[DECODED] The Psychology of Perpetual Commerce: When Shopping Becomes Who We Are

[00:00:12] Phillip: Hello, and welcome to Decoded, a podcast by Future Commerce presented this season in partnership with our friends at Commerce. I'm Phillip.

[00:00:17] Lindsay: And I'm Lindsay.

[00:00:18] Phillip: And this season, we are breaking down this new research, this new report that we put together called New Modes. New Modes uncovers an incredible amount of research about what life feels like in a state of perpetual commerce. We're talking about the new modes of shopping. And that mode of shopping is, well, we've heard about omnichannel, Lindsay, for well over a decade now. But, omnichannel has now become omni-modal, where a consumer is in many modes of shopping – whether that is the mode of search or discovery, when they're looking in an "answer engine," right? They're looking for answers in their "answer engines," we've heard a lot about that recently. But they're also in the mode of learning from their favorite creators on TikTok or YouTube about products that they didn't even know they wanted. So, whether we're experiencing context collapse or the funnel collapse, the world of omni-modal commerce, this new mode of shopping, is something that we have experienced as a consumer. This season for the next five episodes, we're going to explore that new piece of research. We are going to unpack how 48% of people exist in a state of perpetual commerce, how younger generations are more commerce-minded, and so much more. And this season of Decoded, Lindsay, you are are sitting next to me in the cohost chair, and we're gonna explore all of these transformations. But before we get into it, I get this chance to meet new people every season and cohost along with new people every season. Tell me a little bit about you and what you do for work.

[00:01:57] Lindsay: Awesome. Thanks, Phillip. Yeah. Actually, I'm really excited to be here and be part of this conversation. I joined Commerce two years ago when Commerce acquired MakeSwift, which I co-founded. My background is in marketing, and in MakeSwift, we solved a lot of problems for marketers who are trying to take their storefronts or their products live via their website really quickly. And now, I've had the opportunity to be in this larger set of solutions for the entire commerce experience end-to-end. Today, I lead our commercial offerings team, where we're trying to piece all of these different ways of solving problems for merchants together in a cohesive set of tools that you can use to build your storefront and build your eCommerce business into the agentic future.

[00:02:44] Phillip: Wow. So from founder, to, I would say, a leader in this new era of commerce. It's such a shift, and I think we're all experiencing a fundamental shift. If could put on your consumer hat for a moment, do you believe that you also are experiencing the state of perpetual commerce? And when we say perpetual commerce, we are finding that more consumers now than ever are in this constant mode of considering a purchase.

[00:03:16] Lindsay: I don't really know how you can answer that with anything other than yes, honestly. I mean, it's so unconscious, and that's the thing that really stands out to me, is that it's kind of this unconscious experience. But really, when you look at it – yeah, we're all having it. You know, we're not shopping in the way that we used to in these big moments. We're acting on little tiny impulses every single day. And so brands have to create those micro moments to meet those impulses. And that's just a big shift from these large campaigns that merchants have focused on in the past. So, yeah, absolutely. I'm definitely in the mix. I think we're all in that state right now of perpetual commerce.

[00:03:53] Phillip: Yeah. And I take it you probably use AI tools, answer engines, ChatGPT?

[00:04:00] Lindsay: Oh, yeah. All the time – on my phone, on my computer. It's become a way of life now. It's crazy how fast that's happened.

[00:04:06] Phillip: And you're not alone. In our research, we found that 46% of millennials and Gen Z use AI tools daily and 50% of that usage drops off after age 45, I might be entering that age group in the next year.

[00:04:26] Lindsay: I'm not far behind ya. {Laughter}

[00:04:28] Phillip: I feel like we have discovered quite a bit. There's a lot more to unpack including the broader range of apps that consumers use every day that are direct and indirect influences of shopping behavior patterns. You can get the full report by visiting the full directory of all of the podcasts for this series, and that's at futurecommerce.com/decoded. Today, Lindsay, we get to sit down with a brilliant speaker, a author, and a psychologist who talks about the "why" behind what we buy. Today, we're joined by Ken Hughes. He's a customer experience expert and author who spent years studying the psychology behind what we buy and why we buy it. And without any further ado, let's go to our interview with Ken.

[00:05:22] {Music}

[00:05:22] Phillip: We're so pleased to have a globally recognized keynote speaker, CX strategist and social scientist whose work explores the psychology and sociology of consumer behavior in the digital age. Also, probably my new favorite book, your new favorite book, and definitely Taylor's new favorite book, it's the author of "Taylormaking: A New Era of Modern Branding and Customer Connection." He is the author and renowned, now, guest of Decoded season five. It is Ken Hughes. Welcome to Decoded.

[00:05:56] Ken Hughes: Thank you very much. It's an honor to be here. Looking forward to it. This is going to be a good chat.

[00:06:00] Phillip: Glad to have you. And, we are covering this new topic of what we're calling the "New Modes." Before we get into any of that, I think we're talking today, specifically, about this concept of perpetual commerce. What we found in our research, Ken – I think we'll get into it here today – is, about half of consumers are in this perpetual state of consideration of purchasing something. I think I fall into at least that half. What do you think of our research that we found and how does that line up with the work that you've been doing?

