Matt Britton Live| Social Media week NYC 2019: 5/3/19 (millennial keynote speaker) digital marketing

Welcome to the stage Matt Britton, founder and CEO of Suzy. Thank you. Thanks for Social Media Week for having me. I love this conference. I love the production, the people, the content, all of it. That was not a paid endorsement. Who in here is a Millennial? Raise your hand. Wow, so you guys are really not that young anymore. And that's really what I'm talking about today. Because when I used to ask, who's a Millennial in the audience at these conferences, maybe I'd have 10, 15% raise their hand. Now I'm having 80% raise their hand. It's kind of what I'm talking about today, which is Millennials aren't kids anymore. They're your most important customers. Still, so many brands right now are marketing like Millennials are these people, when the reality is Millennials really look like this. Okay, the oldest millennial is actually 38 and a half years old right now. So when you think about it, the Gen Xers right now are actually the consumers that have kids that are actually ready to go to college. The core parent, the core CMO of the household, the future CEO of the enterprise, is Millennials. And that's a big deal. And why it matters is that Millennials were the first generation to ever grow up with the Internet in the household. I'm Gen X. I tell my kids that when I grew up, I didn't have the Internet. They literally think I'm a dinosaur. But it kind of makes sense because when I had to do a research, I went to Encyclopedia Britannica, I had to actually call the phone and talk to people on the phone. Right. Instead of actually texting them. I did not have access to technology. I did not have on demand access to any type of information I needed. Millennials did. So there are different species, as we all know. Their brains are wired differently, but so many brands are still marketing to a Gen X society. And the disruption that's going to happen when Millennials become in positions of power when they're running their households is going to be enormous. I would argue the biggest impact of the Millennial generation is actually yet to come. As you see, the global spending power is about to overtake Gen X. And you know who I think is at most risk is brands like these. Who works for or with, as an agency, at least one of the brands on this slide. Raise your hands. You don't have to be, okay, so companies that make consumables, companies that make food, companies that make beverages, household products, low involvement categories, in my opinion, are at most risk to be disrupted as millennials get older. And that's what I'm going to talk about today. And for the purpose of this presentation, I'm going to talk about one of America's most beloved brands, Tide. Because when you look at the tried and true American brand, you have Hershey's, you have Nike, you have Tide. Tide is a brand that has built an incredible franchise over the last seven years. Tide launched in 1950 with amazing print spots like this. But back then, this actually was very innovative. And the launch of Tide was incredibly fortuitous because it launched in what Seth Godin, who actually is somebody who got me my mind started in this industry, who's speaking next, which is crazy that I'm speaking right before him. Side note, but what he talked about during his first presentation is the TV Industrial Revolution complex, which is buy TV spots, sell more product. Buy more TV spots, sell more product. Because back then There wasn't cable TV, there was no YouTube, there was no Internet. The whole family would gather around and watch the Ed Sullivan show at night. So you had the most captive audience possible. So Ty took advantage of this, running TV spots as early as 1953, marketing their brand. And over time, they realized that the more TV spots they ran, they could market to a broad audience. They would continue to sell products. The insights might have changed over time, but in the end of the day, it was about trust and quality. It was a household brand. This is a brand you can trust to bring into your home and wash the clothes of your kids and feel good that you're making the right decision for your family. Over time, as we'll see, Tide got into celebrity partnerships. They created branded entertainment projects and of course, brand extensions like Tide Pods. But generally speaking, Tide's business has been driven by this TV complex and one of the first disruptions for the millennial generation. That's really going to impact this, as millennials become the moms and head of the households, is the fact that the TV is about to become a giant iPad hanging on your wall. The disruption of TV is right around the corner. I'm sure people said it 10 years ago to the conference, but. But things are really starting to happen. Like at CES this year, Samsung, the premium de facto flat screen TV manufacturer, has announced that they will integrate itunes into their television. And once the TV and the Internet become one, once the TV becomes swipeable, because nine, ten year old kids go up to TVs and they try to swipe televisions like you should be able to, the TV is going to become fully programmatic and while Apple TV looks like this today, where you actually get to pick different networks you can stream, so tomorrow Apple TV is going to be