Matt Britton Live At Brooklyn World's Fair Nano : The Future Of The Consumer

CEO of Crowdtap will be speaking on the future of the consumer. Take it away. Thank you. How many Millennials are in the audience? Raise your hand if you're a millennial. Okay, so you're not a millennial, little guy. So I've spent the last 10 years speaking about the impact of millennials, and everybody wants to know why, why the Millennials are so important. Why are they so different? Well, in my mind, Millennials are a different species than every human that was alive before them. And the reason why is they were the first generation Internet in the household. If you think about the access to information, the way you can communicate with other people, the intuitive knowledge of technology to disrupt industries that have been around forever, this species is unlike anybody else before, and the world will never be the same way again. People also ask me about Gen Z, how that's going to be different than Gen Y. I just think it's more Millennial ness. I think this break is unlike any other break that we've ever seen. And it's impacted a lot. It's impacted business culture, it's impacted the geopolitical landscape, it's impacted economics, but it's really impacted the consum. I think, the most, the way that brands, advertisers, small businesses, large businesses go to market aren't the same. And the problem is, especially at big companies, the C Suite is not filled with Millennials yet. It's filled up with people who did not grow up with the Internet in the household. So they are making decisions based upon a legacy world, based upon the rearview mirror. And that's why you see companies like Kodak going out of business, because the people that are running those business intuitively, but don't think to make those decisions. Think about a company like Netflix. When Netflix first started, they were shipping out DVDs. And Reid Hoffman, the CEO, knew Reed Hastings rather very early on, said, you know what? I don't think this business is going to last. People aren't going to have DVDs in 5, 10, 15 years from now. So what he did is he cannibalized and disrupted his own business and shifted to streaming. He was able to go three steps back, to take 20 or 50 or 100 steps forward. Most businesses today, especially ones that are publicly traded, will never do that. They're too scared. They're too much thinking about the short term. So what I implore in all of you guys in this audience, no matter what you're doing, is don't be romantic about the future. Don't hold on to the Past embrace what's moving forward. And what's moving forward is really these 10 lasting legacies that the millennial generation have left. So I'm going to talk to you about 10 things that will never be the same as a result of the millennial generation. You guys ready to go? Number one. Number one status update is the new status symbol. In the 90s, in the early 2000s, and every year before that, consumers would build their personal brand and their status by stuff. The cars, the houses, the watches, the sneakers. People would roll up in the suburbs with their Lexus and it would be a status symbol. Stuff and brands made people portrayed a certain way in society. But then a little thing called Instagram came about. And when Instagram came about, all of a sudden you had something different than stuff to build your own personal brand and to build social currency. It was experiences. If you sat front row at a game, if you hung out with a dj, if you saw a celebrity, if you traveled to a far, remote place, all of a sudden those experiences could be shared at scale. Before that, I could only show my pictures to who was right in front of me, right? But now, all of a sudden, my experience is with new social currency. And now the status update is a new status symbol. And it's caused a lot of major trends, one of which I wrote about my book called Youth Nation, called Dipty, which stands for did it for the Instagram. And that experiences are so powerful and important to building somebody's brand that a lot of people actually pursue experiences just to show everybody else they were there versus actually enjoying the experience. We've all been at concerts where people, instead of watching with their own eyes and high def, are watching through a phone, which they're going to share a video which no one's going to watch anyway because they ultimately have an inner need and desire to share that they were there. So diffty is really changing the world. It's making people do things for a whole different reason, for right or for wrong. This is Mission Peak in Fremont, California. Who's been there? Anybody in the audience? Well, Mission Peak's been around for a very long time because it's a mountain, okay? But in the last four to five years, Mission Peak has been plagued by pollution complaints from local residents, lack of parking. Why? Well, it's not that hiking has been ultimately that much more popular in the last three to four years, but Mission Peak is conveniently located within two miles of two major highways. This hike, while it looks like it was a major climb up a huge mountain, is really only a 15 minute, slightly hard trek up a mountain. All of a sudden, people climb and there's a pole at the top to take the ultimate selfie. Everybody now wants to be a hiker. Well, actually, everybody doesn't want to be a hiker. Everybody wants to portray that they climb this huge mountain. And that's really case in point of what Diffty is doing. I ran a panel of millennials. I rounded them up in the wild and I brought them on stage. And I actually said, hey, Millennials, tell us some of your favorite apps that we haven't heard of before. And a bunch of