[00:06:40] Ken Hughes: Yeah, it lines up really, really well. I mean, I'm a cyber-behavioralist also... A relatively new field of social science, which looks at people's behavior digitally and how that impacts their real world interactions. So, it's not just about looking at how they observe and how they play out digitally. It's about how those behaviors actually make their way back into the real world. And so what I'm fascinated by is that what you mentioned there, what we call the "always-on consumer." This idea, and in fact, this is the always-on society. Like, we are a digitally-first world now where everything that comes into your mind, you tend to reach into your device first to check with. And so whether that's something as simple as "where am I," "where am I going," "what time is it," "who am I meeting next," or "what do I need next as a product," or "what do I want?" You know, "I have an emotional mental health question, I'm to use ChatGPT here." Basically anything that comes into your mind, reach for your device first. That's your first port of call. And as an always-on consumer, and if we look at some of the big things in cyber behaviorism, we talk about the tenderization of society, easy come, easy go, easy swipe. This idea of one click, and I think Jeff Bezos gave us years ago, when he launched that one click buy button, and then – done. Easy.

[00:07:49] Ken Hughes: Then everything kind of started to shift. And then when social commerce came along, it gave us swipe up shopping where, "oh, I like that –" just one swipe and I have it. And there's very much, there's a lot of stuff going on behind the scenes in terms of the digital ability and the convenience part of that, the easiness. Because ultimately, when you think about it from a behavioral scientist point of view, humans don't like making decisions. We actually don't like it because it's work. It's hard work. And you know that wonderful book, "The Paradox of Choice," the more choice you give someone, the more difficult it becomes actually to make a decision. And so, making decisions easy for customers is kind of one of the core things that brands need to think about. The fact that they're already in the mindset now of the distance between being a shopper and a consumer. We used to have very separate definitions of those two things: a consumer consumes, and a shopper shops. And while you're in shopping mode, you may not be... So think about, let's say, a supermarket, really simple example. When you're pushing the cart, you're not in consuming mode, not eating the stuff as you buy it. Maybe you are. But you're shopping, and then you get home and you consume, and sometimes there'd be a separation of those two things.

[00:08:55] Ken Hughes: So sometimes the shopper wouldn't be the consumer. But now we've got a kind of a shrinking distance between shopper and consumer because at any given time, you can be a shopper, at any given time. And, particularly the advances in the payment systems field, where we don't need to enter all our details anymore, and it's always held for us, it's double click, use your face, and boom, boom, boom, all open, done. So, lots of things happened in the last ten years that allowed us to make it so frictionless and so seamless to buy, that, of course, now this step between, "oh I'm considering buying a product," "oh, I will buy that product" becomes smaller and smaller and smaller. And so we have that always-on state now, where the moment you see something, previously you might have gone in... Do you remember if you did an MBA or a business degree that you would have been taught the five stages of purchase decision making? Where You kind of... "What is your need? Look for products that meet that need, evaluate all the alternatives, make a decision, post-purchase decision." And they're all very linear, and it's very standard economics. What we're seeing now is just a complete collapse of those phases. And so, really the evaluation of alternatives is happening without the need being there at all. Which is, of course, the sweet spot for impulse shopping, isn't it? And the difference in platform is reading your report.

[00:10:08] Ken Hughes: I mean, the difference between, let's say an older consumer who has, of course, not grown up with this reality... Let's say a boomer or a Gen X. They tend to be more functional. They tend to fall back into that five stage process, where it's like, "what is my need?" And let me go out there and let consciously find products to meet my need. Therefore, I will go on to Amazon, and I will go on to platforms that I know the where the product will probably live. Going to Walmart and I'll find something, and then I will make decisions. Whereas you got other generations who are spending hours and hours – not necessarily a good thing – on other platforms that are entertainment-focused, maybe like TikTok or even Snapchat or even ChatGPT now with AI commerce coming in. And they're using those platforms for entertainment, for information, for curiosity. And into that slipstream comes the product pieces. And now you could argue that shopping is kind of, is it functional or is it entertainment? And it's that line between that. And so, you could have a great moral conversation about that, of course, also.

[00:11:09] Phillip: And we will. {Laughter}

[00:11:12] Ken Hughes: Yeah. {Laughter} The easier we make it for people to buy, which is the job of a behavioral scientist who looks at things from a branding point of view – is it my job to help brands convert, help brands close that gap between consideration and purchase? The easier we make it happen, the higher danger is that people will start buying things they maybe don't even need in the first place. But look, you're into the ethics of marketing there as a whole discipline, I'll be honest.

[00:11:33] Phillip: The cohorts by generation is where it's realized differently. We have 48% of consumers broadly in our research are keeping this mental shopping list at all times. But for millennials, it's two in three. And Gen Z is twice as likely as boomers to wake up with commerce on their minds. What do you think is spurring these generational differences? Why is it different per generation? And I think that, to me, the fascinating difference here is... Do you think it's digital nativity? Do you think that there's something to be said about the fact that maybe, some of us spend more time on our phones than others, some of us are more connected to each other by default through social media or through texting. What do you think is spurring this?

