This document discusses how technology is changing consumer behavior and merchant dynamics. It notes that power has shifted to customers as technology becomes more integrated into culture. It highlights several statistics about technology usage and adoption. It then discusses three forces driving changes: changing consumer dynamics as more people globally become middle class and younger; changing merchant dynamics as consumers research and shop online more; and increasing technology adoption and proliferation of devices. The document is a presentation by John Gerzema on these trends of the "Brave New Consumer World."
2. A BRAVE NEW CONSUMER WORLD
JOHN GERZEMA | STORE 2012
2 Copyright 2011, John Gerzema
3. Source: Flickr, Eric Fischer
3 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
4. POWER HAS SHIFTED TO CUSTOMERS
AS TECHNOLOGY BECOMES CULTURE
Boy Scouts debut Badge in Robotics
4 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
5. 694,445 1,600+
SEARCH READS ON
98,000+ QUERIES SCRIB’D 370,000+
TWEETS MINUTES CALLS
ON TWITTER ON SKYPE
13,000+ 20,000+
iPHONE APPS
DOWNLOADED EVERY NEW POSTS
ON TUMBLR
SECOND
6,600+ 13,000+
NEW PICTURES HOURS MUSIC
ARE UPLOADED STREAMING ON
ON FLICKR PANDORA
12,000+ 100+
NEW ADS POSTED 70+
NEW LINKEDin
ON CRAIGSLIST DOMAINS ACCOUNTS
REGISTERED
5 Source: Go-Globe.com Copyright 2012, John Gerzema | BAV Consulting | WPP PLC
6. 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 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
7. SMARTPHONES: A LOVE AFFAIR
7 Copyright 2012, John Gerzema | BAV Consulting | WPP PLC
10. THREE FORCES AS CATALYSTS
CHANGING
CONSUMER
DYNAMICS
A BRAVE NEW
CONSUMER
WORLD
CHANGING TECHNOLOGY
MERCHANT ADOPTION
DYNAMICS
10 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
11. CHANGING CONSUMER DYNAMICS
• By 2020 31% of the world’s population
will be under the age of 351
CHANGING
YOUNGER • 40% of Canadians will be under the age
of 35 in 20202
CONSUMER CONSUMERS
DYNAMICS • Half of US 20-somethings have no
landline3
A BRAVE NEW
CONSUMER
WORLD
CHANGING • By 2030, 2/3 of the world’s population
MERCHANT TECHNOLOGY
ADOPTION could be middle class4
DYNAMICS
GLOBAL • BRICs could account for 50% of global
equity markets by 20505
PROSPERITY
• Single largest transfer of wealth in
American history6
1Infosys, 2 2012 U.S. Census Bureau, International Programs: International Population Projections 2020, 3 FCC June
11 2011 4 Brookings Institute 2010, 5 Goldman Sachs Global Economics 2009, 6 PEW Center 2011 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
12. CHANGING MERCHANT DYNAMICS
• 52% of Canadian online adults prefer to
MINDFUL research a product online before
purchasing1
CHANGING
CONSUMER SHOPPING
DYNAMICS • 43% of US retail sales are influenced by
the web1
A BRAVE NEW
CONSUMER
WORLD
• 44% of US consumers reported 1+ P2P
CHANGING fund transfer in 2009, expected to rise
MERCHANT TECHNOLOGY
DYNAMICS ADOPTION PERSON TO to 61% in 20142
PERSON (P2P) • 2010 P2P transfers totaled $7 billion,
TRANSACTIONS with substantial growth expected in
coming years2
• 4/10 mobile bankers made a mobile
P2P transfer in 20102
12 1 Delv/Nia Survey 2010, 2 Javelin Strategy & Research, 2011 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
13. TECHNOLOGY ADOPTION
• 2 billion people are connected to the
internet; 200 million more each year1
• $8 Trillion exchange hands each year
through ecommerce1
EXPANSION OF
CHANGING • The internet accounted for 3.4% of the
CONSUMER THE INTERNET GDP in 13 countries and 21% of the GDP
DYNAMICS in mature markets over the past 5 years1
• 28% of smartphone owners use them as
their primary net connection2
A BRAVE NEW
CONSUMER
WORLD
• 5 Billion mobile phones in use in 20101
CHANGING
MERCHANT TECHNOLOGY
ADOPTION • 45% of all Canadian adults have Smart
DYNAMICS
DEVICE Phones3
PROLIFERATION • 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
1 McKinsey Global Institute 2 ARS Technica, 2011 3 comScore, 2012 Canada Digital Future in Focus Report
13 4 Global Industry Analysts 2.0 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
14. THE WORLD’S MOST EXTENSIVE STUDY OF
CONSUMERISM: BRAND ASSET VALUATOR®
WORLD’S LARGEST 800,000 CUSTOMER QUARTERLY U.S.
