Talk with Simonetta Carbonaro
Simonetta Carbonaro: "Less, please, but of the best"
This must have been the only LZ-interview where the interviewee kissed the photographer.
However, things can easily be explained when one remembers that Professor Simonetta Carbonaro is not only a leading academic, but also a warm-hearted Italian.
Carbonaro probably knows more about consumers and their psychology than anyone on this planet.
The researcher and co-founder of the Karlsruhe-based marketing and design consultancy REAL_ISE is a world-leading analyst of consumer behaviour and an expert in innovation management and strategic design.
Simonetta Carbonaro clearly believes that most retailers, brand manufacturers and marketers are barking up the wrong tree and issues a gently-worded, but direct challenge to trade group think.
I met Simonetta Carbonaro at the Anuga 2009 food & drinks fair in Cologne where the lady had a speaking engagement.
Carbonaro is great fun to interview and is not at all standoffish or donnish. The friendly nature of the Italians quickly triumphs over mere formalities. Like a verbal acrobat, one extraordinary phrase and unusual juxtaposition after another rolls off the lips in both English and German.
Among her many intellectual surprises, there was even some praise for US supertanker Walmart…
Interview
Professor Carbonaro, to what extent do you think that modern consumers can be defined as Lohas (Lifestyles of Health and sustainability)?
Lohas were once a kind of trend-setting consumer elite whose values have since trickled down to the broad consumer masses and become mainstream ones. That said, I don’t like to use the term because it is a typical result of customer segmentation.
What is wrong with customer segmentation? Much of our industry is based on it, and there are top managers who say that one can never segment the consumer enough.
I think it is a dangerous illusion – a fata morgana. Over the last few years, the trade has gone in for such an extreme amount of customer segmentation that we are now left with a picture of the consumer as a contradictory, multi-optional, schizophrenic being.
Perhaps this is because the consumer really is so?
This type of animal only exists in the head of market researchers and marketers — or certain trade journalists!
So what are we confusing?
The confusion arises when diverse and varied market segments are confused with consumers themselves, i.e., real people.
In fact, the attempt to segment customers instead of the market has created a vicious circle where the trade can’t stop hyper-differentiating products that have been developed in the desperate attempt of running after customers’ wishes.
Why is this so dangerous?
Hyper-segmentation treats customers as if they were whimsical and moody beings and the result is that one makes them unhappy, like when parents spoil their children by overloading them with presents and constantly run after what they think their children want
In other words, retailers and suppliers have misunderstood what customer orientation really is?
Yes, the trade is trying to create products and services on the basis of what it believes are the customer’s wishes. But, in reality, it is the customer who needs orientation from suppliers and retailers.
So what should retailers and suppliers do?
They should forget their obsession with customer segmentation and marketing. Instead, they should offer something which makes sense to themselves and therefore to the consumer. They should go their own way. The best way to differentiate one’s self from others is to be yourself, i.e., authentic.
What do you mean by authentic?
The word is currently very much abused. Authenticity is simply being and doing what you really are. This is something radically different to past marketing where there was often a big contradiction between what one looks like and what one really is.
Today our trade is becoming increasingly organic, fair trade and sustainable. Isn’t that a big step towards authenticity?
No. The average consumer is absolutely confused by what one calls the “green wash”. So many companies are pretending to be what they are not under the flag of environmental friendliness, sustainability etc. I can’t hear these terms any more, they are just slogans, and they have been so misused.
Why then are consumers increasingly buying these products?
They are motivated by, what I would call, “egoistical altruism”, because they have realised that there is a link between what they purchase and the state of the world.
Unlike in the past when they felt powerless, consumers now know that they can change the world by buying or not buying a particular product. In fact, consumption has become a gesture of responsibility.
So shopping, as Edward de Bono once said at the World Economic Forum in Davos, is politics?
Yes, except that consumption is still more powerful than politics. Voting at the next election is not likely to bring about any change nearly as dramatic as voting with your wallet.
To what extent does your demand for more authenticity require a change in current marketing models?
