ConsumerLoop #4, July 1998

Consumer Fusion

Through the Loop tracks emerging consumer values which we believe will become more important in the market-place. Many of us are more than familiar with the concept of convergence which deeply affects many product categories. For example, the integration of communications and computing technology is now creating many new alliances such as Symbian, combining the skills of Motorola, Psion, Ericsson and Nokia to deliver the first generation of smart phones. However, this is a market response to a deeper consumer need. Consumers are seeking new methods to reassert control over their busy lives because of the sheer shortage of time, the old ways do not work any more.

Why Fusion?

This is creating an emerging consumer value, a search for ways in which fusion can be used. Fusion has many benefits at it takes the best from both worlds in a new combination but releases the baggage or downside of the old ways. It can help to create new markets, companies and brands as a response to this need. Fundamentally, fusion allows the consumer to create not only new ways to do common-place things but also new types of experiences. Marketing, close to the millennium, is about understanding the potential power of the consumer need for fusion across products, services and most importantly brands. There is an argument for which comes first, the consumer or the market lead. The reality is that one feeds on and enhances the other trend.

Consumers Lead...

There are some examples of fusion where consumers are leading and the market-place is following:

• Consumers are taking some of the aspects of Eastern culture and combining this with Western principles of interior design. The Western adaptation of Feng-Shui is just one example.

• Consumers are continually searching for new food experiences. They want to eat faster yet with more taste. The interest in Mediterranean and Pacific Rim foods is one response. A recent up-market food magazine published a series of recipes for Milanese Sushi.

• The pace of change means that there is some comfort in looking back at the 1950s, 1960s and 1970s and shunting elements forward into the 1990s. Emotionally, consumers may mix nostalgia and anticipation together. Much of fashion and design does exactly this, look at retro 70s products.

• Consumers’ financial behaviour is changing and reshaping. They do not have to go to a main street traditional bank. They can access financial services at the supermarket and get financial advice on-line. Deconstruction of previous modes of behaviour is a necessary precursor to new constructions.

• Consumers are meshing conventional religion with more spiritual approaches. Some people are combining Eastern and Western principles. Traditional religion expressed in old ways and through old media is sometimes seen not to have functioned very well.

• The breakdown of old working patterns and the need to have a more dispersed working day is leading to a greater integration between work and home and also work and leisure. New skills, new work-places and new work tools are needed. This will represent a long term shift in employment patterns.

• Consumers will drive media "channel" fusion as they look for new forms of entertainment. They will want to choose and direct the mode of access. They will listen to the radio on the web, watch TV on the computer or another set box. Media brands will have to learn how to encompass channels of access/ distribution.

• Consumers are looking for a new integration between the global and local communities. They are not shaped by one or the other but are a fusion of both. Both global and local forces impact consumer behaviour.

• There is a merging of men’s and women’s roles, a new androgyny, if you will. This will also be a driving force for the future.

• Consumers are not looking to consume products, they are looking for experiences.

The Market Leads.....

This drive to combine new tools and tactics is leading to new market and new brand opportunities. Through the Loop is monitoring areas where the market might be perceived as leading. Some of these are described below:

• The Body Shop has moved beyond just selling beauty care products but is now offering experiences in certain locations. Pampering the consumer should be inclusive of advice, care and therapy, stress alleviation etc.

• On similar lines, Superdrug, the UK high-street based chemist and cosmetics chain has just launched its first branded hair and beauty salon offering consumers a full range of hairdressing, beauty and massage services. The changes are an attempt to differentiate from the market leader, Boots the Chemist.

• Asia de Cuba, a fashionable Manhattan bar, serves 34 rums from different countries and Asian-Latino food. The cuisine is inspired by Oriental, South American and Caribbean influences. There is a 32 foot-long communal eating table. A branch is set to open in London in early 1999.

• Calvin Klein’s new fragrance, Contradiction , appeals directly to this new consumer value. The fragrance is designed to capture the ambiguity of modern women. The modern woman is not one-dimensional.

• Virgin, a consummate rule breaker, has introduced a new type of bank account which relies on the consumer having just one bank account for all types of financial transactions.

• In a different field entirely, Virgin is planning a grand hotel in the air by 2002.

• The new alliance, Symbian, is expected to market all kinds of hand-held device, with a wide range of different computing and communications functionalities.

• Classic FM is moving closer to the model of offering its listeners access to the brand through not just the radio station but also a magazine, CDs. Classic FM starts to define the consumer channel to accessible classic music.

• The introduction of nutriceuticals combines both an internal need for specific types of nutrition as well as a cosmetic benefit. Kanebo, Shiseido already have many such products in the Japanese market.

• Gary Rhodes, the innovative English chef has found several ways to express the Rhodes brand: through television and books, restaurants in combination with Gardner Merchant and finally now as a brand of frozen food in conjunction with Hazlewood Foods (Rhodes to Home). "I think I can give you better food than you get in restaurants from the freezer in under half an hour."

• Generically, products will need to encapsulate both a service and an experience dimension. This will lead to all forms of experimentation.

Summary

The talent to combine product and service attributes for the future has to be an over-riding objective for the future. Through the Loop can show that understanding and harnessing the power of consumer fusion will create new markets and also competitors. New competitive threats will occur in this environment combining skills and competencies.

Have you looked at your business through the eyes of consumer fusion? Can you nominate sources of momentum and possible strategic discontinuities? Through the Loop offers both Horizon™ to take a longer term view and Blackjack™ to assist in the creation of new products and services. Consumer fusion is here to stay, new ways are needed.