Making sens of these turbulent times

Research Note: On Selling Out (The So-Called Fansumer) by Umair Haque

Quote from Umair Haque’s Research Note: On Selling Out (The So-Called Fansumer), posted on november 2007:

“The word consumer is nasty enough - with all the implications of helplessness and the assumption of stupidity it carries.

Fansumer, I think, is even worse - as this commenter points out.

It utterly - and completely - misses the point of connected consumption.

Consumers connect with each other - not with brands.

Which brings us to a set of deeper issues. There are foundational problems with the concepts execs are using to make sense of the next mediaconomy.

Here’s what happens when we think about “engagement”: we think consumers want to be fansumers, on the assumption that they wanna connect with brands. Here’s what happens when we think about “relevance”: we bombard consumers with ads on the assumption that it will be good for them.

Neither is true. There is, as I’ve pointed out before, an existence proof confirming this: if consumers loved brands, no one would have to advertise. If consumers loved ads, firms wouldn’t have to pay for them. If consumers trusted firms, brands wouldn’t exist.

What do those simple economic truths tell us?

There are no fansumers. There are people who love products. But very rarely will they want to be pimped out and put to work on Facebook’s (or anyone else’s) digital streetcorner.

And those who want to - well, those are exactly the guys you don’t want talking about you and your brands: classic adverse selection”.

Consumers connect with each other - not with brands

If consumers trusted firms, brands wouldn’t exist

(The hypothetical Fansumers) are exactly the guys you don’t want talking about you and your brands: classic adverse selection

Via Taylor Davidson.

Unmarketing And The Webful Brand by Stowe Boyd

“When people retreat from mass belonging to social belonging, their motivations are less oriented toward self-identity based on affiliation with mass markers in mass markets. They shift toward social identity, where its most important that those that ‘know me’ in my social networks ‘know me’ based on what I am doing, what I care about, what I am trying to accomplish, and who I affiliate with in those efforts.

In this world, a company’s name or product marks can’t be just an industrial warranty, or a feather in your hair. For brands to be social, they have to seem more like people and less like a corporate artifact. Specifically, real people will have to front for the brand or company, and they — and their actions — will define the relevance and influence of that product line or company. Like tags, the company or product will become defined by what it is associated with, and those that are involved in the activities that they are linked to.

So those companies that work to understand this tectonic shift — from mass markets to social unmarkets — will rethink their marketing, and after that headshift will approach their interaction with Edglings very, very differently.

I call this webfulness, based loosely on the idea of mindfulness”.

It seems that consumers evolve faster than "big guns" executives....

So we know that the web has dramatically affected the way communication must operate and crate new (old?) values for consumers (who are no longeur passive zombies, but rather “creative” prosumers)

We know that to some degrees, dumb consumption confiscated part of the libido (life intinct), at the expense of creative, life-producing drives.

We know that new media, social capital, social media etc. help to recover this creative part.

What we don’t kow is the time it will take to see change become mainstream.

An article in the FT, “New’ US shopper to emerge from crisis”, may help and give some hope ;-)

A Citigroup report, for example, argues that US consumers are shifting towards “conscientious consumption”, embracing a “thriftiness” focused on value and quality, not quantity.

Euro RSCG, the global advertising group, says a recent survey of 500 people in the US, the UK and France pointed to a shift to “value” combined with a desire for “voluntary simplicity”. And consumer anthropologists suggest Americans will seek to “un-stuff” their lives, and focus more on the community.

Andrew Benett, of Euro RSCG Worldwide, says the changes are likely to be long-lasting. “I don’t think we are going to go back to the behaviours of the past, which were about excess and not thinking things through…we have moved on as consumers.”

(…)

The behavioural changes have included cutting back on “aspirational” luxury shopping. People are using cash and debit cards more than credit, while favouring lower-cost stores such as Wal-Mart and Costco. At supermarkets, well-known national brands have lost ground to retailers’ lower-cost own-brand products.

Joan Lewis, head of consumer and market research at Procter & Gamble, the world’s largest consumer products company, says there is a remarkable consistency in these shifts, in both developed and developing markets. “We think that many of these changes we have seen will remain for a long time,” she says.

(…)

Ed Kerschner, chief investment strategist at Citi Global Wealth Management, says the US has passed an “inflection” point, marking the end of an acceptance of conspicuous consumption that he traces back to the Reagan presidency of the early 1980s. The end of easy access to consumer credit will, he argues, lead to “thriftiness” focused on “value”, rather than “frugality” focused on low prices.

It seems that consumers evolve faster than “big guns” executives….

Sustainability and Luxury

A not very interesting article on a subject though very interesting, at Havas Media Lab’s blog today.

Nevertheless, something deserves to be highlighted.

Kavita Maharaj, back from the IHT’s “Sustainable Luxury” conference held at New Delhi on March 24th and 25th 2009, explains.

“In addition to high levels of engagement with traditional luxury brand drivers like heritage and quality, consumers in emerging markets are increasingly showing extremely high levels of engagement with other issues, for example, the area of sustainability. Retailers that move quickly to capitalise on this, will be more adept at building greater brand equity and thus greater commercial succcess, both in the medium and long term”.

Ok, it’s not a scoop. But around one year ago, i read this article by Dana Thomas (author of “Deluxe: How Luxury Lost Its Luster”), in The New York Times.

“For more than a century, the luxury fashion business was made up of small family companies that produced beautiful items of the finest materials. It was a niche business for a niche clientele. But in the late 1980s, business tycoons began to buy up these companies and turn them into billion-dollar global brands producing millions of logo-covered items for the middle market. The executives labeled this rollout the “democratization” of luxury, which is now a $157-billion-a-year industry.

To help these newly titanic brands retain an air of old-world luxury, marketing executives played up the companies’ heritage and claimed that the items were still made in Europe by hand — like Geppetto hammering in his workshop by candlelight. But this sort of labor is wildly expensive, the executives routinely explain, which is why the retail prices for luxury goods keep going up and up.

In fact, many luxury-brand items today are made on assembly lines in developing nations, where labor is vastly cheaper. I saw this firsthand when I visited a leather-goods factory in China, where women 18 to 26 years old earn $120 a month sewing and gluing together luxury-brand leather handbags, knapsacks, wallets and toiletry cases. One bag I watched them put together — for a brand whose owners insist is manufactured only in Italy — cost $120 apiece to produce. That evening, I saw the same bag at a Hong Kong department store with a price tag of $1,200 — a typical markup”.

It would be very cool if some luxury brands could be a little bit more coherent (fortunately some does).

By the way, if you want good thoughts on this topic, visit the excellent John Grant’s blog, Green Normal.