Over the last 20 years, everyone in the industry has very much believed in pushing volume. So product marketing has tended to be extraordinary, excessive, extravagant, and superlative.
Everyone shouts that they are the best and pretends to be the best in order to grab as much attention as possible, instead of trying to be what you really are.
Surely screaming for attention is not a bad way to sell a product?
If you go to a party where everyone is dancing and screaming, you will probably be much more attracted to someone who stays quiet rather than someone who tries to shout over everyone else.
What retailers do you find authentic?
Ikea, because they have always tried to be different rather than shout about being the first or the best.
But, at the end of the day, it doesn’t really matter whether you are authentically cheap like Aldi in Germany, or authentically classy like Waitrose in the UK, or authentically original in your assortment like Trader Joe’s in the US, the essential thing is to seem what you really are and not to try to market what you are not.
What retailers lack authenticity?
Schlecker is authentic in its low-cost at any cost strategy, but not as authentic as dm in terms of price transparency and brand values.
At dm, you don’t feel hassled; you can ask staff questions; the cashier is pleasant; you have the feeling prices will stay broadly the same from day to day; and if you want to check that out, you just go at that billboard which hangs at the wall of every dm store and which tells you what products got cheaper or more expensive.
Schlecker is the opposite. As a shopper you feel that you have to buy today in a hurry because what you want today might become more expensive tomorrow. You also have the uneasy feeling that Schlecker is cynical and mistreating its own employees; and one finds one’s self asking whether you can really trust them.
Why have consumers changed?
After the Second World War, people bought whatever the trade wanted them to because everyone in the western world was identifying oneself as members of an increasingly wealthy middle class, whose belief was in a modern and industrial- driven future of unlimited economic growth.
Then the promise of an always better future started to crumble because of a series of cultural shocks, starting with the first oil crisis in 1973 and continuing with the dot.com bubble, the 9/11, the sub prime crisis, without talking about all the too many scandals occurred in the food sector in the last ten years.
And what has the consumer become today?
Today’s consumer is worried, nervous, uncertain and mistrustful, and wants to be reassured that they are not buying products that might be harmful for their own and their children’s health, bad for the environment or made in sweatshops. This is why the trade must be as transparent as possible today.
Total transparency is both extremely complex and difficult to achieve. Therefore, if you had to make just one demand of suppliers and retailers, what would that be?
It would be the same advice that I would give to consumers: “Less please, but of the best.”
Meaning?
We have to break the vicious circle of our hyper-consumption, put a halt to the logic of the more, more, more of what is actually is more or less always the same and go instead for something less, but definitively excellent.
Excellent does not mean just something better, but something unique, transparent, graspable and sustainable. This implies a paradigm shift in our consumption model, but it’s feasible. The best companies in the sector are already heading in this direction.
How near are we today to making such a change?
Had you asked me this question only this summer, I would have said at the most 10 to 15 per cent of the way. But, having attended a strategic workshop at Walmart in US, I think we are 50 per cent along the way.
Why such a big jump?
I genuinely believe that they are serious in their new sustainability goals, and that they can use their huge market power to do things differently.
Only two weeks after hearing our views, the views of a pool of invited international environmental experts and business strategists, they evolved a series of guidelines to be implemented by their suppliers both right away and within the next three years.
They are so big that, if they want, they can change the rules of the game of the whole consumer goods business and by doing so they can change the world. This has made me be much more optimistic.
So Walmart is successfully implementing new consumer trends?
These changes are far more than just trends. We are witnessing nothing less than a huge socio-cultural shift in our western industrial societies that will dramatically change our consumer culture. People, who were breast-fed with the “too much is not enough” credo, are now moving towards frugality.
How will you ever convince the broad mass of consumers that frugality is good?
Because frugality has nothing to do either with abstinence or austerity. In Europe, we are seeing this shift towards the pursuit of “sober happiness”.
In the US, we call it the new promise of “happy frugality”. It’s a new vision of wellbeing which is not based on denial, but on achievement and fulfilment. And here we go: let fulfilment — instead of “overfillment” — make people happy.
German version: Lebensmittel Zeitung, LZ 01, 07.01.10
