Matt Britton Live at TMRE - "Injecting Humanity Into Business" (Expert Gen Y Keynote Speaker)

Are there any millennials in the room? Millennials, raise your hand. Okay, cool. So today I'm going to be talking about you. Now, it used to be when I asked in the room who was a millennial, and people raised their hand, they would think that they were super young, but actually the youngest millennial is 21 years old. So millennials are sort of aging out as a new disruptive generation, and they're being replaced by Gen Z. But that doesn't mean that businesses need to stop thinking about millennials or millennial tendencies. It's actually quite the opposite, because millennials are basically now going to be the next moms of the household, the next CFOs of the household, the next CEOs, next CMOs, the people who are making big business decisions. So while they're not the young hipsters anymore that are coming in, they are the people from a B2B perspective that are incredibly important. And what we'll be talking about today is how millennials are going to slay the hippo. Does anyone here know what a hippo is in terms of business? Okay, well, a couple people do. It's the highest paid person's opinion. Okay. And to me, the hippo is the biggest thing from allowing businesses to become data driven. The last presentation, which I thought was great, talked about what to do if you work for a boss that kind of thinks they know everything, Right. And they don't actually think about market research. And I think market research's biggest kind of competitor is actually assumptions in general. 95 to 97% of all decisions that are made in everyday business situation are actually made by hunches or gut instincts and actually have no data behind it. So one of the things we're working on, Suzy, is having an easy, seamless, intuitive way to have data behind every decision making process that's happening at a company to essentially eliminate the hippo. And the hippo's not obviously a good thing. I mean, the hippo's somebody who thinks they know everything. The hippo is the person that said social media is a fad or. Or boy bands will actually last forever. Or Nickelback rocks. Right. Why does the hippo think Nickelback rocks? Because his daughter says so. When I was running an ad agency for 20 years, I can't tell you how many times a senior business decision maker made a decision based upon something that their kids said to them. No data behind it. Spending millions of dollars behind a big concert sponsorship or some big integration because of something they heard their kids say. Is that something that can be represented on a wide scale when the CMO lives in New York, probably not. It's a whole big world out there. So the hippos obviously have become within a company, I think, the equal opportunity destroyer, because they're assuming everything. There's no data behind it. And I think the biggest role for people in organizations to really make change is to figure out a way to slay the hippo. So who is a hippo? Generally speaking, they are not a millennial, because millennials grew up having access to information, being able to validate any thought they have. Hey, with real data. People who grew up before the millennial generation did not grow up with a phone in their hand. Their brains are wired differently and they're obviously more predisposed to being a hippo. Somebody who's stuck in their ways, not listening to consumers, shrugging off new competitors, or just focusing on legacy models. And as Mark Twain once said, it's not what you know that gets you into trouble, it's what you know for sure that just ain't so. And there's many things that business decision makers think think they know that just isn't the case anymore. This was an interesting study where we asked business executives what's the biggest drivers of decision making that's happening at companies. And management judgment was at the top of it, which to me is just so shocking in a day and age where information is so readily apparent and you can access what consumers are thinking at any time of day. Here's some examples of hippos. And this isn't to say the CEO or CMO of Anheuser Busch, hopefully not in the room, is a hippo, but decisions are made a lot. And even you look at the quote here. Craft beer took us by surprise. I'm a terrified dinosaur. So this is the president of Anheuser Busch essentially admitting that he didn't actually look at the data and made decisions based upon a legacy world. And Anheuser Busch, as a result, kind of was late to the game in craft beer and looked what happened. These are some of my personal favorites. This is on the outside, on the Bud Light beer bottle, said, the perfect BO for removing no from your vocabulary for the night. So this actually made it on a bottle in this day and age, believe it or not, obviously it got pulled off. But if the voice of the consumer, not the voice of some ad agency or somebody who wasn't testing at that point when this label was being created, obviously that wouldn't have gotten out. Bloomingdale Spike, your best friend's Eggnog when they're not looking. Another ad that actually made out shocking, right? How do things like this make it out for massive corporations? Well, because data are behind it. Or the watermelon Oreo. I don't know how many people actually tried this, but I think consumers right away would have said it wouldn't have worked. And the examples go on and on about companies that are getting disrupted. You guys hear it all day because they actually don't have data behind it. And the Hippo hall of fame unfortunately kind of continues to grow. There's obviously Thomas Watson who said, I think there's a world market for maybe five computers. Thomas Watson, of course, the president of IBM. Or Steve Ballmer, former CEO of Microsoft, saying, Google's not a real company, it's a house of cards. Or the blockbuster CEO saying neither Redbox nor Netflix are even on the radar screen in terms of competition in 2008. Or Ken Olson saying there's no reason anyone would ever want a computer in their home. Now, if