[00:12:24] Ken Hughes: I think you could lay a graph across those reports that you've got, the findings you have, and simply the amount of time people spend on their devices. I think you really could. I don't think it's to do with, like, commerce particularly attracting Gen Z more. I think they're waking up with commerce on their mind; they're also waking up with everything else on their mind digitally. Digital connection just runs their lives. And I think it's nothing...I think it's no different. Their relationships with friends are more digital than previous generations. Their relationship with commerce is more digital. Their relationship with self is more digital than previous. And so, it's just, to do with the digital activity as you talk about. Their reality is just a digital world. There's no line. You know, we used to create. We had this wonderful word – and we don't use it anymore, actually, interesting – the word "online" was a word that we used a lot. And that's because you had to go there physically. Like, you had to dial-up using a modem twenty years ago, and now you do it with WiFi and 5G, but you still kind of "go online." Like it was an active verb. Even the way we used talk with the internet when it came about first... We used to "surf the web," like they're all active verbs. You'd go there and you'd sit down and you dial-up and you'd go online. Of course, there's no such thing as online offline anymore. There's no line. There's no line. The line is well gone, know. We just live in an ever perpetual state of a phygital reality, half physical, half digital kind of smashed together.

[00:13:46] Ken Hughes: And so you can have physical experiences in the real world that you're using digital input through. You can be on digital and you can be kind of forgetting your physical; then you throw metaverse in there and AI in there. It just becomes a whole melting pot of existence. And I think previous generations still view the world as a line, and, whereas other generations like Gen Alpha and Gen Z don't, they don't see a line, they don't understand the difference between their being not in line or offline... And so from a commerce perspective, that perpetual piece that you put your finger on is just their state for everything, I feel. Like, their state of interaction with everything, with everybody, with everyone. So they may have romantic relationships that start off digitally and may last digitally for several weeks before they meet physically. So previous generations wouldn't have understood that. They think, well, "wouldn't you meet them first and then maybe chat afterwards?" Digital...And so, everything has changed. It's not really... And I think the really interesting thing about this whole conversation is – to put the AI piece in, because I've become fascinated, again, going back to the difficulty of decision making – if we're talking here about brands connecting with customers and perpetual commerce, it's a really interesting space.

[00:14:59] Lindsay: I remember getting online and using dial-up and having to wait for it to load and that whole experience. And there's something similar, when you used to go shopping, you would have to drive to the store you would have this transition time to arrive into the place where you're going be shopping and you're going be making these decisions. But now, we don't have to wait for dial-up. We don't have to drive to a location. We don't even have that transition into these experiences. And so I'm curious, what does that do to us psychologically when we are constantly in that state? And what does it do to our nervous systems? What does it do to the way we interact with the world when we do not have a transition into shopping or into being connected? How does that impact us across generations?

[00:15:41] Ken Hughes: I think probably in a negative way. If you're talking about nervous system, I mean... There's a reason that we have a loneliness pandemic, a depression pandemic, an anxiety pandemic that very few people are actually talking about globally at the moment. Every country I visit has this issue. And so the irony of these devices that connect us all at all times, 24 hours, making us fundamentally more disconnected from the self, disconnected from each other, disconnected from our workplace, our colleagues... Hybrid working has a lot to answer for, post-pandemic, particularly for Gen Z as they enter the workplace without mentors, without the structure that we need socially to belong to community. And so there's a lot going on. You could argue, also, that the commerce part is a crutch that people are using to express self worth, to express their...their reality, their needs in the life and, "okay I'm bored, I'm shopping, I'm bored, I'm shopping, I'm feeding myself with something." Getting a small dopamine hit when the little package arrives tomorrow. There's a lot of that that's interesting in that space, isn't it? And so I think where we're going with this always-on piece... I do believe in cycles. I'm fascinated. I'm wondering how Gen Beta are going to grow up in this AI-fueled quantum computing world of humanoid robotics in food service and hotels and warehouses and probably in our own homes. And so will there be a return to values, simpler times? We do tend to move in cycles. It's interesting. But for commerce, I think the challenge here is what we're about to go through next.

[00:17:09] Ken Hughes: So in terms of decision making, the always-on piece. I always want stuff. It's always stuff I need. Always curious. And curiosity is interesting, curiosity is a wonderful space. Like, when we're curious about things, and bit of FOMO and a bit of, "oh I want that." It's kind of the car trunk, the boot sale, isn't it? You wander in and you see something as trip shopping and say, "Ooh, look a bargain. I love it." So we're hunter gatherers still at our core but as your report talks about we're kind of more now cartists, and put stuff in the cart and maybe buy that, maybe buy this, and kind of the always shopping piece. Now, the next thing that's coming along is agentic AI for consumerism. And this is a fascinating space, because today humans are still making the decisions. We're all on this chat and we'll finish this now and I want to buy something and I'm in control. I choose what I want. Whereas agentic AI will do all the heavy lifting for me. And I don't really want to try and work out if I have to go skiing with my kids in a few weeks time, what resort I'm going to go to, what flight, what hotel I need to book... I've got decisions to make, you know. I don't want to make those decisions. So I'll just give that to my personal assistant AI agent. It knows me so well. It knows my family. It knows what we want. It knows we want self catering. And then the more it does, of course, more it serves me that... "I've looked at your car insurance. It's up next week. Here's three options that meet your needs. Will I buy the cheapest one for you?" Yeah, it's car insurance. Just give me the cheapest. And then it stops asking the next year, you know, and says "I found you the cheapest again. Will we go with that again?" Yeah. And then there comes a point where it doesn't even ask because I've given a permission just to do those basic stuff. They don't care about my broadband provider, my cell provider, my insurance, my groceries. I don't care. All I'm gonna say is I've got like a high protein, low carb diet this week. It's myself and my two teenage kids in the house this week. Please, do the diet and order the stuff. Done. And so what happens when the human steps out of the decision-making process? What happens when there's no human involved in the evaluation of alternatives? That's the next step to this perpetual commerce, where basically our needs are being fulfilled, but we're not even responsible for the brand choice. And that's terrifying for everyone in branding and marketing because that's B2M, business-to-machine. Forget about B2B and B2C. And so perpetual commerce, you could argue, might be a step towards that. A step where we're always kind of need stuff, but actually we don't like even making the decisions, which is why predictive commerce and predictive AI can just do it for us. And just we'll only step in when we want to a piece of direction.

