Spend Shift offers insights into how our lives are changing after the Great Recession. It documents a new values-led cultural revolution, born in of all places, consumerism. How we spend our money, time and energy reveal how America’s values are re-shaping capitalism today. While the data and research is extensive, perhaps even more compelling are the stories gleaned from their travels across America. Gerzema and D’Antonio help us feel the lasting impact of the crisis through the experiences of middle-class families, small business owners, CEO’s and entrepreneurs. The lessons in this book are essential to examining your business strategy for the post-crisis age.

Philip Kotler S.C. Johnson Distinguished Professor of International Marketing Kellogg School of Management, Northwestern University

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ABOUT THE AUTHORS Chief insights Officer of Young and Rubicam, John Gerzema is an internationally known expert on culture, innovation, marketing, and futurism who has worked with the world’s best-known companies. His first book, a bestseller called The Brand Bubble marked the beginning of the change in consumer attitudes caused the Spend Shift revolution. It was voted #3 in Amazon’s best business books of 2008 and in the best marketing books by Strategy & Business for 2009. Gerzema is a pioneer in the use of data to identify social change and to help companies both anticipate and adapt to new consumer interests and demands. A much sought-after source for the business press and in-demand public speaker, Gerzema’s 2009 TED lecture— The Post Crisis Consumer—has been viewed by tens of thousands of people.

Michael D’Antonio is the author of more than a dozen books on topics ranging from business to science and sports. Hershey, his biography of the chocolate king, was named one of Businessweek’s best books of the year and his book The State Boys Rebellion received similar honors from both The Chicago Tribune and The Christian Science Monitor. While at Newsday D’Antonio won the prestigious Alicia Patterson fellowship for journalists and was a member of a team of reporters who won the Pulitizer Prize. His original story for the film Crown Heights earned him the 2004 Humanitas Prize. His work has appeared in The New York Times Magazine, Esquire, Discover, The Los Angeles Times Magazine and many other publications.

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WHAT IF THE WORST ECONOMIC DOWNTURN SINCE THE GREAT DEPRESSION WAS ALSO AMERICA’S MOMENT OF RENEWAL?

WHAT IF the real revolution that came out of the Great Recession weren’t only a “Tea Party” but a sweeping “Spend Shift” involving a majority of us in a movement to promote quality, responsibility, and human kindness?

WHAT IF the collapse of inflated real estate and stock prices drove consumers to higher levels of creativity, cooperation, and community?

WHAT IF tight money made corporations behave more ethically and responsibly while offering us better quality along with better prices?

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SPEND SHIFT As America emerges from the worst economic calamity since the Great Depression, all the artificial demand based on the value of inflated assets and a mirage of wealth has disappeared. But in the space opened by the crisis, our society is rediscovering its strength by reappraising its consumerism. We are moving from mindless to mindful consumption. In this new climate, “consumers” become “customers” and, more importantly “people” whose needs mandate that companies deliver value and values. And like-minded businesses are mashing up old-fashioned American virtues with progressive technologies to form a solid foundation that is remaking capitalism, and America for the better.

Gerzema had seen the pressure had been building for many years. With every quarter of surveys at Young & Rubicam showed that more and more Americans were skeptical about leaders of all sorts, uneasy with debt, and questioning the proposition that a good life could be purchased (or for that matter rented) if only you had enough cash. By 2007 all data pointed to a revolution in the making, a Spend Shift that is realigning the vast consumer marketplace. All that was required was an inciting incident, a shot-heard-round-the-world that would turn unrest into action.

The “shot” came with the banking crisis of 2008, which marked the start of the Great Recession. While Wall Street got most of the media attention the pain was felt most acutely on Main Street where businesses and their customers struggled to survive. And yet, every quarter, Y&R’s BrandAsset® Valuator, the world’s largest survey of consumer attitudes, showed these same people were not defeated. Instead they were returning to bedrock American virtues—thrift, faith, creativity, hard work, community and more—in order to build new lives of purpose and connection.

“As voting patterns define the societal mood, consumption patterns do the same. We signal our values and our priorities every time we make a purchase or decide where to invest our time and energy. In contrast, we participate in elections every two years, or so. This means political choices are very crude and lagging indicators of public sentiment. If you want to understand how people really feel, track them day-to-day in the marketplace”.

