Published on: February 1, 2005Technology breeds change. And change forces a technological response, which in turn breeds even more change. Is it any mystery that it is difficult to keep up with the complex, accelerating and unpredictable change that typifies the world in which we live?
At the Food Marketing Institute (FMI) Marketechnics conference, scheduled to take place on February 13-15 in Washington, DC, Andrew Zolli – who describes himself as a “foresight strategist” – will offer a road map that will allow attendees to navigate this uncertain territory successfully, drawing together the connections between demographic, technological, geopolitical, and business trends, and putting them into plain English.
To get a preview of the subjects that Zolli will address in just a couple of weeks at Marketechnics, MNB engaged him in an exclusive e-interview.
MNB: You talk about “tectonic shifts in global demography.” It seems to us that just here in the US, some of these tectonic shifts are creating political, cultural and economic chasms (reflected, to some extent, in the blue state/red state maps we’ve all become familiar with), and differences in attitude and perspective become culture wars. From a business perspective, how does one deal with these changes and divisions? (Especially in a food industry where a prevailing strategy in such cases seems to be to wait until they go away.)
Andrew Zolli: If we believe the truism that "demographics is destiny", then there is indeed a *great* deal of change coming to the United States, and the world at large. And you're right to point out that these changes will be expressed (and experienced) in political, economic, and cultural terms. Here's just a few examples: in the next decade or so, we will see our society split into an hourglass shape, with the largest number of older citizens in its history, and the largest number of younger people in its history (even bigger than the baby boom) at the same time. This is going to cause a schism in the way that all consumer products, including food, are marketed and sold, as these two enormous demographic segments buy goods in very different ways, and the brand 'meaning' and benefits they expect to derive from those goods are also very different.
And it's not just an age split we have to look forward to, but the rise of a true multi-ethnic and international culture. Today, a majority (about 70%) of Americans are what demographers call indigenous "White/Non-Hispanics"; by mid-century, this number is going to dip under 50% for the first time, and we'll move to a society with no ethnic majority. By 2050, 1 in 4 Americans will be Hispanic, a smaller but equally significant number will be Asian, and up to 60% of the population will be foreign born. I personally believe that this new tapestry is a source of strength for the country; indeed our ability to assimilate immigrants has been a cornerstone of the historical strength of America.
The 'culture wars' that you refer to derive from another important demographic trend, which is increased economic and cultural regionalism. (We tend to be more acutely aware of 'culture wars' in six calendar months on either side of major elections, because exciting them is key to both political parties' "get out the vote" efforts.) By and large, companies will deal with these as they always have, by putting larger 'universal' brand promises into regionally appropriate terms, although there is not 'magic bullet' simple answer.
Beyond the culture wars, I believe that the larger implications of future demographic and economic change will come from segment-specific concerns. For example, with an inevitable curtailment of Medicaid benefits, aging boomers are likely to reinvent nutrition, and we're likely going to see a dramatically increased focus on the economic and health impact diet for this class of consumer. This is just one of dozens such implications.
MNB: Many people who look at the retailing environment would define the overwhelming force of change as being Wal-Mart...but we suspect you might have a broader and better perspective on what the real forces of change might be affecting consumers and marketers. What would they be?
Andrew Zolli: Eight percent of all consumer goods purchased in America are purchased in a Wal-Mart; in the coming decades, it may rise as high as 12%. Wal-Mart is commodification incarnate, and its not surprising that retailers and analysts would look to Wal-Mart as the great force of change. However, there are a number of equally important, but less visible forces. One is demographics, as we just discussed; another is the rise of disruptive new technologies, which will differentiate not only what functional benefits consumer goods deliver, but the way in which their brands are experienced and integrated. We're about to see a revolution in molecular science and biotechnology which will 'decommodify' many categories of commodity goods which have been classed as such for decades – wrinkle creams that actually get rid of wrinkles; compositionally targeted food products designed around the individual, etc. So, if you're terrified of competing with Wal-Mart on price (and who wouldn't be?) the good news is that many new products are coming which are intrinsically new, which aren't price-sensitive commodities.
In addition to the benefits these goods deliver, there is a coming revolution in consumer packaging which will also allow manufacturers and retailers to tell their brand stories in new ways at the shelf and package level. I'll be talking about some of these in my speech, but here's a hint: RFID is just the beginning.
MNB: What’s the most overrated influence on culture and business? How about the most underrated?
Andrew Zolli: Consistency is the most overrated idea, bar none. When we invented the world of brand marketing, back in the late 19th century, we were in the midst of an industrial revolution, which achieved efficiencies by stamping out identical products over and over and over again. So it’s not surprising that we came to see consistency as a hallmark of good branding -- it was the big idea of its day. A hundred plus years later, and many of our concepts about branding haven't moved much -- we're still focused on doing the same thing over and over and over. But now, more than ever, we're awash in commodities, similar products, made for similar people using similar techniques and delivering similar benefits. And doing the same thing over and over again just adds to the noise.
In our commodity soaked markets, consumers crave great and distinctive storytelling, and that gets my vote for the most underrated force in business. Great storytelling is a de-commodifier par excellence - it can take a parity product and elevate it above all of the other equivalent goods. But there's a challenge here: the skills that make people good presidents, good CEOs, aren't always the ones that make them great storytellers. Many leaders tend to think of this kind of storytelling as something 'soft' and irrelevant, when in fact, it's at the core of value-creation.
MNB: Are technologies like the iPod and TiVo creating a generation of non-linear consumers that is able to pick what it wants when it wants it, without being exposed to traditional branding messages? If so, what does this mean for brand marketers?
Andrew Zolli: We certainly are in the midst of a decades-long empowerment of individual consumers, and the rise of self-service-driven, a la-carte consumers, like the iPod and TiVo users, means one thing for brand marketing: there is tremendous opportunity, and necessity, for brands to become filters for the enormous number of choices consumers face. Look at what happens on Amazon.com -- the company thrives as a brand not because it offers the greatest selection of products on earth, but because its become an expert at helping me find my way through the mind-numbing variety. And when they can't connect me with the right item, they enable other consumers, who might be better at doing so, to help me along. Today, I cannot conceive of buying a book from any other retailer, online or offline, even though there are plenty out there who offer exactly the same products for less money.
There's an equivalent opportunity in food marketing. Today, I confront 40,000+ items in my grocery store -- and I get nowhere near Amazon.com-like levels of help when I walk in the door. The first retailer, producer, or marketer who figures out how to do this cost effectively has me, and my self-directed, price-insensitive, high-margin brothers and sisters, for life.
Andrew Zolli will speak at FMI Marketechnics on Monday, February 14, from 10:30-11:30 a.m.
To find out more about Marketechnics and how you can still attend, go to:
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