Factors « Belongingexperiences’s Weblog

Factors

There are millions of trends being tracked by a wide range of researchers, marketers, and brand consultants. Individuals such as Faith Popcorn and organizations such as Trendwatching, GDR Creative Intelligence, and Sputnik, among others, have identified a wide range of trends impacting marketers.In an effort to create understanding on how consumers interact with brands, we have identified five key factors that support underlying mega-trends that lay the foundation for comprehending why creating “Belonging Experiences” is critical to the success of organizations, namely:

Factor One: Empowered Knowledge
Factor Two: Belonging Doorways
Factor Three: Adult Recess
Factor Four: Experiential Lifestyle
Factor Five: Vigilant Network

By gaining a better understanding of these five factors and what need states are driving them, we can build a framework of understanding of the importance of building “Belonging Experiences” .

Factor One: Empowered KnowledgeEmpowered knowledge is fueled by the easy access to the Internet, with more than one billion consumers online today, and growing at an incredible rate. Consumers have access to an overwhelming range of information, with more than 100 billion public web pages and over 50 million blogs (1.5 million of these are being posted daily).This factor is driven by consumers’ need to be in control and have a clear understanding so that they can make the right choices in their lives. Empowered knowledge is as much about learning as sharing information so that others can benefit from the good, the bad, and the ugly experiences.

In the book 2020 Vision, Davis and Davidson redefine the 80/20 rule. The book notes that by 2020, 80% of business profits and market values will come from that part of the enterprise that is built around info business. The new info business will include services that provide turbocharged information, industry-wide product offerings, preview, twenty four hour access, and self-design features.Catherine Fake, one of the cofounders of Flickr, an online image sharing site, responded to a query as to why Flickr should not pay to feature traffic-building images posted by consumers by indicating that money was not the key driver for user loyalty.The ability of connecting with other people, creating an online identity, expressing oneself, and not least, garnering other people’s attention were more important than being paid to post the images.In his new book Wikipedia, Don Tapscot identifies that the new web challenges the assumptions that information must move from credentialed producers to passive consumers.Co-creating with customers is like tapping the most uniquely qualified pool of intellectual capital ever assembled a pool of talent that is as keenly and uniquely enthusiastic about creating a greater product or service as companies are.The other dimension of this factor is the need for consumers to be empowered to get the most out of life. Maslow identifies that the highest level of human need is self-actualization, which is articulated by the need to increase our intelligence and thereby chase knowledge.

The web allows for ease of access to information and the sharing of knowledge on a global basis, in real time, and evolving daily.Based on the old saying “A little knowledge is dangerous”, the new saying centered on today’s trends would say “A lot of knowledge is deadly”, since consumers now have the ability to become experts in the most minute parts of life.Although the growth of online knowledge is a not anchored in bricks and mortar, it is important to understand that the web is a tool for retailers and service providers to create on-going dialogue and collaboration with their customers, allowing their understanding and knowledge learned from other industries and rivals to harness stronger value for the organization.The real opportunity in a “Belonging Experience” model is the ability to have your most loyal customers promote your offerings as part of a virtual community.

Factor Two: Belonging DoorwaysMaslow’s hierarchy of consumer needs is often depicted as a pyramid consisting of five levels: the four lower levels are grouped together as being associated with physiological needs, while the top level is termed “Growth Needs”. In reviewing Maslow’s theory, it is important to note that the need for belonging is truly the doorway between basic physiological and safety needs (first two levels) and those that are much more aspirational, such as the need for esteem and self actualization (last two levels).

The “Doorway” is also a metaphor for how the experience fosters an environment where consumers can gain a high level of esteem and self-actualization.The “Belonging” levels gives consumers permission to explore more aspirational needs since their basic needs have been met.

Maslow identifies that humans need to feel a sense of belonging and acceptance, whether it comes from large social groups such as clubs, office culture, and religious groups, or small social connections such as family and friends. It is important to note the need for belonging can often overcome physiological and security needs. The belonging needs give permission for the growth needs that are identified as the final level in the pyramid, those of cognitive, aesthetic, and self-actualization.In the Handbook of Cultural Psychology by S. Kitayama & D. Cohen (Eds.), social relationships are defined as the primary channel through which cultures are transmitted, and conversely, culture informs social relationships.