—John Quelch Lincoln Filene Professor of Business Administration Harvard Business School as interviewed in Spend Shift

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This examination of the post-crisis American experience chooses the vantage point of consumerism, allowing the authors to measure not just words but actions. Spending habits and preferences reveal insights into culture in much the same way that voting patterns inform political science. Through our consumption we are able to see value shifts that are changing our society. Market forces in consumerism are reforming capitalism for the better.

Gerzema and Pulitzer-prize winning writer Michael D’Antonio then set off across America to document the Spend Shift and its effects from coast-to-coast. They traveled through dozens of communities in nine states (both red and blue). They talked with people across kitchen counters, in restaurants, on street corners, in factories and in boardrooms. They shopped with people in supermarkets and watched them network at job fairs. They walked the floors with start-up companies and interrogated the changing business models with Fortune 500 CEO’s.

The result in the first-ever, on-the-ground report from the quiet revolution of values that is remaking the American economy and reshaping the global marketplace.

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This book is based on a landmark study of post-crisis behaviors drawing upon BrandAsset® Valuator: the world’s most extensive study of brands. In polling values, attitudes and behaviors of over 750,000 people (17,000 in America each quarter), BAV assesses over 50,000 companies and brands across 200 categories. Young & Rubicam have invested over $130 million compiling 17 years worth of data in over 50 countries.

PROFOUND VALUES SHIFTS ARE CHANGING INFLUENCING THE SPENDING HABITS OF CONSUMERS IN AMERICA AND ABROAD.

Who is The Spend Shift? They aren’t ‘radical frugalists,’ Christian ascetics, or extreme New Age anti-materialists. They are merely people who, in adapting to crisis, have subtly adjusted their lives to seek greater balance and a more fulfilling existence.  What unites them is a common sense of optimism and purpose, driven by a return to ‘core American values’, which were clouded by the excess of materialism. In the wake of the crisis and their mistrust of institutions, Spend Shifters are expressing their values through their spending.  

The Spend Shift encompasses people from all walks of life. It is blind to age, education, income, political affiliation and geography. In disparate places like inner city Detroit, suburban Dallas, rural New England, and Bohemian Brooklyn ,the authors found Spend Shifters leading a drive toward locally produced products, artisanal foods, and sustainable business practices. Gerzema and D’Antonio found entire communities willing to change their habits for the benefit of the environment or to reward companies who didn’t take bailout money. Everywhere they saw risk-taking entrepreneurs and nimble giant corporations opening themselves up to consumers in order to connect with them on shared goals and values.

Spend Shifters are the silent majority in America.

55% of all Americans belong to this movement, with 27% mimicking many of the same beliefs and behaviors.

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55%

SPEND SHIFTERS THROUGHOUT THE WORLD

Through BrandAsset ® Valuator’ international values segmentation — 4-C’s (Cross-Cultural-Consumer-Characterization), Spend Shifters are most prominent in developed, European markets. In fast-growing markets like China and India consumerism is still emerging.

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Spain 38%

France 53%

U.K. 44%

Switzerland 49% Italy

45%

Greece 48%

Germany 45%

Russia 38%

China 21%

India 34%

Singapore 44%

Japan 26%

Brazil 41%

Mexico 34%

Chile 39%

Canada 51%

Australia 45%

WHAT DOES THE SPEND SHIFT MOVEMENT BELIEVE IN?

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Indestructible Spirit: The value of optimism, resiliency and opportunity

Don’t Fence Me In: The value of re-tooling, education and betterment

In Dallas, the values of self-reliance and reinvention are everywhere as people reclaim control by seeking new skills and knowledge. Faith runs through this theme of reinvention as spirituality, community and family guide the people of The Lone Star State, who are determined to reinvent themselves and set upon new careers and horizons. Texas is emblematic of a ‘do it yourself’ nation that is shifting from acquisition to iinquiry 68% of Americans now have a library card, the highest percentage ever. Personal responsibility and resourcefulness are the new virtues: Twenty-three million Americans grew their own food. Dallas had to hastily pass an ordinance for the exploding number of suburban chicken farmers.

