Bombarded by digital messages, stressed financially and overwrought emotionally, there’s almost nothing left of the traditional shopper who fits neatly into demographic norms. The preconceived notions that brands and merchants have used for decades to understand their customers and coax them to purchase are gone. Forever.
People are anxious, seeking integrity, untrusting of the establishment, politically divided, worried about global terrorism, watching wealth become ever more concentrated at the very top of the food chain and struggling to regain some modicum of control.
The 21st century is still young. And while its core characteristics are only starting to solidify and still impossible to pinpoint, this is an age that is being defined in a significant way by the digital revolution and the widening wealth gap that is leaving middle- and lower-income rungs with less — and feeling left out.
There is no easy catchphrase to summarize the new Millennium — and perhaps one will only come clear in hindsight, as was the case for the Industrial Revolution or the Age of Enlightenment. Will this era simply be the Digital Age? The Age of Terrorism? Or is there a new disruption around the corner that will cause yet more tectonic shifts in peoples’ lives and attitudes?
That could be what’s fueling the worry — in a time when terrorists can strike on any street corner, once high-flying companies can go boom and bust within a few years, binge watching is the latest thing in entertainment and formerly revered public figures — be they politicians or sports stars — can turn out to be crooks, cheaters or worse, it seems there is little solid ground beneath us. Everything is shifting faster than ever and — at least for now — the phrase that defines these years best might be “The Age of Anxiety.”
Here, a look at some of the issues — and at what might lie ahead. Buckle up.
U.S. household expenditures have bounced back from the Great Recession, but incomes have not — the bills are back, but not the paychecks.
This is not a problem for the 1 percent, but a vise for middle- and lower-income consumers.
Most American household incomes fell between 2010 and 2013, with families of color and the less educated hit the hardest, according to a recent examination of the household finances by The Pew Charitable Trusts. Stock ownership also declined during that period for the households that weren’t at the top 10 percent of the income ladder, while almost a third of working-age adults had no retirement savings or pensions.
“Recent public opinion polling found American adults pessimistic and anxious about the economy and their own economic stability,” Pew said. “They question whether the American Dream is within reach, and many doubt that their children will fare better than they have.”
That’s a heavy weight to carry and one that will only get heavier if the “slack” in household budgets continues to slip away.
The typical U.S. household in the middle third of the income spectrum had $17,164 left over at the end of 2004. That slipped to $5,944 by 2014, according to Pew. And the typical household in the lower third saw its excess of $1,417 disappear over the 10-year period and in 2014 ended up $2,339 in the hole.
Stock market volatility has hurt the top of the income spectrum, but Forbes’ latest tally of the world’s wealthiest still found 1,826 billionaires with an aggregate net worth of $6.48 trillion. In the U.S., the average chief executive officer makes more than 300 times the average worker, according to the Economic Policy Institute.
It’s a dichotomy that’s increasingly seeping into the public consciousness not just in the U.S., but worldwide, from the Occupy Wall Street movement to the presidential campaign to the economic proselytizing of Pope Francis, who has warned against the “idolatry of money.”
People are demanding to be heard, to be noticed — which is fueling a U.S. presidential race that has been more divisive — and more bizarre — than any in recent memory. Discontent is boiling over outside the U.S. as well, from student demonstrations in the Place de la République in Paris over proposed changes in labor laws to the campaign for Britain to exit the European Union.
Bernie Sanders, who has mounted a much stronger primary challenge to Hillary Clinton than most thought possible, has done so by speaking out forcefully about a system that is “rigged” — to pick up a theme also used by Trump on the other side of the aisle.
“The American people are sick and tired with establishment politics, with establishment economics and establishment media,” Sanders said last year as he was gaining momentum and followers. “They fully understand…that corporate greed is destroying our economy and that almost all of the new income and wealth being created is going to the top 1 percent.”
He also laid out the difficulties facing anyone trying to change the dynamic.
“No matter who is elected to be president, that person will not be able to address the enormous problems facing the working families of our country,” Sanders said. “They will not be able to succeed because the power of corporate America, the power of Wall Street, the power of the campaign donors is so great that no president alone can stand up to them.”
