How Important is Ownership?

Market Leader
Issue 29, Summer 2005
How Important is Ownership?
Chris Middleton
Sociovision Ltd
Recent research suggests the place that possessions occupy in our lives is changing, slowly but surely. Look back to the 1960s, for example. The mass market was built on the assumption that you worked hard, earned progressively higher salaries and bought more and more products that reflected your new money status. Today, selfactualising is about experiences, emotions, ethics and engagements – leaving less space for products.

As in any change, there is opportunity for those businesses that read the new reality and react in ways which align to the world as it is. The danger for so many retail and fmcg businesses is that they ignore the signs – or read the signs but enter a denial phase. My contention is that, like so many social shifts before, the change in attitudes to ownership is going largely unnoticed; it is creeping up by stealth and the proverbial frog is dying in the slowly heating waters.

If you look in the right places, you can see the results of these demandside changes all around. Retailers had a bad Christmas and continue to publish poor results. Articles appear regularly signalling the urgent need to rebrand brands, turn them into 'lovemarks' or revitalise them into 'powerbrands'. Marketing becomes more desperate in its tactics to seduce people – to the point where its activities are regularly criticised by MPs, watchdogs and journalists. Sales become an accepted way to make year-end figures rather than simply the method to clear stock for the next season – with the evident impacts on margins.

And here's the rub. While marketing has undeniably become harder, most analysis ignores changes to people's values as a significant driver of the retail marketplace. Typical complaints are that 'the competition just got stronger' or 'housing values are no longer growing' or 'demand is now limited to replenishment due to high household penetration levels'. And, of course, if everything else fails, we blame the weather. On the other hand, we rarely hear, for example, 'Some people are now coming to the conclusion that enough is enough and that increasing the amount of material possessions they own is no longer a central value in their lives.'

To state our conviction in even stronger language, we are convinced that the very assumptions of the existing consumerist paradigm are increasingly out of sync with everyday reality. Moreover, we observe that most of contemporary market analysis and market research is so rooted in these traditional assumptions that it is blind to changes at the edges.

We hear about 'identity morphing', 'hyper wants', 'tribal belonging' and 'buying bulimia', and these are presented as the trends driving today's consumer. But what if the truth is increasingly elsewhere? What if companies are continuing to measure the past rather than anticipating the future focus?
Sociovision's research indicates the consumerist value set is becoming passé and new life is burgeoning beyond the old world of purchase, prestige and property rights. We have been able to identify seven archetypes, each with a specific new take on ownership. Let's look at just two of these archetypes, which sit outside of the mainstream consumerist logic, and illustrate their impacts on businesses today.

Light Lifers do enjoy material possessions. It's just that they see no need at all to pay for them. In an era when so many have so much, their strategy of beg, steal or borrow is perfectly practical. What counts for them is to be able to use things for more or less short periods of time; individual access is the door and networking the key.

The ramifications are considerable for consumer goods companies. Renting and leasing are frequent means to access, although borrowing, filching and sharing are even better. The idea of spending money to acquire something, frequently does not even enter Light Lifers' heads. Their philosophy of travelling light means being weighed down by longterm commitments and 'for ever possessions' is the last thing they desire.

What challenges do Light Lifers lay down for marketers? Car companies, in particular, are scratching their heads about the move towards rental. Equally, they are worried that an increase in leasing contracts is blurring the perceived cash value of cars. In the future, many will only know that their Ford Fiesta costs £199 a month, the total cost being hidden from view.

The travel industry is also feeling the effects of Light Life attitudes. Why buy a package holiday when you can design a DIY adventure around visiting distant family and friends? Finally, ever wondered why people use internet cafés? Well, if you have recently bought a home media system you will soon understand. Light Lifers may or may not have the money to buy a new HP tower, but subcontracting the configuration and maintenance to the internet café owners meets their footloose objectives. Renting a screen for half an hour of emailing is so much lighter than plug-and-pain.

