The Big Shift: A Social Revolution

1 C4tE• Every team needs an explorer – an individual or group that scouts the edges of

what’s happening, finds what’s new, maps the terrain, and brings that information back to home base. That’s the role that C4tE plays in Deloitte.

• Note that these comments come from the point of view outside of your industry, supported by a large consultancy.

We’ve all heard the news• retail chains seem to be collapsing every other week• manufacturing is falling apart• at the same time Apple has just become the largest company in the world, and

in history, as well as posting the largest revenue for a single quarter ever without releasing any new products in that quarter

The change we’re seeing is not due to new technology making old technology irrelevantWhat we’re seeing is a social revolution• Technology is changing how we relate to the world• The internet, smartphones and social media are rewiring how we behave• Firms that adapt to this shift are thriving• Those who fail to adapt are being cleared out of the market

PEG Lightning Talk 12/02/2015 - 19 February 2015

2 Remember back to your first trip to the CBD, which is one of those formative experiences that most of us go through• 20 years ago this was a big deal as you would have trouble contacting your

parents should something go wrong. All you had was your own wits, 20c and the hope of a nearby payphone.

• Today most kids carry smartphones enabling them to call their parents, and their parents to call them. These phones also have GPSs, so they can’t become “lost”. Some parents even have the ability to track their kids’ phone, can can do to them if they think that they’re in trouble.

• We see a similar story with organising Friday drinks with friends. We react, rather than plan, and reach out to others, rather than rely on our own resources.

Consumers – en masse – now have more information about the environment around them, and the products in front of them, than the firms that are attempting to serve them.This is changing how individuals relate to businesses:• consumers are now dictating the terms of the deal

• since the internet and air freight (mid 90s)• we’re buying the cheapest or the best: killing mid-market products

• consumers now rely on their tribe, rather than brands, to navigate life’s challenges

• since the smart phone and social media• we rely on reviews/recommendations from our tribe rather than

information from brands, shifting the market from “mass marker” products to “niche” products

• Yelp/Boston story http://hbswk.hbs.edu/item/6833.html• tribes are funding products and services as a crowds

• Kickstarter etcOur relationship with firm/brands is no longer based on products and services. What is it based on then?

PEG Lightning Talk 12/02/2015 - 19 February 2015

You’re either:

• a religion

• part of a community, or

• a commodity

3 One dimension: tying yourself to a consumer’s identity

Religion• Your brand/image is so strong that consumers want to identify themselves with

it• Firm cares that you buy their product, but don’t care where you buy it.• Apple: stores are an educational tool, under the Marketing rather than the Sales,

budget, despite being some of the most profitable retail in the world.• Note: scales well (just ask the church)

Community• You integrate yourself into a community, making your places (both virtual and

physical) places that the community gathers and interacts.• Firms care about where the consumers congregate, but don’t care what

products they buy.• Scrapbooking: Friend has built a business around a scrapbooking community,

with retreats (weekends way to scrapbook and chat with friends), workshops, etc. This business has survived multiple scrapbooking vendors going bust around it (Creative Memories etc).

• Note: hard to scale (it’s based on interactive relationships, not firm -> customer/tribe)

Commodity• Compete on cost• Firms care about being cheap• Amazon

PEG Lightning Talk 12/02/2015 - 19 February 2015

You’re helping them to:

• work towards the future

• deal with the present

• understand and interpret the past

4 Another dimension: time

Future:• You help customers deal with future challenges• “Help me achieve my goals”• Firms must position as educators, where education should be considered “any

intervention that brings about a positive change in the student, a change which the student could achieve on their own”.

• Super funds: they sell “happy retirement” not “investment products”, and need to focus on instilling the attitudes and behaviours in customers that ensure that

• they have reasonable expectation of retirement goal• they have the investment/saving habits required to achieve retirement

goals

Present:• You help customers manage day-to-day activities• “What do I do next?”• Firms are entertainers• Scoop On / Group On: here’s something to do now• Netflix: here’s what you want to watch next (you’re buying the queue, not the

library)

Past:• You help customers understand the past• “Help me build my personal narrative”• ancestory.com: where did I come from, who am I?

PEG Lightning Talk 12/02/2015 - 19 February 2015

5 If we think back:• The shift from mass market to niche products -> is killing industrial era

manufacturing (though new, more flexible, niche manufacturing is thriving)• The shift from brands to tribes -> is killing retail (most retailers were just

conveniently close, but the internet eliminates that distance advantage)

The opportunity, however, is for those firms that do make the shift, and define themselves in terms of their customers (identity and time), and these firms are growing strongly.

PEG Lightning Talk 12/02/2015 - 19 February 2015