In inner city Detroit, a resurgent civic pride is uniting a small but undeterred community of citizen-entrepreneurs set on rebuilding their city with new industries and local cooperation. While others see a post-apocalyptic landscape, artists, small business owners and urban farmers have flocked to Detroit to take advantage of inexpensive land and limited municipal oversight to create a grassroots marketplace that is rising like saplings from a clear-cut forest. When the average price of a house is $ 18,000, there is no speculation, only raw opportunity. What the authors found will convince you to not short the Motor City.

“Since the recession I’m actually more capable of starting my own business.”

“Since the recession, I am interested in learning new skills, so I can do more myself and rely less on others.”

Spend Shifters

Total population

60%

48%

Spend Shifters

Total population

81%

65%

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Liquid Life: The value of nimbleness, adaptability and agility

An Army of Davids: The value of community and cooperative consumerism

In Tampa, the authors uncovered how individuals are finding strength in numbers by scaling their talents through meetup groups, and in carrot mobs, where people band their spending together to reward businesses who do the right thing. Here cooperative consumerism gives scale to individuals who, enabled by the tools of social media are creating new businesses and rebuilding community values. 52% of Spend Shifters believe that “since the recession there is greater opportunity for small business owners to compete with large companies more now than there used to be”. The Davids are remaking a marketplace where ideas now trump scale.

In Boston the authors discovered how people are eliminating want from need and becoming faster, lighter and more agile. And with less excess there is more flexibility. From short-term jobs and micropayments, to renting and Zipcars, people are moving from fixed to variable living to shield from adversity and be more available to opportunity. Visa reports that debit cards now outpace credit card usage. And whereas having things defined success before the Great Recession, today less is more. The average size of the American home declined for the first time in three decades suggesting the era of the McMansion is waning.

“Since the recession, I realize that how many possessions I have does not have much to do with how happy I am.”

“I believe my friends and I can change corporate behavior by supporting companies that do the right thing.”

Spend Shifters

Total population

87%

76%

Spend Shifters

Total population

69%

66%

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What’s on The Inside Matters : The value of character, authenticity and humility

America is moving away from excess and debt-fueled consumption and toward savings and investment. Consumer spending drives over two-thirds of America’s GDP, meaning these spend shifts represent a values revolution that is remaking our culture and our economy at once. Consumerism, which in many ways led us into this crisis, is changing the rules of business and our society for the better.

In Brooklyn the authors found that materialism is in retreat as what we carry becomes less important than how we carry ourselves. In BAV empathy is up nearly 400% as a leading attribute desired for in company behavior. Here, businesses like Etsy, Brooklyn Industries and Crisis Camp are thriving because of their focus on what’s inside: quality, performance, narrative and meaning. Their success and that of Brooklyn itself, reflects how America is dismantling ego and artifice to reveal foundational truths about what makes us truly happy. 87% of Spend Shifters agree that “Since the recession I realize that how many possessions I have does not have much to do with how happy I am”.

“Since the recession, I realize I am happier with a simpler, more down-to-basic lifestyle.”

“I now make it a point to buy brands from companies whose values are similar to my own.”

Spend Shifters

Total population

77%

65%

Spend Shifters

Total population

76%

71%%

“I believe my friends and I can change corporate behavior by supporting companies that do the right thing.”

Spend Shifters

Total population

69%

66%

The Spend Shift: Aligning spending with their values to remake the marketplace for the better