DATABASE OF BRANDS ATTITUDES, PANEL OF 17,000
PERCEPTIONS AND RESPONDENTS
ACADEMIC REVIEWED VALUES
$ 130 MILLON
17 ANNUAL STUDIES 50,000 BRANDS INVESTED WITH DATA
COMPRISING 78% BACK TO 1993
GLOBAL GDP 275 STUDIES IN 51
COUNTRIES
14 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
15. TRAVELING THE GLOBE IN SEARCH OF THE
BRAVE NEW CONSUMER WORLD
REYKJAVIK
STOCKHOLM
LONDON BERLIN
BRUSSELS
SAN
FRANCISCO NEW YORK
ATHENS BEIRUT TOKYO
ST LOUIS TEL AVIV
JERUSALEM PARO SHANGHAI
AHMEDABAD KOLKATA
MEDELLÍN
NAIROBI
BOGOTÁ
LIMA THIMU
15 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
16. BRAVE NEW CONSUMER WORLD #1
CURRENCY GETS CURRENT
16 Copyright 2011, John Gerzema
17. TIM KUNDE
FOUNDER
FRIENDSURANCE
BERLIN
17 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
18. MARIA DAMANKI
EUROPEAN
COMMISSIONER
MARITIME AFFAIRS
AND FISHERIES
BRUSSELS
18 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
19. ANNA PEARSON
FOUNDER:
SPOTS OF TIME
LONDON
19 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
20. MOBILE COMMERCE IS RESHAPING THE MARKETPLACE
“ EBAY BUYS ZONG FOR “MOBILE PAYMENTS TO TRIPLE “24% OF MOBILE USERS BANK
$240 MILLION IN CASH TO TO $670B BY 2015; DIGITAL FROM A PHONE.”
BOOST PAYPAL’S MOBILE GOODS WILL REPRESENT — Mobile Payments World
PAYMENTS TECHNOLOGY.” 40% OF TRANSACTIONS.”
— TechCrunch — TechCrunch “WHY MOBILE PAYMENTS
CAN'T COME SOON ENOUGH.”
“ VC’S INVESTED $834 MILLION IN “MOBILE PAYMENTS TO REACH
— CNN Money
SCORES OF FIN-TECH FIRMS IN 2.5B USERS GLOBALLY BY 2015.”
2008 AND $1.4 BILLION IN 2011, UP — Mobile Commerce Daily “STARBUCKS CONTINUES TO
75% FROM LAST YEAR .”
BLAZE M-PAYMENTS TRAIL.”
— CB INSIGHTS “TWO MAJOR INDIAN OPERATORS
—Mobile Payments World
HAVE ANNOUNCED PLANS TO
“ AN ADULT FEMALE IS 3X MORE PURSUE MOBILE BANKING
INITIATIVES.” “PAYPAL PREDICTS THE END
LIKELY TO BE A GAMER THAN A
— Mobile Payments World OF THE WALLET BY 2015.”
YOUNG MALE.”
— Slashdot
— Ars Technica
“INDIAN MOBILE BANK EKO RAISES
$5.5 MILLION, PROCESSING $270 “MOBILE GAMING TO SURPASS
“ NFC PAYMENTS TO GENERATE
MILLION IN PAYMENTS A YEAR.” CURRENT CONSOLES.”
$50 BILLION IN 3 YEARS.”
— TechCrunch — Slashdot
— Mobile Payments World
20 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
26. BRAVE NEW CONSUMER WORLD #2
CINDERELLANOMICS
26 Copyright 2011, John Gerzema
27. VINAY GUPTA AND
TOM WRIGHT
C0-FOUNDERS
WHIP CAR
LONDON
27 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
28. MARIA ZIV
DIRECTOR OF THE
GOVERNMENT OF SWEDEN
TOURISM BOARD
@SWEEDEN
STOCKHOLM
28 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
29. CINDERELLANOMICS: WANT LESS, RENT MORE
66% AGREE 67% AGREE
Since the recession, I realize I am
happier with a simpler, Because of the recession, I shop less
more down-to-basics often than I used to
lifestyle
29 Source: USA BAV All Adults Q1 2012 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
56. LEO RISKI
´
CULTURAL ATTACHE
FINDLAND
THE FELLESHUS
BERLIN
56 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
57. BEYOND BRICK AND MORTAR, OR ‘STORE AS WI-FI’
WHERE A BRAND IS SOLD “TRUSTWORTHY” 2007-2011:
INFLUENCES HOW I FEEL ABOUT A BRICK & MORTAR VS. INTERNET
BRAND RETAILERS
26
24
22
20
63% DISAGREE 18
16
14
12
10
2007 2010 2011
BRICK & MORTAR RETAIL
INTERNET RETAIL
57 Source: USA BAV All Adults FY 2011-Q1 2012 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
63. WHERE THESE TRENDS LEAD US:
A BRAVE NEW CONSUMER WORLD
63 Copyright 2011, John Gerzema
64. RETAIL BRANDS ACROSS CANADA FACE MORE
COMPETITION IN THE BRAVE NEW CONSUMER WORLD
WHILE TOTAL USAGE AND PREFERENCE HAVE INCREASED
STRONG LOYALTY TO SPECIFIC BRANDS IS DECLINING
Use Regularly Use Occasionally One I Prefer One Of Several
-12% -8% 13%
15%
64 Source: USA BAV All Adults FY 2010-Q2 2011 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
65. THIS IS BECAUSE THERE ARE FEWER BRANDS PEOPLE TRUST,
MAKING TRUST ACT AS A PRECIOUS COMMODITY
50 49%
45%
40
29%
30 25%
20
10
0
2001 2009 2001 2009
PERCENT OF CORRELATION OF TRUST
TRUSTWORTHY TO FUTURE POTENTIAL
BRANDS (BRAND STRENGTH)
65 Source: Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
66. FEWER BRANDS ARE DELIVERING PERFORMANCE, WHICH
DRIVES SATISFACTION AND LOYALTY.
