Circular Economy Circular Economy

Brands:
Time to Address the Growth vs Happiness Conundrum

Materialism is making us miserable. That’s the unavoidable conclusion from decades of research into the links between consumption and wellbeing. Buying stuff just doesn’t make life feel any better. Advertising paints a picture of what we don’t have and fuels frustration and insecurity. What does this mean for businesses that aspire to grow? How can brands improve their impacts on the world whilst also selling us more?

By Richard Hardyment | Published 6 years ago | About a 6 minute read

The science of happiness has advanced at breakneck speed in recent years. Scientists have worked out, quite conclusively, which actions (by governments, businesses, brands and citizens) do most to improve — and erode — how we feel about life. Academics talk about subjective wellbeing. This is more than just passing moods; wellbeing is made up of short-term emotions (such as joy or anger), as well as deeper measures of what’s called life satisfaction. This refers to the degree to which we feel that life is rounded, fulfilling and has meaning. It’s typically measured by asking people to rate their “life as a whole” on a scale from 0 to 10.

If you are a booming brand that’s selling more and more stuff, the conclusions make for some unhappy reading. Buying more things — whether gadgets, food, vehicles or housing — is not significantly associated with increased wellbeing. Impulse buying is particularly bad for happiness.

Brands are in the court of public opinion. They are accused of selling us things that we neither need nor truly want — and failing to make life feel substantively better. Canny marketing appears to fuel pointless consumption. According to some critics, such as the writer Oliver James, materialism has become a disease, an “affluenza.” It is a false promise. Brands use their advertising to claim that buying products will make us happier, healthier, even better-looking — but these expectations are never met.

Psychologists call this the hedonic treadmill. It’s hedonic because, as individuals, we want the bigger car or next version of the smartphone; a treadmill because, as we become aware of better choices and then experience that product, we quickly adapt. Our happiness reverts to its prior state; consumption efforts are futile.

The sacred cow of capitalism

The sacred cow of capitalism is growth. As a society, we are told we must create, sell and consume more and more in order to continue the steady march of progress. This is the reason why there is so much focus on quarterly finances. In many businesses, alarm bells go off (and heads sometimes roll) when fewer units are shifted in one quarter than the previous one.

Our entire economic system is built on this growth obsession — yet it appears to be failing to raise quality of life. Environmentalists, of course, have challenged this premise for a long time. Organisations such as WWF have produced clear evidence that we cannot go on consuming at our current rate and leave the planet in a sustainable state.

The science of wellbeing casts a new light on this topic. It forces us to challenge the assumption that greater happiness will come from the next unit sold, the next product consumed. The truth is that many of the things sold on a daily basis won’t increase the sum of human happiness. Essential purchases of soap, toothpaste, healthy foods or medicines may be the exception. Good health is closely correlated with higher, long-term wellbeing. But for all other brands, what benefit does consumption bring?

This is a tough challenge for business. Brands that are serious about their impacts on the world need to wake up to the science. We simply cannot afford to ignore the challenge of consumption. Yet companies are expected to grow. Shareholders expect a return. How can we overcome this conundrum?

Experiences boost wellbeing

There is one type of sale that is scientifically proven to raise happiness time and again. Purchases made “to do” are much better for wellbeing than those made “to have.” Buying experiences — or products that create an experience — brings higher levels of satisfaction because they immerse the consumer.

Think about when you read a book, listen to music, enjoy a meal with friends or travel somewhere amazing. You’re focused on enjoying the experience, the “flow,” and also creating memories that last. Recollecting experiences creates particular value. Experiential products are often shared with others. By playing a part in strengthening relationships, brands can further improve wellbeing.

The best experiences for happiness are those that we never fully adapt to and never take for granted. Spending money on leisure is one of the few purchases that research suggests does raise happiness.

By shifting the business model from products to services, purpose-driven brands can improve their ‘wellbeing footprint.’ Businesses can grow revenues and increase profits through selling experiences, not more stuff. This approach will have environmental as well as wellbeing benefits. It’s rarely the products that affect our happiness; it’s what we do with them that counts.

The reason business should care about all of this is because wellbeing is a massive commercial opportunity. Across the value chain, there are countless opportunities for business to affect how we feel about life. Disengaged employees cost US firms an astonishing $500 billion every year in lost productivity. Boosting happiness not just for staff, but right across the supply and distribution networks, can save money and increase outputs.

Wellbeing can drive an affinity with a brand through customer loyalty and improved reputation. Business is ultimately about generating a return for shareholders through creating value for customers. A better understanding of what really creates human value — a sustained, positive, emotional response — must make brands more successful. Estimating how products and services improve life for those buying and using them can spur wealth creation.

The new science of happiness raises profound questions about what we are placing value on as a society. Business plays a massive part in this, shaping culture through employment practices, product innovation and advertising. The marketing community must now apply its expertise to measuring how brands affect life. This isn’t about short-lived straplines to a jolly campaign — it’s about the substantive effects of business on life. The opportunity is there for forward-thinking brands to apply the science, and step up to improve life.

Richard Hardyment’s The Wellbeing Purpose: How Companies Can Make Life Better — published by Routledge on 6 September 2018 — is the start of a movement to inspire all businesses to measure and improve their impacts on life.