them talked about travel apps like get the Flight Out. Okay, well, get the Flight out is on Friday morning. You could search the furthest place possible. You want to travel for the least amount of money. Oh, it's only $179 to go to Budapest. I guess we're rolling the Budapest. Why? Because it's another adventure. It's another thing to kind of check off the box. It's another thing to share on Instagram, to portray the personal brand. This is Color Run. It's reinvented the fitness space. There's a company called Bally's out of Chicago. It was a great gym. It had great machinery. It had a traditional membership program. Well, guess what? That wasn't enough. Bally's is now bankrupt. What is the New Fitness? It's SoulCycle. It's Barry's Boot Camp. It's Tough Mudder, where people spend $350 to climb in freezing cold water under barbed wires to show everyone, I'm rough, I'm rugged, I'm not the traditional corporate suit. I can roll like that. Right. Or Color Run. People show up wearing completely white shirts, and all of a sudden when they show up, they're doused with colorful power, creating the perfect Instagram moment. When you watch people running the Boston Marathon, they're not holding up their phones. But at colorun, you better be sure they are. Everyone has their phone there. The race is untimed. At the end, there's a dj. People are treated to a live concert. The new fitness, even is experiences. Number two is something that couldn't be more relevant than it is right here in Brooklyn, which is the inner city will be dominated by the creative class. The notion of the inner city blue collar worker will never be that way again. Instead, the inner city has been taken over by the creative class. And the livable boundaries of cities are getting pushed further and further outwards. I can tell you that this neighborhood looked nothing like this neighborhood 10 years ago and will look nothing like it does today 10 years from now. A big reason why is urbanization the traditional version of the American dream. Getting in a car, driving to the suburbs, having that nice house with a picket fence and a two car garage, right? That's taken a U turn. The future consumer has no interest in living in the suburbs. The real estate prices in Brooklyn over the last 10 years were up over 100% while they flatten out in the suburbs. Why? First of all, people that are older can see what younger people are doing. And we live in a 24 hour news cycle. And the action is not going on in Westchester or Long Island. It's going on right here in Brooklyn, in the city. So people actually want to stay where the action is. Schools are becoming better, cities are becoming safer, and cities create the environment that people sort of imagine for themselves in this new world. It's also changing kind of the landscape of cities. As I mentioned earlier, areas that were crime ridden 5, 10, 15 years ago, like many neighborhoods right here in Brooklyn, are being replaced by multi million dollar townhouses, right? We call that gentrification. It's happening whether it's good or it's bad. It's happening. I would argue there's a little of both. And when gentrification happens, when the terrible story of a mom and pop shop goes out of business because of Amazon, one of three stores generally opens up. One is a Starbucks or a quick service restaurant because as of right now, they're Amazon proof and people need their coffee or to eat right away. Two is a bank because although we're entering a cashless society, we're not there yet. And people still like to go to the ATM or go to a banker and get their money. And number three is a pharmacy where you need your convenience stuff that you need within the hour. But anything else, Amazon Prime. Amazon prime. Now it's going to deliver it to you. So the future of retail will obviously never be the same way again. And when gentrification comes in, this is what you usually see. Another byproduct of urbanization is people are getting married later and later and later. Bunch of reasons why. Number one is obviously Tinder, right? We all know that. But since people are staying in cities, it's more expensive to stay in cities. There's more two income household households. People are pushing off, starting a family later. So the notion of the young mom, the CFO of the household is actually getting older and older and older. People are in no rush to get old, right? Don't get old. It's a trap that they say a lot of people think that marriage is kind of the first step in that direction, and that's why people are getting married later and later. And we're seeing that through the demographics. Number three, services will continue to make us buy less stuff. I would argue the one thing that Steve Jobs got wrong is he said that people would actually want to buy music and not actually access or rent it. And the fact is there's only so many times that somebody can listen to the song Despacito. Okay? So as a result, you had the streaming services like Spotify and Beats, which would then get acquired by Apple. People would rather access their music than buy it. Access over ownership. But that actually is not just limited to the music space. And it's really driving again, further deterioration in retail and. And it's actually driving further deterioration in almost every category. First, obviously, cars. The cost of cars combined with the cost of gas, tolls, parking, insurance for people who live in a city make owning a car just not something that makes sense anymore. People would rather access their vehicle than own it. Especially with the ease and ubiquity of Uber. You have houses, you have Airbnb, where you can rent out your apartment when you travel and rent out somebody else's