The Respectable Rebels have grown up in an era where bytes replaced atoms and where the web is the new marketplace. Respectable Rebels barter rather than buy; in the peer-to-peer world, what is virtual is virtually free. Do not speak to these downloaders about legality since this archetype believes in rebels' law, where possessions are shared and where the payment for a transaction is the investment needed to set up the software.

The music industry has taken the best part of five years to cotton on to Respectable Rebels. The industry first threatened Napster: then it bought and closed Napster; then it attacked pirates through the courts and only latterly has set up legal download sites. The film industry is likewise threatened and has yet to respond with official sites. Meanwhile, millions use emule, e-donkey and so on to build their film archives. Less obviously, Respectable Rebels were some of the first to pile on board low-cost airlines. The price was seductive, of course, but, at the back of their minds, it was so sweet to put one over on the national airlines that had milked the market for so long. This time they
did nothing illegal but rebellious thoughts were part of the appeal.

The other archetypes we discovered were as follows.

Financially Challenged: necessity drives these people to access not possess. Hand-outs and rental are frequent means of accessing consumer society.

Freeloaders: a group of individuals whose high-powered network is the source of their wealth. They are parasitic consumers rather than purchasers; it is more important 'to know than to buy' and 'to seem' rather than 'to have'.

Old Style Socialists: supporters of sentiments like 'all private ownership is theft'; people with this leaning want collective ownership and public service to distribute wealth equitably.

Pre-Materialists: these are people who have never been fond of possessions, emphasising a simpler, sometimes spiritual, approach to life.

Post-Materialists: experiencing and being are the leitmotivs of this cluster, who have gone beyond possessions and now 'invest in lives'. They do consume, of course, but always for higher motives and ethics.

Taken together, Sociovision estimates that these seven archetypes represent around 55% of the population. Put another way, only 45% of British society today believes in full-on consumerism as a way to live, a route to happiness and a reason for being. Furthermore, our time series research indicates that, over time, this percentage of white-hot consumers is slowly declining. Meanwhile, the most rapidly growing groups are the Respectable Rebels (which we estimate at 4% of the population) and the Post-Materialists (at 9%). Interestingly, while the Rebels, in common with Light Lifers, are younger in demographic terms, Post- Materialists tend to be older. The fact that some older people have turned their backs on serial consumption would seem to scotch any hope that this is a passing phase linked to carefree youth trends. Moreover, we are convinced that these value changes, which now replace consumption at the centre of many people's lives, are more permanent than many in our industry hope.
In conclusion, we believe current marketing faces a significant risk of being blindsided by social evolutions despite some clear signs of the consequences of change. So much seems to be riding on the uninterrupted and unmolested continuation of the consumer marketplace – and yet archetypes surround us that threaten this continuity. Each archetype, remember, has a radically different notion of what ownership is all about. Retailers and consumer goods companies would do well to understand better the emerging social shifts, and plan how to reconfigure as a consequence.

Coke ad from Spain has grown men falling to their knees crying

March 12, 2009

One of the hottest videos right now is this Coca-Cola commercial from McCann Erickson featuring a 102-year-old Spanish man.
(It's up there with other hot videos featuring
talking fish and exploding apples.)
Released in Spain in January as part of the brand's "Open happiness" campaign, it's logged more than 100,000 views on YouTube and inspired hundreds of blog posts.

The ad, which is in Spanish, shows the man traveling to see the (real) birth of a girl named Aitana, the newest addition to his family. He then tells the baby that he believes we were all born to be happy. The ad is supported by outdoor ads in seven Spanish cities that beckon people to take pictures of themselves in their own moments of happiness.

They're also encouraged to
post words of advice for newborns on a Web site. Somewhat creepily, Coke has also collaborated with hospitals in Spain so that parents can set up webcams in nurseries, allowing Internet users to see newborns in their first hours of life and send them their "messages of optimism." Dubbed versions of the ad have aired in Portugal and Italy, but a Coke rep says there are no plans yet to bring it to the U.S.