you ask consumers at this point, I would beg to differ that they would actually say this because the desire was there and these decisions usually are made in vacuums. So we all know that business decision makers have a choice. You don't need to be a hippo. You don't need to essentially trust your instincts for everything you do. But the business world in the past has actually rewarded hippos because the world that many Gen Xers and boomers grew up in is as long as you're golfing buddies with the business decision maker, you can kind of control what happens. It wasn't a consumer generated world. Decisions were made from the top down, from the boardrooms and not the sidewalks. So if you were golfing buddies with the CMO or business decision maker, well, that would be okay. Or if you were able to go down to Bentonville, Arkansas and get a couple few extra inches of shelf space, that one meeting, it didn't matter what your consumers thought. As long as the buyer from Walmart gave you a couple of few extra, extra inches, you were going to have a good year. Right? So it didn't really matter. It was Walmart's decision what they would impart in consumers. And as long as the product was readily available, the products would move. And despite the fact that things are changing and data's still out there, a lot of hippos are still relying on what I'll call the three GS, which is the last stand of the Hippo, which is Google gut instincts and guys with MBAs so these are kind of the three things that hippos are kind of holding onto. But eventually, you know, I think we all know that the hippos aren't going to exist in big companies. And I think one of the biggest drivers of hippos being eliminated from companies is millennials actually filling the C suite. Because I think once millennials fill in the C suite, they're going to walk into a company and say, why do you still have those holes on the side of your printer paper? Why do you have a blinking 12 on your VCR in your conference room? And why do you have a VCR in your conference room? And really kind of try to drive that change. Because decisions in the future, as I mentioned earlier, are not going to be made from the boardroom, they're going to be made from the sidewalks. Because consumers are the ones that are disrupting companies. And it's the companies that are putting consumers first are the ones that are disrupting the companies that aren't putting consumers first. And that is apparent in every single industry. And there are still legacy industries, whether it be banking or real estate or health care, where it's still kind of a top down approach. But I think with the technological innovation in those categories, it's only a matter of time, because before those companies who are largely driven by hippos, are going to be disrupted as well. As we all know, the pace of disruption has increased exponentially over years. So what you're going to see is disruption happen faster and faster and faster, which is why the average age of a company on the Fortune 500 while it was over 60 years old back in 1960, is now down to 15 years old. And by 2030 is projected to be only 10 years old. Which means that the companies that we look at as the tried and true bedrocks of American corporations are no longer going to be around. And that creates, obviously massive opportunities. And again, it creates massive opportunities for companies that are putting the consumer at the center. So why is this all happening? Why do actually millennials have the power to take down the hippos, unlike past generations? Well, there's a lot of traits with this millennial generation, besides the fact that they grew up with the Internet in the household, that makes them different than any other consumer segment. First and foremost, it's about their version of the American dream. The vision of the American dream for boomers and Gen X was find a mate after college, move out to the suburbs, get that two car garage, white picket fence, 1.7 children, move out to the suburbs. But now Cities are actually the world where millennials envision living. And because of that, the livable boundaries of cities continue to be pushed further and further outwards, creating obviously tons of gentrification and social issues in major cities, as well as transforming the very blueprint of what we all know as America. All this is from Richard Florida, who wrote an incredible book called the Creative Class, which talks about how the creative class in America is actually transforming the American landscape. This is New York City, and as you see, the purple shades are people who are part of the creative class. The tan shades are people who are part of the service class, and the light blue are part of the working class. You don't see a lot of light blue. This is Manhattan, and this is New York, the biggest city in America. What's happening to the inner city blue car worker? They're obviously being pushed out. And what that tells you are millennials are staying in cities. Since millennials are staying in cities, they don't really find needs to buy cars anymore. I saw earlier today, Uber's going public at a market cap of $120 billion, which makes them worth more than Ford, General Motors, and Chrysler combined. Right. And obviously it's no surprise that auto sales declined in 2017 for the first time since the financial crisis. Consumers aren't buying homes anymore. They're renting. They're staying in cities. What does all this mean? It means that their lifestyle is different, and their lifestyle is different in that they're not going to retail as much anymore. You look at retailers, you look at major malls across the country, and they look like urban landscapes, not because they have great gardeners in them, but because actually, no one's going to malls anymore. You look at the debt classes of major malls across the country, and so many malls, 334 malls, are right now at risk of closing because millennials aren't going places to shop anymore. They are no longer rolling up in their suv, listening to a Shania Twain CD and filling