[00:19:29] Lindsay: I'm thinking of your your blue dot consumer thesis and and how brands navigate around the shopper. You know, the customer is the center and the brands have to do the work of navigating around the consumer. How does that change in the agentic future? How does that do do brands have more of a capacity to keep customer at the center because of agents and because of the way that AIs shaping the the way that we interact with commerce?

[00:19:57] Ken Hughes: Yeah, I think so. Because in the end, putting the customer at the center, the old world map was you did all the work basically. You had to find out where you are, where you were going, you had to navigate, and now you're right there in the middle. The frame of reference is built around you. And what I'm really interested about that is the context piece. So when you decide, you take your hungry, you take your phone out, you say, "I'd like to go to an Indian Thai restaurant." You know, Google Maps will show you restaurants that are on the street that you're on right now. That's the point. It's saying, "Where is Lindsay? What does she need right now? Let's serve her up products that basically allow us to understand, okay, here's what we here's what will satisfy our needs at the time." I think AI opens up that really better. It opens up hugely what using all the data that we have on customers, we can now activate that data. And we can say, right, what does Lindsay need? And we can start to predict her needs. So instead of waiting for Lindsay to say, oh, "I'm here like this," we can see where Lindsay is going. So perpetual commerce becomes actually not from a customer point of view, I'm always shopping. It goes the other way. And the algorithm and the brands need to think, "Well, where are they going in their lives? What are they what's happening in their lives contextually? And how can we then step in with relevance?" And so most of advertising in the world is irrelevant to me. Most of it is megaphone brands just shouting about themselves, to get your attention.

[00:21:16] Ken Hughes: Whereas we're moving to a model which is much more relationship focused, which is, "We know everything about you, we know what you need in life, and let us step in now and be a partner with you with this particular brand and product that can meet your needs." So that's an easy sell, then, because that's exactly where I was going. That's what I need. And so the brands that are doing that well, that are investing in relationship as opposed to transaction are the brands that are winning. And so it's a shift away from convincing someone to buy towards someone automatically buys because they feel that you're a part of their life, you're part of their community. They've invited you in. I love that expression. Every time you buy a brand, you invite them into your life. And we have to respect those invitations as brand owners. And we think, okay, how can we build a relationship now? In that AI future B2M world, all you have is relationship actually, because there's a huge commoditization of product with an always-on consumer who will always be ready to buy. Why should they buy your product? Well, they only buy yours if they feel some kind of affinity to you. If they're going to call through the AI agent, "Actually, no, I don't want anything. I want that particular brand, please." Then there's a reason they'll ask for that. As a human, there's a reason you're asking for a particular brand because you have an affinity to the brand. And that's where the secret of success is gonna be. It's gonna be predictive. It's gonna be heavily data based, but ultimately, it's about relationship.

[00:22:38] Phillip: Lindsay, you mentioned the blue dot consumer thesis that Ken has spoken a lot about. Ken, could you actually define that for us here on the podcast?

[00:23:37] Ken Hughes: Absolutely. So if you think about commerce, the way commerce worked in the 80s and 90s, You went to a store, you physically went to a store, to a bank, to a hospital, whatever the place was that you had to get your product. Meaning again, that you did all the work. So if you open up one of those big old paper maps, there was a lot of work involved for you. We used to drive cars with these things, was hilarious. And you would know where you are. You'd know where you were going. You'd have to navigate your way between a and b. That's a lot of work.

[00:24:03] Phillip: Mmhmm.

[00:24:04] Ken Hughes: So you kind of grew up knowing that you're a small part of the big world, that you're maybe in an inconsequential part of the big world. And you can look at it as a customer journey or whatever. But then the blue dot – which is basically the Google Maps, little blue pulsing dot in the middle of your screen – came along. And that location chip inside the phone changed everything because now you're not in the inconsequential part of this big world. You are the world. That the world is shown only from your perspective. And as you move through it, the world and the frame moves around you. And that was a game changer for business because actually not only did it spawned the whole direct to consumer channel, which of course Uber is a blue dot product, we bring the car to you. And why you go to a dentist when you can just get your teeth straightened or whitened at home now? So that's one part of it. But the real part of it was the idea that we're the important part, the brand, the product, the service. No, no, you're not. The customer is the important part. They can survive perfectly well without you. They have hundreds of other options they can choose. And so really, it's about putting the customer at the center.