PERCENT OF PERFORMANCE CORRELATION TO GUEST
BRANDS CONSUMER SATISFACTION
100% 1.0
50 0.5
73% 0.82
0.68
47%
0 0.0
PRE POST PRE POST
66 Source: USA and Canadian BAV All Adults (Trustworthy brands defined as those with greater than 20% attribution) Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
67. A LESSON TO PRICE-DRIVEN RETAILERS: VALUE DOES NOT
EQUATE TO DIFFERENTIATION
WORTH MORE, THOUGH NOT AS STRONGLY GOOD VALUE DRIVES RELEVANCE AND ESTEEM,
CORRELATED TO KNOWLEDGE AND RELEVANCE BUT IS NEGATIVELY CORRELATED TO
GROWTH, DOES A BETTER JOB DRIVING ESTEEM DIFFERENTIATION, THE KEY DRIVER OF CURRENT
AND DIFFERENTIATION. AND FUTURE BRAND VALUE.
KNO KNO
EST EST
REL REL
DIF POSITIVE DIF NEGATIVE
CORRELATION CORRELATION
0.2 0.0 0.2 0.4 0.6 0.8 1.0 0.2 0.0 0.2 0.4 0.6 0.8 1.0
67 Source: BrandAsset Valuator, 2012 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
68. IN BRAND VS. PRIVATE LABEL PRICE ALONE ISN’T DRIVING
BRAND CHOICE
“I PREFER TO BUY ENERGIZED DIFFERENTIATION
NAME BRANDS WHEN PRIVATE LABEL VS. BRAND NAME
AVAILABLE INSTEAD
OF STORE BRANDS.” 80
BRAND NAME
14% INCREASE IN 60
AGREEMENT FROM Q4
DIFFERENTIATION
2011 TO Q1 2012 45% INCREASE IN
DIFFERENTIATION
40 GAP FROM 2009
20
PRIVATE LABEL
0
2008 2009 2011
Source: BrandAsset Valuator, 2012
68 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
69. THE POWER OF ‘SOCIAL AS BUSINESS MODEL’.
35
SOCIAL
30 MEDIA
25
CHANGE IN TRUST
(Percentage)
20
15
10
WEBSITE
TELEVISION SPONSORED
MAGAZINES 5 EVENTS
NEWSPAPERS MOBILE
0 10 20 30 40
PERCENTAGE CHANGE IN BRAND STRENGTH
(Future Potential)
69 Source: BrandAsset Valuator 2012 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
70. WHILE NON-INTERACTIVE MEDIA HAS DECLINED
2008 2010
2
FOX NEWS
100
SOCIAL MEDIA INTERNET SEARCH
(Energized Differentiation / Relevance)
INTERNET PORTAL
MSNBC
BRAND STRENGTH
INTERNET CNBC
TOOLS AND
SERVICES INTERNET
WSJ
COMMERCE
50
SERVICE
ESPN THE
MAGAZINE
INTERNET THE NEW
NEWS/INFO YORK TIMES
THE NEW
FINANCIAL YORKER
TIMES
0 50 100
BRAND STATURE
(Esteem / Knowledge)
70 Source:BrandAsset Valuator 2012 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema
71. ULTIMATELY STRONG CUSTOMER-CENTRIC BRANDS
BREAK AWAY FROM THEIR CATEGORIES
ALL ADULTS 2011
100
COMPUTER
(Energized Differentiation / Relevance)
AVERAGE
INTERNET
BRAND STRENGTH CUSTOMER
RETAIL AUTO
AVERAGE AVERAGE
50
AIRLINE
HOTEL AVERAGE
AVERAGE
0 50 100
BRAND STATURE
(Esteem / Knowledge)
71 Source: BrandAsset® Valuator USA, All Adults, 2011 Copyright 2012, John Gerzema | BAV Consulting |WPP PLC | @Johngerzema