Speech by Guillaume Erner,
Doctor in sociology

One of the subjects studied by sociologists is that of illogical population groups, whose behaviour is irrational. In their attempt to understand these not always rational consumers, sociologists examine the society in which the consumer lives.

We can take a look at examples of two types of customers; the first, a courtesan living at Court three centuries ago, and the second, a Desperate Housewife, a customer who in today’s society tends to be courted. This second customer type stems from the vast middle classes and lives in a society where luxury and consumption have become commonplace. The courtesan’s aim was to expend all the assets she owned, and in exchange, she belonged to the king, whereas modern women spend their assets with reason and intelligence.

The contemporary consumer is an ecologist, he has a moral conscience, he is a non-smoker; he wants to be different from the others, be his own person, and of course, he is not materialistic! He nevertheless buys cheap goods from China, acquires products that are obsolete within six months and, being receptive to marketing, he is able to live quite easily with his desire to be different alongside his desire to belong. A paradoxical man!

Traditional society is a cast-society (profession, religion, etc). The law is imposed from the outside and people die at the same station in life as they were born. In modern society, we are free. However, we must be able to be equal to this freedom. The most important of our life-stories now relate to our family, and above all, to the goods we consume. In effect, it is the objects that we buy that establish the identify of the consumer.

Property prices and the cost of transport, in particular, have led to a general reduction in consumer goods budgets. This means that the consumer hates forced spending and seeks out strategies to reduce such expenses, by shopping in factory outlets, for example. Luxury goods, once the reserve of the elite, have now become everyone’s right, which means that now everyone has access to the consumer society. So, if, for some reason, we are prevented from having this access, we are frustrated. It can be noted that whenever a new product is released, there is a peak in expenditure (for example, the need to have a flat screen). So we see that there are consumer modes that are entirely cyclic.

If we compare middle class incomes in France, Europe and in the United States, we see that the mix is not the same. In some systems, the poor population is more numerous (Anglo-Saxon countries). In Europe, as in the United States, the middle classes are better off. Consumer profiles in these countries are extremely varied. Inundated by advertising, people are persuaded that they have to consume. Therefore to deal with the "astute" consumer, we have to acquire " consumer skills".

The consumer has become an expert in terms of prices. This universally widespread "calculation skill" goes hand-in-hand with the fear of being "stung". The consumer therefore tends to buy during the sales, because by spending less money on an article, he thinks he is combating a system he believes to be robbing him. This idea of a the distributor/manufacturer plotting against the consumer is referred to in "the Hidden Persuader", a book written by Vance Packard.

Today, shopping has become the number-one leisure activity, boosted by the emergence of new information sources (blogs, forums, etc.). Sixty to seventy percent of consumers now do research on Internet before buying and Web-information is perceived as being legitimate and credible. This extremely detailed information (operation, price, etc.), works in concert with changing consumer behaviour. Information is shared on consumer websites, which means that the modern consumer has a knowledge of the market that a journalist would scarcely have time to acquire.

Even better than word-of-mouth, this system is relies on the fact that the internaut believes what unknown persons on the web have to say. The "six-degrees of separation" rule (the ability to reach at least one out of six persons) is changing due to our increasingly fast communication channels, in particular the Internet. Today the degree of separation is 3.5. We can observe, therefore, that patterns of influence have changed. It is the system to which we belong, rather than methods of operation, that defines the degree of influence.

The consumer is moving towards more rational and status-enhancing spending. No matter what his social class, the consumer has to demonstrate his status. Status-symbol brands must have a strategy based on pricing. In effect, although the consumer has become more skilful, the product brand can change the deal, or at least, the price that we thought we would be willing to pay. The consumer consciously provides specific product information (financial calculation), but he also unwittingly passes on information on a product.

In a normal economy, prices play a psychological role (1.99 € is a loss-leader price) and a price increase is often considered to be a pledge of quality. On the other hand, when there are special offers, the consumer sees that he can get a bargain, and it more difficult to find the right price strategy in this case.