[00:25:00] Ken Hughes: It's a true customer centricity metaphor in terms of, okay, they're pulsing away. They're looking for products. They're looking for services, but they are moving. They're continuously moving. Unless you move with them, you move off frame and you're gone. And so this is the idea as we go through our lives, again, going back to the contextual piece, as we move through our lives with various needs, unless I as a brand are moving with you, I'm going to drop out of the frame. So I need to be close to you. I need to know what's going on in your life. I need the data. I need to understand your needs better than you even understand your needs if I'm going to be one step ahead. And so it's a fascinating kind of reframing of is your business blue dot? Because anyone listening to this, if your focus is on your channels, your product, your service, your distribution, you're not blue dot because you're focused on you. Whereas the moment you move to the customer focus, you think, where is your customer? What are they doing? What do they need? Can we predict what they might need? And then can we have that product ready for them? Now you're running a blue dot business.

[00:25:55] Phillip: It makes me think of our series Visions which began a few years ago first as a, you know, a big futuristic trends report, and now we run it every year as a summit series. Um, when we launched it, we launched it with a study of John Berger who's an art critic. And diving into his big thesis that perspective makes the eye the center of the visible world. And when you start forcing everything through a particular person's perspective, I sort of take things to the logical end. It's like, well, hyper personalization, everything, sort of the minority report future where every surface becomes an advertising surface, everything is hyper-personalized for just Ken. You know, everything is just the way that Ken wants it and Ken sees it. And then everything is hyper-efficient. Advertisers are the ones that are most likely to convert are the ones that are shown to Ken. And I think about the world as well, isn't that just such a shame, because at least here in The States, I only buy Dawn dish detergent here in my home. But I think the world is a richer world because I know that Palmolive exists.

[00:27:16] Phillip: And I see Palmolive ads. And I don't know that I would like a world where I only know that one dish detergent exists. I think I like a world where I see lots of different things, and I know they exist. And I feel like the world is a richer place because we know that things exist that we don't consume. I feel like we like things. It's a romantic ideal, but I know that things exist that I don't buy and that I never will buy. But I know that the world is bigger than what I personally prefer. And I know if those choices were taken away from me – and I'm getting a little waxing, philosophic here, but maybe that's your job, Ken – I feel like if, there's, sort of like a beauty and the beast effect, where I might pine for something more than this provincial life if it were all taken away from me, I'd wonder what else might be out there. But that's just me. Is there an effect there that you could put your finger on and say that that is something that's observable that we could maybe want to steer away from?

[00:28:23] Ken Hughes: It is. I mean, the desire for discovery is interesting. Curiosity and discovery are very interesting things and they give us dopamine rushes. And so the idea of just being limited to one thing...

[00:28:33] Phillip: Yeah.

[00:28:33] Ken Hughes: It takes away that dopamine hit. And at the same time, you can look at the division of social media today. And we all know that you see what you want to see, you've built your own echo chamber. And we've all heard the reports of opening up a video and sitting on the couch with your partner, and you see one set of comments, they see another set of comments on the same video because of who you are. And so we already have a hugely divisive echo chambers being built. And Gen Z and Gen Alpha are very used to that, but unfortunately, they don't realize it so much. So they're not zooming out. They just assume that this is the way the world is. And so, I think for lower involvement products, when you're talking about about dish soap and things, the lower the involvement of the product, the less likely the consumer is to care actually. As long as it meets their needs. The higher involvement you go, then they do start to care and they start to... But then people have relationships with all sorts of products.

[00:29:22] Ken Hughes: And I think, again, it's to what you're getting from your purchase. You're getting the functional transactional piece, whatever that is. But there's also obviously an emotive piece to every purchase you make. And no matter how involved, low or high. And so the brands are trying to dial into that. They're trying to say, how can we I mean, one of my favorite examples to this day is the Red Bull. So if Red Bull was brought out on the market tomorrow, it was a brand new product that never had existed before and there was some kind of taste test like a Pepsi challenge and it was the feasibility study phase and they said, "Here, taste all that please, and would you buy that?" Like 99 out of a 100 would say, "god, god, no. It tastes like cough syrup. I'm never buying that." "Okay. And by the way, it's twice as expensive per milliliter as any other drink on the market... And it's gonna be in a smaller can but more expensive." Like, nobody would buy it. But nobody buys Red Bull really for what's in the can, do they? I was I was skiing once a couple of years ago, with my kids. And the 25-year-old snowboarder sat down next to us, you know the type: super cool, took the helmet off, dreads just spilled out. And he had a big Red Bull tattoo across his neck, like on his neck. And I thought like, wow, that guy was really love soft drinks. But the point was that this was his tribe. And if you think about the word branding where it comes from, branding comes from the cattle brand in the old days of owning something and branding, physically branding your property. And here he was carrying a commercial brand. He had sat in a chair for hours and hours and hours to get this colored tattoo across his neck. And he had branded himself with a commercial brand because to him, that's not a product. To him, Red Bull is a tribe. It's who he is. It's who he self identifies as, danger or adrenaline. And that's when you know that you've pushed past product into relationship and into into space. And that's where that's the the desire for every single brand to get to that place, to get to a place where it isn't just about the product you're buying, it's actually about the...what the customer is feeling because once you've engaged the heart, once you've engaged feeling, then you've got the foundations for customer lifetime value, for loyalty, and for tribal belonging.

