Professional Documents
Culture Documents
THE CHANGING
RELATIONSHIP
BETWEEN PEOPLE
AND GOODS
A fresh perspective on our need for “stuff” and the
role of sustainability in emerging consumer behaviour
Oskar Korkman & Sharon Greene
© Sitra 2017
Success in business requires understanding customers, getting close to them and analysing
their behavior. Figuring out what truly makes customers tick is key. This allows the creation of
tangible and intangible products that customers truly desire and the communication of these
benefits in the best way, in the right place at the right time.
Sitra received an opportunity to participate in an honestly international study on changes
in consumer behavior with Alice Labs. We were excited, because this type of broad under-
standing is precisely what is needed: the lessons from this study must be available to Finnish
companies. We also wanted Finland as a country to be included in the study, so that we could
compare Finland to other countries. Where are we lagging, where might we be front runners?
Where do the greatest opportunities lie?
It is our hope that this report will also provide the reader insights on the role sustainabil-
ity plays for consumers, as well as tools for bringing sustainability to the fore. A common
refrain is that consumers care about sustainability in surveys but only about price when in
stores. This study provides some thoughts on how sustainability often plays an important part
in creating a well-rounded product.
Contents
Introduction 4
The Stuff in Flux project 11
Flexible stuff 18
Perfect stuff 24
Stuff for pleasurable engagement 30
Familiar stuff 36
Summary and conclusions 42
Methodology and scope 46
References 48
The authors 49
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Introduction
Historically, abundant choices have defined more mobile, versatile and demanding. These
consumer society. Shopping for new and a consumers, with their grassroots market power,
greater range of goods occupies the core of are beginning to influence industries to change.
developed societies. In other parts of the world, Furthermore, this study serves to shift tradi-
emerging-market consumers have rapidly tional market assumptions from fast cycles,
adopted these habits. Collectively, we have come novelty and ownership towards ideals of selec-
to believe that access to and ownership of tivity, longevity, collectivism and resourceful-
products define our lifestyle and quality of life, ness.
as well as our happiness. The key component of this study is the
This philosophy drives many consum- identification and intense observation of a
er-goods businesses. Today successful goods group of consumers we refer to as the “leading
companies are developing new products at an edge.” On three continents (North America,
increasingly rapid pace, advertising them as the Europe and Asia), leading edge consumers share
newest and greatest. From technology to fashion a crucial set of values—that is, their curiosity,
and household items to fast-moving consumer open mindedness and desire to learn about
goods, innovation often draws upon novelty. what is new on the marketplace. These individ-
Novelty, however, quickly wears off, necessitat- uals believe in creativity and finding innovative
ing replacement with newer and better prod- solutions to today’s problems. They also exercise
ucts. their soft power in terms of leadership and
The technology industry offers a prime influencing change.
example of this trend. Replete with cycles of We believe the new direction these con-
programmed obsolescence, consumers expect sumers have shown us is not only valid for the
and “need” new models more frequently. Many leading edge, but will also become increasingly
products last only a couple of years, often three relevant for the mass market. Their consump-
at most. tion habits create new business opportunities,
Such is the modern mass-market reality. while simultaneously placing more pressure on
In early 2016, inspired by the belief that the established businesses to change and adapt to
market status quo was being challenged and meet a new set of expectations.
shifting, we set out to identify the nature of such
transformations and the potential impact on
business and society.
This study revealed an emerging story
about consumption, characterised by the emer-
gence of market-shaping consumers who are
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
A shift in our
relationship to stuff
A structural shift has changed consumers’ relationships
to goods. This shift is not an abrupt move away from
the existing model. Rather, it better reflects a new set of
behaviours, values and needs emerging in parallel alongside
those that already exist.
STARTING POINT
5
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
The nature of the emerging ing specific goods can serve to externally
change express non-materialistic self-improvement
through the quest for items that correspond to
Stuff and owning stuff is important. Envisioning functional or aesthetic perfection or support
a future where stuff does not continue to play an our aim to achieve optimal performance. Such a
important role in people’s lives is difficult. That quest can include searching for the perfect work
role, however, is changing, and it is quite likely clothes, the ideal sport shoes or the perfect
that the overall amount of material goods will nutritional balance in a meal substitute. Con-
decrease, particularly in more developed markets. ceptually, consumers discriminate by finding
Leading edge consumers do not necessarily the item that perfectly corresponds to their
aspire to own goods associated with fast cycles, unique set of requirements. By removing
novelty and an individual’s status. In addition, unnecessary clutter, consumers can create a
changes can be seen in the mass market itself. space for calm personal development.