Navigating the New Grid
But financial strain and disparity are just a part of what’s weighing on the modern mind. People today are always on, always searching and plugged in to more information than they know how to use. Brands feel the same.
A mishmash that has everyone looking for something more. Consumers don’t want to part with their hard-earned money unless it’s funneled to brands that speak to them and their values, companies that “get” who they are as people and allow them into the design and manufacturing process. For their part, brands want shoppers who are engaged, loyal, able to bring along their friends to spend and willing to stay in one place for more than a nanosecond.
Very few — brands or consumers — are getting what they want. Those who are find that the market is always moving and requires that they always be changing, branching out in new, unexpected ways.
“What you’re seeing is off the grid,” said futurist Edie Weiner, president and ceo of The Future Hunters. “The problem today is that because we’re going through a fundamental global economic transition, things just really aren’t the same and they’re not going to be the same. And the expectation that they’re going to be the same is just leading us down the wrong path.”
Weiner said even the old shorthand of thinking of the world in terms of opposites doesn’t work anymore. So retail, fashion or politics can’t be seen as brick-and-mortar versus online or expensive versus cheap or left versus right, Donald Trump versus Bernie Sanders.
“We have all these terms to help us navigate what’s going on,” she said. “What’s going on is that the opposites are breaking up and they don’t hold as points of comparison anymore.”
Weiner noted: “Is the consumer cautious or is the consumer freely spending? Those are not the two anchors anymore. They don’t mean anything because consumers are figuring it out completely differently. They’re both at the same time — very cautious, but very free about what they’re doing, but on a different grid.”
Coordinates on this new multidimensional grid can help marketers identify, for example, that new-money social media addict who doesn’t feel rich but drives a Mercedes-Benz, wears Toms shoes, shops at H&M and supports Sanders’ campaign for president.
But is that enough?
The Knowledge Influx
Shoppers also know what’s going on in the factories where their fashions are made, if brands are staying true to their message, if companies are on the “right” side of social issues — from who’s using which bathroom in North Carolina to whether they use “on call” scheduling.
Having all that knowledge is empowering, but it’s not making the retailer’s life any simpler or the shoppers any happier. The torrent of information has washed away so much of the old-establishment facade while the social media echo chamber has ratcheted up the adrenaline.
“None of this would have been possible without the Internet,” said Kit Yarrow, a consumer psychologist at Golden Gate University. “Both the insight and empowerment of the Internet, but also the complete distrust and a feeling like people have to be wary and guarded and take care of themselves because they can’t really, really trust that the politicians, health-care providers are going to take care of them. Deep down inside, I think people really want to trust — it’s less stressful, it’s less work, it’s more rewarding. But they can’t.”
That sentiment has bruised the titans of the previous age.
“People would look to designers like they were gods — and they still do, I’m not saying it’s like a switch turned off, it’s a continuum,” Yarrow said. “But is the designer the god or is it the stylist who puts it together or the blogger…these people seem to have more and more power today.”
The step change across society has made people more depressed, more anxious and more narcissistic, Yarrow said. Need proof? Just look at the success of Instagram selfies, bloggers, YouTube video stars — hello, Justin Bieber — and the on-demand, I-want-it-now-or-you’ve-lost-me generation. A Verizon Wireless study several years ago on Millennials noted that unless a Web site loaded on a Millennial’s smartphone in three seconds or less, they would give up. That is literally one…two…three.
“The thing that makes us feel safer is control,” Yarrow said.
Younger brands that are willing to have a conversation with consumers — look at Dollar Shave Club’s snarky give-and-take with consumers — have gained share by giving up some control of their image, online and elsewhere. But that’s a tough ask for established brands that are used to speaking on high. And it leaves the seasoned executives who have clawed their way to the top by learning the old ways and applying them in a very tough spot.
“People who have been in retail long enough to get to those really senior positions a lot of times are the last people who should be running the shop,” Yarrow said. “A lot of times it takes almost a complete break from the previous reality to really understand consumers and what they want. If retailers just keep trying to do the same things better instead of doing better things, it’s just a question of time before they die.”
