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Retailing in a violent society

puzzle,maze,game,businessI originally wrote this post the weekend before the Martin Place siege in December 2014. I decided not to post it because it may appear to be insensitive. But now we have had Paris 2015 with the Charlie Hebdo massacre, it seems it is a topic that must be addressed.

I published a draft framework recently that is designed to help organisations think about the future. In brief, I postulate that society of the future will function very much like a caveman society.

The technology will be different and it will eradicate the disadvantages of being part of a small tribe (eg. geographic limitations, physical limitations, health risks, etc) and enhance the advantages (intimacy, safety, etc). I argue that this is the naturally preferred state of mankind. I then proceed to explain how and why these patterns all point to that future.

I encourage readers to go and create their own predictive frameworks for the domain of interest. To bring this home with an example I thought I might take what is currently happening on an international level regarding the economic distribution of wealth. How would this caveman society play out on an international level?

I believe it will manifest as follows:

In the past tribes increasingly grew in size until they reached adulthood of nations. What we call a country today is the outer limit of what a tribe can be. The world can be seen as a series of silos all side by side. France is its silo, America is its own silo, and so forth. The borders are (were) the walls that kept each silo separate.

In each vertical silo, you had different layers. You could view the layers of society in a few different ways, but since we are talking about economics, we can highlight the different economic classes. At the top is the so-called one per cent and then all the layers to the bottom  you find the destitute and homeless.

In essence, tribes were vertically segregated, even as they had different horizontal layers of economic status within each tribe: Inter-tribal geographic separation and intra-tribal economic separation.

Migration on a grand scale has caused a high degree of homogenisation in all countries. There are few countries in the world where you won’t find a Mosque, Indian restaurant, or McDonald’s. This is disrupting the fabric of the traditional tribe as the culture (language, practices, ethnicity etc) are being rendered apart.

Naturally, some members of the tribe are feeling threatened and the lines of tribal boundaries are being re-drawn. The question is how?

Some commentators think (and agitate for) traditional geographical borders to be made less permeable. I argue that it is too late for most countries. An exception may be made for a few countries. For example North Korea is not attractive to migrants and China is not available to most migrants.

I argue (in Rigidly Defined Uncertainty) that formation of the tribe is the natural state for mankind and consequently a ‘borderless world’ is not an option.

Unless there are widespread civil wars in a great number of countries, migration won’t be stopped. If one country stops the inflow, it will simply raise the pressure somewhere else to the point of breaking, resulting in a domino effect.

If we can’t resurrect the old physical tribal boundaries, how will we re-draw the new borders to help us revert to the caveman state of belonging to a tribe?

In theory, tribes can be formed by, say, all red haired people, or by thin people or whatever is perceived to be a common interest. But in my view there are only two candidates for providing the basis for cohesive tribes that have strong, behaviour influencing common bonds. That is religion or economics.

Many people think (and fear) that religious extremism is being used to define tribes, but the most viable option I see is economic tribes forming across the world at the expense of geography, language, and any other commonality. It won’t matter if you are French or American, it won’t matter if you are red haired or blonde, it won’t matter if you are Christian or Catholic – what matters is your economic class.

· The one percenters will stick together to defend what they have got.

· The destitute will wallow together, irrespective of race or creed, in the rot.

The million dollar question is how the middle will break up. That is, how big and how cohesive will those groups will be?

In theory, those with the most to lose will fight the hardest; but the paradox of economic wealth is that also makes you soft; so theory may be obliterated by a relative minority of people who have less to lose, but are street smart and not bound by the conventions of civility.

The point is that tribes are re-formed around economic interests. In effect, I am talking about the lateralisation of tribal boundaries. The new dispensation will have inter-tribal economic separation and intra-tribal geographic separation. Instead of vertical silos in a single geographic area, we will have lateral (horizontal) silos (along economic lines) across geographies.

To illustrate, one could look at the link between religious extremism and economics (of the American Fundamentalist Christian Right and Muslims, for instance), but that would be too contentious for this forum. Instead, consider what is happening with something called #gamergate. It started out as a debate about sexism (female discrimination) among the small community of (nerdy) gamers. It has exploded into something entirely different.

On the one hand you have the so called SJWs (Social Justice Warriors) – get used to that term – and if you want to waste some time online, check out the #SJW hashtag. When I wrote the little treatise, I labelled it as vigilantism. But I bet if you dig deeper you will find the SJWs are at the yuppie end of the economic scale and the hardcore gamers are the archetypal lonely, nerdy males who are most likely not particularly economically advantaged.

This post is not about gamers, but is meant to illustrate the practical application of the framework provided by Rigidly Defined Uncertainty. Gamergate transcends national boundaries and a new set of boundaries are drawn. New tribes are being created around new ideas – and this is important to understand.

We all belong to a tribe and we need to belong to a tribe. As one set of tribal allegiance are being demolished we will create others to replace those. The ongoing challenge will be define what those new boundaries will be drawn with – and I think it is a safe bet to consider economic class first.

That is all social theory. What are the implications for your business?

In the first instance it is worth thinking about the over arching impact that this new tribalism will have on politics in Australia and what that may look like in the near future, for as we know political decisions have a material impact on business.

Every economic class will practice its own form of vigilantism to secure the safety of their tribe. Which tribes will win? We might not have the skinheads of Europe, but that does not mean the sentiments don’t exist here.

On a more direct, pragmatic level it has obvious implications for market segmentation. Every tribe is a potential market. That may appear cynical, but the golden rule of economic demand and supply will come into play. What is the make up of your current users/patrons/customers?

It also has obvious practical implications about workplace health and safety and managing risk. It has implications for supply chain. Which countries are you sourcing product from?

It has implications for branding and marketing communications. New taboos and new opportunities will emerge.

Finally, ideally and most importantly; what all businesses should be doing is creating tribes of their own. Seth Godin wrote about tribes a decade ago. I agree with him. The idea of tribes are even more pervasive than Godin thinks it is, and explains more. It also has awesome predictive power.  But if you can do what Godin says and turn a target market into a tribe, you’ve got it made.

The violence we see in our society, whatever you believe the cause is, is a manifestation of the innate desire for humans to belong to tribes. One of the smartest things you can do as a retailer is to use this insight to protect and improve your business.

All the best**

Dennis

PS: I was going to start the year with a series of posts on failure, so that will stand over for next week. This year I plan to rebrand failure. It is much maligned, and unduly so. Hope you will join me on the journey.

May the best of 2014 be the worst of 2015 for you, your business, and your loved ones.

 

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