The Sovereign Consumer

The Great Recession has made

an indelible dent on the
consumer psyche
 Are you feeling better about
your economic situation
(adults 18+)?
Yes 28%
No 71%

Are you starting to spend

more on discretionary items
(adults 18+)?
Yes 17%
No 82%

Source: BIGresearch
The brand value equation has been re-
thought by all socio-economic classes

Authentic
Value

Discretionary Essential
Spending Spending

Perceived
Value
 Frugal-shifting is on
Stay-cations
Share-swaps

Declaring Barter
bankruptcy

In-home
Eating at
entertainment
home

Coupon clipping
Store
brands Piracy

Doing without Under-employment

 Marketers have been put on notice

Empathy for the consumer is now

intrinsic to the brand-value
formula

“Consumers are
not walking
wallets”

Mo Morales,
Provocateur
 Even luxury brands are taking notice

“Coach has begun to “It has definitely

rebalance its collections made us all reconsider
so that at least 50 what we’re doing, how
percent of handbag we’re doing it, and
choices will fall into who we are trying to
the $200 to $300 range, reach as a customer.
compared with 30 percent In a way, it has been
previously” a reality check for
all of us.”
Lew Frankfurt,
CEO Coach Vera Wang
 Culture Environment

Technology
Health
Leisure
Communications

We need to tune-in meta-factors that

influence behavior and confer context

Education Nationality

Religion
Politics
Economy

Sexuality
Energy
“Only those who are
grounded in the reality of
their consumers’ lives
will understand their
priorities. The consumers
themselves may not have
the ability to articulate
their needs.”

Idris Mootee,
CEO, Idea Couture
 Meet The Sovereign Consumer: a first
world archetype that eludes demography
and exudes psychography

Extremely Cynical
of media and brands Commercially Engaged
defined by brands selects/rejects

Network Enabled
on-demand influence
Privacy Disabled
personal data out of control

Needs Community
Seeks sharing with peers Needs Anti-Community
defined by what isn’t
Owns Self-
Determination Suffers Status
defines value on own terms
Anxiety
aware of place in society

Promotes New
Social Contract Ethically
expects responsible pursuit of Ambivalent
profit Selective application of
values
“The ideological market has
become equivalent to a self-
service restaurant where
individuals can provide
themselves with single pieces
to put together their own
cosmology and have the feeling
of thinking for themselves.”

Marc Auge,
Anthropologist
The Sovereign Consumer desires a role
in the innovation journey –
commercially, politically, culturally
– and will compulsively syndicate
their experience
“Consumers are so acutely aware of
how media narratives themselves
operate, and of how their own
behavior fits into these narratives,
that their awareness feeds back
almost immediately into their
consumption itself.”

Bill Wasik,
Senior Editor, Harper’s
Magazine
 The Sovereign Consumer doesn’t
necessarily think
digital connectivity = engagement

Meaningful relationships require an

investment of time, care and ability to go
analog sometimes
“I've long believed that
printed matter will gain new
value in a digital world as
everyone begins to crave the
more physical / tactile /
emotional nature of printed
stuff.”

Tim Milne,
Creator Artomatic
and Matterbox
 The Sovereign Consumer harbors
ambivalence towards open-source culture
because it requires the surrender of
privacy

“We have democratized

voyeurism on a global
scale.””

Paul Virilio,
Cultural Theorist
 The Sovereign Consumer lives life on
a spatial continuum that provides joy
rides into a remixed past, an
augmented now and a future that’s
been forwarded-by-a-friend

“It doesn’t matter who

you say you are.
Meaning = process of
discovery.”

Tim Stock,
Managing Director,
ScenarioDNA

Pic by Benjamin Reed

“Many of us will begin to
feel naked and somewhat
stupid out in public without
the web, the way we’d feel
out in public without our
clothes today.“

John Smart,
Founder, Acceleration Studies
Foundation
 “Privacy is
expensive and
publicity is
cheap.”

Sam Lessin,
CEO, drop.io

Pic: Dan Outram

Sovereign Consumers decide the

degree to which they allow
themselves to become an ad-unit
“Understanding and
appreciating the public’s
increased awareness of its
own value to the marketer
is the first step to
formulating a marketing
strategy.”

KEMO,
Brand Revoltants
 Raised on a steady diet of samples,
schwag, loyalty points and file
sharing ; The Sovereign Consumer is
pushing business into freemium models

Infinite Components = Attention

Scarce Components = $$$

“The reason monetization is
a dirty word is simple. It
blinds us to value
creation, at the expense of
value capture.”