[00:31:27] Lindsay: In this era right now, where consumers are thinking about shopping constantly, but they have different rules of engagement with brands themselves. For instance, a common point of frustration is being forced to create an account when you're logging in. So one thing that I'm interested in is what is the disconnect that happens with brands? You know, why do we connect with things like chat GBT in a different way than we do with brands themselves? Why are we more willing to kind of bear our souls when we're chatting with something like AI, but we still have a disconnect when it comes to the way that we engage with brands?

[00:32:01] Ken Hughes: I think we inherently distrust brand conversation because underneath it all, we know that the brand is trying to sell us something. That's it. It's that simple. We know that the brand has a megaphone in their hand and they want us to buy their product. And we see through that. In the next generations, as these generations come along, they see through it faster and faster. That's why you have the death of influencer shopping now. We're starting to see the end of that. We're like, "I don't really care that you're saying that because you've been paid to say that. I'm actually more interested in what real people have to say about the product." So it's more about users and consumers talking as opposed to an influencer talking. You're seeing the push for depth of search. And so the idea of what a brand has to say about itself is a little bit pointless. But what the users have to say about you as a brand—we're very interested in that. So that's the peer-to-peer economy in those conversations. And it's really the authenticity that's missing in the brand conversation. The brands that—again, it's a bit like dating. If you went on a first date and the person just talked about themselves again and again, you probably wouldn't go on a second date, would you? And that's what we do in branding and marketing.

[00:33:06] Ken Hughes: We talk about ourselves all the time. "Here's the product, here's the features, here's what it does"—and we don't actually ask the customer, "What's going on for you? Where can we be for you? What do you need?" And so the moment that—I think the next generation is much more attuned to that. They're looking for brand partners in their life. What I find really interesting about some industries, like the financial services industry, insurance and banking — very few of us have an emotive relationship with the bank we use. They mistake that for loyalty. They look at the stats and say, "Ken's been a customer for twenty-five years, he's a loyal customer." No, he's not. He's just a customer too lazy to move. And so what you need to look at is that ease of shopping piece that we're talking about. The easier you make it for people to buy, they'll buy. But the minute you put any bit of grit in the machine, like opening up an account or "give me your email" — no, go away. Boom. You lose them. As quickly as that always-on shopper will press the button to buy, they will equally just shut the thing down in that moment. And remember, again, looking back at generations — Boomers, Gen Xers, and some of the early Millennials — we grew up with the little white circle buffering on the screen.

[00:34:18] Ken Hughes: That was just how we connected to the world. And so we are a slightly more patient generation. When something goes wrong, we'll wait for it to clear. We'll wait for it to come back. We'll wait for that brand to send me the right one. The next generation has never seen that white circle in their life. They don't know what it means, they certainly don't tolerate it, and the moment Netflix hangs, they're on Disney Plus. I've seen this with my kids — they're 18, 19 — the moment anything hangs, they just change operator. Bump, gone. Whereas you have older generations who will wait for it to clear, for it to push its way through, wait for it. And that's it. There's just an immediacy to satisfy my desires now. For commerce, that's really interesting, because the idea of brand loyalty — if you go back, you probably have to go back even into the Traditionalist section and Boomers to find loyalty. "I go to this supermarket and I always must go there because I've always gone there, and it would be bad to go somewhere else." They have a loyal mindset. And then as you go down the generations, you see the complete dissolving of loyalty. And it's a case of, "I will use whoever I need to use to satisfy my needs."

[00:35:22] Lindsay: I'm really fascinated by what you're talking about, especially as it relates to trust and the way that we do or do not trust brands and then how that may shift to how we do and do not trust each other. I'm thinking I'm a millennial, and I remember watching commercials on TV and telling my parents, "I need to buy Pantene Pro V because it's gonna make my hair shiny, and that's what they're telling me. Hair so healthy it shines." And I remember my dad telling me, "they're trying to get you to buy something. They're trying to get you to go make a purchase because that helps them. You know, you need to think about it critically that way." And now I have the same conversations with my seven-year-old daughter who is hearing somebody who seems just like a normal person on YouTube or on social media who's talking about something subtly enough that she is convinced. "Oh, I need this thing." And it's not even a brand necessarily that's presenting it to her. It's just a person who has a shared interest with her. And so, what does that do, not only to the way that we trust or don't trust brands, but do or don't trust each other in this context?

[00:36:23] Ken Hughes: Yeah. I mean, think there's a whole generation of people and we hear it all the time. Where did you hear it? My kids – my favorite one is they come in, they're dropping massive, like huge thing like, "Oh my God, the Pope just died." "Oh, really? Where'd you hear that?" "TikTok." "Oh he's not dead." And so this idea of...and obviously AI accelerates that hugely, where, you know, the amount of just noise in the marketplace now. And actually, I really welcome AI and fake news in that space because until now there was that kind of, "I believe, the Internet told me, and therefore it's true." And so now, because AIs so pervasive and there's so much fakes out there, actually that generation now are finally getting to that critical place of, "Hang on. That mightn't be true." And so there is an interesting dissolving of trust that don't trust everything you see on the screen anymore. And that's probably a good thing for society, but not a great thing for advertising. Because now all the stuff that we used to do on advertising, we used to say you need that, you need this because of this. And now people think, "do I? Not too sure." And so the critical thinking part is very, very interesting. What's also interesting though is that the age of consumerism keeps dropping. So the definition of consumer is someone who has access or has their own money and makes a critical decision of their own what they buy. If we all think back, what was the first thing you ever bought? It's really interesting.

