How to buy, selling: Consumers as sellsumers in the Americas

Author: Daphne Kasriel

Date published: 17 Aug 2009

The credit crunch has changed many things, especially the mentality of consumers. Where it used to say “more” it now says “less”, and the word “credit” has somehow transformed itself into “saving” for many. But the change in the behaviour of many consumers in the Americas goes beyond this: besides just buying, they also sell.

Branded as “sellsumers”, a new race of consumers does what until now, only companies did: they offer products and services. The new trend includes the enthusiasm for online sales in Latin America and the “American” fairs, where used products are sold. It is linked to bartering and exchanging and more: because sellsumers have found a new way of buying… selling.

Key trends

Sellsumers in the eBay world;

The “americanas” are a success in Latin America;

Returning to bartering by exchanging;

The thin line between expense and investment: Toyota case study;

Some entrepreneurs are DIYers.

Commercial opportunities

How to take the eBay values to a brand: Auctions offer participants the feeling of winning or that business is being done at the time of buying. They also favour participation by encouraging the relationship between equals. Sellsumers are aware of these attributes, which is why applied to a brand or company, they can give instant results;

The place where your consumers are: In markets such as clothing and footwear and in both North America and Latin America, the “americanas” are a big hit. These are places where people sell products and buy not only used but handmade articles too. If you are wondering where the consumers are, you may find many here. If you aim to reach young audiences of all classes, the “americanas” may be a good place to check out fashion trends and even sponsor them in order to make the consumer go back to where he or she should be: shops selling your brand;

Discounts or money? The trends that sellsumers promote, repeatedly say that it's better to give money to clients instead of discounts. The exchange of old products for newer ones is a better option for many companies. Bartering as a way of buying and selling has reappeared in many countries of the region, and may be a successful strategy to sell anything from printers to cars;

Resale value: In markets such as real estate, the car industry, jewellery or even luxury apparel, the resale value of the product is acquiring a new meaning in a crisis context. By making the right use of it, companies are seeing results;

Some sellsumers are DIYers: The easiest and fastest way to make money, for some, is by repairing, remodelling or creating for others. Without realising it, sellsumers are reactivating some markets affected by the crisis, such as DIY.

Background

The democratisation of new technologies alongside the world crisis has helped develop this new trend in which consumers are also the ones who sell. According to trendwatching.com, who came up with the name, sellsumers are the people that actually create, participate and contribute, instead of just buying. Because “if saving is the new spending, then selling is the new saving”. Trendwatching.com stresses that consumers will increasingly become sellsumers “whether it's selling their insights to corporations, hawking their creative output to fellow consumers, or renting out unused assets”.

The crisis has not only has created new selling possibilities for consumers, but has helped people become experts in business, marketing and advertising; and allowed them to link with specific niches through social networks and the internet. To be able to reach this audience allows sellsumers to sell “premium obscure products and services and experiences”, whose values are different, hard-to-find, special, vintage, quirky or personalised, even cheaper. For Trendwatching, sellsumers search for “extra cash”, but sellsuming does not include “making money off capital”, “bartering and swapping” or “saving money by spending less” via promotions and discounts.

At first sight, the trend can be divided into two parts: “sellsumers & proprieties”, which includes ways for consumers to capitalise on anything they already possess, “from unused parking spaces to excess energy”; and “sellsumers & creation”, where money is won by selling designs, software, sculpting, knitting and others. Sellsuming, however, is also a consumption trend; as odd as it may seem, sellsumers find ways to keep on consuming... by buying! Some of the new techniques present in the Americas refer to the old market methods: bartering or trading. The concept is also present in the minds of consumers, for nowadays, everyone is looking to do business, even when they are buying.

Sellsumers in the eBay world

First there were newspaper classifieds and then online sites like Craigslist.com, which offer hyper local goods and services online. But the eBay phenomenon, for USA Today technology columnist, Kevin Maney, goes beyond this, for two reasons: the feeling that it gives consumers that they “are winning” with online auctions, and the possibility of saving by buying directly from someone rather than a company. The current crisis has given peer-to-peer sales a new opportunity, especially in Latin America, where shopping through sites like Mercado Libre – an eBay subsidiary – is thriving, with an increase of between 20% and 40% in the first quarter of 2009, depending on the country, according to the company. The possibility of selling to millions has allowed sellsumers to sell to internauts with other small and average companies.

Online markets kept on expanding during 2008 in the USA, despite the recession, and various reports affirm that smaller companies and even “autonomous persons” are fuelling these sales. According to Euromonitor International statistics, sales through internet retailing expanded, by 14.3% in North America and 46% in Latin America in US$ terms in 2008 compared to 2007.

Number of internet users in Latin America and North America: 2003-2009

Millions

Source: Euromonitor International from International Telecommunications Union/World Bank/Trade Sources

Note: Data for 2009 is forecast

The “americanas” are a success in Latin America

Websites like eBay in the USA and Mercado Libre in Latin America have not invented something new; they have merely applied to the internet offline ways of getting in touch. The USA is where fairs of used or nearly new products have thrived. Although until a few years ago the trend was related to the eagerness of Americans for things “disposable”, the world financial crisis has resuscitated these selling techniques. But not only there: in Latin America these events are called “American fairs”, and according to many sources they are a success on the continent, and not only among the middle and lower classes.