Umair Haque,
Director, Havas Media Lab
On the shelf or in a landfill,
The Sovereign Consumer’s
impression of a brand is
holistically defined
“Let’s be honest. Design,
like marketing, is about
driving mass consumption, and
anything produced on a mass
scale contributes to
pollution and global
warming.”

Hartmut Esllinger
Founder, frog design
 Opening doors of unknown
consequence, The Sovereign
Consumer invites symbiosis with
myth and machine

Designer Lifestyle Augmented Living

Brand as Semaphore Brand as Prosthetic

“Evolution, including genetic
progress in human nature and
human capacity, will be from
now on increasingly the
domain of science and
technology tempered by ethics
and political choice.”

Edward O. Wilson
Biologist
 The Sovereign Consumer is no
anarchist, as government provided
security and regulation are thought
necessary for a reasonably prosperous
and peaceful co-existence
“You’ll have lower
prices under
deregulation than
you will through
regulation”

Kenneth Lay,
Former CEO, Enron
 “If it's a choice
between listening
to a teacher
lecture about
what's happening in
Darfur or playing
Darfur is Dying,
the serious game
wins hands down.”

Anastasia,
YPulse Blogger

Through virtualization, The

Sovereign Consumer gains awareness,
but becomes desensitized to harsh
realities
“I often wonder whether real
conversation in real time may
eventually give way to these
sanitized and easier screen
dialogues, in much the same way
as killing, skinning and
butchering an animal to eat has
been replaced by the
convenience of packages of meat
on the supermarket shelf.”

Baroness Greenfield, Oxford

Neuroscientist
So how can we stay in-tune with
Sovereign Consumers?
 Think with the box

People can exist independent of brands –

respect the current ecology of your
audience before you mess with it
“Suppliers can no longer just
compete by providing the best
product or best solution to a
defined requirement. They must
enter the customer’s world, and
understand it as a context-of-
use that conditions the nature
of the demands that the customer
makes.”

Philip Boxer
Systems Researcher,
Carnegie Mellon University
 Connection planning, over
media planning
It should be the goal of every company
to wane themselves off of paid-media and
re-direct those funds into product
innovation, customer service and
dialogue-intended outreach
“I'm convinced fat media
budgets help make people
lazy, and we've thought
about [whether we] should
cut media budgets on some
specific projects in order
to force people to come up
with ideas."

Simon Clift,
CMO Unilever
Interpret the never ending trail
of consumer-generated artifacts
Decode the stream of photos, videos,
songs, projections, gestures,
presentations, drawings etc. – to have
the broadest understanding of how your
brand is trafficked
“The right to use copyrighted
materials freely without payment
or permission for purposes such
as criticism, comment, news
reporting, teaching, scholarship
and research”
Copyright Act
of 1976,
Section 107
 Don’t think that just because
someone bought your product that
they are part of your community
People cohort around mutual interests,
not brands – utilize permission-based
social graphs as intelligence filters to
deliver increasingly relevant value to
your customers
“The community begins to take
on its own branding power: it
begins to assume the
“certification” aspects of
branding that reassure buyers
that their purchase is likely
to be one they will be
satisfied with.”

John Hagel III,

Co-Chairman,
Deloitte Center for
the Edge
When employing graphic design,
provoke sensation exploration
“It’s only if your willing to
be completely fucked up that
you’re going to do anything
important.”

Dan Wieden,
Co-Founder Wieden & Kennedy
 Don’t perpetuate hype unless
your company truly believes it
to be true
Is it really “new and improved”?
Is the product really “the choice of a
new generation?” Are you really
powering “the human network”?

Are brands really ushering in an

idyllic tomorrow?
“Today’s new technologies are
hardly more destabilizing than
the railroad, the automobile,
the airplane, steamships,
electricity, telephones, mass
production, antibiotics and
radio were in their day.”

Matthew Stuart,
Author
 Take privacy seriously
There’s a fine line between market
research and surveillance:
always get permission to collect data,
always provide co-ownership/access to
personal data,
set reasonable expiration dates on
personal data
“The Sovereign Consumer is
quickly morphing into the
Evasive Consumer.”

Keith Gerr,
Author of this
presentation
 Thanks

Keith Gerr, Principal

Keith@krgmarketing.com