It is necessary to restrict routines, stop thinking according to type, place the consumer in a state of cognitive uncertainty. As the consumer is well informed, we have to try and defeat him, for example, by confronting him with different types of price and ranges. He will conclude that the least expensive goods are offered in the supermarket.

There exists a sort of battle between manufacturers/distributors and the consumer. Today, it is the consumer who sets the rules. Given the vast middle class category and the advent of cheaper production, there is a mechanical market effect, whereby it is now very difficult to maintain income. Moreover, the alliance between consumerism and anti-capitalism is increasingly influential For example, the consumer magazine, "60 Millions de Consommateurs", does not encourage us to eat less, but to eat more cheaply.

We are also witnessing a revolution in social patterns – the thirty-five-hour week system is leading to people having less rigid, more individual schedules, some sectors work on Sundays, etc. Our existence are no longer synchronised. In the Paris urban area, the traffic jams between six o’clock and ten o’ clock in the morning prove that there is no single and unique life-mode for everyone. New services are being established to cope with consumer impatience and intolerance (he wants to be served increasingly quickly) and to offer more flexibility. Current consumer requirements are leading to an increase in the place attributed too discount and the bottom of the range.

We are also confronted with changes in relation to age. Very frequently, young people’s expectations are just as high as their seniors’ (with respect to their private lives, the world of fashion etc.). There is also a pathological spending phenomenon affecting "happy victims", that is, people who decide to buy a specific brand only (for example, the all-Chanel woman). This type of fetishism epitomises new compulsive shopping pathologies.

In short, we have to buy cheaper products, because we want everything.

Japan has a particularly high proportion of fashion victims; some women spend 80 % of their budget on designer or luxury brands - a sort of latter-day wishful-thinking.

Changing consumer trends make it more and more difficult to establish market segments. Classifying the population in order to predict consumer activity often no longer reveals actual consumer spending. We have to work on different forms of logic to understand the new market breakdown.

Behavioural analysis is based on two opposing rationales:

 the Winner Takes All rationale The market is filled with a small number of references which make up the majority of sales. For example, the 200 million books sold in the last 3 years were written by only four authors (including the author of Harry Potter). This is Fordist capitalism with which we are familiar. This system is not likely to endure today, due to the long tail effect; with Internet, the sum of minor references placed end-to-end may collectively exceed most popular product sales. We can, therefore earn money with small references, which brings us outside the unique model (clothing, disks, etc.). But the "Winner takes all" syndrome is still working well in a certain number of markets. The term refers to the effective differential between the leader and the other players. In an economy where all risk-taking is becoming increasingly dangerous, the "winner takes it all" rationale enables a single reference to go full speed ahead.

 the unknown new product rationale Twenty-two percent of titles sold by Rapsody (on-line music sales) are unknown. It can also be observed, that thanks to Internet, there are more and more unheard of films for hire. Revolutionary systems are being implemented, like at Amazon, where they have set up collaborative filtering, an extremely sophisticated algorithm to highlight the books we are likely to appreciate, as a function of another book we have liked. So Amazon quite simply is replacing the standard bookshop – the shop no longer presents any advantage over the machine. This Internet advice is proving to be relevant, as 35% is converted into a sale at Amazon. This service allows readers to discover new products. Customers themselves are thus creating the market segments. In the book world, we can observe that the titles are radically diverse within the same consumer segment. It is hard to imagine that an individual would, personally, select all these books – IT plus consumer opinion have produced this map and grouped these products together. The phenomenon is very powerful - once a purchase has been made, another potential purchase is presented as a logical follow-on.

In this era, we are also witnessing a new moral attitude to of capitalism; the consumer requires to be informed of the ethical and moral nature of goods sold. The most telling transformation is Microsoft’s – a company that in the past had not been well perceived, it changed its identity by investing in philanthropic causes. Not only did it regain its brand image (external interest), but it also became attractive as an employer. In California, it is much easier to employ IT specialists if the company is considered to be ethical than if it has a poor brand image.