In essence, new consumer behaviours
come into play.
Possessing stuff for a long time is desirable New expectations and
and attractive. Keeping and using things for a opportunities
longer period of time and possessing things that
evolve or improve through use became valuable. These behavioral changes are creating new
This behaviour, characteristic of generations requirements and expectations in the market. In
past, represents a fresh approach among today’s this report, we introduce four opportunities to
consumers. Fast consumption is increasingly create new value in the market. We call these
seen as old school or “passé,” particularly among “value territories,” because they include differ-
leading edge consumers. ent attributes that create value when combined.
Distinction comes from skills and autonomy; FLEXIBLE STUFF. This represents a
stuff tells a story. The quest for status symbols is value territory focused on constant innovation
being gradually supplanted by the quest for providing solutions to everyday challenges.
symbols of distinction. For today’s new con- Such solutions are multifunctional, flexible,
sumer, distinguishing oneself is not merely adaptable, resourceful and planet friendly.
accomplished through buying more exclusive This value territory combines personal
and more expensive products. Success is multi- mobility with the solidity and reassurance of the
dimensional, and the desire to acquire items as physical realm. This territory allows individuals
trophies indicative of economic success gives to reduce the volume of objects in their life,
way to a desire to possess items that tell a story while also providing the safety and security of
about one’s personal knowledge, experience and ownership.
acquired skills. For example, consumers may want multi-
Stuff helps make the world a better place. purpose clothing suitable for both work and
In the past, consumption of mass-market prod- sports.
ucts served to satisfy personal desires. Increas- PERFECT STUFF. This value territory
ingly, today’s consumers seek to connect with identifies the extraordinary in the ordinary,
collective interests and products that support providing the perfect version of the mundane
those interests. This collective interest can take object. Such perfection would reduce consump-
the shape of reflecting environmental values or tion while providing confidence to do and be
choosing to consume products that create con- more. Perfect things support the consumer’s
nections with others, such as local communities. quest for an optimised daily life.
Stuff helps us to achieve our personal best. Such consumption requires an extreme
Choosing specific goods and how people inter- selectivity. The perfect object is fit-for-purpose
act with things may also allow us to regain a and does not necessarily adhere to the latest
sense of control in a fast-moving world. Choos- trends. Perfect objects characterise a consumer
6
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
who choose based on skill, independence and change, the long-term ownership of objects that
wisdom. Such a consumer is responsible. A low age and evolve through use appears new.
negative impact on the environment is also For example, consumers want to buy a
becoming a significant component of the per- product that evolves with them and that ages
fection formula. gracefully. Such products include a kitchen
For example, one respondents described knife or a leather bag that with more use gradu-
his idea of a perfect backpack as having an ally fits its owner’s hand better.
integrated solar power panel and kinetic power THE ROLE OF SUSTAINABILITY.
generator linked to his walking shoes, providing Across all territories sustainability plays a
a source of clean energy to charge his smart- crucial role.
phone and to heat water. Sustainability emerged not as a stand-alone
STUFF FOR PLEASURABLE requirement for consumers, but as a characteris-
ENGAGEMENT. In this territory, priority is tic linked to other attributes.
given to a collective and shared value. Physical For instance, for flexible stuff, sustainabil-
objects represent means of expressing the ity is based on multipurpose products and
personal values of the “engaged” consumer. The materials. One example lies in Lynk&Co1,
value of things extends beyond material goods launched by Chinese manufacturer Geely in
and takes into account the human and environ- collaboration with Volvo. Leveraging the bene-
mental impact. Yet, goods also provide pleasure. fits provided by the internet, the carmaker’s
Enjoyment and removing the guilt associated system is described as the “smartest driving
with consumption help the conscious consumer platform ever made”, allowing consumers the
renew their collection of goods through pleas- option to buy, lease or simply borrow a car.
urable consumption. Among perfect stuff, goods are produced
This territory allows individuals to enjoy aimed at perfectly fitting a function. Here, a few
consumption, but in a responsible way. Here, high-quality products replace multiple lower
aspects of hedonism and luxury relate to sus- performance or quality items. One example of
tainability. perfect stuff lies with Ministry of Supply appar-
For example, consumers may seek to buy el,2 the founders of which are driven by their
premium goods, such as a pair of sneakers made desire to understand the problems individuals
from ocean plastics. Such an option makes the face related to formal workwear. Ministry of
purchase even more appealing. Supply was launched through a Kickstarter
FAMILIAR STUFF. Objects falling project aimed at making the perfect men’s
within this final value territory focus on longev- formal work shirt. Emphasising the use of
ity and familiarity. Such goods endure and innovative fabrics and tailoring methods that
evolve with the consumer and appear to reduce waste, the company’s founders claim to
improve over time. Consumption slows down, make the best workwear ever produced.