looking a lot more like this where you're going to be tuning in to people. If you ask an 11 year old kid what ABC is, they'll tell you it's the Alphabet. If you ask them what Fox is, they'll tell you it's an animal. Kids do not know what TV networks even are. They come home at night and they tune into people via YouTube. And I believe that's where we're heading in a TV era, meaning that billions, great show by the way, will be able to distribute directly to you. And you're going to be able to say I'm either going to pay $2 to watch billions commercial free or I'm going to basically get it for free, but I'm going to be targeted by commercials. But then as an advertiser, you're only going to be targeting people in the value side of the equation because anybody who values their time will pay that $2, which means that TV is about to become soon very programmatic. So that mass audience that tied in Jordan billion, their business, it's going to go away very soon and, and you're going to be able to buy spots during the super bowl like you can buy Facebook spots today. And that's where we're heading for tv, which is the first thing that tide needs to worry about moving forward. The second of which is about the barbell economy which is happening here in America, which is a big social and cultural issue which is above my pay grade to solve arguably and basically right now it's impacting every brand. For the first time since the 20s, public 0.1% of the population controls nearly 25% of the wealth. There are middle classes rapidly eroding around the country and really around the world as jobs get offshored and outsourced. The eight richest men in the world control as much wealth as the poorest 50% of humans on this planet. And the value right now and the opportunities are on both sides of the barbell. On the luxury section, LVMH Louis Vuitton Moet Hennessey just announced record earnings. The luxury side is marketing towards a Gen X world who still values luxury brands. But if you own a luxury company, whether it's Four Seasons or Coach or Prada or Louis Vuitton, you're doing incredibly well. And the value side, there's Dollar Tree, Dollar Store, Dollar General, there's Vizio that sells flat screens for $199, winning on supply chain innovation, the best possible product and the lowest possible cost. They're doing quite well as well. But what about the Gap, who just closed 35% of their stores? Well, the Gap's problem is they sell 100 hour jeans, and the value side's going to Walmart and buying lee jeans for $20. And the luxury side's buying J Band jeans at a boutique in Soho for $200. And no one's really buying $100 jeans anymore. And I would argue that Tide is $100 jeans in the laundry sector because the value side of the equation is buying. By the way, I will be sending out a version of this deck to everybody, just so you know. You're welcome to take pictures of the slide. But side note, on the value side of the equation, there's Purex and private label brands for 100 ounces of laundry detergent, selling it for eight bucks. Right. On the luxury side, there's Method, which is selling the same volume of large for $20 because they have non toxic, non harmful ingredients, which the luxury side is going to go for. And Tide finds itself right in the middle, in a world where the middle class is going away. And I would argue so many CPGs are focused on the middle right now. And the middle is not where you want to be. It's certainly where you want to be in 1951. And Tide, and so many brands like Tide have a big choice to make. Are they going to go up market or are they going to go down market? Another major change is the urbanization movement. For millennials, the version of the American dream has taken a U turn. The notion of moving out to the suburbs, two car garage, white picket fence, 1.7 children. That's taken a U turn. And cities are the place that millennials imagine growing up and building a family. Schools are becoming better, parks are becoming safer, more options for children. And as a result, we're seeing massive gentrification. In Brooklyn, where I live, real estate costs are up over 125% over the last 10 years. Neighboring suburbs like Long island and Westchester, up 2 to 5%. Gentrification is happening everywhere. Knocking out mom and pop stores that have been around for 50 to 75 years. It's not a good thing, but it's happening. And we're not going backwards because millennials are not going to want to go back to the suburbs anytime soon. Richard Florida predicted this in a book he wrote 10 years ago called Rise of the Creative Class. And here what you see is the light blue is the working class. And this is New York City right now. You don't see much light blue anymore, do you? The notion of the inner city blue collar worker is no longer the blue collar workers going to the suburbs as millennials stay there and push out the level of boundaries because simply they just don't want to leave. As a result, millennials don't want to buy cars as much as they used to. Which talks about the rise of companies like Uber and Lyft that are both going public this year. And even the Last mile companies like Bird and Lime are offering scooters everywhere. So not buying cars and also not buying houses. Look at this dramatic drop of home ownership. Now somebody could say, oh sure, 2008 was actually the year