Lauri Elliott

This article was commissioned by ITWeb/Brainstorm of South Africa for the June 2010 issue.  It was originally entitled, “Facebook Generation.”

Consumers are becoming increasingly identity-focused. Corporations will have to keep up to remain relevant – both as suppliers and employers. 

Diane Hessan, CEO of Communispace, a US company that does consumer market research, recently shared insights about consumers at the Milken Institute’s Annual Global Conference for global thought leaders. One of her comments was that consumers have found mental strength through the economic crisis.

Says Hessan: “Consumers are empowered and clear about what they are doing. People know where they spend money and how they define value for themselves. These consumers are very clear and very intentional. They do research and feel they have learned a lot.”

This is a new consumer paradigm. We are seeing the beginning of the age of identity. Consumers better understand their unique identity and what they value these days. They prioritise based on what allows them to live out their unique identities.

The principle drivers of identity-focused consumers can still be understood in the context of Maslow’s Hierarchy of Needs. Maslow says that needs drive individual motivation. Needs start with survival issues around food, water, and shelter. As people develop and move up the socioeconomic scale, their needs change from needs to connect with family and friends to self-esteem found through education and career. The final levels of actualisation and transcendence speak to people achieving mental and spiritual acuity. In other words, people become attuned to their unique identities and personalities.

The difference in the consumer markets moving forward is that an increasingly larger number of consumers will not prioritise based on needs indicating lack, e.g., self-esteem, safety, relationships.

They will focus on needs that allow them to fully live out their identities. As the old saying goes: “To thine own self be true.”

Tipping Point

This mindset used to be limited to individuals like artists and elites who had education and perhaps money, allowing them more freedom to explore who they were, according to Shoshona Zuboff in her book, The Support Economy.

The developed nations have been moving along this continuum for the last 50 or so years, but it’s possible that the economic crisis was a tipping point. This shift is not limited to Western cultures though, thanks to things like the internet, globalisation and democratisation. People have much more freedom and access to explore their unique identities even with limited means.

There is also an age dimension to this consumer market. The majority of them will be under the age of 40. By and large, they are young people who were born as the internet, globalisation and democratisation took hold.

These young consumers expect mutual, not hierarchical, relationships. That means they do not want to be pushed into something, they want to make their own decisions and co-create solutions. They will remove themselves from situations that do not create value for them, much more so than their parents did. This is a significant issue for employers.Employers need to see how to create value for themselves as well as this identity generation. Some call this talent management, but it’s more than that.

Successful employers will treat even entry-level employees as leaders in their own space and help them develop accordingly.

Employers will also have to shift thinking about turnover. This identity generation will come and go as they please. Money and perks will not hold them if employers have not connected with their needs. And even if they have connected, people will still leave much more readily for other opportunities.

So employers need to ask themselves: “How do we deal with continual change among our workforce?”

A New Age?

This identity generation can also parallel an age of entrepreneurs. A basic definition of an entrepreneur is someone who creates. Our societies will be filled with creative, ‘out-of-the-box’ people who develop disruptive solutions on a continual basis. They will be willing to take informed risks when aligned with a purpose.

While this identity generation sounds like selfish individuals, in actuality, because they understand themselves better, they become more aware and conscious of the world around them. Part of identity is having a purpose beyond yourself. According to McKinsey Consulting, this young generation, the youngest sub-group being the Millenials born after 1982, is actually more socially conscious.

Relationships are key for this generation. While it starts with a social dimension, these relationships become quite powerful as people come together more often for a common purpose or interest. However, they will flow in and out of groups or communities more readily.

Many view this as an online phenomenon, but it will also hit the real world. The grassroots strength in the Obama presidential campaign in 2008 and the Ushahidi story of citizens reporting instances of election violence in Kenya are just the tip of the iceberg.

And, it is not just a social or political shift. It is also a market and business shift. The control discipline of management science no longer works in a world with continual chaos, change, speed, and identity-focused individuals. Businesses need to be able to flow with the dynamics, not control them. IBM’s orchestration of its ecosystem has become a technology sector example.

While some may consider this not new, the significance is that, in the next decade, the identity generation will finally get a leading voice in the main markets across the globe just from sheer numbers. This will shift society, business and politics.

New Models

So what business models will work in this age of identity? The key is models that allow people freedom and growth in their identities. In practical terms, The Copenhagen Institute of Future Studies says that strategies should allow consumers to be a part of the creative process from beginning to end. The gaming market is an example. Players co-create by developing their own content in new ways of playing, skins, activities, etc.

Another strategy approach is to focus on what gives meaning to consumers. One way that Facebook enhances the meaning people derive from their relationships is through real-time engagement. Businesses should also look at business models that incorporate pull-versus-push and self-generating strategies.

African consumer markets have traditionally been disenfranchised from paradigm shifts because of the continent’s lack of development. As consumers rapidly adopt technology innovations like mobile phones, however, development, including human, tends to accelerate. Businesses focusing on Africa need to prepare for this shift, too.

The horizon for this shift in Africa may be longer, but a good gauge will be ICT patterns of usage three to five years after major ICT projects are completed. In the meantime, businesses can monitor patterns in markets where ICT access, penetration, and usage is more robust.

South Africa is the first market, but East Africa should also be followed as ICT infrastructure is rapidly developing there.

The age of identity is not just for consumers but businesses that can navigate it well. Businesses will have innumerable configurations for potential products and services with an ecosystem to bring them to market, allowing them to more readily sustain competitiveness.