replacement cycles diminish and resources are Stuff for pleasurable engagement combines
protected. gratification, guilt-free consumption and sus-
This type of consumer choice renders tainability. For instance, exclusive carmaker
objects more valuable over time and creates an Tesla3 combines a premium driving experience
experience of newness or renewal. Perhaps with clean energy and societal benefits. Its
because we are conditioned to expect frequent appeal is undeniable, whereby Tesla’s most
affordable car, the Model 3, received 400 000
1 http://www.lynkco.com/en/
2 https://ministryofsupply.com
3 http://www.tesla.com
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
4 http://www.theverge.com/2016/4/21/11477034/tesla-model-3-preorders-400000-elon-musk
5 For example, https://www.youtube.com/watch?v=llufipzI8_k
8
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
FOUR OPPOR-
TUNITIES FOR
CRE ATING
VALUE
9
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
WE MUST:
6 http://www.airbnb.com/
10
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
The Stuff in Flux project aims to understand Third, we integrated thinking on new
how the relationship between consumers and technologies and business models with our
goods is changing and whether this change insights into the evolution of consumers. The
represents a systemic and structural shift away future is about more than simply replacing the
from what we call the “abundance model.” old with the new. In most cases, the future
The abundance model refers to a late 20th represents a reality where multiple values and
century mature-market form of Western consum- approaches coexist.
erism. This form of consumerism focuses on the Finally, and perhaps most importantly, this
idea that shopping and the acquisition of goods project ultimately aimed to establish clear
or things is hedonistic, pleasurable and linked to guidance for managers on preparing for the
enhancing individual identity and status. future. Whether a company is already directly
In this project, we sought to examine a or indirectly selling consumer goods, or plan-
cross-category perspective to evaluate whether ning to do so in future, this report was created
shifts in behaviours and requirements occur to help companies become and remain competi-
across multiple categories simultaneously or if tive, both in Finland and globally.
they only relate to specific product categories. The appendix provides further details on
First, we examined goods and consumers our methods and an overview of our approach.
holistically, focusing on an understanding of the After completing thorough background
overall change in how people value goods today research identifying the key themes of change,
and how goods are likely to be valued in the we interviewed 50 individuals under the age of
future. We studied big-picture dynamics in 35 in Stockholm (Sweden), Malmö (Sweden),
relationships between people, life contexts and San Francisco (USA) and Bangalore (India)
macro-level trends, and how these impact who fit our sociocultural definition of leading
expectations, attitudes and behaviours in rela- edge consumers. By this we mean that these
tion to goods. individuals are recognised within their circles as
Second, we applied a sociocultural lens to authorities in “knowledge about newness.” Such
investigate the relationship between people and knowledge and accompanying curiosity is
goods to explore how individuals interact with confined neither to a specific category nor to
stuff in the context of everyday life. By doing so, “stuff.” These consumers provide us with clues
we framed consumer opinions within a deeper regarding the type and direction of changes to
understanding of social and cultural contexts as come in the future.
a means to develop deep human insights and to We spent more than 350 hours in one-on-
answer our key research questions. one discussions and activity-based hackfests
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
with these individuals. Following an intense 3. The individual feels a connection to the
period of discovery, we formulated a series of world around them, and believes that all
qualitative hypotheses about the nature of this actions cause reactions and that their own
change. These were then tested in an online actions can bring about change. (Notably,
quantitative survey. This online study was this mimics a form of systems thinking.)
conducted in seven markets in September 2016,
and allowed us to quantify the leading edge Through the identification and quantifica-
consumer segment, leading edge consumer tion of the leading edge consumer category, we
behaviours and the degree to which such con- also identified and quantified the fast follower
sumers are already impacting the larger mass and mass adopter segments of consumers. In
consumer base. our quantitative analysis, we examine two
Leading edge consumers represent approx- primary dynamics within these segments. The
imately 11% of the four-county population first is the proportion of leading edge consum-
which form the perimeter of this report. They ers who are already adopting new behaviours.
were identified by the degree to which they The second is the proportion of mass adopters
correspond to a set of shared characteristics. lagging behind in the adoption of new behav-
These characteristics, previously identified iours. This contrast allows us to formulate
through a descriptive study, are shared among predictions regarding the adoption potential
leading edge consumers: and, to an extent, the relative speed of adoption.
In this report, we confine our discussion to
1. The individual is recognised by their social responses from individuals in four (Spain,
circle as a “go-to” person Germany, Finland and the USA) of the seven
for information on new stuff such as markets we studied.
music, culture and technology.
