Brands, Marketing & Trends, Inc.
February 4, 2011 3 Comments
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Plan Online, Do It Offline
Society is changing – and the evolution of the Internet in recent years is causing unprecedented changes in consumption patterns. Virtual world is getting bigger.
Until very recently, people rely on cafes to conspire and explore tomorrow’s trends or, in an often isolated act, used napkins from restaurants to record ideas born in a spark of creativity. In deciding a purchase, we had to go to a friend’s house to ask for advice, a few trips to the stores, read magazines or newspapers, have ears ready to catch the last word-of-mouth, be attentive to whatever was advertised. We had no central decision-making – we had several: scattered geographically and conceptually. With popularization of the Internet, the centres of decision merged into one: a huge online headquarters.
Today we plan online and do it offline. Internet provides all the information in a single point, and only ceases to be used when a physical demand overtakes it. Internet is the base camp where organization is built, and decisions are taken. Offline world exodus is just at his beginning…
Private Label Brands
The private label brands are now an inescapable reality in many markets, gaining share year after year. In the U.S., ¼ of the products sold in supermarkets are store brands (the most important segment of private labels). In Europe, the share of private labels is revealing (image and data: PLMA – Private Label Manufacturers Association). The private labels have long passed the “trial” stage; they’re now clearly in the phase of frequent purchase. And if you think that private label brands only became popular with the crisis, take note: for more than five years that its share is growing. This means a sustained growth before the crisis, the crisis has only accelerated the adoption of these brands. The private label brands are cheap and of lower quality? “Blind tests” conducted around the world show that private label brands of reference do not owe anything to national brands. And there are even premium private brands all over, so there’s no excuse.
But they will dominate the market even more. Social inequality, the rationalization of livelihood, the new law dictated by the current crisis (to be more restrained in our spending, taking everything to the fullest, both in our personal and businesses lives), the shortage of food worldwide and the empire of distribution companies will dictate its rules against national brands, costlier and less flexible. The private label brands will always have a huge advantage: they do not require flight routes (read distribution): they are already at airports. They’ve also little need for advertising.
If we raise the private label brands issue to a new level, we can say that in the future there will be (i) “manufacturers” brands (keeping low profile, but surviving), (ii) “distribution” brands (medium profile and stable) and (iii) reference national brands (high profile to sustain some market share). Private Label Brands have their own modus operandi: they steal more easily market share from brands with uncharacteristic image or with a less clear positioning. Then, I remove from the equation the “normal” national brands and reinforced reference national brands. And manufacturer’s brands will depend more on the distribution companies (being chosen by them to manufacture their products, which does not mean they are the benchmarks in the market …) than their own marketing. If this view is correct, and if the empire of the big retail chains grows, there is a risk that the remaining brands find themselves at a crossroads: either struggle to be manufacturers for distribution chains or they’ll be at their own risk. Ultimately, marketing as we know it can undergo a dramatic negative impact: only will remain the distribution channels and reference national brands to advertise their products or devise marketing strategies. However – and forgive the audacity of this preview – the world economy will be shaken if some very known brands enter the arena. Let me explain: what prevents global brands like Google, Facebook or Twitter to “borrow” their image to anonymous producers and dominate the market? The virtual world will tend increasingly to establish foundations in the offline world. Do not be surprised if one day you find in a supermarket shelf some Google Flakes, Facebook Deodorant, or unexpectedly, you look at the sky and see a plane of Air Twitter.
Rights, Piracy & Patents
We must say it: the more restrictive measures we create to control the Internet, the greater the forces to set it free. France opened hostilities in Europe with its anti-piracy measures, in order to protect copyrights. The results are little or nothing visible. On the one hand, it is known that piracy is behind incalculable damage to businesses and fade the effort to create; on the other, the means of defence against illegal downloads will never be enough against the forces of stratagems and sharing options. Patents themselves will also be a mirage: the number of people tempted to use technology patented by others will be vastly greater than the capacity of detection of irregularities and restoration of justice.
