John Gerzema Fridays with Vistage Webinar Summary: How the Post Crisis Values Revolution is Changing the Way We Buy, Sell, and Live
There are five shifting values and consumer behaviors currently remaking America and the world. What are they and what do they mean to you as a business leader? In last week’s Fridays With Vistage webinar, John Gerzema gave us the answers. John is the Chief Insights Officer at marketing giant Young & Rubicam, and oversees Brand Asset Valuator ®, which is the world’s largest database of brands. 50,000 brands in 51 countries and 1.2 million people were studied to build John’s #1 marketing research bestseller, SpendShift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell, and Live.
Gerzema began by explaining the shift in consumption from mindless to mindful. He explained that people are now “voting” their values through consumerism. They are choosing to buy from companies that build trust and integrity, and focus on transparency and community. This is because, around the world, people have lost faith in institutions and leadership. 86% of people surveyed agreed that there is too much power in the hands of large institutions and corporations. 76% of people disagree with the statement “My country cares about its citizens more than it used to.”
This “macropessimism” translates economically into the fact that the number of trustworthy brands has been cut by 50% since the global financial crisis five years ago. Today, on average, people trust only one in four brands. From this we see that trust is moving in the marketplace like a commodity; when something is scarce, the value goes up. People have far less money to spend nowadays and far more opportunities to use their voice to vote their beliefs. Therefore, marketers must now focus on aligning with customers before selling to them.
Technology has become part of culture at the same time power has shifted to people. Not only that, but the mobile revolution amplifies connectivity and control. Computers aren’t the only things connected to the internet anymore. Now there are iPads, SmartPhones, Kindles, Tablets, games and more. It is projected that, in the near future, objects and even living things will be connected to the internet (in the form of microchips embedded in the skins of farm animals or pets). Marketers have to pay close attention to this rampant connectivity because soon all actions are going to be magnified beyond our imagination in a very brief period of time.
The five trends that are driving these shifts are:
- The Army of Davids—The power of the open, sharing, collaborative economy has allowed people to come together and do great things. For example, the new constitutional government in Iceland recently used social media to crowdsource the first constitution of a sovereign nation.
- Prosumer Nation—This refers to the blurring of public and private collaboration, the blurring of IT and the C-Suite, and the professional and amateur lifestyle. Emily Bolton co-founded Social Finance in Britain, which rewards private investors if government costs are lowered. This model was applied to the prison system. Private investors got involved in helping prisoners re-integrate into society by establishing job training programs. Government costs were lowered, prisoners benefited, and the private investors profited.
- A Market of One—This is the fragmentation of the mass market down to the individual customer level. It is driven by emotion, empathy, flexibility and a fierce focus on the individualism of customers. At Grannies, Inc., customers can order custom-made, hand-knitted scarves and hats online (they can even choose their own granny!) Many of the grannies have developed individual relationships with their customers beyond the product, helping this company become the darling of millenials in Britain.
- Better.me—This is the desire people have for feedback loops, sources of encouragement, and the belief that marketing can actually help them get better. For example, Shai Reshef of Tel Aviv founded The University of the People, an online university which is completely free to students. 80% of his students are in the bottom 20% of the GDP producing countries in the world. 2,500 volunteer professors from Harvard, MIT, Cambridge, Stanford and others help these kids get a free education. One of the students who studied from a tent in Haiti was just accepted to business school at NYU.
- E-Bricks and Mortar—This is the rise of the mobile, social shopping experience and the way it translates into better customer experience at retail. A great example is Tesco Homeplus- a virtual store that originated in subway stations. Customers hold their cell phones up to scan the QR code of a product, which then lands in an online cart. When the online purchase is done, the product is delivered to the customer’s door right after they get home.
All of these trends imply that we are entering a new megamarket, which John calls, “The Race to Routines”. The brands that have earned our trust and captured our attention in terms of the way we buy- or earned our routines- are the brands that we’re going to rely on in the future. For more information on John Gerzema and his social theories, please visit his website www.johngerzema.com or see him on Twitter @johngerzema.