Prosumers and the future of shopping

I spoke to journalist Caitlin Fitzsimmons recently about prosumers and co-design in the future of shopping. The following excerpt comes from Caitlin Fitzsimmon, ‘Customer in control: The future of shopping is already here and retailers are battling to keep up’, BRW 07 November 2013.

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Personalisation and participation

Personalisation is usually viewed through the prism of customer data. For example, eBay tracks when users buy infant formula or nappies and then updates the offer every few months as the shopper’s baby grows up.

But personalisation is about more than that. One of the best examples is Shoes of Prey, which lets consumers design their own shoes using templates on the site.

Another Sydney start-up, StyleRocks, does the same for jewellery, although its website is not as advanced. Shoes of Prey taps into several key consumer trends – most importantly, the desire to have fun and take part in an experience, not just buy a product.

The website is highly visual and social. Users can view shoes from multiple angles, explore designs by other people, and share their designs on social networks such as Facebook and Twitter.

The desire for something special is also one of the factors behind the popularity of marketplaces for handmade items such as Etsy and Zibbet. Both are also very highly visual sites, with strong communities and curation elements.

Tim Rayner, co-founder of consultancy Philosophy for Change, says social media is increasing people’s design expectations and this benefits sites such as Etsy.

“If you go on Pinterest, for example, you can leaf through a vast range of different designs for large objects, which greatly increases the consumer imagination and expectations for what they can find on the market,” he says.

Marcus’ mixtapes: three models of everyday gift culture

Neon Mix Tape Banner 80s Cassette Birthday Decoration http://tinyurl.com/kulentf

I spent my preteens in Jakarta, Indonesia. My parents moved to Jakarta in 1979, lured by the promise of company-funded accomodation, cheap travel, and an exotic lifestyle. They took us three kids along for the ride. For my parents, life in a third world tropical metropolis and military dictatorship turned out to be harder than they’d imagined. For me, at the age of 11, Jakarta was an adventure ripped straight from the frames of a James Bond movie, with dapper diplomats, hair-raising traffic, and heroes and villains abound.

There are many stories I could tell about my time in Jakarta. Here I offer one: the story of Marcus McAdam and his mix-tapes.

One downside of living in Jakarta was that we were cut off from the culture machine that had dominated life in New Zealand. At home, I’d been cultivating a passion for Blondie and the Cars. At the bustling markets of Pasar Baru, I could pick up any number of pirated cassettes, and I compiled a back catalogue of every band I’d heard of. Yet, there was no Western radio or television stations in Jakarta at the time, and no internet to browse in pursuit of the latest thing. I soon discovered how dependent I’d become on the weekly chart countdown. I didn’t lack for entertainment, but I had no idea what kinds of entertainment were cool. With my teenage years on the horizon, this was a serious problem.

Into the breach stepped Marcus MacAdam. Marcus was my friend Andrew’s older brother. At fifteen years old, Marcus knew everything about anything worth knowing about: bands, movies, comics, all the important stuff. He was a legend. Marcus left Jakarta for boarding school in Perth shortly after my family arrived in Indonesia. Twice or thrice a year he would fly back to Jakarta with news of the outside world. Marcus introduced me to the pop-cultural references that (for better or worse) defined my teenage imagination: Alien (‘…and this thing just explodes out of his stomach!’), KISS (‘…and then Gene Simmon goes HUURR and fire comes out his mouth!’), and The Savage Sword of Conan comics that satisfied my hunger for epic fantasy long after umpteen readings of The Lord of the Rings had taken the shine off the trilogy (‘…plus there’s a movie in the works, starring this Austrian bodybuilder, Arnold Schnizelburger!’).

Some might say that Marcus MacAdam had questionable taste. What the hell – we were kids. Marcus brought Western pop culture to our gated compound, and for that, we were very grateful.

21st century giving: how Facebook’s News Feed catalysed a culture shift

Facebook became a gift economy on September 6^th, 2006. Its users got a shock that morning when they logged on to find a News Feed in the place of their Personal Wall, which is what they’d previously seen in logging on. Everyone’s status updates had been routed into a single feed, which was continuously updated as their friends added content to their Walls. We are so use to aggregating feeds on social media today that it is hard to imagine Facebook without one. But prior to 2006, Facebook was a different kind of environment. Users had to visit each other’s Walls to see what their friends were posting. It made for a more private experience.

News Feed killed the privacy. Now everything was out in the open: posts, shares, likes, comments – everything. Thanks to News Feed, you could see everything that your friends were posting, in real time. Your friends could see everything that you were posting too. There was nowhere to hide. The platform was governed by an implacable transparency.

People freaked out. There was a major backlash. Users screamed violation of privacy. Critics called the site ‘Stalkerbook’ and threatened to decamp for MySpace. Zuckerberg offered a half-hearted apology for introducing the changes unannounced and without consultation, which inflamed the situation even more. Still, Facebook refused to budge. News Feed stayed. Contrary to expectations, News Feed turned out to be central to Facebook’s success.