that the financial collapse happened. It's also the year that Instagram became mainstream, when this generation started to value experiences more than the accumulation of personal things, which in my opinion made them not want to stay in one place and had just as big of an impact in home ownership. Instead, they're going to places like Airbnb, they're staying in cities longer, and they're pushing off getting married. Tinder is 100% the blame. They're just kidding. It's one reason why. But there's many other reasons why this generation is in no hurry to get married and have kids. So if you're a household product manufacturer, the notion of marketing to a 28 year old mother is soon going to be no longer here in the US as the average age of a first time mother nears towards 30 years old. People staying in cities is bringing on the Amazonification era. Because it used to be that if you were a salesperson for Procter and Gamble or, or Kimberly Clark or Johnson and Johnson, and you went down to Bentonville, Arkansas and you sold a couple more inches of shelf space at Walmart, you were taking your family to Aruba that Christmas, right? You were all good. Because that's where the volume was coming from. Because mom used to roll up in her Lexus listening to Shania Twain in her brand new SUV and she'd fill up the back of her SUV with stuff from Target because that's where consumers went. In a world where once you got married, you actually moved out to the suburbs. But now what we're starting to see is malls and trouble all around the country. And it's not binary, because there's always areas that are going to be the last the fall. And obviously this is something that doesn't flip a switch and happen overnight. But you're seeing it happen everywhere that traditional shopping attitudes and behaviors are no longer. And even if you got good shelf space in a big box retailer, you have to compete with private label because as they get more margin erosion targets and Walmarts of the world are creating actually their own products. And then on top of it, you have Amazon. This looks like my apartment when I walk in every single day. I'm sure many of you guys feel the same way. But Amazon is slowly but surely going into low involvement categories. Obviously it's exemplified by the recent purchase of Whole Foods. But not only are they buying companies like Whole Foods, but they're buying technologies like ring a smart doorbell which will essentially allow Amazon to let you let one. They're delivering people into the house to conveniently put their products in your home. Right? No longer do you have to wait. And oh, by the way, Amazon is investing dramatically in their own private label brands, leaving brands like Tide no choice but to advertise and give Amazon more money, which are then funneling back into products that compete with Tide. Right? And now the companies like Tide are saying, well, our shipping costs are too heavy. We're going to invest in great new technologies. And I love this called DS3, which is essentially liquid free detergent. They have liquid free cleaning products. You add water to it, they drop shipping costs. This is ways they're fighting. Because I will say Procter and Gamble is one of the most innovative companies in the world. Right? Don't hate the player, hate the game. P and G has to very quickly respond to what's happening surrounding them. They didn't invent Amazon, but it's up to every major CPG company to quickly respond. Utility is the new brand. Once we were growing up, there were tried and true brands in America. There was your Nike and there was your Coca Cola and there was your Hershey's. But now it's actually starting to happen. Here we go. Is this running? Here we go. Oops, that sucked. So there we go. I don't know how many of you guys have seen this slide before. I stole it from somebody. And if you tell me who it is, I'll add the source retroactively. But I couldn't find the source. But this is amazing because from the year of 2000 to 2018, what you start to see is the most valuable brands in the world start to change. They used to be the brands that told the best stories. They used to be the tides of the 1980s and 1990s. They used to be the Nikes and what you start to see over time as we go to right now is the brands that are willing are the brands that are utilities. They're the brands that figure out what their consumers want at 6am in the morning and how do they fit in. The brands that make consumers lives easier. So you'll start to see Coca Cola and McDonald's and these brands drop and you'll start to see brands that are focused on making consumers lives easier jump up. This is no coincidence. In fact, if you look at the most valuable brands in the world, you'll see many of them are utilities. Apple, Google, Cisco, Samsung, these are the fastest growing brands. The second tier are the luxury brands. Because the luxury brands still hold near and dear friends for the Gen X population. But the brands that are built on stories, the brands that are built on brand promises, unique selling propositions. You're going to start to see them go away because every product is great. The Toyota Camry would be looked at as a technological marvel 10 years ago, right? You can get from California to New York in a lot of comfort in Toyota Camry. So what's differentiating these