June Jo Lee, VP, Strategic Insights, The Hartman Group
For much of the twentieth century, consumers shopped and purchased much like the utilitarian models so favored by economists. This was a consumer story of brands, uniformity and prices, what we refer to as traditional culture. Towards the late twentieth century we evolved into a consumer culture, one celebrating a higher quality of life often with equal focus on, say, health and wellness and indulgence.
Successful niche brands emerged as we began trading up with new lifestyle identities. Now we have fully transitioned to a participatory culture, and digital technology is the key driver of that transition.
Participatory culture is increasingly moving away from traditional business models of companies providing goods and services, offering solutions or solving problems. Instead, consumers believe the world revolves almost completely around them, their activities, their imagined desires and how they would like their world to look (and work).
For consumers, these desires are enacted not as work but as play. Playing is about discovering, sharing, making and trading, and we will cover these four dimensions in great detail in the slides that follow. But most importantly, participatory culture is about doing it themselves. There is plenty of room in the sandbox for companies selling goods and services, but it works best if you are invited and begin to play by their rules.
Consumers orient differently within what we, at The Hartman Group, refer to as the World of Food, based on the intensity of their involvement or commitment to multiple dimensions of attitudes and behaviors in broader food culture.
We see three consumer segments that cover the spectrum of intensity from low to high, based on involvement in food culture. Primary dimensions used in this segmentation include price sensitivity, aspirational approaches to food and underlying indicators of food passion. The Core (13 percent) is the smallest and most intensely involved segment. Core consumers are early adopters, trendsetters, evangelists and highly food literate. The Mid-Level (60 percent) represents mainstream consumers. They actively seek new food experiences and provide greater articulation around distinctions such as local, seasonal and global. Periphery (27 percent) consumers are the least engaged in the World of Food. They seek pleasure and sustenance more than knowledge.
Consumers may move back and forth in the three segments, but the most common pathway is from periphery to core. Likewise, we find a consistent gradient from periphery to core in terms of attitudes, preferences, orientations and behaviors.
The dimensions of participatory culture come to life when we consider how consumers think and behave within the World of Food. Food is, of course, a cultural product to be discovered, shared and experienced by all.
To that end we find there are some universally held beliefs in the digital world. For instance, 81 percent of smartphone users be they Core, Mid-level or Periphery, believe that in the past ten years technology has genuinely improved how well they eat.
And yet different levels of food engagement have shaped how consumers engage with food-related technological changes, with especially noteworthy implications for the Mid-level consumer. Mid-level consumers are more likely than Core consumers to rely on digital technologies to support behaviors associated with making and discovering. These include searching for recipes, learning about new foods, discovering new retailers, etc. And these behaviors in turn drive increased knowledge about food and nutrition among Mid-level consumers to levels higher than we’ve seen in the past, even within the Core.
All told, we find that digital food life has its greatest impact among the Mid-level consumer, pushing their thirst for knowledge, expanding their own audience and repositioning them as amateur food experts. When we look beyond the Mid-level we see that overall food engagement among digital consumers shapes future aspirations quite differently for the Core than for the Periphery.
Digital Food Disruption Lay of the Land
Whatever trends may be swirling around in the digital food arena, don’t forget that food itself is always the main ingredient and cultural.
How we eat, when we eat, whom we eat with, those habits and practices are forever embedded in American cultural life. The same is true for how we shop, what we buy and how we cook. And of course our culture industries, like food television, websites and recipe collections, also influence how we cook and eat.
We’ve been exploring the landscape of how digital food companies are fundamentally disrupting and circumventing the traditional paradigm by understanding how consumers are actually experiencing the digital food terrain. The image below depicts a select group of the most relevant start-ups, companies and services in digital food and delivery.
The categories align with how consumers think about, talk about and use the assorted retailers and services
Which start-ups represent a new way of doing things that may map to consumers’ desires and needs better than current business models?
Grocery home delivery currently seems like a sound business proposition. But what happens if consumers begin to view home delivery as something akin to broadcast television. It’s solid. It’s there when you need it. But it’s not everything. Perhaps a subscription service offering the opportunity to craft unique, interesting meals might be much more relevant to the way consumers are living and eating. Maybe traditional food companies and retailers should be more concerned with snack and meal delivery services than home grocery delivery.
Subscription meal services may not be commanding much, if any, market share. Then again, Netflix wasn’t either at the outset. If there is one lesson we can learn from the examples of the music and television business, it’s that the old-school heavyweights haven’t been faring too well lately.
Of the companies and services depicted in the chart, it’s likely that only five or six will exist in three years, though there will certainly be others that are not even on our radar at the moment. But to try to guess which ones will win would be to miss the point.
These are examples of new ways of doing, ways that may be better aligned with consumer behaviors, desires and the larger cultural trends affecting how we shop, how we cook and how we eat.
The lesson here is don’t follow the lead of the entertainment industry. Don’t believe traditional business models operating through the grocery home delivery channel will be enough.
Listen to consumers. They will guide companies through this era of chaos and transformation. Yes, things seem messy, but what a glorious mess this is.