Taking into account how things are going, the business community should begin to adapt to an environment in which nothing can be protected. Create something and earn royalties for years, depriving others of their use seems fair, but not very practical. The new dynamic demands you to create something and sell it to the maximum while others do not copy it. If piracy against your idea increases, it means you already have another idea ready to launch in the pipeline to resume the cycle. In my idea, this could be called “Marketing Acceleration”.
Behavioral advertising. Genius (iTunes Store), monitoring a patient’s vital signs, which are sent via Internet to a virtual “hospital” (in order to anticipate serious health situations in the near future), augmented reality that responds to our preferences, Skis that monitor the movement of the body (to help perfecting the technique later). Apps that suggest recipes based on the contours of our face (do not believe? Find Kraft’s Assistant iFood on Google).
Software that checks the emotional tone of content in e-mail (see for yourself at http://www.tonecheck.com/) or monitoring projects such as the United Nations is carrying out, that explores the growing world of real-time data monitoring (http://www.psfk.com/future-of-real-time).
These are some examples that should be explored to exhaustion in the following years. The consumer / person is monitored in real time, so that there is a bilateral interaction with other people or companies – the latter will have sufficient means to anticipate the needs of individuals. This is not about needs, but rather proactive actions to respond to needs that still don’t exist … but they will.
Up to date, or die
Advertising, newspapers, encyclopaedias, technical books … everything that is perishable within 24 hours (in many contexts, less than that), at the level of information or communication, is outside. Just art (music, drama, painting, film, photography …) will have the privilege of timelessness.
Connected: all the time, everywhere
After being announced the departure of Eric Schmidt as CEO of Google, it is wise to remember his words: in the future we’ll all be connected, all the time, everywhere. I believe the future will bring some changes in consumption patterns, based on connectivity. One may be a rule: “fewer procedures.” Some time ago, to listen to music in the car was something like this:
Itunes at home> Recording a CD> listening to music from a CD in the car.
In a short time, the intermediate procedures will simply be unnecessary. It will be rather something like this: Itunes in the car.
“Less obvious” examples?
Now, a movie is filmed > It’s recorded on tape > is projected in a theatre.
Future: In the theatre, the projectionist turn on Internet and projects the movie via streaming
Now, you go to a museum > you pay at the ticket office to get an audio guide > you appreciate art and hear the explanations.
Future: you go to the museum, connect the headphones to your smartphone and, via GPS, unlock the audio guide system of the museum.
Now: Buy yourself a Lonely Planet Guide> Travel to a city> explore the city with the help of the Guide.
Future: just travel to a city> take up the Ipad from your suitcase and wi-fi city “download” automatically to the tablet all the information needed within a 500m radius around you (ps: and also notes with local low cost restaurants!)
The App Empire
Apple brought the “apps” (applications) to the agenda and made it a strategic advantage – now copied by many technology companies. What these Apps do is to enable the customisation of your digital world, while incorporating useful functions for your daily needs, whether personal or professional ones. It’s like building a house with blocks of different types in order to make it “yours.” This App idea, in my opinion, may shape the architecture of other areas, giving them new life and even a trendy air. The universities of the future could not rely on static programs and disciplines. Around the (few) core subjects, courses may have slots to fit blocks (read other disciplines) so that the student do something closer to what he wants to his future. These apps will surely be on e-learning mode.
Service companies have long been offering packages to their clients, in a way they can contract services like they prepare a “do it yourself pizza”. Companies that provide services and projects pre-defined and at large-scale, surely will have to disassemble them into smaller units, giving more choice to customers. An automobile manufacturer provides some special features (extras), but 90% of the car comes “standard” from factory – if we want to do some changes, we will need to go to the garage or appeal to third parties and pay double. In the future, I think the cars will be sold with 50% of standardization: the rest will be built by the client in “a la carte” basis. We will not sell cars, furniture, or electronic devices as we sell today. We will be selling “structures” that consumers will adorn with pre-designed options, provided in large quantity by manufacturers.