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
QUALITATIVE
AND QUANTI-
TATIVE EXPLO -
RATION
Stockholm Finland
Malmö
Germany
Bangalore
10
senior decision-makers
hours total leading edge participants
from 4 companies
Quantitative exploration:
4 2400
markets respondents
(7 total)
13
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
7 Berger, John (1972), Ways of Seeing, British Broadcasting Company and Penguin Books. London.
14
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Skilled, mobile
CONSUMERS & autonomous
HAVE A WIDE
SPECTRUM OF
NEEDS
MULTI-FOCAL Better
Better me
MODEL world
8 http://www.toms.com/
9 http://methodhome.com/
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
What is driving change value of goods. We will also illustrate the impact
of various post-material tendencies.
Since the turn of the millennium, we have Digitisation has become an integral part of
witnessed an unprecedented wave of change and everyday life. This change in the way we live has
instability, culminating in the last decade of been fundamental, ranging from communica-
economic turmoil. While technology (such as tion to shopping to entertainment. Digital
artificial intelligence and robotics) continues to goods have many benefits, but also create a
impact how we live and work, climate change is longing for alternatives to “streams” of content.
becoming an ever-present threat. Unsurprisingly, we also see a resurrection of
In the a world of volatility, uncertainty, vinyl records and old-style cameras. The most
complexity and ambiguity — the so-called advanced consumers revert back to a material
VUCA world — society’s attitudes and behav- world in search of stabilising rituals, local
iours are changing. In the face of uncertainty, connections and, in some cases, mindfulness. In
we see an increasing need for preparedness, a this context, some physical goods take on new
sense of mobility and a need for versatility meanings as explicit counter-reactions to the
sufficient to adapt to changing circumstances. digitisation of everyday life.
These newly dominant attitudes and behaviours The many benefits of digital goods are
are driving some of the major changes in con- undisputed. In many cases, digital goods have
sumers’ relationships to material goods. created more flexible relationships to various
The economic uncertainty following an products. We will discuss the sharing economy,
extended period of unrestrained consumption including its current limitations and future
and affluence has accelerated the emergence of possibilities. Furthermore, we understand that
post-material values, predominantly spear- sharing and more flexible arrangements involv-
headed by millennials — individuals born ing possessions remain impossible without
between 1982 and 1997. Instead of valuing digitisation. The promises of technologies such
ownership and possession, these new consum- as blockchains will only further enable such
ers are more interested in relationships, satisfac- tendencies.
tion with life and their health. The World Values Powered by an increasing transparency
Survey illustrates how these values have histori- afforded by the internet and better access to
cally evolved, where the Nordic countries tend technology, consumers are making better-in-
to top global charts on post-material values.10 formed choices and progressively opting for
In our analysis, we see how post-material products that carry some form of social or
values create new types of relationships between environmental benefit. Companies are under
people and goods on the market. But does an increasing pressure, both through legislative
increase in post-material values indicate that changes and consumer expectations, to provide
materialism is declining? Or is materialism goods that minimise any potential negative
being redefined? In late 20th century material- impacts.
ism, or what is sometimes called “terminal The convergence of these forces of change
materialism,”11 was ownership an end in itself? generates new and distinct consumption behav-
Is the 21st century about rejecting possessions iours. The rise of these behaviours shapes
or becoming more selective with regards to emerging sets of requirements, and in turn
ownership? frames value territories or opportunities for
In this report, we provide an answer to those capable of interpreting the signs.
these questions in the context of the changing
10 http://www.worldvaluessurvey.org/wvs.jsp
11 Csikszentmihalyi and Rochberg-Halton (1981), The Meaning of Things. Cambridge University Press
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
These new requirements can be grouped into In this section, we describe these opportu-
four value territories, which we label: nities, identified through our conversations with
—— flexible stuff leading edge consumers and quantified through
—— perfect stuff our quantitative survey among mass market.
—— stuff for pleasurable engagement
—— familiar stuff.
Skilled, mobile
CHANGING & autonomous
BEHAVIOURS,
CHANGING
REQUIREMENTS
AND NEW
OPPORTUNI- Flexible
TIES. stuff
Four interconnected and
overlapping value territories
Perfect
driven by predominant beha- stuff Better
vioural themes. Better me
world
Pleasurable
engagments
Familiar
stuff
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Flexible stuff
To align with a world in constant movement, Part of this lightness concerns the environ-
consumers increasingly exhibit a strong need to mental impact of products. We found that
be prepared to move, change and evolve. They leading edge consumers seek to combine spe-
develop strategies to remain light and agile, cific functional qualities with sustainability.
acquiring skills and seeking products that Such products minimise their negative impact,
enable readiness and mobility. including those that have an end-of-life solution.