[00:37:40] Ken Hughes: So for some people, it might be a CD. Uh, you remember your first CD that you bought. But you can probably go backwards a bit in terms of your influence and go, "what was the first thing I asked my parents for?" Like, it was probably some kind of toy that you want this and maybe maybe you saw it on TV or whatever. And nowadays, the first time kids become consumers is often in the virtual space using virtual currency on a virtual product. It's something like Fortnite to buying a Fortnite skin and they're five or six or eight. And they're...They need money, real money to load up to convert that to virtual currency to buy a virtual product in a virtual environment. You go, "Wow, that's a bit weird." So they're eager to become consumers. But there's also an invisibility to the price piece. We haven't talked about price yet. And so if you want to get into the moral piece around this, around consumption, of course, every product costs money. And the easier it is to buy something, the shorter distance between consumer and shopper, the more likely you'll activate that without conscious thought of the impacts on your bank account. And so this is one of the big huge conversations has particularly post pandemic, but it was already happening pre pandemic, the move away from cash to digital currency. That's okay for most people, but there are people who would be very low budget, low income households that would still have withdrawn cash from an ATM on a weekly basis to budget physically through the week because the invisibility of purchasing digitally causes them huge issues and huge debt.

[00:39:04] Ken Hughes: And where we are now with commerce generally in terms of the ease and the perpetual, let's buy it all, let's have everything, come on, let's keep going. Problem The with that is at the end of the month, the end of the second month and third month, you've got huge credit card debt. And that's quite invisible. There's a Dan Aarley, a very, very famous experiment, Dan Aarley, behavioral scientist, with pizza. And one day, he had a pizza in a restaurant for sale, and you could buy the pizza for $10 or you could pay – I can't remember what it was – 10¢, 20¢ per bite. And basically, was a kind of an experiment in happiness. And so the average number of bites to consume the pizza was the same. But of course, nobody liked paying per bite because it took away all the joy of eating pizza because you're continuously adding up how much the pizza costs you. But you had a clear clarity on how much it would cost you at all times. When we take the clarity away of how much things cost you because it's just one click, one swipe, it's paid with your face, it's at your Apple, it's at your Google Pay, it's all very invisible. And so it is dangerous to give people that perpetual commerce ease of payment piece for some people, not for everybody, but for some people, there's a moral question around that.

[00:40:14] Phillip: I think that brings us to one of our last points of data from the research that we'll cover here today with you, which is... Our data shows that smartphones are the primary portal for people who are browsing and buying as their device of choice. But they're also starting to purchase across other channels like connected TV or smart speakers, although not as much as I think Amazon would have liked, but they're using multiple devices to do so. And does this surface level spread of shopping and shopping consciousness across all of these surfaces, is that diluting their sense of always-on perpetual consciousness of shopping or is it intensifying it, you believe?

[00:41:06] Ken Hughes: I think it intensifies. Every turn here, you're a shopper — no matter where you are. Whether you're talking to your in - home Siri or Alexa, using your watch, using your TV, or your car. As we go now in terms of autonomous driving and AI everywhere, everyone's used to twelve months of using their ChatGPT vocal feature, and now they're talking. Because there's a huge shift between typing to ChatGPT and having a text conversation. And when you move — we've all had the experience — when you move to voice and you're having this really humanoid interaction with it, the trust levels just go flying up. I mean, you completely forget that it's AI, it's just the internet scraping. And you just believe it to be true, and everything it tells you is true, and therefore what it recommends to you in terms of shopping is true. And so I think the intensification is definitely there, the more devices we throw in. And again, this idea of "I'll have that, I'll have that" — and no matter where you are — is quite fascinating. People are in various states of their journeys. But again, I'll go back to my point about predictive and about what you need versus what you want. And this opens up the lecture on the ethics of marketing.

[00:42:13] Ken Hughes: It's quite an interesting debate around what we need. And you mentioned how the hierarchy of needs are in here. What we need and what we want. And in between those two spaces is the invention of the social science of marketing. Like, just because you need, you know, if you're thirsty, you need water. But now I'm gonna sell you a, like, a $5 can of liquid death, which is just water. But I've done such a good branding marketing job, Randy. You're gonna pay $5 or $6 or $10 for Fiji, Fiji water. Fiji because water is magic, it comes from the volcanoes and if you drink that, you're going to be beautiful. It's just water, you know. And so and we buy Evian and that's twice the price of the store water, but it's still just water. But we don't tell people that. So marketing is the conversion of a core need to a want. And a want is to do with desire. And once you've got human desires... This is from Edward Bernays, who was Sigmund Freud's nephew. And he traveled from Austria to New York in the 40s and 30s, I think even. And he was he set up what we would call the first ad agency today. It was a PR agency, but he was the founding...Madman's all based around that.