When the wave of new registrations began the following week, few people had any idea that they were engaging a changed environment. For them, News Feed was what Facebook was all about – ‘sharing’. Once the initial furore had died down, people discovered that they liked News Feed. It meant that life on Facebook was never dull. There was new content every time they refreshed their browser window. It also meant that the more people contributed, they more they were able to stand out. Facebook was a time suck, but there was a reward system built into the design. Every contribution earned a tiny hit of egoboo.

Facebook took off. The site had 50 million users by October 2007 and it had doubled that number by August 2008. By the end of 2011, Facebook would have 850 million users, 50% of the total internet population. Just how much of this success can be attributed to News Feed is impossible to say. But the success of the News Feed concept was confirmed by the viral success of Twitter, another major social media company, which launched with a News Feed and nothing else. Since then, it has become standard practice on social media sites to feature an aggregating feed that compiles everything that people are doing on the site in one place. The all-in News Feed has become central to the social media experience.

Given that the News Feed concept hadn’t been tested in a commercial environment, it is remarkable that Facebook chose to introduce it at such a decisive stage in its development. Where did this idea come from, and what made Zuckerberg so certain that it would work? David Kirkpatrick, author of The Facebook Effect (2010), caught a glimpse of News Feed’s origins in a casual conversation in which he asked Zuckerberg about Facebook’s potential to change society. Zuckerberg responded by talking about the Potlatch, ‘a traditional celebration and feast of native peoples on the northwest coast of North America’. ‘Are you familiar with the concept of a gift economy?’, Zuckerberg asked him.

The Potlatch is a gift economy. So too, by implication, is Facebook.

The word ‘Potlatch’ comes from the Chinook language, meaning ‘to give away’ or ‘a gift’. Chiefs would host a Potlatch by gathering their tribe together and presenting them with a massive gift of food, blankets, furs, weapons, canoes, crafts, and more. The gift was dispensed at the end of a long and elaborate festival that involved speeches, songs, and spirit dances that could go on for days. The gifting ritual was the heart of the Potlatch. Everyone waited patiently to see what the chief would give. The bigger the gift, the better.

For the chief, the point of the Potlatch was to display abundant generosity. Any sign of stinginess would work against him. By amazing his tribe with a massive outlay of gifts, he sought to establish himself as a powerful leader, a figure of true status and nobility.

Sometimes, at a gathering of clans, different chiefs would compete to out-give one another. Each chief would seek to offer up a greater gift than the others, seeking in this way to cast the other chiefs in their shadow. Sometimes, this could lead a tribe to ruin. Sometimes, ruin was what was intended. The Potlatch could be used as a tool of war. By compelling the chief of a rival tribe to engage in an exchange that he couldn’t hope to win, a warring chief could force his enemy to impoverish his tribe in an effort to save face.

As the sociologist Marcel Mauss observed in his classic book, The Gift, the Potlatch inspires exorbitant acts of generosity. ‘The man who [gives] recklessly is the man who wins prestige’. The European settlers who moved west in the nineteenth century didn’t understand the Potlatch at all. European missionaries saw the Potlatch as a scandalous waste of time and resources and an impediment to the ‘civilization’ of the native people. One can imagine that the missionaries were offended by the egoistic nature of the Potlatch ritual. Following Jesus’ example, they aspired to the ‘pure gift’, an act of generosity that brooks of no return. In the Potlatch, by contrast, chiefs gave to establish their reputation and prestige.

The idea of giving to establish status was anathema to the teachings of the Church. The Potlatch was banned by the US and Canadian governments in the nineteenth and early twentieth centuries, contributing to the decimation of the tribes up and down the Pacific coast.

The traditional Potlatch has faded into history. The age of the digital Potlatch has just begun. When Facebook launched News Feed, it created a virtual Potlatch. By establishing a transparent space in which everyone could see what everyone else was posting, it created an environment in which status and reputation accrue to people who add value. In the transparent space of a real-time News Feed, users put their reputations on the line whenever they post content.  If they want to impress their followers, they need to share content that contributes something valuable. This dynamic ensures that most people think twice about their posts before posting them, which works to the benefit of everyone. It encourages people to curate the content that they share, reflecting on how it will add value for different audiences. As people post content that adds value for their audiences, and their audiences reciprocate by posting content that is valuable for them, the exchange of gifts creates an interpersonal dynamic that keeps people engaging with the feed.

This gifting dynamic is what keeps us coming back to social media, despite complaining about the hours it consumes in our day, how it fills our minds our trivia and distracts us from important tasks. Love it or loathe it, it has changed the mindset of a generation.