This desire to remain mobile and flexible Furthermore, versatile and modular products
generates a complex set of requirements for the yield a larger range of functional benefits for
physical things in their lives. Desirable qualities consumers. Therefore, consumers need fewer
include lightness (mobility or compactness), products to create a sustainable future, while
flexibility and versatility. managing to do more with less.
These product qualities facilitate an ease of In this regard, constant innovation is
movement and experiences providing a sense of necessary, because the primary requirement
achievement. relies on providing new and intelligent solutions
One participant spoke about a favourite to everyday challenges, allowing individuals to
bag, illustrating how certain products enhance adapt their lifestyle to keep pace with their
one’s sense of personal capabilities. “Using that changing environment.
bag means that my hands are always free; it’s As such, new usage models without owner-
like I have another set of tools available to me.” ship find a natural home in this territory. Cur-
Leading edge consumers seek out products rently, however, many participants in our study still
that combine the promise of mobility and prefer ownership, primarily because the “sharing
versatility with products providing a strong economy” has not necessarily delivered on the
connection to what is physical and real, while requirements of easy access and convenience.
also providing assurance and comfort without
being weighed down.
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
19
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
12 Take for example China, where today’s young adults are the children of those who got ahead due to the opening up of the
economy and the first wave of economic growth.
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
ADOPTION OF
BEHAVIOURS
RELATED TO
FLEXIBLE
STUFF.
Key beh avio r d r iver :
75%
Leading edge
Consumers
4 countries High
Slower adoption
Finland
21
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
22
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Physical lightness
Lightness here represents a sense of lightness through independence and not weighing
one down. Physical lightness forms a part of this ideal
Multipurpose materials
How can the same materials be used for multiple purposes? By way of example, can
clothing be smart for work, as well as suitable for travel or biking, for instance, without
wrinkling?
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Perfect stuff
Above, we touched upon the notion of a quest need for a product that allows the consumer a
— a concept we will more fully examine in this slower-paced lifestyle and the ability to focus.
section. This quest reflects a relentless search to These types of products should generate
find the perfect fit-for-function item. That is, a more confidence, comfort and a sense of con-
product that will not only do what it should do, trol. This echoes the flexible living requirement
but will do it better than any other product for products that do not encumber or tie down
could. The ideal surrounding perfection builds the consumer.
on an expectation of constant innovation — This territory also creates a demand for
taking something good and making it even new brands that accept the challenge of perfec-
better, keeping it up to date, while incorporating tion, as well as highlights the need to provide
new and incomparably useful functions. This is consistent, high-quality products over time
not about “the latest,” but rather about “the best.” among more well-established brands. These
This area offers many creative opportuni- brands can ensure trendy and contemporary
ties. Requirements for this type of product products, while maintaining the characteristics
include innovation combined with a sense of of previous collections that carry a sense of
familiarity and comfort. Perfect stuff takes an familiarity and functional coherence.
ordinary object and renders it extraordinary. Sustainability is implicit in the idea of
Simultaneously, we find a tension in this perfection. For the forward-looking consumer,
consumer territory, characterised by balancing innovation is synonymous with finding solu-
impersonal access without ownership with the tions to collective problems. Part of the criteria
necessity of personalisation and customisation. for perfection should consist of a relentless
This value territory, similar to flexible stuff search to minimise any negative impact. The
described above, also encompasses a need for perfect object minimises the need for many
mobility and compactness. But, here, we add the objects; instead it reflects purpose and inten-
tionality in its fabrication.
24
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
25
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
26
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
ADOPTION OF
BEHAVIOURS
RELATED TO
PERFECT
STUFF. PERFECT Key beh avio r d r iver :
71%
Leading edge
Consumers
High
Finland
27
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
17 http://www.dyson.com
18 https://en.wikipedia.org/wiki/Dyson_(company)
28
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Business implications
29
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
30
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
31
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
32
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
ADOPTION OF
BEHAVIOURS
RELATED TO
STUFF FOR
PLE ASURABLE PLEASURABLE Key beh avio r d r iver :
ENGAGEMENT.
ENGAGEMENT Preference for pur -
chasing product s
from companies
that combine con-
sumer and societal
or environmental
benefit s .
