CROSS CATEGORY THEMES
The sustainable revolution 2.0
Across the United States, single-use plastics have become an endangered species. While the federal government is doing its level best to eliminate environmental restrictions wherever it finds them, states, brands, and municipalities seem to be running in the opposite direction. The chief casualties of this war on unnecessary plastics are drinking straws and shopping bags, two major culprits in the production of oceanic microplastics.
Americans are becoming increasingly concerned about the environment. A recent study by the Yale Program on Climate Change Communication found that 73 percent of Americans believe climate change is happening. A similar study showed that 56 percent believe that the environment should be the top priority of the government. Those numbers have been on the rise for roughly a decade.
This has caused many brands to adopt a policy of doing no harm. Rather than wait for government regulations to enforce compliance, they are undertaking their own initiatives to reduce their carbon footprints. For example, yogurt brand Danone espouses the belief that if it wants to help people live healthier lives, it needs to promote a healthy planet. Every year, it releases a climate policy report in which it fully and transparently details its successes and shortcomings in its progress towards its goal of becoming carbon neutral. Other brands might do well to follow its lead.
The wellness craze
Roughly 36 percent of Americans qualify as obese. While that number does not put the US among the top 10 nations by that measure (such rankings are dominated by small Pacific island nations), it is nonetheless ahead of every other Western democracy.
But while some Americans can’t say no to a slab of prime rib, an equally large number of people are obsessed with health—and they are defining it in increasingly broad terms. Being healthy no longer means that you can pass your physical and don’t have any noticeable disease. Americans are now wearing sleep trackers, increasing their number of social connections, monitoring their mobile device usage to ensure digital health, and simply trying to find a sense of balance in a fast-moving and demanding world. Where a generation ago, healthy food was defined by the absence of certain ingredients—like salt, fat, or cholesterol—today it’s more often defined by what’s put in: organic, macrobiotic, paleo, and so on.
The evolution of this market is creating opportunities for brands in all categories. Auto manufacturers are looking at ways they can use sensors to track people’s health, clothing has become increasingly digitized to measure fitness, and wearable tech has become synonymous with jewelry. This trend should only continue to accelerate as we become better and better at quantifying our well-being.
The divided last mile of commerce
In New York City, long before the advent of services like DoorDash and Uber Eats, residents were able to get almost anything delivered, from meals and groceries to laundry and electronics. In recent years, that capability has expanded to many other urban areas. Wherever you find population density and affluence, you can find someone willing to deliver whatever you need to your door.
Move out of the city, however, and a different dynamic plays out. Suburban and exurban towns in the US typically set aside different geographical areas as zones, where only particular activities can occur. There are office parks, retail centers, and housing developments. An unintended consequence of this is that people living in these places get in a car any time they need to shop, work, or seek out entertainment. On any given weekend, the average American family typically knows when and where it will be on the road.
This makes them perfect customers for click-and-collect services, which are being adopted at a fast rate. Walmart, for example, has attributed most of its recent success to the surprising growth of its Walmart Grocery offering. Moving forward, brands will need to account not only for the usual economic, demographic, and behavioral data that they have on their customers, but also the landscape in which they live. If they’re in a crowded American city, delivery will be on their minds. Outside of those areas, however, making sure there’s a place customers can quickly and efficiently grab their orders, is always a good idea.
J. Walker Smith, chief knowledge officer at Kantar, likes to point out one of the stranger brand pairings in recent years: Capital One and Pete’s, a coffee brand. Inside Capital One bank branches across the country, you can sit down and get a steaming cup of latte along with a mortgage application. While this may seem strange, it changes the entire dynamic of banking from utilitarian coldness to a much more welcoming and casual experience. The partnership seems to be doing well, as the two brands have announced their intention to expand the partnership.
This mirrors a broader trend in which consumers have signaled an increasing desire for experience over stuff. The rationale for this is often attributed to environmental concerns, but it could also reflect a natural shift in consumer tastes. According to Smith, brands need to address this new reality in two major ways. The first is to recognize that people have less time for the purchasing process. They are seeking seamless shopping experiences, both from traditional retailers and directly from brands.
Equally important are traditional experiences, which is where Capital One and Pete’s come in. People now want to see, feel, taste and interact with brands in surprising ways. Google, for example, has treated its fans to everything from an interactive hardware store to a Disney-style amusement park ride. As a result, even brands that are not traditionally considered experiential are finding themselves challenged to reinvent themselves or partner with others to deliver something more.
For years, the go-to for home entertainment in the US was a so-called triple play package. Cable or satellite providers would give their customers a bundle consisting of a fixed telephone line, an Internet connection, and 200 or more television channels. Such packages would often cost more than $200, which led to a lot of grumbling from people who wondered why they should pay for a telephone line they didn’t need and 193 channels they didn’t watch. They may soon come to regret this attitude.
Across the American media landscape, channels are rapidly fragmenting. Brands like Disney, ABC, and NBC have announced plans to withdraw their popular programs from traditional cable networks and offer them instead as standalone OTT offerings. On the surface, this may seem like a great idea. Consumers simply pay for what they want à la carte. But it may also open up a Pandora’s Box of unintended consequences.
The most obvious problem is cost. Even though consumers may not have liked paying for the expensive triple play packages, adding these new services, which cost anywhere from $5 to $50, could easily be more expensive. The problem can be particularly acute for sports fans because games bounce around the networks, leaving them to have to maintain a bewildering array of short-term subscriptions just to watch their favorite teams. Less obvious problems include the annoyance of navigating an array of non-standardized interfaces and the lack of support for niche channels that don’t command the same level of interest of a Disney or network.
Above all, debundling is a paradox in the modern world. While most of the brand world seems dedicated to removing consumer pain points and friction, media players seem determined to exacerbate them. We’ll see how that works out for them.