ADAFRUIT INDUSTRIES • FORD MOTOR COMPANY • BETAWORKS • NEXTEK POWER SYSTEMS • ZIP CAR • CITY BIRD • SAN FRANCISCO GIANTS • RELAY RIDES • LE PETIT ZINC CAFÉ • EARTHWORKS • GOOD GIRLS GO TO HEAVEN • UNIVERSITY CULTURAL CENTER ASSOCIATION • COLUMBIA BUSINESS SCHOOL • MAJORA CARTER GROUP • MAKE • KOGI • SHOPSAVVY • KICKSTARTER • CHALLENGEPOST • LIVINGWORKS • BIG IN JAPAN • IBM • DALLAS PUBLIC LIBRARY • HARVARD BUSINESS SCHOOL • LEGACY BOOKS • VOLUNTEER CENTER OF NORTH TEXAS • GOLOCO • RECYCLEBANK • BLUHOMES • BERKSHARES • MAIN STREET RESOURCES • NORTHHAVEN GARDENS • KALEISIA TEA LOUNGE •GROUPON • MEETUP • BROOKLYN INDUSTRIES • ETSY • MADEWELL • ZAPPOS • PATAGONIA • SOCIAL VIBE • WALMART • MICROSOFT • COLLECTIVE BIAS • HULU • SUNRUN • FRESH JIVE • ALICE • CRISISCOMMONS.ORG • DAYTUM • 37 SIGNALS • GOOD GUIDE • TWITTERFEED • BITLY • OUTSIDE/IN • CLICK FIX • NORTHWESTERN KELLOGG BUSINESS SCHOOL • WINDSONG CHARTERS • BROOKLYN FLEA • CHARTBEAT • QUEEN OF SHEBA • TAMPA TRIBUNE • HUFFINGTON POST • AMERICAN CITY FARMS • MARLOW & DAUGHTERS • ELEVEN MOMS • PEPSICO • 83 DEGREES • GOOD GUIDE • THE BROWNSTONER • ASIA DOGS • RED HOOK VENDORS • JUMO • DR HORTON • NEVADA FEDERAL CREDIT UNION • ADAFRUIT INDUSTRIES • FORD MOTOR COMPANY • BETAWORKS • NEXTEK POWER SYSTEMS • ZIP CAR • CITY BIRD • SAN FRANCISCO GIANTS • BROOKLYN BRINE • LE PETIT ZINC CAFÉ • EARTHWORKS • GOOD GIRLS GO TO HEAVEN • UNIVERSITY CULTURAL CENTER ASSOCIATION • COLUMBIA BUSINESS SCHOOL • MAJORA CARTER GROUP • MAKE • KOGI • SHOPSAVVY • KICKSTARTER • CHALLENGEPOST • LIVINGWORKS • BIG IN JAPAN • IBM • DALLAS PUBLIC LIBRARY • HARVARD BUSINESS SCHOOL • LEGACY BOOKS • VOLUNTEER CENTER OF NORTH TEXAS • GOLOCO • RECYCLEBANK • BLUHOMES • BERKSHARES • MAIN STREET RESOURCES • NORTHHAVEN GARDENS • KALEISIA TEA LOUNGE •GROUPON • MEETUP • BROOKLYN INDUSTRIES • ETSY • MADEWELL • ZAPPOS • PATAGONIA • SOCIAL VIBE • WALMART • MICROSOFT • COLLECTIVE BIAS • HULU • SUNRUN • FRESH JIVE • ALICE • CRISISCOMMONS.ORG • DAYTUM • 37 SIGNALS • GOOD GUIDE • TWITTERFEED • BITLY • OUTSIDE/IN • CLICK FIX • NORTHWESTERN KELLOGG BUSINESS SCHOOL • WINDSONG CHARTERS • BROOKLYN FLEA • CHARTBEAT • QUEEN OF SHEBA • TAMPA TRIBUNE • HUFFINGTON POST • AMERICAN CITY FARMS • MARLOW & DAUGHTERS • ELEVEN MOMS • PEPSICO • 83 DEGREES • GOOD GUIDE • THE BROWNSTONER • ASIA DOGS • RED HOOK VENDORS • JUMO • DR HORTON • NEVADA FEDERAL CREDIT UNION • ADAFRUIT INDUSTRIES • FORD MOTOR COMPANY • BETAWORKS • NEXTEK POWER SYSTEMS • ZIP CAR • CITY BIRD • SAN FRANCISCO GIANTS • BROOKLYN BRINE • LE PETIT ZINC CAFÉ • EARTHWORKS • GOOD GIRLS GO TO HEAVEN • UNIVERSITY CULTURAL CENTER ASSOCIATION • COLUMBIA BUSINESS SCHOOL • MAJORA CARTER GROUP • MAKE • KOGI • SHOPSAVVY • KICKSTARTER • CHALLENGEPOST • LIVINGWORKS • BIG IN JAPAN • IBM • DALLAS PUBLIC LIBRARY • HARVARD BUSINESS SCHOOL • LEGACY BOOKS • VOLUNTEER CENTER OF NORTH TEXAS • GOLOCO • RECYCLEBANK • BLUHOMES • BERKSHARES • MAIN STREET RESOURCES • NORTHHAVEN GARDENS • KALEISIA TEA LOUNGE •GROUPON • MEETUP • BROOKLYN INDUSTRIES • ETSY • MADEWELL • ZAPPOS • PATAGONIA • SOCIAL VIBE • WALMART • MICROSOFT • COLLECTIVE BIAS • HULU • SUNRUN • FRESH JIVE • ALICE • CRISISCOMMONS.ORG • DAYTUM • 37 SIGNALS • GOOD GUIDE • TWITTERFEED • BITLY • OUTSIDE/IN • CLICK FIX • NORTHWESTERN KELLOGG BUSINESS SCHOOL • WINDSONG CHARTERS • BROOKLYN FLEA • CHARTBEAT • QUEEN OF SHEBA • TAMPA TRIBUNE • HUFFINGTON POST • AMERICAN CITY FARMS • MARLOW & DAUGHTERS • ELEVEN MOMS • PEPSICO • 83 DEGREES • GOOD GUIDE • THE BROWNSTONER • ASIA DOGS • RED HOOK VENDORS • JUMO • DR HORTON • NEVADA FEDERAL CREDIT UNION • ADAFRUIT INDUSTRIES • FORD MOTOR COMPANY • BETAWORKS • NEXTEK POWER SYSTEMS • ZIP CAR • CITY BIRD • SAN FRANCISCO GIANTS • BROOKLYN BRINE • LE PETIT ZINC CAFÉ • EARTHWORKS • GOOD GIRLS GO TO HEAVEN • UNIVERSITY CULTURAL CENTER ASSOCIATION • COLUMBIA BUSINESS SCHOOL • MAJORA CARTER GROUP • MAKE • KOGI • SHOPSAVVY • KICKSTARTER • CHALLENGEPOST • LIVINGWORKS • BIG IN JAPAN • IBM • DALLAS PUBLIC LIBRARY • HARVARD BUSINESS SCHOOL • LEGACY BOOKS • VOLUNTEER CENTER OF NORTH TEXAS • GOLOCO • RECYCLEBANK • BLUHOMES • BERKSHARES • MAIN STREET RESOURCES • NORTHHAVEN GARDENS • KALEISIA TEA LOUNGE •GROUPON • MEETUP • BROOKLYN INDUSTRIES • ETSY • MADEWELL • ZAPPOS • PATAGONIA • SOCIAL VIBE • WALMART • MICROSOFT • COLLECTIVE BIAS • HULU • SUNRUN • FRESH JIVE • ALICE • CRISISCOMMONS.ORG•RELAYRIDES•ZIP CAR•SUN RUN•BETAWORKS•CHARTBEAT • DAYTUM • 37

