Wednesday, April 7, 2010

Shop and Make the World a Better Place

Having totally disrupted American politics with the election of President Barack Obama, America’s youngest and largest generation, Millennials (born 1982-2003), are about to overturn the rules of retailing with equally dramatic implications for the country’s economy. Underpinning this shift is the deployment of broadband speed mobile services that take full advantage of the capabilities of America’s favorite new toy-- smart phones. But just as Millennials transformed the Internet from a libertarian tool for individual action to one that provides a new capability for connecting everyone through social networks, these new broadband services will be put to work in ways that reflect the values and beliefs of Millennials, especially their fondness for doing good while doing well.

Even though the FCC’s recent announcement of a national broadband plan was followed quickly by a court decision that might undermine the Commission's ability to implement it, the goals in the plan for the deployment of a faster broadband infrastructure for the country are likely to become the focus of any policies the country adopts either by administrative fiat or Congressional action. The plan’s first goal is to provide at least 100 million U.S. homes with affordable access to broadband download speeds of 100 megabits per second by 2020. But the plan’s second goal is even more ambitious, suggesting that the United States should lead the world in mobile innovation, with the “fastest and most extensive wireless networks of any nation.” This will be accomplished by freeing up vast swaths of spectrum currently owned by older media that these new broad band speed mobile networks will need to operate. Here, the Commission clearly has the authority to regulate since spectrum allocation was the original reason for its creation in the 1930s.

As NDN fellow Rob Shapiro recently pointed out,the economic benefits of this kind of infrastructure deployment can lead to the direct creation of 500,000 new jobs over the next five years. But many times more jobs will be created by the way “that a basic infrastructure such as broadband stimulates additional economic activity, much as highways and railroads once did. Building out these networks creates a platform for the development of thousands of new applications,” and that’s where Millennials’ behavior and use of technology come into play.

A recent Nielsen study of generational shopping habits found that Millennials make the fewest trips of any generation to any and all retail settings-- from big box stores to the local drugstore-- but really enjoy in-person shopping on those relatively fewer occasions when they engage in it. “On a typical mission, they know how to find what they need and are less likely to shop the entire store,” the report concluded, reflecting the generation’s penchant for going online to research their purchases before they take offline action. But once they have a smart phone in their hands, and about one out of every three Millennials already owns one, this distinction between virtual and physical buying behaviors will blur almost to the point of extinction.

About half of all mobile phones in the US today are smart phones. The iPhone alone now has eight times the number of users as AOL and is enjoying the fastest adoption rate of any Internet service, eclipsing the record set by the Netscape browser in the mid-90s by a factor of five. Almost every smart phone comes with a camera and a GPS or location identification application that, unlike PC Internet access, enables the network to know where you are at any moment in time. This combination of capabilities enables new “location-based services” or applications that takes the information about where you are and provides you with information you might find helpful based on your location. So, for instance, you will soon be able to use your phone’s camera to take a snapshot of a more square shaped looking bar code on a particular piece of merchandise and send that information to a service provider who will tell you where you could find that item for less money at a store nearby or perhaps even where to find it in the color or size you need.That rather mundane use of the technology may make the retailing industry even more efficient than it is today, but that’s not what will soon transform this key engine of economic growth.

The real dramatic changes will occur when retailers link the Millennial Generation’s constant use of its mobile phones with its equally large penchant for helping causes. Already, Millennial entrepreneurs are building social network sites to link their generational cohort’s desire to improve the world with opportunities for doing so. Chris Golden and Nick Triano’s website recently won $25,000 in the PepsiRefresh challenge to help them expand their beta site that connects service volunteers with each other and with local opportunities to help. Chris Hughes, one of the founders of Facebook, and the creator of, just announced plans for his site that will do similar things for those wanting to make a more global impact. With Facebook and YouTube becoming the preferred destinations of mobile users accessing the Net, it is only a matter of time before sites like these will attract Millennials on their cell phones in record numbers as well. This same type of connection between where you shop and what cause you want to support has just become a newly popular app on smart phones.

The capability is being accessed today by each of the three-hundred thousand iPhone users who downloaded the “CauseWorld” application in its first two months of availability. Users earn “Karma points” by visiting retailers who have registered with the service in order to get Millennials to “check in” to their store. By letting the iPhone’s GPS service know you are physically in the store, each visit generates more points that can ultimately be traded in for a contribution to one of seventeen selected charities, paid for by the service’s corporate sponsors. “Scanning for Karma” becomes a great way to multi-task for Millennials with more time than money. And for retailers it moves the decision on where someone shops away from price comparison models of services such as “ShopSavvy
toward a more powerful generational motivation to shop at companies that support causes Millennials believe in. The application’s popularity is just the latest demonstration that, in a Millennial era, the brand is political.

The technological brilliance of the Obama presidential campaign was the way it focused its “Hope Factory” organizational efforts on moving online interest to offline action.Now that same strategy will be deployed to change shopping to an activity that helps make the world a better place. Those retailers and carriers that take advantage of the opportunity broadband internet mobile computing provides will soon be rewarded with victory in their sales campaigns by a generation committed to creating change it can believe in.


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