63%
Leading edge
Consumers
4 countries High
Slower adoption
Finland
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
A new generation of products lines its purpose of “making the world a more
welcoming place, one cup of tea at a time.” In
As personal values shift, brands attempt to doing so, Brooke Bond granted India’s transgen-
reflect these new values. Some brands enjoy der community a platform to challenge carica-
more success than others. A few new brands tures and stereotypes towards them through the
incorporated such new values from the outset, launch of the “6 Pack Band,” winner of the Glass
while others established new business models to Lion Grand Prix award for brands at the Cannes
coincide with shifting personal values. Lions Festival in 2016.25
For example, Angel Jackson, 19 a British Finally, Tesla, already mentioned for its
accessories firm, emphasises “that ethical pro- electric cars, keeps a larger goal in mind in
duction and fashion with a conscience needn’t relation to renewable energy. As such, with Tesla
sacrifice cutting-edge style.” Edun, 20 the fash- batteries, the company seeks to accelerate the
ion brand launched by U2 singer Bono and his move away from fossil fuels to a more sustainable
wife Ali Hewson, 21 aims “to source production energy future. According to the company, its
and encourage trade in Africa”. Honestby, 22 batteries will help “manage power demand, pro-
“the world’s first 100% transparent company” vide backup power and increase grid resilience.”26
launched by Bruno Peiters (former Creative
Director of Hugo Boss), seeks to combine
societal benefits with luxury offerings.
The Volvo Car Company’s vision for 2020
aims to improve road safety and ensure that
“nobody should be seriously injured or killed in
a new Volvo car.” As part of its campaign, Volvo
created Lifepaint, an invisible paint that reflects
in headlights and is designed to make pedestri-
ans, cyclists and bikers more visible at night.
According to Volvo, this paint “is a unique
reflective safety spray” making “the invisible,
visible.” 23
Additionally, the Ben & Jerry’s 24 ice cream
brand reflects a social mission: “To operate the
company in a way that actively recognises the
central role that business plays in society by
initiating innovative ways to improve the quality
of life locally, nationally and internationally.” As
such, Ben & Jerry’s promotes democracy and
the importance of voting.
Some brands risk venturing onto politically
thin ice in order to take a stand. For example,
the India-based Brooke Bond tea brand under-
19 https://angeljackson.com/
20 http://edun.com/
21 Luxury group LVMH acquired 49% of Edun in 2009.
22 http://www.honestby.com/
23 http://www.volvolifepaint.com
24 http://www.benjerry.com/values; https://youtu.be/vNzXxYnQI3s
25 https://youtu.be/blvOBnSRfVc
26 https://www.tesla.com/presskit/teslaenergy
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THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Business implications
35
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Familiar stuff
In this section, we move into an area of oppor- exist to lead users towards confidently finding
tunities revolving around the ideals of easy, and expressing their own uniqueness through
sensual stability. These are defined by exacting their interactions with such products.
requirements regarding quality and longevity, Such features challenge current business
where products are familiar and offer the pleas- models based around programmed obsoles-
urable predictability of habitual use. cence and revenue generated through volume
Life is made easier through simple famili- and repeated purchases. This opens up avenues
arity. Physical goods become a vector for this towards service and usage-based revenue mod-
cultural shift by slowing down the pace of els, where a product is more valuable and has a
replacement. Slowing the pace of replacement higher resale value because of its quality and
thus becomes a quality; keeping things and durability.
using them longer becomes a source of newness. In this instance, sustainability is expressed
Using and interacting with objects then focuses both implicitly and explicitly. A product fabri-
our fragmented attention. cated from high-quality materials, designed for
An opportunity exists for the manufacture long-term use and that is reliable and repairable
of ordinary objects that become extraordinary when necessary is viewed as implicitly sustaina-
through use. When shaped by use, these prod- ble. But consumer requirements also remain
ucts become more personal. They establish a explicit because consumers demand responsibly
dialogue between the product and the user, a produced goods using renewable, natural and
dialogue guided by repetitive actions and inter- organic materials.
actions. That is, these goods and products A strong natural affinity for such products
become more beautiful with age and use. exists in Finland. As such, 35% of Finnish
Opportunities once again exist here for respondents reported that owning things and
creatively using such tensions. For example, using them for a very long time corresponds to
such products should be long-lasting and famil- their thinking. Yet, in Finland, considering price
iar, but carry a sense of newness. They may also elasticity also remains important, whereby 43%
combine fun or be unique and carry basic or of Finns strongly agree that affordability is
ordinary features. In addition, opportunities important.
36
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
37
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
38
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
ADOPTION OF
BEHAVIOURS
RELATED TO
FAMILIAR
STUFF.
Key beh avio r d r iver :
65%
Leading edge
Consumers
High
4 countries
35%
Mass potential in Finland
High
Finland
39
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
27 http://eu.patagonia.com
28 “Normcore defined in 2013 by K-Hole (http://khole.net/issues/youth-mode/).