apartment. The right of passage of owning a home, the bedrock of sort of financial stability is for a lot of people, especially stay in the city, no longer in reach. Used to be you can come out here to Brooklyn and here in Greenpoint and buy a place. Well, most young people, that's not even an option anymore. So buying real estate isn't an option. And with all the money they're saving and not buying houses and not buying their cars, they're putting tourist experiences so they can actually have that status update as a new status symbol. Services are also impacting kind of spaces that go on in Main street in major cities. There's a company called Glam Squad, where if you want to get a bunch of girls, want to get their hair done, a blowout, makeup, etc. You don't have to go to the salon. The salon will come to you. For Glam Squad, they have an incredible business model. They no longer have to pay Main street real estate fees. Right. And for the consumer, super convenient, super easy, saves time. Anything that saves time right now for the consumer is very likely to win. This is Rent the Runway. Okay, girls traditionally and young women would buy very expensive $1,500. Diane von Furstenberg dresses right to go out for the big Night out. Well, now you can rent that dress for $100. Take an Instagram with it. No one actually knows that you don't actually own it and actually happily give it back. And there's plenty of better things you can do saving that $1,400 rent. The Runway is exploding based upon access over ownership in the apparel space. It's hitting every single category. Owning stuff just isn't cool anymore and we have less space to keep all the stuff that we've owned in. Again, positives and negatives towards society. But it's the future for sure. Number four, the global middle class will likely continue its rapid evaporation. The middle class is rapidly eroding. I travel all over the country and all over the world. And when I'm on the coast, it's a whole different world than when I'm in middle America. When I go to a place like Cincinnati and I go to the nicest hotel and in the lobby there's locks on the door to keep the homeless people out, then I know that actually the world is really changing because jobs are getting offshored and outsourced in middle America and it's dramatically decreasing the middle class. For the first time since the roaring twenties, 0.1% of the population in the United States controls nearly 25% of the wealth. The top ten richest people in the world actually have more money than the bottom 50% of the world. So we're actually seeing this big divide, obviously driven by the Internet. And it's creating haves and have nots and it's creating a barbell economy. Okay? And what I'm telling businesses is you need to pick a side. You either have to be a super luxury brand or you have to be a super value brand. But you actually can't be in the middle. This is Miniso in China, the equivalent in the US to Dollar Store, Dollar Tree, Dollar General. Right? These big retailers, they're selling stuff for $1 or $2. Playing to the value sector. Walmart, Everyday low prices. Vizio selling flatscreek for $199. These companies are winning in this new economy because they're winning by supply chain innovation and giving the best product for the lowest possible price. On the luxury side of the equation, no shortage of luxury companies. JetSmarter, a private jet rental company. Blade, a company that shuttles people from here in New York to the Hamptons for $600 versus actually getting in the car. Four Seasons Amman Resorts, companies. On the luxury side, Apple, which recently just announced the Apple X is going to be $1,000 for a phone. Right. They're playing to the luxury space, but who's losing? Companies in the middle. The Gap just announced they're closing 40% of their stores. Well, why? The value sector, they can't afford to shop at the Gap. They're not going to buy jeans for $50. The luxury sector, they're not going to buy jeans for $50 either. They're going to buy, you know, Citizens Jeans or JJ brand for $200. The Gap finds itself in the middle. If you are in the middle, you will die because there's not a market in the middle anymore. The Gap also owns a company called Old Navy or a brand called Old Navy. They're doing perfectly fine because they're playing very well to the value side of the equation. So we're in a barbell economy. You need to pick a side. Number five brands will be built direct or no longer built at all. In working with a variety of brands, what I'm finding is so many companies have no idea who the consumer is because they've actually never needed to talk to their consumer. As long as these big merchants have been able to sell their products to Walmart or Target, and consumers would walk by it and grab it on the shelves, put it in their car and put it in their SUV and drive to their house, those companies would win. But now what's happening is Walmart and Target are creating their own brands because their margins are getting squeezed and consumers aren't going to retailers as much anymore, which is forcing a lot of companies to figure out how they're actually going to go direct to consumer. How are they going to sell their product directly? And most of the big traditional brands have no idea how to do so because they don't even have data on their customer. They've never had to. As long as they can go to Bentonville and sell more pallets to Walmart, they were fine. So there's a new world of companies that are taking off that are cracking direct to consumer, like Warby Parker, which is basically taking on a huge giant in the eyewear space called Exotica. They've understood how to build direct relationships with their