Sephora:: flawless

When the biblically renowned Sephora hotfooted it with Moses on his exodus to the Red Sea, she probably could have used a pitstop at the beauty retail chain that today bears her name—after all, all that time in the arid desert air surely didn’t bode well for a gal’s looks and general hygiene (though Yvonne De Carlo certainly held up well in the Cecil B. DeMille account).

Since its inception in 1969 in France (the first US store made its debut in 1998), Europe’s hottest beauty retail chain was acquired by luxury-products conglomerate LVMH in 1997 and now claims an extensive lineup of upscale skincare, makeup, hair, and fragrance products in a “visionary” retail setting. Customers can shop in-store, online at Sephora.com (boasting more than 12,000 products from nearly 200 brands), or through the brand’s catalog.

Today, more than 500 Sephora stores dot the global landscape (even Serbia, Oman, and Qatar have their own Sephora), inviting customers to browse the wares, spritz on the eau de toilette, and indulge in an afternoon of creative cosmetics, all in a setting where every customer is treated more like the regal Nefertiti than her hard-scrabble romantic rival.

The Sephora apple doesn’t fall far from the LVMH tree. Like its sister brands (LVMH is also the parent company of Louis Vuitton, TAG Heuer, and Moët and Chandon, among others), Sephora tries to lure in a free-spending demographic with dollars to drop on their beauty regimen. But it’s not just the stock on the shelves (including Sephora’s own private label) that draws in the aroma-obsessed crowds—it’s the whole Sephora experience.

Sephora doesn’t want shopping for your cosmetics to be relegated to something you squeeze in between dropping off your dry-cleaning and heading to a dentist appointment—the Sephora svengalis would rather you liken your visit to an afternoon spent at the spa or relaxing at a local coffeehouse. Taken right from the company’s own “Beauty Statement”: “Step in and enter a whole new dimension of shopping for beauty… Each of your senses will be delightfully stimulated in a stress-free shopping environment that celebrates the freedom and joy in exploring and sampling an unparalleled selection of beauty products.”

Who needs a hot-stone aromatherapy massage when you can just go shopping?
Adhering to this brand message means making its customers feel like royalty. Sephora tries to extend its “velvet rope” philosophy by offering attentive (but not stifling) customer service, a generous sampling program, and perks like its Beauty Insider card, a customer-loyalty program that offers personalized e-mails, insider-only products, and even a gift on your birthday.

It doesn’t hurt that Sephora is also able to track all your purchases through the card so it can more effectively sell its wares to you down the line—Big Brother is indeed watching from under well-groomed eyebrows.

The Beautiful People
The “open-sell environment” that the company promotes means that customers don’t have to feel guilty for laying their paws on the parfum. Instead, they’re afforded full license to handle the goods without the high-pressure sales environment of a department store, yet with more of an upscale feel (and more hands-on access) than your local drugstore. They’re free to explore, experiment, and play to piece together their own individual beauty curriculum—an integral component of the Sephora brand.

The spartan store design promotes ease of use for busy beauties. The major categories (skincare, fragrance, haircare, etc.) are featured in simple glass displays, as neatly organized as a taxonomist’s medicine cabinet, all within easy view (and touch). As long as you know your ABCs (everything’s alphabetically arranged according to brand or designer label), you’ll be able to find your BORBA, Bourjois, and Burberry in short order. It’s a cosmetic shopper’s dream, whether you’re in the mood to spend hours sampling the wares or you actually do need to pick up your beauty products on your lunch hour.

Don’t go searching for Maybelline or Cover Girl here: Some of the store’s most popular brands include Dior, Cargo, and Smashbox, as well as hard-to-find brands such as Fusion Beauty, T3, and Anastasia. They’re all there on the freestanding racks with sticks for perfume sampling, open tubes of lipstick, and a handy bottle of makeup remover to wipe all evidence away before your boyfriend gets back from the Gap and Sharper Image.