29 http://drmartensforlife.com/
30 http://www.puzzlephone.com/
31 https://cutecircuit.com/about-cutecircuit
40
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Augmentation
Product purchase can only represent a starting point. Consumers should be able to add
possessions during the ownership cycle. These changes can be transformed into
value-added items, not just through their functionality, but also by providing a personal
touch.
41
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Summary and
conclusions
In this report, we outline some key opportuni- Flexible stuff represents an opportunity
ties for businesses. These opportunities centre centred on the idea of creating value or earnings
on developing new types of products that con- revenue through reducing the “weight” of stuff
sumers perceive as valuable and aspirational. for a consumer. Consumers increasingly want a
We began this report with a short intro- flexible lifestyle where the same good may be
duction highlighting some of the key findings. used across a range of contexts. Goods become
We also provided a more generic view on how things individuals carry with them and satisfy
to prepare and act upon shifts in consumer multiple purposes. These products include, but
behaviour currently experienced on the market are not limited to, technological gadgets, multi-
— both globally and in Finland. purpose clothing and modular home solutions.
We identified a set of new behaviours Today, people feel the weight of things.
identified through our research. Not all of these Thus, we asked how that weight could be
behaviours are completely new, yet together reduced. What alternative exists to push more
they form a shift away from the consumption of products out to consumers? Should we produce
goods as learned and understood by the “con- items that are flexible and versatile and serve
suming classes.” multiple purposes? In this case, “more” refers to
We then identified four different territories combined features rather than the quantity of
of growth. These territories are described as things. As we focus on reduction, determining
types of products that both leading edge and how we can build upon the notion of sustaina-
mainstream consumers increasingly value and, bility in natural and appropriate ways becomes
in many cases, hope to own. simple.
We label these territories flexible stuff, We also briefly discussed the sharing
perfect stuff, stuff for pleasurable engagement economy. Currently, however, we do not find
and familiar stuff. overwhelming evidence suggesting that
Each territory allows for different ways of non-ownership should dominate this value
conducting business and offers opportunities territory, especially since many individuals still
for adjusting the standard business model. view ownership as more convenient than sharing.
Sustainability plays a crucial role across all value
territories.
42
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
43
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Familiar stuff combines the idea of long-term ownership with feelings of newness
and excitement. Opportunities here encompass things that endure and evolve with
the owner or user, that appear to evolve, change and improve over time. Consump-
tion slows down, replacement cycles diminish and resources are protected.
How do companies move from focussing on sales to an earnings-based model
reliant upon extending a product’s lifecycle? How can repairs and longer lifecycles
become desirable again? How can we link sustainability to extended cycles of
ownership?
Many opportunities to accomplish the above objectives exist. Most companies
do not have to choose one or another model. They must better understand the mar-
ket dynamics and the demands they create. Most likely, new combinations will form,
while consumption will shift further still. As elements emerge within existing mar-
kets, we witness old attributes meeting new preferences, leading to novel and int-
riguing market tensions.
We can merely encourage companies to explore these avenues for creating value
and to further explore these opportunities. Primarily, companies must be receptive to
market influences and maintain an intimate relationship with the market.
44
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
1
Understand changing consumer behaviours. Applying the perspective of
the leading edge consumer represents an effective means towards action
while looking towards the future. In what follows, we describe how to
quickly identify market dynamics and interpret them as consumer require-
ments.
2
Revisit market definitions. Traditional tools do not allow for a pluralistic
view of the market. Consumer segmentation, for example, is not necessa-
rily the best way of understanding people’s seemingly contradictory needs
and values in the market. We encourage companies to apply alternative
methods to understand today’s consumers. One option lies in focusing
more on understanding the dynamics of certain behaviours instead of
focusing on differences between consumers.
4
Emphasize sustainability as a part of the overall value proposition.
Obviously, sustainability and its related values represent an important
component across all of the value territories identified. The leading edge
consumer expects companies to have a purpose beyond serving its share-
holders. What is good for society and the environment as a whole needs to
be a crucial component of what a company does and sells.
45
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
Methodology and
scope
In this study, we relied upon a combination of We spent a total of six hours with each
methodologies as follows: leading edge participant, through a 1.5-hour
—— qualitative exploration consisting of one-on-one interview, followed by participation
in-depth interviews and hackfests in a 4.5-hour hackfest. The hackfest consisted of
—— quantitative exploration consisting of a a forum for leading edge consumers to exchange
seven-market study ideas with one another and the project team. We
—— collaborative work consisting of two work- focused on several predetermined themes and
shops with key individuals from participat- worked through more exploratory exercises
ing companies. aimed at identifying participants’ definitions of
value and attributes contributing to the value of
things and experiences.