An investigation by Argentine newspaper, Ambito Financiero, for instance, revealed at the end of June 2009 that “top American fairs are appearing due to the crisis and are a trend” and that their profits soared by 20% during the first four months of the year compared to the same period in 2008. According to the newspaper “more and more middle and upper class people buy and sell in these settings,” mainly apparel. A few years ago, the clothes were old and unknown, now it is possible to see premium brands like, Dior, Louis Vuitton and Lacoste.

“Women come looking for branded clothes, they want the most exclusive articles and in many cases, the most expensive ones; men, instead, seek retro or vintage clothes and are the most decided ones”, assured the owner of El Baúl de Valentina, one of the most famous fairs in Buenos Aires, to “Ambito Financiero”. The newspaper affirms that in countries like Brazil, Peru and Chile “the trend is also strong”. In Mexico, in addition, the fairs include new clothing from emerging designers. The trend even includes the return of “bargaining”, a very common habit in countries like Egypt and India, where clients haggle for lower prices.

Returning to bartering by exchanging

The importance of sellsumers not only lies in their capacity to sell products on their own, but is also linked to an even older habit: bartering. In the Americas today, exchange underlies a lot of business and it is a new trend that is enjoying success in transactions for durable goods, cars and consumer electronics. UK newspaper, The Guardian and the New York Times have both commented on the fact that the resale value in the USA is also a defining factor when buying in markets such as jewellery and luxury apparel.

Exchange gives consumers the feeling they are buying… by selling. Companies like Palm, Nokia, Epson, Apple and even governments in Latin America have used this strategy to attract new clients in times of crisis.

In countries like Argentina, Brazil, Chile and Mexico, the trend reveals itself in the so-called “exchange plan” (plan canje), a method through which consumers give away their old products in exchange for a coupon that is worth money, and that can be used to purchase new products and services. Some examples were applied by PalmStore, one of the largest hands-free distributors in Argentina, which paid up to 30% of the value of new products when the client traded in their old model. Printer manufacturer Epson also hands out virtual money to its clients who buy a new model by “selling” their old one.

CarOne, a company that sells new and used cars, pays the value of the used car in cash when the client wants to buy a new one. Such strategies have proved amazingly successful, in part because they give consumers virtual checks with money instead of a simple bonus. This makes the client “feel” they are “selling something”.

The thin line between expense and investment: Toyota case study

Even at the time of purchase, sellsumers are thinking about selling. Which is why the so-called “resale value” is acquiring more importance in more and more markets. Up until a few years ago, only the real estate market took the future price of its properties into account. Now, the car, jewellery and premium apparel industries are also doing so. One of the first brands to understand this was the Japanese Toyota Motor Co, which nowadays makes the “resale value” one of most broadcasted marketing tactics in the Americas.

Toyota seeks to strengthen the brand's image through an efficient technical service that elevates the resale value; that is to say, the price consumers will receive when they sell their car in the future. Because of that, the latest advertising campaigns launched in the United States, Brazil and Argentina include ideas like “only you know what your car will be worth in the next few years”. A study by Dichter & Neira commissioned by the Japanese multinational revealed that the resale value was “named spontaneously as an important aspect to have in mind when buying” and that “Toyota was mentioned by 44% of the users and 100% of the car salesmen as the brand with the most resale value”.

The trend also includes other manufacturers like Nissan and Honda, and fuels the purchase of hybrid cars, especially in the USA, according to various articles by the Kelley Blue Book, one of the most trusted resources on prices, values and car reviews in the USA.

Some entrepreneurs are DIYers

The Mexican “tequila effect” in 1994 and the Argentine “tango effect” in 2002 were the most important economic collapses in Latin America in the last few years, and in these, like in many others, consumers turned to smaller ventures to survive. In the current crisis, many families have started to use the DIY concept as a way to a second or third income source. In countries like Mexico and Argentina, where unemployment and underemployment have increased, many consumers have become entrepreneurs through the DIY economy.

The trend has fuelled DIY and gardening markets, amongst others, due to the thousands of people that are turning to making and fixing things for themselves and others. DIY retailers like Home Depot, Easy and Sodimac, amongst others, encourage this buying trend in their stores with advertisements that attract these types of consumers. The Argentine newspaper La Nación, for instance, whose readership are people with average and high incomes, last June launched the “Soy Empresaria” (“I am an Entrepreneur”) series, guiding readers on cooking and building items that can be sold.

Selling yourself as a consumer is another route to sellsuming seen in the region. Companies like Latin Panel or Happy Spotting offer consumers gifts and even money if they reveal their buying habits and motivations.

Real retail value of DIY and gardening product sales in selected countries: 2003-2008

US$ million	2003	2004	2005	2006	2007	2008	% growth
Argentina	2,023	2,617	3,176	3,679	4,189	4,608	51.1
Brazil	13,154	13,938	14,745	15,571	16,883	18,196	6.4
Mexico	2,694	3,137	3,412	3,963	4,298	4,550	37.3

Source: Euromonitor International from trade sources/national statistics

Note: Data expressed in fixed 2008 exchange rate at current prices. Growth refers to period growth 2003-2008 at constant/real 2008 prices.

Outlook

The crisis has changed the mentality of many consumers who have put their love of spending on the back burner, and now think in terms of saving and earning money. Sellsumers are a part of this new world; the question remains if they are here to stay or if they will disappear when the economy returns to its expansion trail. There is no one and convincing scenario ahead, although some changes are expected to be permanent, particularly the consumer fondness for auction sites and DIY retail. It is expected that they will return in the future, but perhaps only to buy.

Countries and Consumers