When Collaborative Fund started, we believed we’d see a radical shift in consumer behavior toward values-led brands and shared resources.
We think it’s just getting started. Here’s why.
People’s day-to-day choices and the companies they support are increasingly important to how they define their identities.
Crazy as this may sound, brand loyalties – whether to CPG businesses or technology brands – are often more constant in people’s lives than many of the traditional identity definers. This is especially true for younger generations. A few decades ago, people generally defined themselves by where they lived, worked, went to school, who they married, their kids, place of worship, you name it. But now, college graduates change jobs four times on average in their first decade out of college according to LinkedIn, and a 2012 Pew Research Survey says that half of millennials have taken a job they didn’t want in order to get by. While 56% of baby boomers owned their home in 1981, the current stat for millennials of the same age is nearly 20% lower. And six in ten millennials have no children, versus less than half of previous generations at the same age. Meanwhile, 35% of them don’t affiliate with a religion, double the statistic for baby boomers. There’s a void to fill – and we think people will increasingly fill it through defining their values and finding ways to act on them.
Brands need to represent something powerful in this context.
A shift toward consumer choices as integral to identity sounds depressing and superficial, like a strange black mirror version of political stereotypes involving lattes and Nascar. But in a time when people feel increasingly disempowered to effect change through political advocacy, consumers have turned to voting with their wallets. No question, I’d argue that there’s no substitute for engaged citizenship. But whether displayed in warring boycotts and politically motivated purchases of Ivanka Trump fashion, the #DeleteUber movement, or the rise of brands like Patagonia, this can translate to real dollars.
Beyond advocacy, social media has made all aspects of people’s lives – down to the food they eat, the gym they frequent, and the face wash they use – more public. Consumers want to be proud of these choices, because they believe they reveal something about who they are and what they stand for.
The fun things – food, entertainment, and clothing – represent a smaller share of wallet than ever before. Consumers want to make them count.
Despite growth in the overall economy, recent data suggests that most Americans have less to spend on fun, discretionary categories while housing and transportation take up a bigger share of wallet. It’s no wonder that consumers want to maximize their enjoyment per dollar spent. They now want that to come from every purchase, even utilities like coffee and face wash. Just like lipstick sales historically have increased in recessions because they’re an inexpensive indulgence, paying a slight premium to treat oneself in utility purchases (food, personal care, mattresses, home goods) makes psychological sense. It also gives consumers something to share via social media, which means new trends (and companies) can catch on with incredible speed.
What will be the next big categories of change? My eyes are on homegoods, housing, community, mindfulness, and – as always – food.