| Log in

The race towards the lowest common denominator

03 December, 2014

You favourite local eatery has just been replaced by a snazzy Starbucks/McDonalds.

Your favourite music is nowhere to be seen or heard, replaced by assembly-line pop music which, incidentally, has the lifecycle of a fruit fly.

Your childhood local treats have long been long banished from the market or relegated to the “ewwww” category (banta soda, ice cream floats, poppins, oranchu/limchu)

You childhood playground and the neighbourhood market long ago made way for a fancy mall, peddling the same brands every other mall does

These are not uncommon stories. And they are about to get more common.

Welcome to the new world, where everything tastes the same, looks the same, feels the same, has a gazillion dollars in marketing money behind it, has an assembly line production ethos, somewhat delivers on its marketing copy, and promises to reduce humanity to its most efficient and least individualistic best. The US seems to think immigration—i.e. people entering their country—is a burning issue. I beg to differ. I think the bigger issue, especially for the rest of the world, is the exact reverse—about the US marketing juggernaut entering every aspect of our lives, systematically programming us to desire their brands. Because, let’s face it, this is a US phenomenon.

Why do I call it the lowest common denominator? Well that’s an easy one, because brands can only scale to the mind-bending numbers that are the aspiration today if they can please and appease to every single demographic or, at the very least, a very large majority of the demographic. So a Pepsi or a McDonald’s, will produce a product that is “just about good enough for everyone”, and rather than spending money on a superior product of actual value, spend all that money on a) highly localised advertising that “fits” the product into a target market, making it highly desirable and aspirational, and b) distribution, so that the product is always in your face, conveniently available at the very moment you are at your purchase decision point. Virat Kohli feels the pressure and so do I. This is systematic brainwashing and habit forming psychology being practiced on a daily basis, by its finest practitioners. But if I stepped back and actually were given the time and space to think about it, give me a nimbu paani any day of the week!

Globalisation is inevitable. It truly is. Walls are being broken down every day; the internet has just flattened out the world and killed information asymmetry in a very short span of time in front of our very own eyes. We are now exposed to global trends instantaneously. This is all very different from the past, where we’d hear precious little titbits of what’s happening across the globe from that one uncle who just returned from the US, bringing with him a bag full of Hershey’s Kisses. With globalisation comes homogenisation of cultures. That is also being argued as inevitable, which I strongly disagree with. Take Germany and Japan, for instance. They have been termed “developed” for longer than India has aspired to be so, yet they have maintained a keen sense of identity, have preserved their local culture, value system and historical sites with a care and respect that is truly admirable. Homogenisation is a dystopic future we can certainly look forward to if we are not cognizant of the fragility of our way of life, and how quickly it can be overwhelmed and laid waste to by the many vested global forces and trends. This, however, is not about preventing global forces, but about taking a stand and preserving one’s identity, and cherry picking the best the world has to offer the serve our way of life. Lessons are there for the taking on how this balance can be achieved.

The situation, being what it is, forced me think cold-heartedly about the vast opportunities available to, and implications on, businesses of the future. Getting right into it, I see greater opportunity in:

1. Process expertise

Scaling of any technology or service will require more and more expertise in processes. Applications could be as diverse as optimising the efficiency of the assembly line or running a massive Hadoop cluster with minimum down-time. Either way, it is clear, skills related to “scaling up”, are only increasing in demand and value.

2. Advertising, marketing and branding

When a core differentiator of a product starts becoming mindshare created by localised advertising, and budget outlays get bigger, one can imagine the opportunity here. The difference being, a lot of this will be driven by technology in the future. As more and more services move the cloud, personal and behavioural data will be increasingly be mined to provide specific and contextual advertising. This can only be achieved at scale through technology. Online advertising is the first frontier where such targeting has proved to some extent. But this concept can be hoped to be applied across media in our own lifetime. Imagine walking by a store, and a personalised ad pops up on a screen, presciently talking about a product you’ve been researching on the internet and considering buying. Think of the old sales ploy of lining up the check-out counter with chocolates/mints/other knick-knacks, thus catching you at the right moment for an impulse purchase. Today the check-out counter is all around us, the web, your mobile phone; and advertising technologists are gearing up at a frenetic pace to predict when to serve you up an ad that will me most likely to be actioned upon.

3. Personalisation/localisation technologies

You probably run an android or an iOS phone, and use google and gmail extensively. Each of these products is pushing the boundaries of human-machine interaction. Siri and Google Now were the first to partially do the automated personal assistant well, and we can expect many more efforts in the future, that intuitively understand and anticipate our next need and serve it up intelligently. Underlying all these efforts is the ability of a machine to understand what we are saying or trying to say to it. And nuances of language differ over geographies; so personalisation, in this context, will mean tailoring the machine to understand local languages, dialects, nuances. But localisation is so more than just that. What flyers used to tell me yesterday, about the opening of a new coffee shop around the corner, I can expect my mobile phone to tell me tomorrow, through hyperlocal services, serving me up information and opportunities relevant to my location and persona, that I can immediately action upon. We have not even begun to scratch the surface of this opportunity.

4. Shorter production cycles and mass customisation

While we cannot deny or delay the overwhelming economy of mass production, we equally cannot deny that each human being deeply desires to be different, to be unique. Shorter productions cycles/smaller lots and mass customisation are probably two ways that can show promise in resolving this dichotomy. Zara executes the first brilliantly, refreshing is range of products ever so frequently and by completely smashing down the time from design board to store. The second approach has had mixed success, Nike, for example, has experimented with personal designs on sneakers. There are several niche companies trying to build this capability at scale, with carrying degrees of success. This is an equally challenging approach to the first, if not more, and I am willing to bet that mass customisation will be an important value creator in the retail apparel/shoes business in the near future.

5. Logistics and supply chain management

The backbone of any large consumer facing business. This one is obvious.

I’m sure the changing landscape of business will throw up many more such opportunities. This obviously is not an exhaustive list (or probably even a correct list – can anyone really predict the future?). We at IvyCap Ventures are making a few investments in the above areas, and are very excited by these trends, and continue to look out for trends in technology that promise to enable mankind to do things faster and more efficiently, with fewer resources. After all, isn’t that the ultimate promise of technology?

(Norbert Fernandes is Co-founder & Principal at IvyCap Ventures . Views expressed are personal.) 

To become a guest contributor with VCCircle, write to shrija@vccircle.com.


Leave Your Comment
Why local companies are winning in emerging markets

Why local companies are winning in emerging markets

Jose Santos 2 years ago
Many leading multinationals are finding that their biggest competitors in...
The number of repeat customers is important than store count: Avani Saglani Davda, CEO of Tata Starbucks

The number of repeat customers is important than store count: Avani Saglani Davda, CEO of Tata Starbucks

Shrija Agrawal 4 years ago
In an exclusive interview with VCCircle, Avani Saglani Davda, CEO of Tata...
How Samsung changed the game on Apple

How Samsung changed the game on Apple

Adam Hartung 5 years ago
The iPad is now 3 years old. Hard to believe we’ve only had tablets such a...
No Comments

The race towards the lowest common denominator

Powered by WordPress.com VIP