Consumer Consciousness: Two Forces Redefining the Value Equation.

The bubble of indifference has burst.

Until recently, it used to be very different. Consumers cared about functional performance and price...and cared about very little else. Like how products were really made. The ingredients they really contained. What they really did to the body. So the reasoning went, if it was available, it had to be safe. Governments regulate, after all.

Nothing like crisis to wake people up. And shaken up they have been. Toxicity in toy paint, lethal ingredients in pet food, health threats in the food chain (fruits and vegetables), ever rising cases of cancer, and obesity on a mass scale among not just adults but children. This is the PERSONAL dimension that evolved the value equation of what people buy. No longer is buying convenience foods so easily divorced from the health consequences of doing to. Marketers are responding with convenient foods that force less of that trade-off. It is a good development.

The consumer value equation is also being redefined by another key dimension: PLANET. The environmental crisis has precipitated a shift: people en masse are making a direct personal link between what they consumed and the impact they were having on the planet.

The result: a time of greater scrutiny but if anything higher standards. People care more about what's in products and how they're made. They have to know, it's almost not a choice. The cost of indifference - personally and for the planet - is too high. Companies are responding by making better products.

















A new kind of involvement and a new strategy has emerged among consumers: asking question and demanding answers. The smart companies are recognizing this is a new age of transparency. Avoidance is an option but not a good one. Being part of the conversation is a way companies can shape the dialogue about them, thought the days of control are over. Trust has been broken and companies now have to earn it back.

Platform Thinking: History Beats Jarvis' Edict by 170 years.

In What Would Google Do? Jeff Jarvis makes many great observations about the new rules of business success that have emerged in the last 10 years.

One example is platform thinking, in which products and services deliver the utility they were designed to, but which users go on to embrace and use for purposed well beyond the original intent.

Jarvis gives the example of Craig's List and Google Earth which have been adopted in new ways never originally envisioned. And with the dramatic popularity of apps for its handheld device, Apple's iPhone is perhaps the ultimate testament to platform thinking by delivering utility that have nothing to do with the phone at all.

We were delighted to find a historical predecessor to this digital idea by some 170 years.

An emigrant ship Niantic was moored and then marooned at a site now deep in the heart of San Francisco's financial district. It was covered in a shingle roof and housed offices and stores on the upper deck, while the hull became divided warehouses. A wonderful historic example of people taking an idea, making it their own and giving life to new uses, ones delivering valuable utility that was never anticipated by the original builders. Like their digital counterparts today, we're sure they were equally pleased.

[Click on image to enlarge]

Parody display: ostentation is in the rip

Parody display is an odd phenomenon. At its heart lies an expensive imitation of less fortunate living.

As a fashion statement, torn jeans are one example of a parody expression which first emerged in the 1990's. Celebrities like Lindsay Lohan and other pop culture influencers of the mass market adopt them precisely because they are in contradiction with their own wealth and success.
























It costs more to buy these jeans torn than un-ripped (much to the consternation of parents everywhere placating their children's demands for the latest 'in' thing). It is an indulgence of the affluent.
























The idea that something worn - damaged even - is worth more than something new is itself not new.

In Elizabethan England, patina - the worn marks that accumulate on a prized object - had status conferring significance. In becoming minutely dented, chipped, oxidized and worn from use over time, the physical property of patina took on a symbolic property: the accumulation of physical flaws suggested the object had been in the owner's possession for some time, implying longevity to the wealth being displayed and that the family was no newcomer to its present social standing. (McCracken 1990)


We encountered a new medium for parody display recently:


















Why not furniture? Duct-tape is a universal measure to fix and patch up almost anything that's ripped, torn or broken. Leveraging this association as a purposeful design element in furniture is classic parody display. No one would so willing put it on display unless it carried different expressive value.

Loyalty drivers that Apple and Microsoft miss

There’s an easy yet effective way that major companies can inspire their current consumers to stay within the brand and not defect when the time for repurchasing rolls around.

The principle is simple: Recognize the investment the consumer has already made in the relationship and reward accordingly.

It’s standard practice in certain categories such as automotive, who offer a trade-in on existing models.

It’s not just huge ticket items either. Finis, makers of a second generation waterproof mp3 player (below) are offering a discount for owners of the original version, retailing at about $180.














The reasoning is simple: help a consumer unlock a fair residual value in his existing product and he’ll be more likely to buy a new replacement. But it goes beyond economics to something altogether human and valuable when it comes to profitable relationships: respect. This quality is all too absent in many brands strategies yet it does much to inspire attachment and loyalty.

The reason why Apple and Microsoft haven't ventured down this road is no surprise: they feel they don’t need to and focus on maximizing profits. Consumers don't expect a trade-in with computers the way they do for other categories. Certainly, with new marketplace mechanisms like eBay, consumers can dispose of their older version on their own more easily than they could in the past (though that responsibility is still left with them).

Overtime, however, it can leave customers feeling like they are paying too much to continue the relationship. One of our OFD staffers is about to acquire his third laptop. An Apple clamshell and Titanium G4 Powerbook sit on a shelf. In seeking a new, faster model, he’s considering defecting brands. $3800 has already been spent on hardware and animal-themes upgrades of OSX over time. Yet when he steps inside an Apple store to contemplate the purchase of the new Airbook – or any other computer – his loyalty is unrecognized: his value to the company is seen no differently from a potential first-time buyer.

As with any relationship, what incentive is there to stay in it when you don’t feel valued?