up the back of their shopping carts at Target anymore. They live in small places, and they're not traveling as much anymore because they don't have the car. And obviously, they're ordering everything with their mobile devices, which, again, puts them in control, doesn't put the Hippo in control. They're also leveraging services. How many of you know about Glam Squad? Okay, so for those of you who don't, if I'm Maybelline or l' Oreal or Revlon, I'm buying Glam Squad. Why? Because in a world where the millennial generation is not getting in their car. They're not going to target, they're not relying on decisions made by a hippo, but they're staying in their homes. How do these brands actually get in front of consumers in the right way? Well, with Glam Squad, it allows women to hit a button and have a team of stylists to come to your house and do your hair or your makeup or a blowout before a night out. And actually, what it gets, Glam Squad, is in the consumer's home, first party data, which is hugely important and an intravenous selling model. So now, all of a sudden, if you're a maker of beauty products, you have an incredible way to actually sell your products to consumers without relying on them going into a store. Handy's a tool where you hit a button and people can come in your house and clean your home. And if I'm Clorox and I make cleaning agents and you actually want to sell your product, why not buy a company like Handy? Because now, obviously, you have. When the team of maids and housekeepers that are coming into your house, they want to clean your house, they could use their products. Leave whatever's left on the product in and just add it to your bill for Handy. And then WAG hit a button. You have a dog walker. So if I'm Purina or I make pet food or. Why wouldn't you buy a company like Wag? And some companies are getting it, which is why IKEA bought TaskRabbit. So when you buy your dresser with 110 parts, but only comes with 108 parts, for some reason from Ikea, it's impossible to put together. Now, you don't have to call TaskRabbit. TaskRabbit's part of IKEA. You hit a button, somebody comes to your house and actually makes your dresser for you. But with TaskRabbit, what they're giving Ikea is an ongoing source of consumer contact. More first party data with them. So these companies are saying, we know that the consumer's in control, and the only way that we can actually add value and continue to sell the consumers is by getting first party data. It's no longer based upon me hoping they're going to see my extra shelf space at a major retailer. Collaborative consumption is also changing the power struggle with consumers. Who in here has heard of Rent the Runway? Right? Rent the Runway is another great example. Instead of me buying that expensive, beautiful, flowery dress for $1,000 to wear a night out, I can spend $75 for it and have that same dress, different types, 12 times over and spend the money that I save on not buying the dress on experiences, which is a whole core in terms of the value system of the millennial generation. But again, it's putting them in control and is no longer predicated on them walking into Bloomingdale's and actually seeing the product. They're going direct to consumer, they're having the consumer's data and, and it's really putting them in control. Obviously we know Amazon is really the big disruptor when it comes to commerce. And Amazon is really what the hippo fears most. Because in a world where the hippo's in control, they can buy TV time. Go back to the 1950s when the family would gather around the TV and watch the Ed Sullivan show, right? Everybody was watching one show. And when they were watching one show, whoever had the biggest checkbook could gain all the mind share. And it didn't matter what was best for consumers. Consumers didn't have a choice, right? It was the CEO and the CMO and the executives of big companies that were driving it downwards. And now it's the complete opposite. Right now if you're a consumer, you have thousands and tens of thousands, in some cases hundreds of thousands. There are millions of choices of what brands that you're gonna choose for every single product out there. And for companies now that are making decisions in a vacuum where without really understanding what consumers want, how are they ever going to survive? Because the barrier to entry is no longer you need a huge checkbook. The barrier to entry is you need a good supplier in China and you put up a Shopify site and you're in business and you're actually competing against the biggest manufacturers out there. So opportunities become democratized on the supplier side and again it's become democratized on the consumer side. And Amazon's impact is obviously mind blowing. This is the doorman of many luxury buildings in major cities across America. Unfortunately, it also looks like my apartment when I come home in some days. But what Amazon is doing to capture the share of spend for consumers is off the charts. Last year in 2017, the average spend in Amazon across the year for prime members was $1,500. They're going to get that number up to three, four, $5,000 a year. How one way is predictive shopping? They're going to see through data from the consumer. This woman has a baby, she's buying Huggies. You buy Huggies for more than one month, they're going to have pattern recognition and start sending the huggies to you before you even order it. Predictive shopping. They just bought a company called Ring, which is a smart doorbell company where you ring the doorbell and it turns on a video that streams to your phone. Well through that they're going to allow you to opt in to actually unlock your door for you so the delivery person can and just drop it in your house without you even being there. So they're trying to make it as easy as possible in a consumer centric way to allow consumers to buy from Amazon. And when I look at all the companies on this list, when I look at major CPGs, I really worry about their longevity. I worry about their longevity in a world where there's