Trends are now being extended to all fields – fashion clothing still is very important, but household spending on clothing is constantly going down (4 % in France). The real innovation today is that fashion now extends to other fields such as the choice of first names, or cuisine, for example. Today, a first name only remains in the "hit parade" for a maximum of two or three years. Elite dishes, once proposed only in certain restaurants are now available in a variety of different types of restaurants, and even on supermarket shelves. The famous "moelleux au chocolat" dessert created by Michel Bras at Laguiole can now be found in the freezers at Picard.

The democratisation of fashion, or rolling out fashion vertically, is taking place at an ever-increasing pace. In the automotive sphere, although the Twingo stayed in fashion for the relatively long period of 10 years, the Renault 21 and the Laguna have a much shorter life-span.

In turn, income mechanisms and market-installation methods are also faster. The consumer loses his enthusiasm easily and becomes disinterested. The success of a brand-name, for example, Zara, is quite simply due to the fact that this retail group decided to ignore the concepts of market segmentation and traditional marketing. It just controls the logistics and the supply chain and the rest follows – it is the consumer himself who is now the channel in relation to trends and marketing. In conclusion, brand-names have a "sacred" dimension. A simple tee-shirt does not have the same value as one that bears a little crocodile. This mythology is very difficult to perceive. Individuals need to be recognised, notably via what they buy (for example, buying a 4x4 makes us adventurers). So we find ourselves in a waking dream, on a small or a grand scale.

Discussions

Olivier DAUVERS,
Editor in chief "La Tribune Grande Conso"

What I would like to say in particular is that spending has become a professional activity and that the consumer must acquire skills so that he does not make unintelligent consumer choices. Is the link between brand names and the consumer becoming stronger or is it slackening? I am fascinated to see that in the food industry, the link between consumer and brand is becoming weaker at an astounding rate.

Guillaume ERNER
People today do not like constraints. Consumers are not attached to brand-names, although there are a few nuances here (they give more importance to water, olive oil, etc) If the consumer has the choice between two products, he will opt for the least expensive because he does not like forced spending, except for a product in which he invests a part of himself. A manufacturer’s marketing aim is to persuade the consumer that his product is part of his identity.

Olivier DAUVERS
Is the dividing line between products that are brand image-sensitive or insensitive the utilitarian aspect of the purchase?

Guillaume ERNER
Yes, for goods they are obliged to buy, consumers may "stray off the path". For example, people who buy a Logan are making a purchase based on utilitarian values. However, someone who chooses a Porsche Cayenne has a different idea of what a vehicle means for them.

Olivier DAUVERS
Is it not easier for the world of fashion and clothing apparel to maintain the attraction or magic of certain brands?

Guillaume ERNER
Indeed, it is virtually absolute.

Olivier DAUVERS
In conclusion, the commercial approach, rather than economic, is first and foremost an issue of society. If society moves in one direction, does trade have to follow?

Guillaume ERNER
In my opinion, it is difficult to go against the flow.

Olivier DAUVERS
Is society open enough for such a change?

Guillaume ERNER
French society is one of the less open societies, but in the majority it is open.

Olivier DAUVERS
Our lifestyles have changed, it is true, but from ten o’ clock onwards the Paris inner ring road is free-flowing. Is it not more of an extension of our lifestyle range than a radical change? Our lives are still structured around major markers.

Guillaume ERNER
If you leave the Paris ring road and go to a sector that is open on a Sunday, you will find that people are there.

Olivier DAUVERS
Is the societal issue about to be resolved, as society is moving faster than legislation?

Guillaume ERNER
Sunday opening would have a certain number of consequences on society. However, this seems to me to be the way things are going and (coincides with) the will of the population.

From the floor (Jean-Yves VERIAU – SEB Group)
Are not the segments measured by different operators complementary, rather than in competition, in terms of defining the so-called paradoxical consumer? Is it not the Web that will be the real competitor in the future? How do we respond?

Guillaume ERNER
Yes, I think that the Web is a real competitor, because of the effect of blogging, forums etc., and the unprecedented type of information that can be found on-line. In addition, the Web is capable of selling everything. So it is a major challenge for the years to come.

Olivier DAUVERS
Do there are no products that are "impermeable"; it is just an issue of logistics that will be raised to a greater or lesser degree, depending on the product categories.