brands? It's the stories they tell and the stories that allows you to tell a story about yourselves. And that no longer holds water in a world where this generation, this millennial generation that grew up with on demand information sees their biggest commodity is time. And time can be saved by utilities. Which is why we're starting to see things like voice take off, right? And what Amazon's starting to bet on is, you know what, what a great way to actually push out traditional CPGs. If you try to order batteries over Alexa, it's going to sell you Amazon Basics batteries. It's not going to sell you Duracell or Energizer because they're betting that the ease and ubiquity of ordering without ever pulling a phone out of your pocket so trumps the value of a multi billion dollar brand. And you know what? They may be right. I'd rather order from this device versus having to look up a brand, even having to pick up my phone. They are winning on ease and convenience. Nike just launched EasyKicks, which allows you to continually bring in new shoes, a subscription service for your young child whose feet are growing very fast just by measuring them and telling them the measurements. And as soon as you're done with the shoes, you send them and you get a new pair back. Ease and utility brandless. A fast growing CPG company is banging. The brands don't matter at all. Their notion of their entire company Is, don't worry about the brand. We're gonna get you the best possible product for the lowest possible price. New retail models like Rent the Runway, recently valued at a billion dollars, is saying, you don't want to spend $1,000 on that dress because once you Instagram it, ladies, you can never wear it again, Right? It's expired, right? Maybe you can wear it for your work friends once your college friends want to, but then it's expired. So maybe you'll get two or three wears once on Instagram, forget it, it's done. Might as well just return it to Rent the Runway and save that $900 and spend it on a night out. So the fastest growing companies are utilities like wag, where you hit a button to allow your dog to be walked. And if I am Purina and I make dog food, I am buying WAG because now all of a sudden, I have my product to add utility. All these dog walkers have my Purina product. I get first party consumer data. I have my own retail channel. That's what they need to be doing. Which is why when TaskRabbit became the DE facto way to build your dresser, when you bought an ikea dresser with 110 pieces but only 107 arrived, you would call TaskRabbit and they would actually build it for you, which is why IKEA bought TaskRabbit. And of course, you have companies like Pepsi that are toying around with SnackBot, which is basically a bot that drives around college campuses to deliver stuff to you. I don't think we're here anytime soon. It's a cute idea, though. Probably got them in Adweek. So Tide sees this. Tide sees utility. They recently just launched their own dry cleaners because they want to get into the service space. They want to collect that first party data. Let's just think about it for a second. Companies like P and G and Coca Cola up until recently had zero pieces of consumer data. The retailers had all the data. They literally didn't have information of who bought their products. That needs to change right now, when first party data is basically everything. So they're launching their own dry cleaning service, they're doing deliveries, et cetera. Another major change with the Millennial generation is status update is the new status symbol. Status update is the new status symbol. In the 80s 90s, early 2000s, people would define who they were by the brands that they adorned. Whether it was a great long sleeve Benetton shirt. Remember those? Or Fubu or Rolex or American Express. Those brands actually meant something because Back in that day, if you had an amazing experience, the only people you could share it with is for people who would look at your photo album. But now, with the growth of Instagram, experiences have actually replaced physical products as a new social currency, bringing about a trend I talk about repeatedly in my book Youth Nation called Diffty, which stands for did it for the Instagram, where people are pursuing experiences not only so much to enjoy them, but to actually prove that they were there. People in Russia are renting out private jets to take pictures on them, but the private jets actually never take off off the Runway. This is a mountain called Mission Peak in Fremont, California, and it's been around forever because it's a mountain. But in the last two to three years, people are complaining about pollution. Local visitors are complaining. The reason why is, well, it looks like this dude on the top of the pole just climbed Mount Everest. It's a quick 10 minute walk with a Starbucks at the bottom, but he's able to show to everybody that he's adventurous. And these experiences are what's going to get millennials to spend time even with their families. Anybody here been to Blacktop here in New York City? Okay, so Black Tap has sundaes that look like this. And if you take a 1012 year old kid and you try to take a bite out of it before they take a picture of it, be prepared to lose a body part. And during the weekend, the lines for Black Tap are around the corner. Their