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THE UPSIDE OF CALAMITY

In interviews with managers and workers at more than fifty organizations —from start-ups and non-profits to small businesses and multinationals – Gerzema and D’Antonio discovered they know something you don’t…how to turn crisis into opportunity.

TEN RULES FOR PROFITING IN THE SPEND SHIFT MARKETPLACE.

1. We are moving from a credit, to a debit society

This is not the ‘new normal’ but return to bedrock values. The borrowing and binge consumption of the past three decade swere an anomaly in American culture. Consumer spending will no longer grow faster than our income as it did in the years leading up to the crisis. Tighter lending standards and limited access to credit means we’ll spend money that’s really ours.

Companies that enable measured consumption are thriving. BluHomes doubled it sales during the recession with pre-fab modular homes that people can grow into custom-tailored spaces instead of McMansions.

2. There are no longer consumers, only customers

The term ‘consumer’ is now considered a term of disrespect in many circles. It suggests a mindless gobbling beast of indifference who ingests an endless abundance of goods and services without regard for consequence. A consumer is a powerless being who can be manipulated for profit..

Companies who treat their customers as not just consumers but as ‘constituencies’ are restoring trust. Walmart’s Eleven Moms program asks mommy bloggers to act as a shopper advisory board. Walmart’s stock is up 30% since 2007.

