether the season's hot toy or some sharp tool necessary for surviving thewinter -- it's also about how we interact with each other.
For better or worse, the holidays have long been synonymous with shopping.
And that has come to mean Black Friday, the start of the shopping sprint
between Thanksgiving and Christmas and historically one of the busiest
shopping days of the year. Over the past decade, retail marketers have staged
events -- 5 a.m. openings with "doorbuster" deals -- designed to drive traffic totheir stores, even risking stampedes for the sake of more sales. Particularly forspecialty merchants, these five weeks are critical in making their annual bottomline.
This year the stakes are even higher. Many retail chains had a disastrous 2008
and are hoping for a miraculous recovery this season. However, some of them
are not going to bounce back, and the results will prove instructive. The current
way we measure the health of our economy, from the markets to consumer
confidence ratings, depends on our overspending. But, simply put, we cannot
continue to be a country where more than 70 percent of our economy is basedon consumer spending, especially when that spending is based on credit.
Even in the best of times, Black Friday has always been an exaggerated gamble.
Nearly every year, retailers overestimate how much they'll make in December,and nearly every year, when the numbers prove they were wrong, stock prices
take a beating. Our post-holiday assessments are more about disappointments
than clear victories. It doesn't look like it will be so different this time. According1

to a survey by the consumer research firm NPD Group, 30 percent of holiday
shoppers said they were planning to spend less than they did last year.
That makes sense, of course. American consumers spent the first part of 2009
hiding under their beds with their wallets shut. They were properly scared. Theirhome values, job security and retirement plans had all suffered. And thoughconsumer confidence is significantly stronger than it was a year ago, mostpeople say their finances have worsened. People have been reporting
deteriorating finances for 13 consecutive months, the longest decline in thesurvey's 60-year history.
Our retail culture is undergoing a fundamental reordering. Consumers havespent beyond their personal limits, grossly misusing their credit cards and homeequity, and the lessons have been painful. Roughly a third of Americans are
suffering deep economic trauma, driven by job loss, home foreclosures or healthproblems. Those who are not suffering know someone close -- a friend, neighboror family member -- who is. Many middle-class Americans find themselves living
paycheck to paycheck with no savings. Even the rich are conscious that theirpiles are smaller.
Our children, meanwhile, have been raised with a sense of entitlement: Not
providing a PlayStation3 is tantamount to child abuse. We talk to our kids about
nutrition, safety and the environment, but we ignore our responsibility to teachthem about money and how it works.
We could start by shifting out of our holiday shopping frenzy. I place some of theblame on Thanksgiving Day. It's one of the only times of the year when extended
families meet and, for all the joy, the backdrop can be tense. Over turkey andmashed potatoes we exhaust all safe topics of conversation, and when Friday
morning comes around, rather than talk about Sally's troubled teenagers or
Darren's divorce, we go shopping.
And we know how to shop; the quest for deals is built into our DNA. America's
retailers are addicted to the sale. Buy one get one free, gift with purchase andloss leaders are all part of the national vocabulary. We have stopped bragging
about how much we spent for something and instead boast about how little wepaid for it, now more than ever.
But today, it's about more than just a good deal. Americans are going on afinancial diet and have rediscovered savings. This season more of our spending
2in stores will be with cash, while online we'll spend more with debit cards. We
have learned that we can't spend what we don't have.
Consumer spending can't drive us out of this recession. We have to adjust tolower, more responsible spending levels. We still will dress our children,
maintain our homes and drive cars. We will eat, drink and have fun. But thetransition to less will be painful.
America has too many stores and too many malls for the population they aremeant to serve. While some are doing just fine, the vacancy rate in malls
nationally is climbing. In urban centers such as New York, it is hard to find ablock without at least one vacant storefront. E-commerce has transformed ourshopping experience, but its fundamental impact has been on what we spend
and what bricks-and-mortar stores look like. Apparel and grocery stores havebeen under huge pressure to control costs, and the most controllable cost islabor. Now that you can pull out your smart phone and check what thousands ofonline ratings sites say about that new TV you're considering, do you really needto talk to an informed salesperson? The retailer can only afford a limited numberof worker bees roaming the aisles.
Retail, therefore, will not be the engine of long-term job creation. Much of thework is seasonal and part time; the pay is low and the benefits minimal. For
many, such jobs are better than nothing, so the transition away from this readily
available part-time work will be painful. But we need real jobs, work thatstrengthens our infrastructure and reduces our dependence on oil. Solar andwind power, battery technology, safe nuclear power, and, most important,conservation are areas with the potential to create life-sustaining jobs.
Our end-of-year holidays are about giving the meaningful people in our lives giftsthat express what we often have difficulty saying. I love you. I'm proud of you. I
respect you. I recognize your pain and stress. And we can do that in more ways
than simply spending. If that means bleaker Black Friday returns, some
economists are bound to be disappointed. But the rest of us will be just fine.

Paco Underhill is the author of " Why We Buy: The Science of Shopping" and"Call of the Mall: The Geography of Shopping." He is the chief executive ofEnvirosell, a retail research and consulting firm.

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