(This is the fourth Future Patrol, a monthly series of macrotrend posts by WONY StrategistEmily Segal. You’ll see Wolff Olins’ established macrotrends called out with a hashtag.)
#Hyperloyalty
I. What it is:
Loyal3, launching in May, is a new startup that enables consumers to buy shares of companies (really $10 fractions of shares) directly on Facebook, an idea CEO Barry Schneider is calling “the ultimate ‘like’ button.”
Loyalty programs have already become a focal point for incenting consumer behavior, creating personalized perks, and gathering consumer data.
Loyal3’s move to put real stakes behind consumer engagement shows that loyalty is beginning to generate new revenue models. The #Hyperloyalty trend is about precisely this kind of consumer-focused shift from marketing to value creation.
Future Patrol predicts that loyalty programs will become an expectation for every brand –even in industries that have conventionally gone without them – with elements such as crowdfunding, branded currencies and extra perks for good social media behavior as key features.
II. Some examples:
FROM REWARDS TO MICROECONOMY
The line between jokes and innovation has become increasingly blurry. Virgin Holidays’ April Fools’ Day hoax, a branded currency with Richard Branson’s face on it, recalls a trend we discussed in Future Patrol’s #Funny Money post: loyalty and rewards programs are becoming alternative currencies unto themselves, with points that can be redeemed for nearly as many things as cash can.
“Most large companies – from Starbucks to British Airways to Sheraton to American Express – are evolving their reward and point loyalty systems into digital micro-economies, complete with redemption and exchange between systems.” (Cayman Financial Review)
EXTREME CONSUMERS
Frequent flyers are the day traders of this new economy.
“Mileage runners are the high-tech nomadic wanderers of the air. Predominantly male, generally obsessed with flying and miles, and typically employed in white-collar careers that involve significant business travel, they scour the web for cheap flights, phoning in sick or using vacation days to fly the longest itineraries they can string together.”
GAMING THE SYSTEM
Loyalty programs – and games – are both about incenting customer behavior, and both use feedback loops and points to that end. But a loyalty system need not actually be a game to feel like one.
“Assembling a mileage run means deciphering complex fare rules and pulling together information from up to a dozen websites. It’s an achievement that tickles the same satisfying problem-solving centers of the brain as a Sudoku puzzle, and always ends in the deep-rooted human thrills of travel and flight.” (Wired)(“Frequent Flyer” documentary on Vimeo)
THE EMOTIONAL LANDSCAPE
Freedom is the best perk.
“Designing programs with an overarching theme of “freedom” can instill incredible power into our initiatives.” …. “Not “freebies.” But “freedom.” The ability to do things, to make decisions, to enhance one’s life, in ways that wouldn’t otherwise be possible. The word is telling. Many elements contribute to freedom, and, yes, the freebie is one such element. Others include privilege, convenience, assistance, guidance, choice and ease.” (“Freedom: Perhaps the ultimate aspirational reward” Colloquy Blog)
COERCIVE CURRENCIES
However, “freedom” is not the first word that comes to mind when integrating social media into loyalty schemes. Giving consumers deals or discounts because they have desirable social media influence is a marketing trend, but also can create a coercive situation in which consumers must forfeit deals if they want to preserve their privacy
+ Gilt Groupe provides extra discounts for users with high Klout scores
+ Amex / Twitter: The new Twitter integration lets American Express cardholder receive special offers by tweeting with a special hashtag. Initial partners include Zappos, the Cheesecake Factory, McDonald’s, Best Buy, Virgin America, and Whole Foods. In order to redeem a deal, you send a tweet with a hashtag and the offer is loaded on to the account. The credit appears automatically when the card is swiped. (Venturebeat)
+ Exchange systems like Pay with a Tweet, or Chime.in that exchange goods for social media “love” and personal data from consumers
+ Reputation currencies like Whuffie Bank (where you get discounts and rewards based on your online social reputation)
III. What this means for brand:
+ Extreme consumers and mileage runners have invented their own rituals around current loyalty infrastructures. There’s an opportunity for brands to leverage the subcultures that spring up around the way they architect their companies. What seems like extreme niche behavior today will likely be mainstream tomorrow.
+ Don’t become so seamless and ubiquitous that you slip beneath the convenience threshold. Failure and friction are important elements in building brand loyalty – and put the “social” in social media. Help your customers “play, fail, replay, achieve, succeed and progress” (LS:N).
+ Brands that make customers feel free are powerful, but the feeling of getting away with something may be even more powerful.