very little barrier to entry to compete. I worry about their longevity when brand equity and low of Melbourne categories doesn't mean as much anymore. And a word about the longevity in the world where retail is becoming democratized through platforms like Amazon. And now instead of you just needing extra shelf space and it's funny, I talk to a lot of CPGs, they say why don't you go direct? Why don't you sell your product direct? And what they all say to me is, well we don't want to piss off Walmart, but look at Walmart's doing to them through private label. What is Walmart doing to Coppertone right now? They're giving them better eye level shelf space with cheaper products saying it doesn't matter what the Coppertone brand says, we're just as good and we can save you two bucks. And for a lot of areas of America that means a lot right now. And the brand equity for Walmart knows the brand equity of Coppertone and other low involvement categories, whether it be toothpaste or deodorant or shampoo, is not what it used to be. In fact, if you look at the most valuable brands of 2017, you don't see Hershey's, you don't see Nike, you don't see Ford Motors, you don't see the brands that were tried and true American brands. What you see is utilitarian brands. Here you see Google, that allows you to access information. You see Apple, that allows you to connect to the ones you love. Amazon allows you to buy easier over and over and over again. Almost every brand here is a utility brand. It's not just because they're a tech company. It's because they're not selling consumers on a brand promise like we grew up in the 80s where it's just if you wear Air Jordans, you're going to be a better basketball player because. Cause I tried it and it didn't work. Okay. And my MBA career was over. But in the 90s and the late 80s, this would look obviously a lot different because the power of these brands don't matter as much anymore. In fact, there's a company called Brandless that just raised $50 million that's betting their entire business on it. What Brandless is doing is they're saying we're gonna create the best possible products. We're gonna sell them all for $3 each. There's gonna be no brand on it, but we're going to tell you exactly what the ingredients are and we know what consumers really care about. And we think consumers are going to buy our maple syrup for $3, which is better quality ingredients over the Aunt Jemima maple syrup for $3. Even though that brand has been around for 20, 40, 50 years. And they're going across category. I got into an argument with now the CMO of Facebook, a good friend of mine, Antonio Lucio, who he believes that Brandless is a brand new. I actually don't believe they're a brand. I think that Brandless is actually a platform that's actually democratizing what it means to be a brand, almost stripping what a brand means. Because consumers, again, don't care about the brand story. They care about the utility. Which is why a luggage company like Away can really take down companies like Tumi and Samsung and other luggage brands simply by having the utility of having an iPhone charger built into the piece of luggage. So they're betting on utility. They're not betting on the brand promise. They're figuring out how do we actually give consumers what they really want. And the insight they had was quite simple. Travelers always have dead cell phone batteries. Let's actually fix that. So what do CPGs do and companies that are in these low involvement categories? Well, I have a couple theories. Obviously, one thing we brought up was they should buy companies like Glam Squad, right? Because that gets them into a home. So actually launching services are huge. Another thought I have is that they should get into the hardware business. Because if you look, if we've learned anything from Apple, it's that ecosystems matter. And if I'm Cascade and I'm selling dishwasher detergent and I know that people aren't going to be going in a world where urbanization, they're not going to be going to Walmart and Target anymore. And I know I need to get into their homes. What I would do is I would Buy a company like Kensington that makes dishwashers and make small dishwashers that fit into drawers. Because if you talk to Millennials, what they'll tell you is they're using their dishwashers to store clothing because they order in every night, right? And that dishwasher would be a smart dishwasher, and every time it ran out of my detergent, it would reorder. And they should be in the hardware business. But instead of the executives at Cascade worrying about what the people in Bentonville, Arkansas think, right. @ Walmart or in Minneapolis or Target, I would actually sell to XTEL and relate it and the biggest real estate manufacturers in the United States who have all the big doorman and huge buildings and say, how do we actually get you to buy into our dishwashing machines? Now all of a sudden you have a built in intravenous sales model for your dishwashing detergent. Game over, right? So that, to me is true innovation. And those are things that you can learn when you have your ear to the ground and, and you listen to consumers and you're not actually have legacy thinking driving your discussion. The last point that I think really illustrates what's happening with branding is what you see happening in Voice right now. Obviously, Voice is in really early days, but if you have an Amazon Alexa in your house, and if you don't, the one piece of advice I have for everyone in this room is order a $50Amazon Alexa dot for when you get back from this conference and just play around with it. Because if you're in business and marketing, you need to see what this device actually does. But, but if you do have one and you tried to order batteries from Alexa and you say, alexa, send me Duracell batteries, what Alexa will say is, I will sell you Amazon Basics batteries. And you say, no, I want Duracell batteries, Alexa. And Alexa will say, I will send you Amazon Basics batteries. Because what Amazon is betting is that the ease and ubiquity.