a brave new consumer world gerzema 2012_retailcanada

TWITTER @JOHNGERZEMA

Copyright 2011, John Gerzema2

A BRAVE NEW CONSUMER WORLD JOHN GERZEMA | STORE 2012

Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema4

Boy Scouts debut Badge in Robotics

POWER HAS SHIFTED TO CUSTOMERS AS TECHNOLOGY BECOMES CULTURE

6,600+NEW PICTURES ARE UPLOADED

ON FLICKR

100+

NEW LINKEDin ACCOUNTS

12,000+ NEW ADS POSTED

ON CRAIGSLIST

13,000+ HOURS MUSIC

STREAMING ON PANDORA

98,000+TWEETS

ON TWITTER

694,445SEARCH QUERIES

20,000+ NEW POSTS ON TUMBLR

13,000+iPHONE APPS

DOWNLOADED

370,000+MINUTES CALLS

ON SKYPE

70+DOMAINS

REGISTERED

1,600+READS ON

SCRIB’D

Copyright 2012, John Gerzema | BAV Consulting | WPP PLC5

EVERYSECOND

Source: Go-Globe.com

Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema

TECHNOLOGY, BY THE NUMBERS...

Web economy 'to double by 2016' |Americans spend 100K years on Facebook each month | More Americans are on Facebook than have a passport | A gamer is three times more likely to be an adult woman than a minor male |48 hours of footage uploaded to YouTube every minute | More U.S. adults own a smartphone than have a college degree | Apple Makes 75% of Profits, With Only 9% of the Phones | Half of US twenty-somethings have no landline | 28% of US smartphone owners use them as primary net connection | One Billion smartphone sales per year by 2016 | U.S. Has More Wireless Devices than People | Mobile Payments To Triple To $670B By 2015 | Avg. US households receive a personal letter only once every 7 weeks

6 Source: Pew Center. Juniper, NPR, U.S. Postal Service, Forrester, BAV Consulting


SMARTPHONES: A LOVE AFFAIR


THREE FORCES AS CATALYSTS

10

A BRAVE NEW CONSUMER

WORLDCHANGINGMERCHANTDYNAMICS

TECHNOLOGYADOPTION

CHANGING CONSUMER DYNAMICS



11

A BRAVE NEWCONSUMER

WORLD

CHANGINGMERCHANTDYNAMICS

TECHNOLOGYADOPTION


YOUNGER CONSUMERS

GLOBALPROSPERITY

• By 2020 31% of the world’s population will be under the age of 351

• 40% of Canadians will be under the age of 35 in 20202

• Half of US 20-somethings have no landline3

• By 2030, 2/3 of the world’s population could be middle class4

• BRICs could account for 50% of global equity markets by 20505

• Single largest transfer of wealth in American history6

1 Infosys, 2 2012 U.S. Census Bureau, International Programs: International Population Projections 2020, 3 FCC June 2011 4 Brookings Institute 2010, 5 Goldman Sachs Global Economics 2009, 6 PEW Center 2011


CHANGING MERCHANT DYNAMICS

12

A BRAVE NEWCONSUMER

WORLD


TECHNOLOGYADOPTION


MINDFUL SHOPPING

PERSON TO PERSON (P2P)

TRANSACTIONS

• 52% of Canadian online adults prefer to research a product online before purchasing1

• 43% of US retail sales are influenced by the web1

• 44% of US consumers reported 1+ P2P fund transfer in 2009, expected to rise to 61% in 20142

• 2010 P2P transfers totaled $7 billion, with substantial growth expected in coming years2