Tug of Store is simple: A picture of an item pops up, and you click on the left side if it’s crap, on the right side if it’s cool, tugging against whoever else is clicking on the site. After a hundred clicks, the verdict flashes on the screen, and the next watch / kayak / pair of shoes steps forth to be judged.
The site is an experiment with the recently released Svpply API, playing on elements of Chat Roulette, Hot or Not, and the convention of Facebook’s thumbs up.
Mercifully, there is no nuanced engagement, no “thinking,” and no actual shopping. After only a few moments, Tug of Store gives you a clear verdict, and a list of the coolest and crappiest stores.At the time of this blog post, the coolest is Etsy, and the crappiest is End Clothing.
The site accelerates what shopping on the internet has become: this product is crap, this product is cool, and that’s the whole story.
(This is the third Future Patrol, a monthly series of macrotrend posts by WONY StrategistEmily Segal. You’ll see Wolff Olins’ established macrotrends called out with a hashtag.)
This post is one in a series of sketches that will look to extreme consumer behavior to see what ideas they open up for brands. The following sketches are of “immortal” consumers who consume in the context of a very long time scheme.
What it is:
Ray Kurzweil believes that humans will outsmart death in 2045. If people can live forever, we’re going to overpopulate and run out of resources. On the other hand, if we’re immortal, do we need to hang on to precious things?
The more that the mainstream concept of time shifts, the more basic consumption models will also likely shift. It seems like the ultimate collaborative commerce scenario (what we call #Streaming Ownership) may come when people are no longer worried about passing their possessions on to their children. It could be like the Shakers-meets-AirBnB. Resources may be limited, but brands (in the form of stories, ideas, and feelings) can be unlimited.
Some current examples:
- The Long Now is an organization that “hopes to provide a counterpoint to today’s accelerating culture and help make long-term thinking more common…to creatively foster responsibility in the framework of the next 10,000 years.”
This is part of a giant clock Long Now is building to tick for 10,000 years.
- Life Extensionistsor Longevists believe that by supporting/consuming the right technologies, they can “conquer the blight of involuntary death.” This segment thinks future technological breakthroughs in tissue rejuvenationwithstem cells,molecularrepair, andorganreplacement will eventually enable humans to have indefinite lifespans through complete rejuvenation to a healthy youthful condition.
- Preppers are also preparing for a long future, but of a different kind: they believe that the collapse of civilization is imminent, and are stockpiling accordingly.
Preppers, as a community, are trying to solve a difficult consumption problem: what stuff to buy, how much of it, and how to store it. Usually people focus on guns or water, creating Without the Rule of Law (WROL) and Shit Hits the Fan (SHTF) videos and sites that read like Consumer Reports for the End Times.
Does “Without the Rule of Law” imply “under the rule of brand”? After all, much of the Prepper advice centers around brands, i.e., “this is a quality brand of antibiotic to stockpile.” Brands that are stickier than the civilization that spawned them are a scary thought.
“We could see a cascade of higher interest rates, margin calls, stock market collapses, bank runs, currency revaluations, mass street protests, and riots…The worst-case end result would be a Third World War, mass inflation, currency collapses, and long term power grid failures.” (Subculture of Americans Prepares for Civilization’s Collapse, Reuters)
- Self Quantifiers who obsessively count, track, and analyze data about their lives (here, a video from Catherine Hooper, who’s known for planning her life by the hour) are not uniformly interested in living forever, but do have a very intimate relationship with the clock. In this highly scrupulous pocket of consumption, wasted time (and wasted energy) are major concerns and something to be avoided at all costs.
What this means for business:
> Is the implication of immortal consumers that companies should sell things that are going to last, and/or guarantee lifetime upkeep, in the manner of Patagonia, Barbour, LL Bean, or other “heritage” brands? Probably not. Make things that people can hack, measure and share. Eternity is a long time to stay enthralled with a single jacket.
> Create services and products where people feel safe. Starbucks as a reliable third space is almost a good example.
> Disrupt the disruption: be consistent and steady while every other business is radically changing.
> Longer consumer memory means that accountability has legs: you can’t “worry about it later” because older generations of customers will be around to remember.
Images via Wired, the Long Now, YouTube user Carrie3570 and Quantified Self
iAura is an app that uses your smartphone camera to capture the energy fields and true colors of those around you.
The app is the 2012 version of Kirlianphotography, which captures electric currents on film.