Though don’t be surprised if your man sticks around once he’s inside: While most guys wouldn’t be caught dead getting a makeover at the Bloomie’s cosmetics counter, somehow it doesn’t seem odd to see an alpha male sampling Peter Thomas Roth botanical buffing beads inside Sephora. Age knows no bounds within the Sephora realm, either: You’re just as likely to rub elbows with a teenager picking up a Juicy Couture gift set as you are to see her grandmother making a Clinique or Lancome purchase.
The Big Sell

While there are always Sephora staff on the ready to help you with your selection, you don’t have to run through the front entrance to avoid being attacked by the “spritzers” or have to butter up the salesperson to find out the price of that Stella McCartney tote. Employees are all well versed in the art of the subtle sell, knowing when to approach and offer beauty tips, and knowing when to let you enjoy your makeup demo in peace.

In fact, Sephora's hired hands (or “cast members,” as they’re called) are one of the other factors the company hopes to differentiate themselves with. Each team member undergoes intensive training in a skincare, hair care, and general beauty program to assist customers with their inquiries.

In October 2007, the company opened the doors to Sephora University, a 25,000-plus-square-foot training facility with more than 30 programs for employees, including Science of Sephora, a weeklong class in general beauty; Encore classes, an additional weeklong session that allows employees to specialize in skincare, color, or fragrance; leadership courses; and product master classes provided by individual cosmetics brands themselves to teach specific techniques unique to each brand (though, unlike department store counterparts, Sephora consultants aren’t “encouraged” to push certain brands on their unsuspecting clients).

To pump up their workforce (and ostensibly pump up its image as the “beauty authority”), Sephora also recently conducted a nationwide talent search of its employees and put together its first Pro Beauty Team, which now represents the company at in-store events and fashion shows nationwide (the chosen members also claim bragging rights as anointed beauty gurus in their hometowns).

Strategic Alliances
While it’s positioned itself as the ultimate beauty expert, Sephora isn’t above aligning itself with leaders in other industries to strengthen its own brand position. The first major synergistic relationship it formed was with the J.C. Penney department store chain, creating a “store-within-a-store” retail concept that positions each Penney’s Sephora in the center core of the store, staffed by Sephora consultants. This offensive strategic move indicated the cosmetics giant wasn’t content to passively compete with the department-store cosmetics counter across the mall aisles—it was ready to invade and vanquish from within.

The Home Shopping Network (HSN) was next Sephora’s next co-branding conquest. Starting in February 2007, five hours of HSN programming each month was committed to Sephora shows, featuring Sephora experts presenting a plethora of new products and brands. This enterprise proves lucrative for both companies: HSN ups Sephora’s visibility factor by bringing the brand into more than 89 million households (the network’s increasingly sophisticated 25-to-54 female demographic has long since moved beyond appliquéd cat sweaters and cubic zirconia), and Sephora offers HSN an extensive and popular beauty channel to add to its portfolio.

But though Sephora is all about looking good on the outside, it also recognizes that beauty really comes from within, leading to its teamwork with Operation Smile, a not-for-profit medical organization that offers help to kids with cleft lips and palates. As part of this alliance, Operation Smile’s logo was positioned on Sephora products, raising awareness and funds for the charity (a portion of each sale went to the medical organization).

Of course, high-profile promotions, “university”-trained staff and customer appreciation cards do not a luxury brand make. While Sephora is trying to sell elements of the high life, some in the industry fear that it represents a “dumbing down” or devaluation of true luxury items—after all, where else can you get a hedonistic makeup consultation, then head across the mall to Dave & Buster’s to grab a Bud Light and a game of Skee-Ball?

So far, though, mainly through word of mouth and viral campaigning, Sephora has managed to bridge the gap between drugstore drudgery and department-store counter coercion to enjoy the sweet smell of both its perfumes and its branding success.

Boxed Water is Better: A new water brand ditches the bottle.

A new water brand ditches the bottle.
About 90% of the Boxed Water container is made from renewable resources, trees, which are sourced from certified, ethically managed forests. The package shape and material means the boxes can be shipped flat to the water plant. Because more boxes can fit in a truck than bottles, Boxed Water requires fewer truckloads and, thus, less carbon expenditure.