• 4/10 mobile bankers made a mobile P2P transfer in 20102

1 Delv/Nia Survey 2010, 2 Javelin Strategy & Research, 2011

• 5 Billion mobile phones in use in 20101

• 45% of all Canadian adults have Smart Phones3

• 10.3 Million US Adults will own tablets in 2010 rising to 82 Million in 20153

• Mobile banking customer base to reach 1.1 billion by 20155


TECHNOLOGY ADOPTION

13

A BRAVE NEW CONSUMER

WORLD


TECHNOLOGYADOPTION


EXPANSION OF THE INTERNET

DEVICE PROLIFERATION

• 2 billion people are connected to the internet; 200 million more each year1

• $8 Trillion exchange hands each year through ecommerce1

• The internet accounted for 3.4% of the GDP in 13 countries and 21% of the GDP in mature markets over the past 5 years1

• 28% of smartphone owners use them as their primary net connection2

1 McKinsey Global Institute 2 ARS Technica, 2011 3 comScore, 2012 Canada Digital Future in Focus Report 4 Global Industry Analysts 2.0


THE WORLD’S MOST EXTENSIVE STUDY OF CONSUMERISM: BRAND ASSET VALUATOR®

WORLD’S LARGEST DATABASE OF BRANDS

ACADEMIC REVIEWED

17 ANNUAL STUDIES COMPRISING 78% GLOBAL GDP

800,000 CUSTOMERATTITUDES, PERCEPTIONS AND VALUES

50,000 BRANDS

275 STUDIES IN 51 COUNTRIES

QUARTERLY U.S. PANEL OF 17,000 RESPONDENTS

$ 130 MILLONINVESTED WITH DATA BACK TO 1993

14


TRAVELING THE GLOBE IN SEARCH OF THE BRAVE NEW CONSUMER WORLD

15

SAN FRANCISCO

ST LOUISTOKYO

SHANGHAI

NAIROBI

THIMU

BEIRUT

TEL AVIV

AHMEDABADPARO

REYKJAVIK

BERLINLONDON

BRUSSELS

STOCKHOLM

MEDELLÍN

LIMA

NEW YORK

JERUSALEM

BOGOTÁ

KOLKATA

ATHENS

Copyright 2011, John Gerzema

BRAVE NEW CONSUMER WORLD #1 CURRENCY GETS CURRENT

16


TIM KUNDEFOUNDERFRIENDSURANCEBERLIN


MARIA DAMANKIEUROPEAN COMMISSIONERMARITIME AFFAIRS AND FISHERIESBRUSSELS

ANNA PEARSONFOUNDER: SPOTS OF TIMELONDON


“ EBAY BUYS ZONG FOR $240 MILLION IN CASH TO BOOST PAYPAL’S MOBILE PAYMENTS TECHNOLOGY.”

— TechCrunch

“ VC’S INVESTED $834 MILLION IN SCORES OF FIN-TECH FIRMS IN 2008 AND $1.4 BILLION IN 2011, UP 75% FROM LAST YEAR .”

— CB INSIGHTS

“ AN ADULT FEMALE IS 3X MORE LIKELY TO BE A GAMER THAN A YOUNG MALE.”

— Ars Technica

“ NFC PAYMENTS TO GENERATE $50 BILLION IN 3 YEARS.”

— Mobile Payments World

“MOBILE PAYMENTS TO TRIPLE TO $670B BY 2015; DIGITAL GOODS WILL REPRESENT 40% OF TRANSACTIONS.”

— TechCrunch

“MOBILE PAYMENTS TO REACH 2.5B USERS GLOBALLY BY 2015.”

— Mobile Commerce Daily

“TWO MAJOR INDIAN OPERATORS HAVE ANNOUNCED PLANS TO PURSUE MOBILE BANKING INITIATIVES.”


“INDIAN MOBILE BANK EKO RAISES$5.5 MILLION, PROCESSING $270 MILLION IN PAYMENTS A YEAR.”

— TechCrunch

“24% OF MOBILE USERS BANK FROM A PHONE.”


“WHY MOBILE PAYMENTS CAN'T COME SOON ENOUGH.”

— CNN Money

“STARBUCKS CONTINUES TO BLAZE M-PAYMENTS TRAIL.”

—Mobile Payments World

“PAYPAL PREDICTS THE END OF THE WALLET BY 2015.”