The word aura comes from the ancient Greek for “breeze” or “breath,” and came to stand for the groovy emanation of a living creature’s essence, discernible by those with special spiritual vision. In brand strategy, auras account for the X-factor or emotional environment of a product or company, discernible by any regular person.
Future Patrol did an experiment using iAura to gauge the brand vibes of three popular energy drinks. Results below:
Your Aura is blue!
A blue aura indicates tranquil, relaxed, energy, and a desire to communicate. Blue may also be interpreted as mournful or emotional sensitivity. Common in artists, philosophers, spiritual seekers, and other intuitive, inwardly focused individuals, that convey wisdom and reliability.
Your Aura is green!
Green auras denote natural healing, high self-esteem, tenacity and prosperity. Green can also indicate frustration and loss.
Your Aura is grey!
Grey Auras represent negative thoughts and emotions. Fear, depression, and a lack of courage are common in those exhibiting this energy. Can potentially lead to health problems, especially if focused on a specific area of the body.
(This is the second Future Patrol, a monthly series of macrotrend posts by WONY StrategistEmily Segal. You’ll see Wolff Olins’ established macrotrends called out with a hashtag.)
Every time you pay for a magazine subscription with Hilton loyalty points, or exchange a foursquare checkin for a shot of tequila, or donate your time as a volunteer, you’re using an alternative (or complementary) currency, which can be defined as anything that serves as a medium of exchange, a stored value, and a standard of value.
Money has always been “virtual,” since it refers to something that isn’t present. But our current scenario is another turn of the screw:
“We are moving towards a world in which money consists solely of data that is kept someplace in the network. When we pay someone in that world all we are really doing is causing some data to move around. The shift from the physical to the virtual raises a number of exciting possibilities for the future of money including the rise of reputation currencies.” Union Square Ventures
Financial upheaval, rapidly decentralizing power and peer-to-peer networks mean that consumers are increasingly down to trade directly with one another and stash their money with nontraditional businesses. (The recent success of the low-fee money transfer startup Dwolla, which just completed their first round of funding with Union Square Ventures is a good example.)
What it is:
The #Funny Money trend is about a new situation in the near future in which it is normal to choose among many different currencies – either in addition to or in place of dollars – when paying for stuff. Imagine a bank where you can pay in combinations of time, personal data, loyalty points and governmental money. Barter, rental, and gift systems will be central parts of mainstream finance, as well as built-in discounts for positive social behavior and wide social media reach.
“Value” and “trust” may be moving targets, but are more crucial than ever. KS12’s Future of Money video defines it this way: “Banks will be whatever best mediates trust in communities.” Brands, too, will be under increased pressure to create/sustain/communicate trust.
+ loyalty and rewards programs: “Most large companies – from Starbucks to British Airways to Sheraton to American Express – are evolving their reward and point loyalty systems into digital micro-economies, complete with redemption and exchange between systems.” Cayman Financial Review
Ven is a digital currency that began as a way to pay for stuff within the social network Hubculture. In late 2008, the currency became tradeable to anyone with an email address, making it the first global digital currency to become valuable outside of its original social network, as well as the first ‘invented’ digital currency to be listed by Thompson Reuters.
Unlike the controversial Bitcoin, Ven is weighted against a basket of currencies and commodities that includes carbon futures, which gives it a “green” point of view.
As one of the creators of Ven writes: “Including carbon in the basket makes the Ven ‘language’ for finance slightly different and puts emphasis on sustainability in a way old currencies cannot.” Rise of Private Money, Cayman Financial Review
The Metacurrency project also describes money as a language and a way of looking into the future:
“In everyday English, we use the words money and currency interchangeably. However, we are reclaiming the word “currency” for something much more powerful than money alone. Money is still certainly a type of currency, but currencies are much more. They are the creators of currents — part of the language of living systems.Currency: a formal system used to shape, enable or measure currents.”MetaCurrency
Currencies have a POV, money is editorial, and land, labor, and capital (the traditional components of capitalism) – are not sufficiently telling the story. As Jerry Michalski, Founder of the Relationship Economy Expedition therexpedition.com puts it: the new “relationship economy” needs to find a way to nurture the commons, the gift economy, and the commercial economy all at once.