consumers. Getting data, top class customer service, and then they're building a retail footprint on top of it, but not the other way around. They've cracked the. Another company that really intrigues me is a company called Away selling suitcases for $200 with an iPhone charger actually built in. Okay. Not going through traditional retailers understanding who their consumer is, using New world channels to actually Communicate and disrupting the space. And a lot of people actually even questioning what brands even mean. This company really interested me. It's called Brandless. They just raised $50 million in funding. And their whole take is consumers don't care about brands and low involvement categories. Whether it's the luxury or the value side. It doesn't matter what your brand of maple syrup is as long as the best possible ingredients. They aren't advertising, they aren't building brands. They're putting the best possible ingredients in their products and they're selling everything for $3, basically saying brands don't matter at all. Number six, we will seek gigs instead of jobs. And education has changed forever the freelancer economy, the gig economy, the notion that individuals and specialized skill sets can have an enviable career is unlike anything we've ever seen. Right now if you can go deep into an art, meaning that you're creative, you're a designer, you can do something that machines can't, or you can go deep into a science, you can operate the machines, you can become a freelancer and go direct to the companies that are buying you and have an enviable income and the freedom that this generation really wants. The average company on the Fortune 500 in the 60s was around 30, 40, 50 years. Today the average company is 10 to 20 years. There was no longer sure path to working your way up the corporate ladder anymore. And people are realizing that. And it's causing a boom in things like collaborative workspaces like WeWork, which now is the fastest tenant of commercial real estate in many major cities around the world. WeWork allows me to rent my desk next to that guy in the blue shirt and pay $150. He could be a designer. The woman behind me can be a coder, somebody can be a YouTube search engine optimizer. We can basically share resources. We, we can network. I have massage therapists, I have receptionists, I have a conference room. I have a culture that rivals Google, right? And I can do it for $150, $200 a month. So that creative class is going towards the freelancer economy. They do not want full time jobs anymore. And what's happening is big companies are taking suit. They used to be in the suburbs, in these huge suburban enclaves like Coca Cola or rather Pepsi being in Purchase, New York or Microsoft being in Redmond, or Visa being in Foster City. They're all moving back into cities and they're contracting their workforces so they can save money and actually have addition through subtraction and they're actually going to where the millennials are and where the talent is. So while companies used to move out to the suburbs for the tax advantages, now they're actually moving back in. Number seven, typing will go the way of hieroglyphics. I had a huge argument with a teacher a couple years ago saying they should not teach handwriting in school. And she got really offended. And I just called her the other day and said, guess what? I actually don't even think they should teach typing in school. Apple last week announced an Apple Watch as LTE built in. When you want to talk to that watch and tell it to send an email, you're not going to type on your watch. You're going to talk. Voice is the future. Typing will be gone in three to four years, full stop. So while you don't trust Siri right now, you're going to trust Siri a lot more in three months and incredibly, more probably more than the person in three years from now. So the way we enter information is going to be from voice. And the biggest companies in the world, they already know that. That's why Amazon's pushing Alexa, Google with Google Home, Microsoft pushing Cortana, Apple pushing Siri for the smartest companies in the world, because they know that voice is actually the future. But this notion of voice is changing consumerism forever. Because guess what? If I have an Amazon Alexa in my house and I say, alexa, buy batteries. Amazon Alexa will say, I will send you Amazon basic batteries. I say, Amazon, I want door sell, and Amazon Alexa says, I will send you Amazon basic batteries. Because what Amazon is actually betting is that the convenience and ubiquity of voice trumps brand. And Amazon now can sell their own products. And in low involvement categories, people don't really even care about the brand. So that voice is having an insane impact on so many industries. I worry about Google's future. I don't actually worry about Google because those people are doing fine. But if I search into a phone and I speak into it, I'm not going to type in Google anymore. I'm just gonna talk. Right, Siri, where's the closest Starbucks? Right? There are 30 within one block away. Right? That's what they'll come back and say to me. But who delivers that search? It could be Google or it could be anybody, because I'm actually looking at the Google logo. So in a world where visualization can go away for so many transactions, what's that gonna mean to the power of brands? The future of the phone looks a lot like this. AirPods computers built into earphones. And the movie Her. Right, you guys saw it. If you haven't, you should see it. Guy falls in love with this film. Number eight, fame is forever completely democratized. The notion of fame has changed forever. What a lot of big companies don't understand is Tom Hanks