— Slashdot

“MOBILE GAMING TO SURPASS CURRENT CONSOLES.”

— Slashdot


MOBILE COMMERCE IS RESHAPING THE MARKETPLACE


BRAVE NEW CONSUMER WORLD #2CINDERELLANOMICS

26


VINAY GUPTA AND TOM WRIGHTC0-FOUNDERSWHIP CARLONDON

MARIA ZIVDIRECTOR OF THE GOVERNMENT OF SWEDEN TOURISM BOARD@SWEEDEN STOCKHOLM


Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @JohngerzemaSource: USA BAV All Adults Q1 2012

CINDERELLANOMICS: WANT LESS, RENT MORE

29

Since the recession, I realize I am

happier with a simpler,

more down-to-basics lifestyle

Because of the recession, I shop less often than I used to

66% AGREE 67% AGREE


BRAVE NEW CONSUMER WORLD #3 REPUTATION.ME

35

ÖRN BáR⇥UR JóNSSONCONSTITUTIONAL COMMITTEE MEMBERREYKJAVIK


IJAD MADISCHCEO/CO-FOUNDERRESEARCHGATEBERLIN


GILES ANDREWSFOUNDERZOPALONDON



WITH TECH LEADERS, TRENDINESS AND ARROGANCE GO HAND-IN-HAND

02 04 06 08 09 10

100

75

50

25

002 04 06 08 09 10

100

75

50

25

002 04 06 08 09 10

100

75

50

25

0

GOOGLE APPLE FACEBOOK

TRENDYUNAPPROACHABLEARROGANT


BRAVE NEW CONSUMER WORLD #4GAMING YOUR LIFE

45

GRANNY HOLLYPARTNER: GRANNIES, INC.BANBURY, U.K.


KENTARO OHARAFOUNDERCOLISHTOKYO



BRAVE NEW CONSUMER WORLD #5 THINKING OUTSIDE THE (BIG) BOX

53


NING LICO-FOUNDER:MADE.COMLONDON

54

ERIKO YAMAGUCHIFOUNDER: MOTHERHOUSEBANGLADESH AND TOKYO


LEO RISKICULTURAL ATTACHEFINDLANDTHE FELLESHUSBERLIN


´

Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @JohngerzemaSource: USA BAV All Adults FY 2011-Q1 2012

BEYOND BRICK AND MORTAR, OR ‘STORE AS WI-FI’

57

63% DISAGREE

WHERE A BRAND IS SOLD INFLUENCES HOW I FEEL ABOUT A

BRAND

10

12

14

16

18

20

22

24

26

2007 2010 2011

BRICK & MORTAR RETAIL

INTERNET RETAIL

“TRUSTWORTHY” 2007-2011: BRICK & MORTAR VS. INTERNET

RETAILERS


WHERE THESE TRENDS LEAD US: A BRAVE NEW CONSUMER WORLD

63

Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @JohngerzemaSource: USA BAV All Adults FY 2010-Q2 2011

RETAIL BRANDS ACROSS CANADA FACE MORE COMPETITION IN THE BRAVE NEW CONSUMER WORLD

64

Use Regularly Use Occasionally

-12% 15%

One I Prefer One Of Several

-8% 13%

WHILE TOTAL USAGE AND PREFERENCE HAVE INCREASED

STRONG LOYALTY TO SPECIFIC BRANDS IS DECLINING


THIS IS BECAUSE THERE ARE FEWER BRANDS PEOPLE TRUST, MAKING TRUST ACT AS A PRECIOUS COMMODITY

65

PERCENT OF TRUSTWORTHY

BRANDS

2001

49%

2001

29%

2009

25%

2009

45%

CORRELATION OF TRUST TO FUTURE POTENTIAL

(BRAND STRENGTH)

50

40

30

20

10

0

Source:


PERCENT OF PERFORMANCE BRANDS

CORRELATION TO GUEST SATISFACTION

PRE PREPOST POST

100%

50

0

1.0

0.5

0.0

73% 0.6847%

0.82

Source: USA and Canadian BAV All Adults (Trustworthy brands defined as those with greater than 20% attribution)

FEWER BRANDS ARE DELIVERING PERFORMANCE, WHICH DRIVES SATISFACTION AND LOYALTY.