What this means for business:
> If consumers have way more currencies to choose from, brand comes in as a major way to negotiate the options
> There is such a thing as “too seamless”
“Is it possible to make a system that’s too easy to use, where you reduce so much friction from the transaction process that people aren’t necessarily aware of what they’re spending on something?” NYT
> An opportunity to rethink loyalty programs
“Most large companies – from Starbucks to British Airways to Sheraton to American Express – are evolving their reward and point loyalty systems into digital micro-economies, complete with redemption and exchange between systems.” Cayman Financial Review
> Actual peer-to-peer value creation from social networks
“What if Facebook evolved to have a functionality like Zopa or Lending Club, allowing you to directly lend and borrow with other Facebook users, and earn a great rate of interest. Extend that one step further to Facebook offering an entire mobile based money transfer system, something like M-PESA, which could then create a simple mechanism for international microfinance. If Facebook goes this far, Credits could quickly face regulatory scrutiny if they actually influence or devalue currencies in other markets.” Forbes
> New freedom to compare systems and rethink the distribution of wealth:
(This is the first Future Patrol, a monthly series of macrotrend posts by WONY StrategistEmily Segal. You’ll see Wolff Olins’ established macrotrends called out with a hashtag.)
“In July, Mexico’s attorney general became a smart object. Rafael Macedo de la Concha had an RFID chip implanted in his arm that can track and authenticate him…Of course, it’s his brain that makes him smart. It’s the chip that makes him an object: cataloged, searchable, and locatable in space and time. The same kind of upgrade is happening to brainless devices, tools, toys, and doodads all around us, creating a world that is Googleable. Ordinary items are being embedded with rudimentary communications and tied to databases….The future product that embodies these developments will be so radically different from today’s that it will need an entirely new name. So let’s give it one. Because it’s tracked precisely in space and time, let’s call it a spime.”
Now, just a few years later, the formerly science fiction vision of a ubiquitous network through which everyday objects embedded with chips, sensors, and “smarts”communicate information by themselves – is becoming an inexpensive mainstream reality.
According to a 2011 Cisco study, the number of devices connected to the internet last year outnumbered people on earth in 2008. Among these devices are the #Internet of Things – not Kindle Fires but microwaves, jewelry, and livestock that communicate autonomously, without human intervention. The way this is heading is the creation of ambient intelligence through mapping, tagging, and data gathering of regular stuff.
McKinsey describes the range of networked objects: “Pill-shaped microcameras already traverse the human digestive tract and send back thousands of images to pinpoint sources of illness. Precision farming equipment with wireless links to data collected from remote satellites and ground sensors can take into account crop conditions and adjust the way each individual part of a field is farmed—for instance, by spreading extra fertilizer on areas that need more nutrients.”
Examples:
The recently launched Twine is a little internet-connected box with censors for moisture, temperature, and vibration, with a dead-simple interface that lets you set it to text, email, or tweet you whenever it notices that your dog bowl is dry, your dryer’s stopped vibrating, your pipes are about to freeze (or whatever your heart desires).
WHEN current rises above 1A for 90 minutes THEN email “The kids have watched enough TV today.”
WHEN Bedside Lamp is turned off THEN tweet “Goodnight, John-Boy.”
Designed by MIT Media Lab alums David Carr and John Kestner, the Twine was a Kickstarter superstar, raising $556,541 on a $35,000 goal (the third largest Kickstarter campaign ever).
At $99 and built to be hacked/customized, it’s a bellwether of the #Internet of Things to come.
Twine also engages the trend #QuantifyMe: consumer hunger for metrics, dashboards, and data about their personal activities. As Nanveet Alang writes in a piece on Twine in the Toronto Standard: “I’d love to have a record of how many times I opened the fridge in the last two weeks of December (my guess: 9000).”
CES was teeming with new products that are part of this trend (though many of which seem woefully specific when compared to Twine):
·Samsung is offering awashing machine and dryerwhich is Wi-Fi enabled and can be controlled from inside or outside your home.
·Xperia SmartTagsareNFCchips that you can stick throughout your home and program with different actions and settings. When you enter the room and tap your phone to the SmartTags, your phone will automatically adjust to the profile you created.
What does this mean for business?
·New metrics: being able to instantly answer how many people laid on a particular mattress at Sleepy’s, as compared to how many people bought it, mean that engagement measurement can get a lot more granular, if not straight-up invasive
·New semantic search engines: ease for customers looking for particular objects, the next step in the vein of apps like Aisle411
·New accountability: “Hackers, activists, advocates, competitors, designers – all of us – can query the data-stream to find out what, for example, happens to the high-impact rubber on our sneakers’ soles at the end of their life – are they being recycled into schoolyard playgrounds or are they becoming aerosol carcinogens?”
It’s too soon to know if Kodak’s Chapter 11 filing is the final death knell for the iconic brand, but the news is a timely reminder of the link between innovation and brand longevity.