Full Credit
Client: Boxed Water is Better
Designer: Benjamin Edgar

"[We] started with the simple idea of creating a new bottled water brand that is kinder to the environment and gives back a bit. We found that water shouldn't be bottled at all, but instead, boxed. So we looked to the past for inspiration in the century old beverage container and decided to keep things simple, sustainable and beautiful.About 90% of the Boxed Water container is made from a renewable resource, trees, that when harvested in a responsible, managed and ethical way serve as an amazing renewable resource that benefits the environment even as it's renewed. Our carbon footprint is dramatically lower because our boxes are shipped flat to our filler and filled only as demand is created, as opposed to most bottled water companies that ship their empty bottles across the globe to be filled, then ship them back for consumption. The flat, unfilled boxes can fit on 2 pallets, or roughly 5% of a truckload. Empty plastic or glass bottles would require about 5 truckloads. Our cartons can also be broken down to their original flat state, are recyclable in most areas and will be recyclable everywhere shortly. We're also giving 20% of our profits back to the resources our product is composed of--water and trees. Not only does it simply make sense, but we really enjoy supporting water and forestation organizations as it's part of our company's ethos and way of thinking to give back and participate. All that and an over-arching focus on simple and beautiful design that compliments our brand as well as the spaces it's sold and consumed in."

Six Ways with Social Media



Abram Sauer
March 23, 2009 issue

For decades, Goldschläger, the cinnamon-flavored alcohol with real gold flakes in it, was a strongly branded product. Recently, however, the brand has weakened, and its decline perfectly illustrates the difference between having a strong brand and having strong name recognition. Let’s begin by examining the main characteristics that differentiate Goldschläger from other brands: 1) it contains real gold flakes and 2) … nothing else.

Goldschläger’s brand is not entirely ineffective, but it is limited by its single-platform approach in such a competitive market. The product’s uniqueness is easily replicable and consequently not a great brand strength. For example, if I launched an alcoholic beverage that contained gold flakes and named it Bullionhessë, I would have already replicated Goldschläger’s core brand strength.

In fact, there are several spirits brands that feature flakes of gold, including Danziger Goldwasser and Gold Strike. Gold Rush is a newer brand (presumably launched to capitalize on Goldschläger’s sudden popularity). Until recently, Goldschläger’s dominance over these competitors was largely due to favorable distribution. How many bottle shops need to carry a full line of gold-flake-infused spirits?

Originating in Switzerland and now homed in Italy under the Diageo stable of spirit brands, little can be easily learned about Goldschläger’s beginnings. (Diageo declined to participate in this profile.) What is known is that it is a cinnamon-flavored schnapps and that the gold leaf floating inside amounts to less than a tenth of a gram. Rumors that the gold creates microscopic cuts that speed alcohol absorption have been largely disproved.

Before addressing the deep shift currently going on with the Goldschläger brand, it’s important to note a fundamental paradox Goldschläger faces: price point. The brand could set a price point that would be on par for a beverage with real gold (!) floating around in it (i.e., the Dom Perignon range), but that would likely result in few consumers because—other than flamboyant grotesques like Donald Trump—genuinely wealthy people tend to want their high-end brands more subdued. Yet, by setting a low price point (i.e., its current sub-US$ 30 one), consumers will scrutinize why a drink that’s supposed to have real gold (!) in it costs about the same as a bottle of mass-market tequila.

For many years Goldschläger existed largely as a novelty—that crazy booze with real gold in it! Then came the rise of Jägermeister, a drink with which Goldschläger would come to share much more than umlauts—namely, a future alongside each other on bar shelves everywhere.

Once a German digestive aide, Jägermeister rose to popularity with hard-drinking American youth thanks almost entirely to marketing by the legendary Sidney Frank (who then went on to make Grey Goose vodka and Corazon tequila top-shelf brands). Jägermeister sales in the US went from just over 50,000 cases a year in 1985 to 2.7 million just 20 years later. The originally-dour brand’s unlikely rise, like Pabst Blue Ribbon beer’s recent explosion, has inspired competing brands and attention, with even the Washington Post throwing in its two cents by declaring, “Tuaca soon will be the new Jagermeister.” A bold statement that will almost assuredly mean it will not.