Sunday tastes no different than any sundae at any diner in New York City. But they give people experiences and their parents are willing to spend their time and their money doing so. So that's another thing that these CPGs need to figure out, how they're going to give experiences. Not easy if you make toothpaste or deodorant, is it? But that's the world that they actually have to live in. So is it all doom or gloom? Because I hate when presenters go on stage and just point out problems and they don't come up with solutions. So I thought long and hard, just for Social Media Week, of what I would do if I were the CMO of P and G and I had to fix the problems that I just talked about. I'm going to tell you what my plan is. And this is what I think is a job of what I call CMO 3.0. And in coming up with my idea, I look back at one of the most successful companies of the recent era. Apple. Duh. Right? What did Apple do? Well, Apple built an ecosystem they didn't just make software, but they made hardware. They didn't just sell content or just sell phones like Android devices per se, but they connected them together. And with that ecosystem, they were able to actually build a differentiated value, extract value from all points. And when you look at CPG companies right now, they are just in the software space. So what I would do if I were P and G is I would also get into the hardware space. I would buy a defunct company that makes dishwashers, laundry machines, maybe dishwashers too. And I would actually reinvent and innovate and make a small laundry machine that fits into the drawers of millennials apartments who are staying in the cities, right? And my new customer that I would have moving forward would not be Walmart, would not be Target, but it would be related and the biggest manufacturers and producers of luxury buildings in major cities across the US and that's who I would call and what I would tell them is what we will give you our amazing subsidized laundry machines at a discount cost if you put them in every single kitchen in every single one of your apartments. But the key is these are smart machines and they only take Tide and they're smart and data connected. And the second it runs out of Tide, it just tells Amazon or even yet P and G to ship them new Tide. It gives the people convenience. They don't have to spend money on advertising at all. Sorry agency people in this room, but you should come up with an idea like this, right? And now all of a sudden they have an intravenous selling model. They have first party data. They can test different upsells of different types of upscale laundry detergent and continue to scale that, subsidize the hardware to sell the software. Now will big CPG companies get into that space? Will they disrupt themselves? Well, it was pretty disruptive for Netflix to stop sending out DVDs and start streaming, wasn't it? At the same time, it was disruptive for Toys R Us to get into E Commerce, wasn't it? So you will need to make these changes and the modern CMO is going to need to look at marketing as not doing a dope new Snapchat, okay? Because that is not going to change the title of disruption that's coming. You need to do shit like this. And if I'm a cmo, I'm telling my CEO, if you don't do this, we're going to be dead in five years. Our retailers are killing us. Amazon's killing us. It's a different consumer. We need to become a completely new business or slowly dwindle down towards oblivion like we've seen happen over and over and over again. And I'll end you with what I think is the biggest disruption which hopefully has been talked about. But 5G, if I told you during the Industrial Revolution that one year later there would be a thousand times more oil than the year before, what do you think would have happened to the Industrial Revolution and the output of products? Well, that's what's going to happen to 5G in the next 12 months, where all of a sudden the streaming that you have and the fastest WI fi you've ever seen is going to be on everyone's cell phones and in everybody's house and no longer will you have cable boxes in your home because everything's going to be streamed in high def. And ideas like this laundry machine idea is now a big reality. Smart devices, all these things we've been talking about are here with 5G. And data is now going to be driving everything. And the reality is that so many of these businesses don't have data. They don't have customer data. They, they have actually no way to get it. So if a company can figure out how to combine the hardware and the software and really actually bring together the two to get first party data and drive, I'll come up with a new phrase, the applification of CPGs. Okay, now all of a sudden you have a chance moving forward. So I hope everybody in this room can look at the big brands, small brands, they're looking at, understand that this new consumer is, is about to bring a completely new wave of disruption to business, to culture and society. The millennials are not done. They're just getting started. I hope you guys can impart this on your clients. I hope you guys have an amazing show. If you want the deck, you can just go here. Mattbritton.com smw so I can get all of your first party data and I'd be happy to send it to all you guys. You can reach me here. I'm Matt Britton. Thanks so much, guys.