For a start, social media has made egoboo part of life for the digital generation. The term egoboo originated in science fiction fandom. Egoboo is the pleasure we get from being recognised for voluntary work and contributions. Facebook is designed to deliver hits of egoboo. Every Facebook user has experienced the thrill of posting something popular on the site. Few are immune to the dopamine rush that we get as ‘likes’, comments, and re-shares come flooding in. Facebook is designed as a gifting-egoboo machine:  we insert what we love, what inspires us, our passions and desires; and the platform delivers crowdsourced recognition and egoboo.

Online gifts can translate into real life reputational rewards. Since, on Facebook, every contribution is tagged with a proper name, users earn reputation capital for their gifts. For knowledge workers and other professionals, this reputation capital can bear real rewards.  By consistently posting quality content, users can establish tribal status that they can use to find work and build a career. Social media professionals most often resemble competing chiefs in a Potlatch, engaged in the effort to out-gift one another to build their reputations.

The success of Facebook and other social media sites has made reputation-based gifting part of contemporary life. The scale of it is staggering. Millions of people around the world are playing the Potlatch reputation game right now. They are sharing family photos on Facebook, breaking news on Twitter, design concepts on Pinterest, and comedy skits on Vine. They are expressing their passions, dreams, desires, and inspirations. They are leveraging their personal gifts in an effort to create value for others. The more that people create value through gifting online, the more they stand out, the more egoboo they earn, and the more they stand to receive from their communities. With every reciprocated gift, an emotional bond is forged between strangers and friends. This gifting dynamic brings the world closer together. It makes us part of a common tribe. It is increasingly flowing offline.

It is easy to underplay the influence of culture on people’s behaviour. Culture is ephemeral. Culture concerns people’s outlook on life, which remains invisible until they get a chance to express it in praxis. It has taken us a long time to appreciate the impact of online gifting on our way of life, probably because most of this activity has no practical consequence. It is only once the cultural approaches started to infiltrate productive activities, in co-design studios, co-working spaces, and corporate innovation labs, that we started to pay attention.

This is what is happening today. The success of Facebook and other social media platforms, from LinkedIn and Twitter to Snapchat, Tumblr, and Vine, has given rise to a new conception of how to get things done. We get things done through an open play of contributions. We get things done by engaging as peers and adding value in a generous and transparent way.

We see these cultural changes happening in a range of sectors today, predominantly environments favoured by digital professionals like co-working and tech start-up spaces. It is particularly evident in the design world. In co-design sessions, people innovate by giving everything they have to give to the session, knowing that it might not represent the final solution that everyone is looking for, or even something particularly useful, but that it is an honest attempt to move things forward. We don’t give with the expectation of return. We give because it is a noble cause, one that we want to be associated with, knowing that the social bonds that we forge through our gifts will pay dividends down the line, as our peers return the gifts that we’ve given them us in their own way.

The success of social media has catalysed a gift culture shift. It has given us a new sense of how to organise for innovation. There is a chasm separating this culture from the way that things get done in most organisations. Kirkpatrick reflects: ‘A world in which each individual has a clear window into the contributions of everyone else, potlatch-style, does not dovetail well with how most companies are run’. This is a problem for companies that want to increase their innovation capability. The only way around this problem is for leaders to let loose of the reins and create safe spaces for gifting and collaborative innovation.

You got to give to get back: Amanda Palmer, crowdfunding, and the theatre of gifts

The talk began without a word. Alt-rock icon Amanda Palmer sauntered onto stage at TED Long Beach, a flower and hat in her hands, nudging a plastic crate along the floor before her. At centre stage, she upturned the crate and positioned the hat in front of it. Stepping up on the crate, she raised her arms to shoulder height and froze.

It was Palmer’s way of introducing the topic of her talk: ‘The Art of Asking’. Prior to finding success with the punk-cabaret outfit, The Dresden Dolls, Palmer had earned a living busking as human statue, the ‘Eight Foot Bride’. She claims in her talk that this provided her with the perfect education for the music business. Becoming a human statue was certainly a great way to capture the audience’s interest. Holding the pose, Palmer held the audience’s attention. She looked left, looked right. Not a word. The TEDsters shivered with anticipation.

Palmer’s talk has generated a great deal of discussion and debate online since TED uploaded the video in February. Two things have captured people’s interest: the fact that Palmer advocates crowdfunded file-sharing as a business model for musicians and artists (she claims: “I firmly believe in music being as free as possible. Unlocked. Shared and spread. In order for artists to survive and create, their audiences need to step up and directly support them”), and the fact that she has been so phenomenally successful at doing this herself. Last year, Palmer raised $1.2 million dollars through Kickstarter to fund ‘Theatre is Evil’, the first album by her band, The Grand Theft Orchestra. In the hit and miss world of crowdfunding, this makes her a guru. No doubt there were a smattering of dark cabaret fans in the audience at TED Long Beach that night. But the majority of people in the audience were there to learn how Palmer worked her money magic.

What they got was a human statue. For a moment. There was magic in that moment – and an important lesson for crowdfunders, too.