Qualitative exploration The results of these interactions allowed us
to identify the key shared characteristics of
The qualitative component of this study began leading edge consumers we then used to repli-
with the identification of profiles and the geo- cate and quantify responses in the next phase of
graphic situation of leading edge consumers. our study. This also allowed us to develop a
For the initial phase, we carefully chose comprehensive list of value attributes to validate
specific markets. In most studies, Stockholm during the quantitative stage.
and Malmö (Sweden) represent extreme forms
of post-materialistic values, emphasising satis-
faction and quality of life rather than ownership Quantitative exploration:
and possessions. Seven-market study
San Francisco (USA) was chosen because
of its liberalism and openness to change. San The quantitative phase of this research consisted
Francisco and the Silicon Valley attract consum- of four objectives:
ers globally who experiment both through new 1. to categorise the leading edge consumer
business and emerging cultural ideals. 2. to validate and categorise the behavioural
We chose Bangalore (India) to represent an changes
emerging-market perspective for the leading 3. to determine the pace of change by meas-
edge consumer. Bangalore serves as a hub for uring the relationship between leading
Indian start-ups and an entry point for interna- edge and more mass-market consumers
tional influence that attracts talent and more 4. to identify the value territories created by
sophisticated consumers. Bangalore also pro- behavioural changes and to group the
vides an alternative perspective to San Fran- attributes of these territories in order to
cisco, Stockholm and Malmö, and allows for an define formulae for creating value.
understanding of how emerging-market con-
sumers adjust their consumption habits and the We structured our sample to represent 50%
degree of influence from and speed of uptake of to 60% of the consumers most engaged in
“global trends.” consumption and most receptive to change.
46
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
We carried out an online survey in Septem- Below, we provide some participant quotes:
ber and October 2016 across seven markets: “This makes us aware of the problems we
China, Finland, Germany, India, Russia, Spain will have with our business model.”
and the USA. In total, we recruited 600 respond- “We can already see how we need to change.”
ents per country, for a total 4 200 respondents. “This [project] provides us with the context
We only included the results from Finland, for how to think about new business.”
Germany, Spain and the USA in this report. “This is somewhat painful for us, but has
opened our eyes.”
“We have decided to set up a future labora-
Participants and tory.”
collaborative work “This makes us think that we need to
rethink our target audience.”
Stuff in Flux, a multiclient research project and
collaborative study, focuses on the future of We presented the project results to partici-
goods. Initiated in June 2016, the project con- pants in December 2016. We believe that we
sists of a small number of diverse companies have uncovered something fundamental about
invited to participate. Four of the most valuable how the market and climate around physical
brands globally, all of which indirectly or goods are changing and how they will continue
directly sell goods, joined this project. These to evolve. This report summarises the most
companies represent industries ranging from important findings from this project, specifi-
technology to fashion, with a combined annual cally focusing on Finland and how various
turnover of more than €200 billion. aspects relate to sustainability.
From the start, we learned that participat-
ing firms found cross-industry approaches
rewarding, affording them the opportunity to
discuss strategic issues with noncompeting
companies.
All project participants came together
twice — in Stockholm in August and in San
Francisco in October — to discuss the project
and agree upon the conclusions and findings.
These gatherings included senior-level corpo-
rate decision-makers directly influencing their
companies’ future strategies.
47
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
References
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https://www.starship.xyz/
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http://www.benjerry.com/values; https://youtu.be/
vNzXxYnQI3s
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https://cutecircuit.com/about-cutecircuit
48
THE CHANGING RELATIONSHIP BETWEEN PEOPLE AND GOODS
The authors
Alice Labs is a Finland-based strategy consult-
ing agency specialising in market exploration.
The Stuff in Flux project was carried out in
collaboration with Informed Intuitions of Paris,
France.
Dr. Oskar Korkman, founder of Alice
Labs and former Director of Consumer Intelli-
gence at Nokia and Microsoft, brings to this
project more than 10 years of experience on
international sociocultural research and trans-
lating his insights into business decisions.
Sharon Greene, an Alice Labs partner
and founder of Informed Intuitions, has more
than 15 years of experience in business insight
and the development of innovation through
the application of cross-cultural and sociocul-
tural research. She is also the former managing
director of RISC International.
Alice Labs gratefully acknowledges the
assistance of Marcus Olsson, founder of Tech-
nium and an alumnus of Singularity University,
who lent his technological expertise to this
study.
49
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