That’s a statement that could apply to politics, a world where many in the old guard find themselves facing a mob.
“Human beings are over-messaged and over-marketed, it’s coming at us from every direction,” said Marcie Merriman, a cultural anthropologist and executive director, business strategy and retail innovation at Ernst & Young. “It’s similar to having a bunch of people yelling at you…the natural reaction is to shut down and ignore it or start yelling back. People are yelling back.”
They are screaming for authenticity — from every direction.
“People are more forgiving of those who say the wrong thing authentically than those who use the right words in a way that feels staged,” Merriman said.
Just look at Donald Trump’s rise as the presumptive Republican party nominee for president.
As for brands, Merriman said those that don’t get the balance right are “saying they’re about one thing and promoting one brand promise and then providing the customer with a completely different experience through the engagement. The consumers aren’t getting that experience and what ends up happening is that brand feels fake. It frustrates them. They’re quick to call B.S., especially the younger people today.”
Stores are generally losing the shouting match.
“Retail in general is increasingly losing its luster,” Merriman said. “People have so many other things to do with their time and their money. Shopping isn’t the social or entertainment activity that it used to be.”
The hope for the old guard is that they can stick to their knitting and stay authentic and bring the consumer into the process. There’s still a lot riding on big names and, in some cases, they’re more important than ever.
“Brands have more meaning now than they’ve ever had for consumers before,” said Amna Kirmani, a professor at the University of Maryland and editor in chief of the Journal of Consumer Psychology. “It used to be that we just got excited about actors and politicians and now it’s specific brands, whether it’s Nike or Under Armour or Zara, they have their fans and advocates.
“For many people who are not that religious, brands do occupy some space that previously religion might occupy,” Kirmani said. “We’re deriving meaning from those brands. It’s a double-edged sword because on one hand, they have these really strong brand fans. On the other hand, if they go beyond what the consumer thinks is the right thing for the brand, the right positioning, the right new product introduction, they’ll get beaten back and consumers will rise up and protest.”
With attention spans shortening and shoppers caught up in an information frenzy, brands are reaching out and connecting to people much more directly, looking to target very narrowly defined slices of the demographic, or even individuals.
“You really just have to know who your consumer is or who you want your consumer to be and you have to define them pretty granularly,” said Kimberly Jones, president of media planning company Butler/Till, which helps brands identify audiences and buy advertising.
“We’re living in a world where you’ve got a 24-7 media cycle and you’ve got so much being thrown at you all the time that a lot of brands have focused on curation and trying to throw valuable content at you at the right time,” Jones said.
Companies also have to be willing to connect with the customers who are attracted by their brand message. Jones said it’s not uncommon for brands to target one demographic, say, guys 18 to 24, with an online media campaign, only to find out that it’s 24- to 26-year-old women clicking.
That makes the interplay between brand and consumer a constant churn.
“It’s never like a set it and forget it,” Jones said. “You can’t take the target audience question as rote. You have to do the research every single year.”
One solution is to flip the script. Instead of trying to find an audience, companies can seek to find themselves, define exactly what their brands stand for and hope audiences come to them, Jones said.
That will be appreciated by everyone and help brands find kindred souls among the Baby Boomers who are moving into retirement; Gen Xers who are hitting their professional strides; Millennials who are nesting and fretting over their student loans, and Gen Zers, who are just awakening to the world.
It’s Gen Z that could best exemplify where the world may be headed. Born from the late Nineties on, the cohort is 60 million to 80 million strong and seen as the most engaged generation to date. They’re looking to not just make their way in the world but to shape it. They will enter the workforce from about 2018 on and will hit middle age from 2037 on. And don’t forget the so-called Alpha Generation — who are all under age five and will hit the workforce in 2030 and later. Who knows what changes will have taken hold by then?
The one firm thread through this Age of Anxiety is that people want to be their own power center. They want to be noticed as individuals — by politicians, brands, other people. They’re wanting to ensure that they’re getting what they’re being sold and told.
They want to trust again — and to take control of their lives.