This occurs because culture is what organisms acquire by interacting in the culture of a social network, namely: aspects of organisms’ capacities, motives, ideas, biology, practices, institutions, artefacts, and landscapes.Humans have exceptional specialization for learning from others, including a sophisticated capacity for imitating purposeful action. The book identifies that humans also have proclivities to modify their innate social-relational dispositions in accordance with the precedents, principles, and prototypes provided by the communities they participate in.Thus, culture is transmitted through culturally informed social relationships, and knowledge and the ability to self-actualize are predicated by how we integrate our beliefs as part of a social network or community, opening the doorway to shared knowledge and acquired learning.

Another factor impacting the need for belonging is the shift of the family structure.Nearly 10 million Americans 65 years and older, or 30% of all non-institutionalized older persons, live alone. (per the 1995 US Bureau of the Census, from the Administration on Aging). Thirty-four million people in the US are age 65 and over, representing about one in every eight Americans. Since 1900, the percentage of Americans 65+ has more than tripled, and the number has increased nearly eleven times.

More dramatic, the 75-84 age group (11.4 million) was 16 times larger (than in 1900) and the 85+ group (3.8 million) was 31 times larger. (US Census Bureau).In addition, over the past 35 years, the proportion of US children being raised in two-parent homes has dropped significantly — from about 85% in 1968 to 70% in 2003 — while the proportion of children living in single-parent homes has nearly doubled. The new family structure is changing the definition of community as social groups, both virtual and real, are replacing its importance.

Factor Three: Adult Recess

“Adult Recess” builds on the need for consumers to take a break from their hectic lives, either as a moment of rejuvenation or a period of stimulation. For many, “Adult Recess” is taking that fifteen minute coffee break in their favourite café, shopping in a mall to discover new items to buy, browsing the web, or just sitting in a bookstore to enjoy mental stimulation.For others, it’s visiting an amusement park, rock climbing, or a twenty minute exercise workout. In this factor, the physical place plays a critical role in answering the consumer need.

The need for “Adult Recess” has been fueled by the current multitasking lifestyle and the growing number of women in the workforce. Women, who comprise just over 50% of the US population, make over 80% of the consumer purchasing decision.With the downsizing of America and the constant need to gain efficiencies in manufacturing and operations, consumers today are challenged to fit a 36-hour day into 24. Long gone are the leisurely luncheons and the long afternoon breaks. Recent studies have identified that consumers are working longer and harder than their predecessors. In an era where technology was going to give humans more time to enjoy life, our dependency on our Blackberries and networked technologies have made us accountable 24/7.However, when consumers are spending leisure time, they are tending to be more active. Based on a 2004 national US study conducted by the National Center for Chronic Disease Prevention and Health Promotion that tracked trends of physical inactivity from 1994 to 2004, the prevalence of leisure time physical inactivity declined significantly, from 29.8% in 1994 to 23.7% in 2004.

With the increase in work pressures and the raised importance of how we are spending our leisure time, consumers are at one end of the spectrum exploring daily oasis to provide a break in their day and an opportunity to connect with friends in both a virtual and physical sense, while at the other end of the spectrum they are also exploring more adventurous and unique experiences when taking holidays.

Another trend is virtual recess in Second Life worlds where you can create a new community. By the end of 2011, 80% of active Internet users (and Fortune 500 enterprises) will have a “second life” as defined as a virtual profile, but not necessarily in Second Life, according to Gartner, Inc.Gartner analysts are examining the hype and reality around virtual worlds during Gartner Symposium/ITxpo 2007. Gartner’s advice to enterprise clients is that this is a trend that they should investigate and experiment with, but limit substantial financial investments until the environments stabilize and mature. A range of companies have embarked on creating a presence in some of these virtual worlds as a tool for awareness and recruitment.The implication to marketers is that consumers are looking for places to refuel, re-energize, re-learn, relax and very importantly, reconnect.

As the virtual world continues to play an important role in how much time is allocated to “adult recess”, place brands will need to step-up their presence and value if they do not want to be left out of the race to fill consumers’ need for belonging.

Factor Four: Experiential LifestyleThe need for status remains a key factor in how consumers view brands. A recent Trendwatching report identified that today’s consumers are maturing and are increasingly dominated by physical abundance, virtual worlds, individualism, and feelings of guilt and concern about the side effects of unbridled consumption. This has caused a shift of what constitutes “status”, shifting from physical objects to experiences and relationships.

Marketers have responded to the understanding that lifestyle needs play an important role by increasing their usage of, and spending on experiential marketing during 2008, according to a survey of marketers in the US, the UK, Europe, China and Australia conducted by Jack Morton Worldwide.The study highlights that 93% of respondents agreed that experiential marketing generates advocacy and word-of-mouth recommendations, while 92% agreed that experiential marketing builds brand awareness and brand relationships, and 77% agreed that it generates sales and leads.Consumer interest in novelty and change is at the highest level in five years.

