Things have changed for Adam Lambert-Gorwyn. Child number three is on its way and his wife, formerly of the Czech Republic, has to return to her homeland to have the baby. After losing a position at a web audio and video conferencing company, he's now supporting his family with a self-funded home delivery gourmet coffee company and a web design service he dusted off and kick started again.

All of these changes are big in their own right, but what's changed most significantly is how Lambert-Gorwyn and his family of four, soon to be five, have changed what and how they buy.

"We don't buy anything but bare necessities and we're selling anything we don't absolutely need," he points out. "We stopped eating out and took a cooking class instead. I think all of the changes we've made in the last several months will be with us for the rest of our lives."

The times, they are a changing

Apparently Lambert-Gorwyn and his family aren't alone. It doesn't take much online searching to find articles related to how the downturn in the economy, coupled with awareness of climate change, has changed the buying habits of the consumptive public. A plethora of recent government reports and independent surveys indicate that for the first time in a couple of decades consumer savings has actually been steadily rising, and that people are willing to pay more for products that are "green." Meanwhile consumer spending, on the whole, continues to fall.

While that save-more-spend-less approach may bring a smile to the members of the Greatest Generation, with nearly 70% of the US gross domestic product resting firmly on the backs of the US consumer, sticking too close to the lifestyle of our grandparents could actually be screwing the economic recovery, ourselves and the neighbors next door. Not to mention, we may be missing a huge opportunity, as consumers, to get industry to bend to our will as they compete for our increasingly scarce dollars.

To give some insight into what this might mean at a dollar level, a March report compiled by Decision Economics, Inc., an economic and financial consulting firm, points out that "with the saving rate in January at 5%, another 3 percentage point increase would be a $300 billion drag on GDP this year." With billions of dollars being thrown around like feathers in a pillow fight, an additional $300 billion that doesn't end up in the GDP is not a good thing.

In terms of sustainability, this may be an opportunity to demand greener products - after all, with the exception of the American auto industry, if we stop buying something, industry will stop producing it. Conversely, if we start buying specific products - say, products free of toxins, produced with minimal impact by corporations who support their workers - they'll keep making them. Production follows the money, so now, more than ever, where you put your money matters.

There is a tendency to conclude that these changes in savings and spending habits can be blamed on the unemployed or the heads of the household - single or otherwise. Think again. The young'uns are feeling the economic pinch too, and making major spending and saving adjustments as a result of both economy and integrity.

In a survey of 14-34 year olds conducted by the Intelligence Group, a market research and consulting company, the so-called spoiled teens, entitled twenty-somethings, and anxiety ridden Gen Xers are all cutting back on what might have seemed like habitually engrained behavior -- eating out, buying clothes, entertainment, and drinking. They too are becoming more thrift conscious with 78% indicating that they are saving for the future rather than spending on what they want now.

Power To The People

This mixture of good news bad news has created a confusing, if not sometimes depressing, array of emotions in the psyche of the general public, forcing many to rethink a wide variety of buying and employment options. Looking down seems easier to do than looking up. But as someone once said, ‘if your only point of view is your feet, you're bound to bump into something that will hurt your head.' Douglas Rushkoff would say that a little such hurt is probably a long time coming.

Rushkoff, a noted author, lecturer, and member of the cyber punk movement, believes the answer is not a government economic bailout. From his perspective this will only perpetuate a lending based economy he believes hasn't worked since it was first instituted back in the Middle Ages. He thinks the World Bank, the IMF and other large lending institutions have done more harm than good and a new economic dynamic needs to take its place; one that puts the power back in the hands of the consumer.

"This doesn't necessarily mean the global economy has to go away-just that it be balanced by local activity," he explains. "Computers don't go away, and we don't lose our internet. We can still work in big groups making really complex stuff. We just do it differently."

See, Rushkoff is a big believer in the idea that we can keep this mess from getting worse by doing more to support our local economies. While he didn't coin the term localvore, he's certainly a proponent of it.

"Ask yourself, how do I stop subsidizing the things I don't like and start subsidizing the things I do like -- like your community," Rushkoff asks. "There is a virtual circle that exists - you help the local school and that gets you to keep kids from getting into trouble. You help the local businesses, you keep unemployment down."

Rushkoff adds that you also keep big business and big banks from gaining more power than they already and unnecessarily have.

When a local restaurant in Rushkoff's community was about to lose a loan that would have allowed it to remain in business, he convinced the owner to let the community invest in the restaurant instead. "For every dollar given to the owner, you got a $1.20 worth of food," Rushkoff explains. "He got money for less than what he would have gotten from a big bank, his employees kept their jobs, and the community kept one of its businesses alive."

Back in March, several news outlets ran reports about an Iranian ethnic restaurant in Hamburg, Germany that took a cue from the band Radiohead and let their patrons pay what they thought their meal was worth. While the majority of their customers paid slightly less per item than what the restaurant owner would have charged, he made up the difference with the increase in business. Apparently, the "pay whatever you want" concept is now hitting hair salons, cinemas and even hotels in various parts of Germany. Recently the Java Street Café in Kettering , Ohio began doing the same thing.

