Overconsumption Learn how to correctly analyse this topic.
11 min Read Time | September 5th 2022
Overconsumption is a considerable problem that affects multiple areas outside of environmental impacts, causing dissatisfaction and financial burdens.
Overconsumption exists in many different industries, but some are core drivers. The specific ways in which industries promote overconsumption need to be examined thoroughly to determine how culpable the company is.
Any incentives for customers to buy more than they need constitutes promoting overconsumption, including the make of the products themselves, the advertising, discounts, etc.
What is it?
Overconsumption describes the consumption of resources at a faster rate than the system's capacity to sustainably renew itself. This leads to the depletion of natural resources and damages incurred from attempts to push production to meet demand.
Excessive consumption in wealthy countries is the strongest factor in increasing social and environmental problems. It worsens climate breakdown, increases pollution, and depletes natural resources and materials crucial to human health. Approximately a quarter of all emissions come from the manufacturing of goods.
Consumption has grown much faster than technology to mitigate the impact on the climate.
Overconsumption is also detrimental to consumers, relying on the promise of instant gratification to encourage impulse buying, which is unplanned and reckless purchasing.
Impulse buying uses around $5,400 per year in western households, making up 30-50% of all purchases.
The fashion industry is one of the worst for promoting overconsumption. Every year millions of tonnes of clothing are made, worn, and discarded. Every second, approximately a truckload of clothing material is incinerated or landfilled. The problem is getting worse; global clothing consumption has doubled over the past years due to the time clothes are used before being thrown out halving. Many items are only worn 7-10 times before being thrown away.
Fast-fashion companies are making large profits from this large-scale consumption, encouraging this through their business practices. They are making cheap, fast-produced clothing of lower quality and therefore has less longevity, meaning the customer will soon get rid and buy again. Further, they accelerate trend cycles, wherein clothes become “out-of-style,” pushing consumers to constantly buy new clothes and accessories to keep up with the current trends.
Adverts promote products or services to be consumed by the customer, this is a large part of overconsumption. Global advertising spending reached $683 billion in 2021 and is forecasted to continue increasing significantly. Companies spend large amounts of money on advertising, encouraging repetitive consumption, increased visits to the shop, and impulse buying. Some of the big spenders are the same ones benefitting the most from overconsumption.
Advertisers manipulate consumers to purchase more by tapping into emotions like fear, desire to fit in, passing off products as new and inventive, and leaning on people's aspirations.
Consumers are exposed to increasing pressure to buy excessively. Advertising firms are now employing many new strategies that greatly affect overconsumption. Data collection allows for extremely targeted advertising, wherein people are selected based on their likelihood to buy, looking at their interests and priorities, and even manipulating their vision of themselves.
Influencer advertising is also on the rise - a form of advertising that uses endorsements from well-known influencers to push their followers and circle to buy a product. This is extremely effective, as 90% of people are more likely to trust a recommended brand. In 2021, around $3.7 billion were forecast to be spent on influencer marketing in the United States, an increase of 33% from the previous year.
General Impact assessment
The introduction is crucial for providing the reader context for the rest of the text. It should first establish what overconsumption is and why it is detrimental regarding social impacts.
Following this, more specific details can help contextualise the upcoming information.
Look at the company's industry, the degree to which it promotes overconsumption and the ways in which they achieve this.
For advertising companies, it may be important to look at which industries are overall the biggest drivers of overconsumption, as this can help determine the true impact of their advertising.
The core of the note should introduce the company and provide the following information:
What the company sells and how much of it they sell - these should be generalised figures of the reach of their products.
Their turnover rate (the rate at which they empty their stocks completely) should be compared to the average for the industry.
Whether their products are built to wear down quickly, prompting the customers to buy again.
Whether their products are designed to be addictive, keeping people buying afresh.
If they are guilty of accelerating trend cycles, making clothes and accessories become "unfashionable" within short periods of time.
Whether they promote overconsumption via excessive advertising and/or deals - for instance, making it cheaper to bulk buy products that people likely don't need so many of, limited-time offers (prompting people to make hasty purchases), etc.
Loyalty programs, offering rewards for greater purchases, and so on.
If possible, the frequency with which customers return to the same store.
For this industry, the analysis aims to be the flip side of the Core Business Impact analysis. The business model entirely relies on people consuming products and services regardless of their needs.
The core analysis should include:
The main industries for which the company runs their adverts, looking at whether their major clients are those most responsible for overconsumption.
The reach of their adverts, i.e., how many people see them.
The quantitative effect they have - how much they increased in sales.
This can be demonstrated through examples of advertisements the company ran for its clients that led to increased sales, brand recognition, brand loyalty, etc.
Whether they employ "tricks" to push people into excessive purchasing - making it seem like a necessity rather than a luxury, etc.
How much they rely on some of the schemes such as influencer advertising and targeted adverts.
The platforms on which they run these ads, and whether they are designed in such a way to captivate the audience (using primarily social media for products aimed at younger people, for example).
Metrics that can be included to substantiate how advertisement and marketing companies' business models enable the unending cycle of consumerism:
- Increased sales for clients
- The brand recognition of clients
- Strategies (targeted advertisements, deals/offers, etc.)
- Mediums (out of home, audio & visual - TV, Radio, Cinema, Video on Demand, Social Media, etc.)
- Number of ads
- Number of clients
Make sure to describe the scale of the impact by taking into account:
6.1 The breadth of the impact
Is the impact local, national, or global?
How many people are concerned? Thousands? Hundreds of thousands?
6.2 The depth of the impact
Is the life of people concerned deeply affected, or does the issue just marginally impact them?
Are the changes brought by the issue profoundly changing society or the planet?
6.2 The persistence of the impact
How long would the impact described last for? Months? Years? Decades?
How reversible is the impact described in the impact analysis? Can it be easily stopped/extended?
Zara’s fast-fashion model induces a dissatisfaction (‘’see now-buy now’’) behavior to ~11M consumers
With total ad spend of $694 Bn in 2021, Publicis advertisement strategies promotes overconsumption
Chow Tai Fook launches a new product every day encouraging overconsumption & unnecessary spending
GAP promotes overconsumption with different price discount strategies and loyalty program
Hakuhodo encourages compulsive buying through its marketing strategies
Spread the word about Impaakt
Based on the article you've just read, here are some more we think you'd be interested in.
Let’s take action together
With the right investment companies having a positive impact on the planet are able to flourish. Our community forms part of that mission by measuring their impact.