Not only do consumers want new experiences, but they are willing to pay more for experiences that are unique and play to their need for fantasy. This need to experiment is driven by the fact that leisure time is becoming increasingly important to consumers, if only because people are living in a time-poor society in which high employment levels leave little time for genuine relaxation.

In addition, many people today have high levels of personal disposable income (PDI), and falling birth rates also mean that middle-aged consumers have more money to dedicate to the leisure interests of fewer children.

Factor Five: Vigilant Network

With the rise of Internet usage by all ages and a heightened awareness of social and environmental issues, consumers are becoming more vigilant in how companies operate. With access to social networks such as YouTube and Facebook, among others, consumers today have an unprecedented platform to blow the whistle on unethical corporate conduct or demonstrate their support for causes that go beyond the conventional and well-known.

This new vigilant network is growing and forcing organizations to rethink their operating and marketing policies. This factor is not limited to only consumers working as part of a network since the market has also responded with the investment community rewarding organizations that are green and committed to sustainability initiatives. This factor is driven by the need for safety and being engaged, not just bystanders as events are shaped.

Trends that fall within this factor are “Crowd Clout”, defined by Trendwatching as an online grouping of citizens/ consumers for a specific cause, be it political, civic or commercial, aimed at everything from bringing down politicians to forcing suppliers to fork over discounts. This trend is also the result of consumers’ need to be engaged in the creation of products and services. Online buying organizations such as Priceline.com or brands such as Nike and Levi’

s have capitalized on this trend by either offering price comparisons when looking for the ideal product, or the opportunity to design your own style of running shoe or jeans.

With a billion people online and the numbers growing exponentially with an anticipated three billion users in the next ten years, consumers are networked beyond geographical boundaries that once dictated style, needs, definition of power and social requirements.

These consumers are skilled bargain seekers and value hunters. They’re savvy online networkers who have been leveraging the Web for half a decade, and they’re opinionated reviewers and advisors. This growing network of like-minded consumers will provide no shortage of online content, both through pictures, movies and stories, especially with younger generations playing a key role; those that are born to the Web, to whom contributing online is an everyday ritual.

They will demand transparency of values, beliefs, price, and service from brands and organizations. Those that do not conform to their beliefs or values will be judged and penalized in a matter of minutes, on a global basis.

This huge online audience is also made up of keen shoppers with the most recent US data identifying that 200 billion dollars in sales were conducted online. Europe spent 100 billion Euros online buying everything from travel to products and services. A new buying power through a shared network has emerged, shifting the buying power from retailers to social networks.

There is a “free” dimension of the vigilant network with the rise of bitTorrent sites for easy downloading of “free”

music or the emergence of shareware programs such as Linux. Youth culture has adopted this free culture with gusto, with free stuff perhaps dominating free learning and open source.

A statistic worth noting: percentage drop in recorded music sales reported by the RIAA in the first quarter of 2007, compared to the first quarter 2006: 20% while the percentage of internet traffic attributed to bitTorrent packaged media files: 35%.

The challenge for brands is to remain transparent while evolving their offering beyond commodities to avoid the “free”

attitude of the future generations.

Another factor that reinforces the concept of belonging is the emergence of status lifestyles identified by Trendwatching. These new consumer status groups are divided by lifestyle, namely: Transient Lifestyles: consumers who live a transient lifestyle, free from the hassle of ownership; Participative Lifestyle: especially for younger consumers where status comes from finding an appreciative audience; Connecting Lifestyles: it’

s all about who wants to connect to you and how big your network is; Eco-Lifestyle: consumers who are dedicated to sustainable design and living, to name just a few.

In his book, Advertising to Baby Boomers, Chuck Nyren suggests that Boomers are less likely to buy packaged cruises and other kinds of trips and more likely to want to plan their own experiential travel, and they will rely on the Internet to do it. However, it’

s important to understand that the definition of experiential travel will vary depending on the Baby Boomer segment.

There are the adventurous travellers who have “been there, done that”

and are looking for new experiences, and then there are also the more conservative, less well-travelled group that defines adventure as something more low-key, where the relaxation comes because someone has planned the trip to the last detail.

The implications to retailers and service providers are significant since they are competing with the experiential need for customers and the benchmark is being raised for what constitutes an appropriate experience. In addition, the search for the journey through online media is as important as the actual activity selected, leading to the premise that information and knowledge are critical in setting the boundaries for the right experience.

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