In recent decades, consumers in the United States and other developed nations have not simply consumed, but over-consumed.  From houses to automobiles to electronic gadgets, the trend was always to move up to increasingly more expensive purchases and to leverage that activity by the use of credit — most recently enabled by rising home values. 

With the present economic crisis, however, a change has come, and we should not expect the future to look much like the past.  As spelled out in a recent report from Citigroup Capital Markets titled Global Consumerism at the Crossroads,¹ consumers in North America, the European Union, Japan, Australia, and New Zealand are no longer consuming the way they had been since the ‘90s.  With respect to consumers in the developed world, the report offers four major takeaways: 

• First, consumers are moving away from conspicuous consumption. 
• Second, when they spend today, Western consumers are seeking out experiences more than possessions. 
• Third, they are avoiding debt and saving more than they have in many decades.
• Fourth, they are lured by quality propositions rather than mere quantity. 

As we’ve explained before — and as BusinessWeek² recently confirmed — many American consumers are de-leveraging by paying down debt, while others are getting substantial balances written off, either through negotiation or bankruptcy.  In February 2009, the U.S. saw the largest drop in consumer credit since 1972, on an annualized basis, as balances on credit cards plummeted by $7.4 billion.  This suggests a structural shift in the economy — one where consumers not only pay down revolving debt, but weed out frivolous consumption.  Reduced credit card limits by banks have reinforced that trend.

Part of this change may be driven by the fact that consumers are now coming to grips with the so-called “aspiration gap.”  The Citigroup report argues that as the income gap between the rich and the not-so-rich has widened, so has the difference between the lifestyles to which people have aspired and those they could afford.  The recession has now forced many people to reassess their aspirations and become...