Challenges to growth are nothing new, but these challenges change with shifts in culture. Consumer attitudes and behaviour are changing rapidly as we move into the “post-ownership age”. With many people’s circumstances and attitudes permanently changed by the financial crisis and the subsequent recession, outright ownership has become an unnecessary hassle. At the core of these changes is the “millennial mindset” –those who have less money but more knowledge. This is tied with the decline of materialism – seen as vulgar, harmful and unsustainable – and means people increasingly seek fulfilment from experience and achievement. Bolstered by social media, Gen Y have led the way in beginning to identify through their own narrative and an ongoing ‘story of self’.
Changes to how we consume present a significant challenge for brands. People are choosing quality over quantity, assessing how best to spend their money. In addition, the stigma around the “budget thing” is declining; spending in trendy, cheap restaurants, jetting off on budget airlines and doing shopping in discount stores is now permanently entrenched. Budget wasn’t cool – now, we’re seeing Angelina Jolie and Kate Moss (OK, maybe that one didn’t end so well) flying EasyJet, reflecting a new appreciation of the “minimum viable product”.
In fact, this rising trend has fuelled the growth of heavy discount supermarkets like Aldi and Lidl, while the shares, profitability and property values of the more traditional Tesco and Sainsbury’s lose out. Consumers are making smarter choices, and brands need to adapt to this. A trip to Lidl over Waitrose might mean they can afford to eat out later on in the week, opting for “outcome” over “input”. This growing popularity of the value/experience means brands aren’t just up against their competitors, but are in fact competing with “everything” for people’s headspace.
'Real' and 'authentic' are the new bling. The hassle of ownership in recent years has led to growing stigma surrounding vulgar, irresponsible consumption, with bling, conspicuous branding on the decline. Defining themselves by their own narrative – not by what they own – people increasingly consider a brand’s purpose as more important than the product itself. This has played out with an increasing demand for meaningful stories, entertainment and experiences. It is through harnessing this demand for experiences that brands will unlock growth. Red Bull, for example, has taken its functional energy drink brand and transformed it into an experience ecosystem in its own right. Other brands are increasingly recognising this mindset. Yeo Valley Dairy’s “Yeoniversity”, the Hollister store experience and Brewdog’s “Equity for Punks” are all delivering emotional and physical experiences to their consumers.
This change we are seeing is greatly impacting the traditional model of manufacturer providing to customer. And technology is driving this change forward. Disruptive models are providing consumers with an alternative: Spotify and Netflix have changed the way we consume TV and music, and Zipcar and Uber are delivering flexible mobility without the burden of owning a car. This growing trend is changing the way consumers interact with brands. Take Zipcar. The short-term car hire company provides the brand experience, while Volkswagen provides the product – with both equally important.
Despite the threat of disruptive brands like Zipcar and Netflix, there’s nothing stopping brands from disrupting their own business models. If a business recognises where people are willing to spend and what their needs are, then brands can adapt their business models to unlock growth. Sky is a prime example in the UK, whose willingness to disrupt its own business model with Sky+ was both beneficial and essential.
Post-ownership is not the end of nice things. It just means less “baggage”. People are opting for fewer, but better suited things and more authentic experiences. Brands must be available as needed, but not be over-powering when they’re not. And giving consumers access to unforgettable experiences through the creation of genuine breakthroughs will justify brands’ existence beyond just their product.
By Matt Woodhams, Brand Director of Added Value.
PrivSec Conferences will bring together leading speakers and experts from privacy and security to deliver compelling content via solo presentations, panel discussions, debates, roundtables and workshops.
For more information on upcoming events, visit the website.
comments powered by Disqus