Consumers are Changing. Brands Need to Change with Them
The Samsung NEXT Innovation team is focused on delivering insights and strategies that paint a picture of how consumers, industries and technologies could evolve over the next 5 to 10 years. Led by President of Samsung NEXT and Chief Innovation Officer of Samsung Electronics David Eun, the team dedicates its work to studying how the world is changing, and from there, where it will evolve and what this could mean for Samsung, its products, partners and customers, and industries at large.
During his keynote at Web Summit last year, Eun unveiled Samsung NEXT’s perspective on the future of the home. Today, companies everywhere are trying to figure out how to deliver new experiences to consumers, which raises crucial questions, such as:
Do we really understand the future consumers of experiences? Do we know what they want? What should companies consider doing to be successful?
As technology evolves to meet the challenge, the consumer landscape is also rapidly changing. In the early-to-mid 1900s, consumers in the U.S. were mostly homogenous — that is, primarily young, white, and male. The demographics have changed dramatically over the last 50 years, as people of color or people who are not white now comprise 40 percent of the U.S. population, have strong purchasing power, and contribute to Gen Z being the most diverse generation in the nation.
Today, consumers from diverse backgrounds have $3 trillion in purchasing power in the U.S., which is comparable to India’s GDP. They are more likely to seek out products and experiences tailored to their interests, with 70 percent saying they would pay more attention to personalized products. And they are much more likely to support companies that align with their values.
“As we accelerate into this new age of experiences and grapple with this new normal, companies everywhere are trying to figure out how to deliver experiences in this new reality,” Eun said.
To discuss how those shifts in demographics and consumer demands are being met by brands, Eun held a conversation with Steven Wolfe Pereira, co-founder and CEO of Encantos, and Michelle Ebanks, the former CEO of Essence Communications, which was streamed during the annual Collision conference.
The fall of the mass market
Based on the diverse cultural backgrounds of consumers today, as well as changes in the way they interact with culture and technology, the panelists agreed that major brands can no longer focus on the mass market and expect to compete with emerging players that take a more targeted and personalized approach.
“Consumers are changing. They are more diverse, they’re more expressive and more empowered than ever before. Consumers want more meaningful experiences that are personal and with brands that align in terms of values and identity,” Eun said.
“To rely on mass marketing now can be perceived as lazy and not broad in terms of the diversity of consumers today,” Ebanks said. “The power of media pushing a mass message also separates us further rather than recognizing our differences and seeing beauty and power and success along a wider continuum.”
A reluctance to change has seen many mass brands losing share across industries and geographies to emerging brands. According to recent research, 90 of the top 100 consumer packaged goods (CPG) brands have lost market share to smaller, more nimble upstarts that are better using technology to reach their customer base.