Fight for Space
In a few years we will be 7 billion people. Arable land will lack in fields and space in the cities. But there are other areas where space is an important (but less conscious) issue that cannot be ignored. The pool of available IP addresses is rapidly decreasing. Internet is running out of space! The processors need to be increasingly powerful in the smallest volume possible. The Federal Communications Commission (FCC) plans to open the “white space” wireless Spectrum, left vacant with the transition from analogue to digital TV – and several companies are already racing weight to compete for this space. Nanotechnology miniaturization spreads. Space: a jewel that never goes out of style.
The strategic collaboration between brands will be a gold mine for management. Joint ventures, open innovation, open source technologies or crowdsoursing are already reality for some companies, but their power will be higher when the number of adherents increases. Partnerships allow members to join synergies in order to produce higher quality and more innovative products or concepts. Perhaps the competition in the future will not be assessed at the corporate level, but at the level of strategic clusters that are being created. It will be a matter of alliances: company A is not really against company B, but the alliances that each one integrates are against one another and this will be relevant. Or you have an alliance to protect you, or you’re dead. And, unlike individual companies, the setbacks in these alliances will have an impact on the global economy and consumers, given the weight they present.
The Game Decade
I leave to the end my biggest bet, which I believe can change the landscape of social and technological world in coming years. If I could say a few words to Maslow (the creator of the famous Pyramid of Needs), certainly I would say that human beings have a need to play and this driver should appear on his motivational theory. Human beings are competitive by nature, and winning is a condition which is in the genes – without it, he does not have guaranteed survival until the present day. Playing games has serious consequences, especially when you’re hooked. Some people loose all their money on games of luck, there are those who play on the computer 20 hours a day and cannot rest or even develop other skills. Unfortunately this often happens.
In late 2009, the videogame “Call of Duty 2 – Modern Warfare” pulverise the sales record on the first day of release, getting 310 million dollars in profit just in the U.S. and Great Britain. The novelty is that this represents the most profitable 24 hours of any entertainment action, even surpassing the all-powerful American industry of cinema. Stats were there to confirm the demolishing power of playing games.
Apple and Google Android platform would be the same without games? For the millions of Facebook fans who like to play Farmville, how would it be if that game disappears from one day to another? And what about all the industry that lives the game business – Playstation, Nintendo, Xbox, game developers, software engineers…?
All this tells us how the game is, after all, extremely powerful – like a mass of energy always ready to be discharged. But this huge mass of energy is not being put to good use: even without knowing statistics, I bet that 95% of this overwhelming energy is being used … to play. “Playing” does not have to be an end in itself for so such power. When playing, we are nourishing our hedonic side, the competitive guy that lives in us, our dark side that leads us to try to defeat the other – but is not usually creating something constructive.
As the matter can be transformed into energy and vice versa, so the game can turn into many things, giving useful purpose to this feature. It can be transformed into education (eg educational games), changes in attitude (eg lose weight, being procedures embodied in a game) in economy simulators (in which teams compete to run a virtual company) in Alzheimer retardants (games that help the brain stay active) in mathematical applications, marketing strategies, to flash mobs, in controlling the biological clock in the gym, on television contests, in dosage drug to sick people and so many other dimensions we can imagine. Imbuing a work with game dynamics can mean the difference between “just” doing an activity or perform it with gusto. The motivational component of playing games rises our attention when performing tasks, enhances our ability to exploit the problems, gives an emotional impact to what we do and, interestingly, is self-rewarding.
Turning games into concepts that structure emotionally activities of our day-to-day will be, in a not too distant future, the goose that lays the golden eggs for consultants, webmasters, software developers, coaching, educational and community organizations, among many others. Let’s stop playing just games. Let’s play something unique.
Consumer Behavior Specialist
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The opinions expressed in this blog, despite they are supported by practical and scientific knowledge, are just that: opinions.
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