and Tom Cruise and Angelina Jolie. And the Hollywood A list matters infinitely less to this younger generation than the people who they watch every day on YouTube, like Dan PDM, right? So when people are watching, those are the new stars that actually matter. And these people have not gone through kind of traditional channels. They have gone through their own path. And fame has been completely democratized. And the new version of the star is a YouTube star, or people are homegrown. And I hate to say it, but the best example is the Kardashians. They have built an audience so enviable by actually exposing their lives in every way, shape and form, obviously. And then they've used social media to kind of offer a voyeuristic peek into what they're doing. And in doing so, they built an incredibly powerful audience where when they post fittee or flat tummy vitamins on Instagram, the websites crash because they sell out so quickly. So the word influence is thrown around a lot, but influence is actually when you can sell stuff, and nobody sells stuff better using the power of their fame than the Kardashians. And individuals are actually the new network, especially in a world of Instagram Live, where celebrities are actually going on live. Justin Bieber, he wakes up in the morning, he puts his phone on, he lays there, he takes his time to get out of bed, and as he's staring at his phone, the audience goes from 50,000 to 100,000, 200 to 250,000 people. If you pick anything up at that moment, he'd be able to sell anything. So celebrities control so much moving forward because they are the new networks. If you wanted to get a message out, you wouldn't call Sumner Redstone or Rupert Murdoch at Viacom or any major network. You would actually ask the celebrities themselves because their audience are bigger and way more powerful. Number nine, and I've been saying this now for 10 years and actually just came true as well with the Apple announcement is the TV will become a giant iPad hanging on your wall. Young kids, first of all, have no idea what a TV network is. They have no idea what NBC, ABC or Fox is. That does not even compute to them. It's like rotary phones to the Gen Xers, right? It just doesn't make Any sense. Apple just announced, as did Amazon three months ago, that they're actually going to be selling a tv. I've had this graphic up for a very long time now. This graphic is real. The TV's going to be a giant iPad on your wall and it's going to look a lot like Apple tv. So this is what Apple TV looks like today, but tomorrow this is what Apple TV is going to look like. Okay, where individuals are going to be in network live sports, which the NFL by the way, is the largest force that we've ever seen in media because it's the only thing that aggregates eyeballs in a live format on an ongoing basis. And big shows are going to go direct to consumer. And what I question is, in the barbell economy, if I can either pay to see the show without commercials or get it for free with commercials, does that only mean the value side are going to even be subjected to commercials whatsoever? What happens when Joe's Pizza can advertise during the super bowl to everybody within one mile of their Duluth, Minnesota location? Because you can buy everything programmatically, because the consumer, when they're watching this giant iPad on your wall, it's going to be doing so in a logged in Facebook state. So everything that they get targeted is going to be towards them as an individual. It's what we call addressable or programmatic in the advertising industry. But it's going to change television forever. And number 10, four companies do and will continue to run the world. When I wrote my book three years ago, I talked about these four companies that are probably going to have to get broken up by the government. And you probably saw the news yesterday that Facebook had information subpoenaed for what they've actually taken in terms of their advertising from the Russians during the election. The government's going to start meddling in these companies. Donald Trump is no fan of Jeff Bezos, that we actually already know. And these companies have an infrastructure, an ecosystem, a power unlike none others. And in the barbell economy, the people that on the right side of the barbell, the people that are extracting the value, are people that can play in this ecosystem. Touching Google in terms of how you reach people at the beginning of the funnel, Touching Facebook in terms of how you drive brand love and actually how you engage with them. Touching Apple in terms of how you get on your mobile device, touching Amazon in terms of how you sell stuff, that's the future of business right there. That's the future of every single category. You name the category. Everything you should do in business should be evolving around these four companies. I'm not saying it's great, and maybe there'll be another fifth. I think Microsoft on the B2B side actually still has some life in them, but there's not that many yet. There's a huge drop of thankfully for all of us who live in this country, they're all American companies. And besides Alibaba and Tencent, most of the innovation is still happening in the US which is why we really need to foster and fuel innovation from everything from our sort of political views as well as to education. So Those are the 10 lasting legacies. What's next for Gen Z? Well, that's frankly a whole other presentation. I'm usually given 40 minutes. I've only given 20. So you have to kind of follow me and check out what I think about Gen Z. That's all I got for you guys today. My books. Youth Nation. I'm Matt Brayton. You guys want to hit me up? Here's how you do. So thanks so much.