Kodak’s heritage is rooted in innovation, and their best products became part of our lives in a deeply emotional way. However, Kodak’s failure to innovate goes beyond their inability to recognize the rise of digital imaging and their ill-fated foray into printers.
Their failure was one of imagination. An inability to understand that product, like brand itself, is a living idea. When you buy a product, what you’re really buying is the ability to do something. The brand is both a projection and a reflection of what that ability is and what it means in your world. Product, construed as ability, is form agnostic, and should not just adapt to, but also anticipate changes in how people will want to access and use that ability.
Kodak, like Blockbuster, Borders and others, failed to imagine product beyond product.
Now Kodak is forced to pursue ever more desperate measures to raise cash, like selling its patents, which will take it even farther away from the pioneering spirit that built the brand.
At its core, Kodak helped us see—and remember—our world. It helped us tell the story of ourselves. This is a remarkable and timeless role for a brand to play, but with Kodak’s growing gap between brand and product, the company itself may soon be a memory.
The ironies of Kodak’s bankruptcy are kind of limitless: Kodak is a classic example of a one-time giant getting outpaced by the technologies it helped invent (in this case, the digital camera).
Kodak hasn’t been profitable since 2007, having switched its focus from photography to printers (making the world-historical mistake of picking the physical over the virtual). The rest of Kodak’s value rests in the patents it owns related to digital imaging, which the company says are used in virtually every modern digital camera, smartphone and tablet.
But the demise of Kodak is also a brand tragedy.
Kodak invented a new kind of memory. It was a brand capable of freezing the present and reprinting the past.
The memories Kodak stood for were both personal – as immortalized in the famous Paul Simon song– and national – Neil Armstrong used Kodak to take the first pictures from the moon, and 80 films shot on Kodak film have won Oscars for Best Picture.
When it invented the handheld camera, Kodak created a sweet new strain of independence.
Now, that brand equity has become a soup of chemicalsand patents. Still, Polaroid bounced back after its 2001 bankruptcy, and Kodak might also find new ways to develop.
If someone posts a video of their toddler dancing to some music and that music is copyright-owned by a US company, under SOPA, the web company hosting the video would be categorised as “rogue.”
Today as Wikipedia, Reddit, and I Can Has Cheezburger protest SOPA (that link goes to its Wikipedia page, so read it now while you can) and its sister bill PIPA, they ask us to imagine a world without open source knowledge (and hating and humor).
Now think of the Internet as a brand for a moment. SOPA is a customer service disaster: privileging the back-end copyright infinitely more than the outright experience of the user.
Both pieces of legislation seek to criminalize a community for whom sharing, streaming and remixing is not merely an entertainment value but an ethos of both online and offline life. (Think ZipCar car-sharing, Airbnb place-swapping and other popular forms of collaborative commerce, where sharing and streaming have actually moved from the Internet to real life.)
Today, criminalizing web companies and limiting users’ experiences couldn’t possibly cure the “problem” of widespread piracy. You’d have to completely halt the evolution of collaborative commerce, part of a trend Wolff Olins calls “new ownership.”
We’re feeling the friction of closed v. open: A counterforce of old-school, concentrated power is waking up, as power decentralizes both geopolitically and by spreading outside of traditional institutions (think of SkillShare, the online marketplace where anyone can teach or learn a skill and the transformative education pilot between The Khan Academy and the Los Altos School District).
The big battle is massively important. But, with every legal struggle comes a golden marketing opportunity — in this case, the Internet giants Google, Facebook and Twitter, who support Wikipedia’s hunger strike and thrive on the open distribution of information, get to position themselves as freedom fighters.
SOPA and PIPA are drawing on a (scary) conflation between piracy and privacy, suggesting that the security of our old media business institutions, not the security of our creativity, is the highest priority, and that it’s under major overseas threat.
Let’s use today to imagine a world where Wikipedia is “rogue.”
The question that stands is if a legal-political system based on precedent is in any way equipped to deal with new media.
Questions? Opinions? comment here or tweet at us @wolffolins
I’ve noticed two stories from this week about magazines (specifically Conde Nast) extending their brands beyond publishing toward other lifestyle pursuits. The first, “Magazines Begin To Sell the Fashion They Review” in the Sunday Styles section of the NYT consolidates a trend that’s been in the pipeline for a while: buying the clothes in magazines right on their sites (leaving Vogue or Elle with a small commission) or through co-branded efforts with dedicated e-commerce.