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In Spend Shift readers encounter an elite corps of companies that is showing mastery of conditions in the post-crisis age. They are becoming market makers by applying values-led innovation in their culture, operations, products and services. While their business models and targets widely vary, success binds them together.

5. Human regulation is remaking the marketplace

We’ve been done -n by complex financial instruments we can’t understand. Simplicity, transparency and accountability now reign. Companies must be more humane and the buying public will watch them carefully and use their spending to regulate the marketplace.

GoodGuide’s safety, social responsibility and environmental information give customers ability to assess a company’s record at point of purchase. GoodGuide is one of TechCrunch’s fast-growing new businesses.

6. Generosity is now a business model

Kindness and empathy (up 400% in BAV) are the prized attributes sought in company performance. Now it’s about ‘giving to get’ where companies creatively negotiate with their customers and exchange value in ways other than merely selling them something. Customers give up personal information to manufacturers to get better prices on household products. Alice.com brokers this transaction and went from zero to well over 1.5 million unique visitors in less than 6 months.

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3. Industries are revealed as collections of individuals

The post-crisis company champions its people as a competitive advantage. With institutional trust waning, customers want to deal with people and employees now drive corporate reputation. Human resources, recruiting and developing a culture to champion the individual will become essential management strategies for this decade.

Ford’s Scott Monty created a community test-drive of Ford Fiestas through Twitter. Engineers joined in the process making design refinements. Ford’s stock has more than doubled since 2008.

4. Generational divides are disappearing

The Great Recession affected every generation., with many older workers foregoing retirement and choosing to stay on the job where they meet new hires who could be their grandchildren. Old and young also come together through new technologies to build relationships and discover they share common values.

The interest in DIY electronics gadgetry has retired engineers mentoring young tech enthusiasts through open source customer support forums in Adafruit online community. Adafruit Industries sales’ tripled in 2009.

9. America is an emerging market for values-led innovation

America is an ‘emerging market’ of opportunity for the companies and individuals who can act with dignity, empathy and respect. With more than half the U.S. population now aligning their spending with their values, the modern ,ethically driven business can serve a whole new marketplace only a few see and really understand. Values-led innovation is the new terrain for growth.

RecycleBank, a ‘frequent flyer’ program for recycling, rewards responsible households while reducing costs for municipalities. RecycleBank’s business doubled in 2009 .

10. Everything will be all right

As the era of excess passes, small entrepreneurial companies and big re-imagined businesses are working with their customers and communities to innovate responsibly. As in every prior period of adversity, leadership emerges, ingenuity is applied, and prosperity again flourishes. Those with the right vision will look back at the Great Recession as one of the best things that ever happened to America because it realigned our values.

Amidst the blighted landscape of burned out and abandoned buildings, Earthworks grew from 80 to 800 gardens, as urban farming is fast becoming one of the solutions to rebuilding inner-city Detroit.

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7. Society is shifting from consumption to production

In the post recession economy resourcefulness and self-sufficiency are virtues and excessive consumption is a sign of weakness. Status is no longer what you have, but what you know and what you can do. This shift from ‘take’ to ‘make’ means we buy less and create more This trend offers opportunity for those who would partner with their customers.

SunRun solves the expense of installing solar panels by setting a fixed cost for power in a long term contract that allows households to become their own utility company. Sun Run grew 300% in 2009.

8. We must think “small to solve big.”

We now realize many of the big problems can only be solved through a network of small solutions. Today small-scale risk-taking is the way to solve big problems and it affords small entrepreneurs greater relevance as America moves from an Industrial Era to an Industrious one.

Groupon aggregates the small into the large, allowing customers to band together to drive down prices through ‘cooperative consumerism’. GroupOn recently closed a financing valuing the company at $1.35 billion.

THE BOOK IS ON SALE OCTOBER 23RD.

See johngerzema.com

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For pre-orders: http://amzn.to/dBFYAj

For interviews with the authors and press inquiries contact Mark Fortier at Fortier, Public Relations: 212.675.6460, mark@fortierpr.com

For speaking engagements contact Tom Neilssen at Brightsight Group 609.924.3060 ext.16, tom@brightsightgroup.com