This is what innovation at a business and community level starts looking like in a constricted environment. Such innovation is exactly what Daniel Pink, author of A Whole New Mind: Why Right Brainers Will Rule the Future thinks businesses are going to have to consider on their own, and consumers are going to have to demand, if there's going to be any kind of brand loyalty in a world that may remain a buyer's/consumer's market for some time. In other words, we're moving from decades of "let the buyer beware" to a future where "businesses beware --consumers have a new attitude."

"When consumers are strapped for cash and credit, they're unlikely to open their wallets for small, incremental advances in products, services, and experiences. They'll want something big and bold -- genuine breakthroughs," Pink explains. "Incremental improvements won't do. And while competing on price is tempting in the short run, it's a downward death spiral in the long term. The bar has been raised: Innovate big or don't bother."

Break On Through To The Other Side

What about the idea of including consumers in the innovation process? If the bar has been raised above price-point, even in a down economy, what exactly are consumers looking for? And as we become more particular about what we buy and who we buy from, will companies of all sizes seek more input from consumers beyond asking them what we're willing to pay? Pink thinks the answer is that companies will have no choice but to get better at soliciting and using customer feedback.

"Companies are beginning to understand that the people who are smartest about and most engaged in their offerings might not be their employees; they might be their customers," Pink says. "The more they listen, the faster companies will innovate - and the better products and services their customers will enjoy."

In other words, the future of what gets made and how much it might cost is now, more than ever, in the hands of the consumer, and that's showing up in environmentally friendly spades with the heightened importance of the "green and socially responsible movement." A recent study released by the research firm Forrester, indicates that a significant number of consumers also now take into account how a company treats the environment and its employees before making a purchasing decision - even now when making those choices may cost a bit more.

That Forrester report issued in March 2009, "Making the Case for Environmentally and Socially Responsible Consumer Products," authored by Sally Cohen, points out that nearly two-thirds of consumers say that a company's socially responsible practices influence their purchase decisions. Donations to charities, Fair Trade practices and how a company treats its own employees are included in that overall concept of social responsibility.

The same report also indicates that a significant portion (18%) of consumers are willing to pay more for products and services that demonstrate an ethical approach to business. That's 40.2 million adults in the US who are willing to fork over more money if they believe the company is doing the right thing.
A related study released earlier this year conducted by Green Seal, an environmental non-profit group, and EnviroMedia Social Marketing found that four out of five adults in the US are still buying green products, despite the fact that they sometimes cost more.

What these two studies indicate is that millions of consumers are no longer buying the previously held belief that they are at the mercy of big corporations. They are uniformly saying with one big voice, "If you're operating in a way that is harmful to the environment, your employees and the community, we're going to think twice before we buy what you're selling. And, oh by the way, give us a say in the products you're creating because we're not going to buy just anything."

Given that consumer dollars are harder to get, and companies - now more than ever - will have to meet the demands of consumers to get them to spend those dollars, that gives each of us more power than we've ever had at any time in history. We now have the ability to use purchasing power to drive a company's practices relative to its products, its people and its overall operations.

(Ch Ch Ch Ch) Changes

If anyone doubts this is possible, take a look at some of the products that have succeeded recently as a result of consumer demand:
• Energy efficient cars, low flow toilets, Energy Star certified appliances
• Lead free toys, greener cleaners, water bottles (that are fashionable & functional)
• Ethically produced apparel and food
• Organically grown foods found at Whole Foods and even Safeway
• Rechargeable rather than disposable batteries

The power to shift industry - and with it economies, climate change and human welfare - has now fallen squarely into the lap of everyone who spends a dime on anything in this country today. The companies that get this right have an opportunity to become more personal "brands," those that we choose to define us because their actions take on as much if not more importance than what they are selling. Since we're judged by the company we keep, associating with a bad "brand" will become this century's version of a scarlet letter.

Tell Me Something Good

There's one more important concept in all of this that both Pink and Rushkoff say has been lost on companies and consumers alike. Anybody selling a product is also selling a narrative of where that product is derived from, how it came into being, and how it is sold. Rushkoff explains that the Industrial Age led to the disappearance of that connection to the products we buy and the people who make them, and, consequently, the story related to them has been lost as well.

As Pink points out, "Creating that narrative can be a great way to differentiate one's offering in a crowded marketplace -- and it can be an effective way to appeal to consumers who have a bursting cornucopia of choices."

Earlier in March, US News & World Report (March 17, 2009) contained a piece that pointed out ten industries that were actually growing during this economic down turn - making things we were still spending money on. That list included: home gardening, Hollywood, romance novels, condom makers, resume editing services, public universities, chocolate, McDonalds, career development websites, and at-home coffee brewers.

Which brings us back to Adam Lambert-Gorwyn, who may very well be the embodiment of innovation, localvore and the new consumer empowerment. His gourmet coffee company, Emergency Coffee, buys Fair Trade, organic, shade grown beans purchased from US wholesalers. He's developed fundraising programs with his coffee to benefit local high schools. Their art departments develop all of the custom packaging. Rather than stop spending all together, impossible for even a diehard survivalist, he and his family have decided "it's okay to spend; we just need to be smarter and more proactive about how we go about it."

Words we, as consumers, can all live by.