66

CONSUMER

0.2 0.0 0.2 0.4 0.6 0.8 1.0

KNO

EST

REL

DIF

0.2 0.0 0.2 0.4 0.6 0.8 1.0

KNO

EST

REL

DIF


A LESSON TO PRICE-DRIVEN RETAILERS: VALUE DOES NOT EQUATE TO DIFFERENTIATION

67

WORTH MORE, THOUGH NOT AS STRONGLY CORRELATED TO KNOWLEDGE AND RELEVANCE GROWTH, DOES A BETTER JOB DRIVING ESTEEM

AND DIFFERENTIATION.

GOOD VALUE DRIVES RELEVANCE AND ESTEEM, BUT IS NEGATIVELY CORRELATED TO

DIFFERENTIATION, THE KEY DRIVER OF CURRENT AND FUTURE BRAND VALUE.

POSITIVE CORRELATION

NEGATIVE CORRELATION

Source: BrandAsset Valuator, 2012


IN BRAND VS. PRIVATE LABEL PRICE ALONE ISN’T DRIVING BRAND CHOICE

68

“I PREFER TO BUY NAME BRANDS WHEN AVAILABLE INSTEAD OF STORE BRANDS.”

14% INCREASE IN AGREEMENT FROM Q4 2011 TO Q1 2012

ENERGIZED DIFFERENTIATION PRIVATE LABEL VS. BRAND NAME

80

60

40

20

020092008 2011

DIF

FE

RE

NT

IAT

ION

PRIVATE LABEL

BRAND NAME

45% INCREASE IN DIFFERENTIATION GAP FROM 2009

Source: BrandAsset Valuator, 2012

CH

AN

GE

IN

TR

US

T(P

erc

en

tag

e)

PERCENTAGE CHANGE IN BRAND STRENGTH(Future Potential)

35

30

25

20

15

10

5

0 20 30 4010

SOCIAL MEDIA

SPONSORED EVENTS

WEBSITETELEVISION

MAGAZINESNEWSPAPERS MOBILE


THE POWER OF ‘SOCIAL AS BUSINESS MODEL’.

69 Source: BrandAsset Valuator 2012

BR

AN

D S

TR

EN

GT

H(E

ne

rgiz

ed

Dif

fere

nti

ati

on

/ R

ele

van

ce)

BRAND STATURE(Esteem / Knowledge)

FOX NEWS

INTERNET SEARCH

INTERNET PORTAL

MSNBC

WSJ

CNBC

SOCIAL MEDIA

2008 2010

INTERNET TOOLS AND SERVICES INTERNET

COMMERCESERVICE

THE NEW YORK TIMES

THE NEW YORKER

INTERNET NEWS/INFO

ESPN THE MAGAZINE

FINANCIAL TIMES

100

50

0 10050


WHILE NON-INTERACTIVE MEDIA HAS DECLINED

70 Source:BrandAsset Valuator 2012

2


ULTIMATELY STRONG CUSTOMER-CENTRIC BRANDS BREAK AWAY FROM THEIR CATEGORIES

71

BR

AN

D S

TR

EN

GT

H(E

ne

rgiz

ed

Dif

fere

nti

ati

on

/ R

ele

van

ce)

BRAND STATURE(Esteem / Knowledge)

COMPUTERAVERAGE

AUTOAVERAGE

INTERNETCUSTOMER

RETAIL AVERAGE

ALL ADULTS 2011

AIRLINE AVERAGEHOTEL

AVERAGE

100

50

0 10050

Source: BrandAsset® Valuator USA, All Adults, 2011


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72

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