October 15, 2012, CEA Industry Forum, San Francisco—John Gerzema from Brand Asset Consulting talked about changes in values in consumer space since the great recession, and how these changes affect the way we buy, sell, and live.
Through studies crossing brands, values, and behaviors, we are saying significant changes in consumer behavior. Consumers are now choosing companies with similar values like respect, trust, and community. This trend is growing throughout the world, as consumers, who represent 70 percent of world gross domestic product, lower their expectations about companies.
Now, people are looking for companies that are socially responsible, as exhibited in areas like kindness and empathy. Four times as many consumers expect the companies they deal with to have similar values to themselves as not. Fewer companies are earning consumers' trust and only one quarter of the brands are getting greater trust than before. This reduction in trust is occurring across all sectors and is hastened as technology becomes part of our culture.
Mobility amplifies our ability to connect to control things. Over time, computers have improved by significant amounts, and the increasing levels of integration and connectivity are driving society and culture towards more social online functions. These social networks are growing in trust as participation and interaction with peers increases. These changes in attitudes greatly affect customer centers and levels of feedback.
As a result, her five trends occurring in various industries. First, soft is strong. Empathy, resilience, and respect are growing stronger within the information structure. The percentage of brands that deliver products and services is dropping as empathy is driving changes. The slow selling, nurturing a customer and helping with suggestions rather than pushing products, increases the value of interaction.
Second, skill building is becoming more important. The company is are looking at retooling, education, and betterment to improve the customer's sense of esteem. In the Internet age, 68 percent of US residents have a library card. In many areas, people were taking greater personal accountability. This increase in self-reliance and resourcefulness drives companies to offer more opt in rewards.
Third, nimbleness, adaptability, and thrift lose their option values as credit moves towards a debtless society. The drivers are of the millennials and seniors are shifting their spending habits. Two thirds of these people are happier with a simpler lifestyle, and afluence becomes influence. New markets like time banks enable new business models and most economies are seeing more sharing. We're seeing a state of temporary luxury, like renting art rather than buying it. As a result, dynamic pricing allows companies to address these new consumption habits.
Fourth, is the block party capability. This is the movement towards local everything and encourages consumers to be more “green”. Again, two thirds of people are willing to pay a premium for product or technology to help local people, and make connections in new ways. And finally, communications and connectivity are making everything more social. This increase in social characteristics enables a values-led marketplace.
Therefore, companies need to align their marketing and retail strategies. Mobile aptitudes increase with smart phones and the many acts available. People can now check their account balances, pay bills, and do many other financial transactions without ever going near a bank. Interest and excitement occur in markets that are not just related to the phone plus some social media function, so were seeing changes driven by the millennial generation that is changing the horizon of social utility. These people are comfortable sharing products and technology with everyone.
Generally, people have different comfort levels with different technologies. A person might be willing to spend up to $25 on a phone transaction, up to $100 on a tablet, and significantly more on a PC. These numbers may be the result of the proportional lack of marketing in the mobile market, especially compared to the amount of time people use mobile devices.
On top of this, there are issues about brand strength and company stature. Those companies with strong customer centric view can break out of from the rest of the market. Some of these are CNet, Apple, Zappos, etc. The off-line areas of retail are more developed especially when experience and service are at the core of their business. There is a big drive to improve customer experience, but the online world is still in its infancy.
Successful companies will find a way to bridge these experiences. Online buyers are adventurous, comparative, and look for endless possibilities, compared to off-line buyers are more leisurely, looking for tangible objects, more indulgent, and have set expectations. The world is now moving very rapidly to a post cash and credit card consumer economy.
Over one third of people surveyed are carrying less than $20 in cash with them and 70 percent have less than $50. Amazon and Wal-Mart have higher valuations than Bank of America. We are looking for brands that we trust. People are becoming a market of one because they want to own greater parts of their own lives. Third parties handle more money than the banks.
Despite statements to the contrary, more things are being manufactured in the US since the recession. This may be attributed to move back to quality, and to local sourcing. Retailers both on- and off-line are trying to develop similar user interfaces and provide better user experiences, but both need realignment to specific issues in the areas.