Somewhere along its move from German diuretic and occasional insect trap bait to college fraternity party staple, Jägermeister became entwined with Goldschläger. A bevy of recipes now combine the two into a rogues’ gallery of shots, including the “Oatmeal Cookie,” “Four Horsemen,” “Viking Funeral,” “JägerSchläger,” “Tonya Harding” and “Dead Hitler.” The difficulty of actually doing a Goldschläger shot (due to intense flavor) has also tied its character to Jägermeister’s. The connection to this “scene” has changed the Goldschläger brand identity from one of novelty item to one associated with drinks that end in the word “bomb.” Its rise in popularity has been noted in pop culture as well, where the brand appeared on the hit show The Office ((Dwight: “Goldschläger. Extra flakes.”) and was spoofed in the film Superbad (as “GoldSlick”).

This brand metamorphosis has been puzzling for Goldschläger. In addition to a change to the brand’s identity there is also a power shift in which half of the brand’s owner-consumer relationship is doing the most identifying. Diageo is losing some control of its brand—a common consequence from a boost in business. The real challenge for Goldschläger, however, is to engage its new identity.

In 2003, Goldschläger attempted to court its new demographic. It went poorly. With ads featuring very young men holding Goldschläger bottles and wearing protective equipment like crash helmets and safety goggles, the brand made the invite: “Drinking a shot with friends should be enjoyable. So be careful out there.” Consumer groups were not impressed or amused. Diageo pulled the ads and appears to have learned its lesson, as no others have been forthcoming.

And why should they? Even without conventional advertising, Goldschläger’s popularity benefits from the undercurrents of the in-the-know. One trip through YouTube’s collection of “Goldschläger” related videos is all the promotion the brand needs. This collection even includes a homemade near-genuine ad. The brand is so at peace with its trajectory that it doesn’t even bother maintaining a
website (having been “currently undergoing maintenance” for quite some time).

Yet it is a stretch to think that any of Goldschläger’s current market would want to go to their official site. That’s what a
Facebook page is for: “Goldschläger... It’s like someone chewed a shit load of Big Red and spit in my mouth. But it’s totally awesome...” Indeed, Tama of Napa, California, indeed.

With that level of customer loyalty, Goldschläger’s brand is poised to become stronger and stronger one shot a time.

AWM Hot List '09: Top 10 Magazines

AWM Hot List '09: Top 10 Magazines
March 22, 2009
-By AdweekMedia Staff

The Hot List and 10 Under 60 Hot list annually recognize consumer magazines with a recent track record of standout advertising revenue and page performance. To be considered, a title’s ad results must be tracked by the authoritative Publishers Information Bureau.
For the Hot List, we look at the last three calendar years, and for 10 under 60, the last two years. Thus, for the Hot List, a title must have been published for at least three years and must have taken in $60 million or more in annual ad revenue, while for 10 under 60, a magazine must have been published for at least two years and reported annual revenue of less than $60 million. You’ll notice that this year, we raised the eligibility cap for the small list to $60 million from $50 million. We did so to reflect the industry’s 23 percent revenue growth since 2003, when the threshold increased to $50 million from $40 million. In examining magazines’ ad performance over time, we give the greatest weight to the most recent year. W
e consider the performance of each title against its category peers, as well as the vitality of the category overall. We also evaluate circulation quality and performance, paying particular attention to the closely watched barometer of newsstand sales for the second half of 2008, as reported by the Audit Bureau of Circulations.
Finally, we consult a number of influential media buyers, who provide insight on which magazines they and their clients favor at the moment. So, please turn the page for this year’s AdweekMedia Magazine Hot List.

1. The Economist 2. Elle 3. People 4. Women's Health 5. Every Day With Rachael Ray 6. Real Simple7. Men's Health8. Family Circle 9. Vogue10. New York

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