[00:43:19] Ken Hughes: And he took his uncle's work around the human psyche and the human mind. And he was one of the first people to realize if you want to sell someone a refrigerator or an automobile, you don't talk about the features and the product. You talk about, like...your neighbor just bought a fridge. Her husband's putting better than you are. You know, so things like jealousy, fear, sex – they all sell way better than function. And that was the beginning of the birth of advertising and marketing. And so today, I think I'm often kind of ashamed and sad with the amount of technology we have today. If you showed that to the guys in the fifties running those agencies and said, someday, we'll have a computer in everyone's pocket. You can actually talk to them now with AI one on one based on data they bought in terms of purchasing. And we can predict their needs, and we can have they would wet their trousers with that ability. But yet, to this day, we still actually are quite blunt with how we use the technology. We're still kind of using the megaphone and shouting at people saying, "Oh, I saw you were looking at surfboards on this website last week. Here's my surfboard." Yes, that's really blunt, you know.

[00:44:22] Ken Hughes: We could be much better in terms of who you are — getting as much data as we can on you and trying to develop a relationship with you — as opposed to transactionally stealing your money, which is, back to your point, Lindsay, about trust. A lot of consumers don't see the brand relationship as an equal relationship. They see it as a toxic relationship where the brand just wants something from us. And they're not necessarily interested in giving us something back. And that customer lifetime value argument—that word is thrown around boardrooms all over the world. What does it mean? It means that there should be some kind of lifetime loyalty. It's like slipping a ring on someone's finger in a human relationship. So we want that from our customers, but then we don't give them anything back. In fact, if you look at most loyalty programs—buy nine cups of coffee, get a tenth coffee free. That's not loyalty. That's entrapment. That's like, "Does this hanky smell like chloroform to you?" You're trying to hold the customer against their will. And so I think from a consumerist point of view, any brand or business listening to this, you've got to realize that if we step into the relationship space—if we step into building relationships with customers with depth, with emotional intelligence—and our product is obviously there as the conduit for the needs they're trying to meet.

[00:45:38] Ken Hughes: But if we make it about them and not about us, if we make it about where where they are, that's the secret. And that's the secret for longevity. It's why Taylor Swift has done so well in the pop industry, because she's invested in the relationship, not the product. And she's super famous for this heart hand building. The heart hand point is half of that heart is created by me, the product, the brand, the music, the videos, and the other half is the fan and the tribe. And together, together we make something magical. And so, it's all about relationship. And that's why she's worth twice the value of any other pop brand in the world. She's twice as valuable as Madonna, because she's invested in relationship and a product. I think we can all learn from that. We can all look at how can we deepen the relationship with product. And then as various things come, as they always will, technologies and new channels and new ways of meeting consumers' needs, will we always be there because the relationship is there because we've invested in that part.

[00:46:27] Lindsay: It's something that brands do struggle to be able to do. So I'm curious, Ken, brands are thinking of obviously focusing on holiday shopping and trying to be be ready to close out the year strong. How do brands move into this era and which channels, which devices would you say present the greatest opportunity for brands to create that kind of relationship at this point in time?

[00:46:49] Ken Hughes: Oh, I don't think you can be that granular about which I think is more strategic. I think you have to come up over a level here. I don't think can say, mean, it's all devices. It's all contact points. I think if you look at the way we talk to consumers today, if you think about a cube, it's like several points in the cube. It can be anything. It can be swipe up shopping. It can be third party website. It can be your own website. It can be your own campaign. Whereas previously, was a much more one directional thing. I think the shift is to move away, look, if you want to talk about context in the holiday season itself, just again, try and be there for your customer before they need you. So it's a case of what would people need. And it's not about forcing product down people's throats. It's not about stuffing warehouses and pallets. It's about starting from the other end of the customer journey and saying, right, how do we understand what Lindsay needs from us and how do we then frame our product and our service and whatever you are selling in that context because then you have Lindsay's attention because Lindsay thinks oh that's exactly what I need great as opposed to trying to fight your way through the tide of noise in the marketplace, you're just another product screaming for attention in a really busy holiday season.

[00:47:55] Ken Hughes: And you're just going to end up using price and promotion tactics. It's a cul de sac. And so it's again, it's all about as you would also do in any human relationship, one of the kindest things you can ever do to your partner is to walk in the door after a hard week or day at work and say, "is there anything I can do for you today?" Like that one statement can deepen relationship any given day in your human relationships, either with a friend, or certainly with your lover and partner, husband, wife, I don't know, maybe of all three. I don't judge. So, the idea of, "what can I do for you today?" Those few words out of anyone's mouth is like, "oh, wow. Okay. Oh, this you can do this. This would be a great help." And immediately, you've got a closeness of relationship, whereas brands are very poor at asking their customers, "what can we do for you today?" And if at any time you actually go to them and say, "look, I'm having this problem." "Sorry. No, terms and conditions." "No. Sorry. Twelve month contract." "No. Sorry." You know, completely the opposite. It's basically talk to the hand. That's super damaging for relationships. And so really, a lot of brands and businesses could do with emotional intelligence training, human relationship training. It's why actually EQ and Gen Z entering the workplace is a good thing.

[00:49:01] Ken Hughes: They're much more emotionally intelligent than previous talent being recruited. And it's why people like Esther Perel and Brené Brown are very popular on the conference circuit in leadership, because we recognize that success and connection now is relationship-based. It's not product-based or power-based or ego-based. And it's the same for brands. The brands that get that tend to be more startup brands. Back to your comment about Taylor Swift — the fact that you feel you have a parasocial relationship with this person. You've never met her. You've never spoken to her, is my guess. Yet you think she's your best friend. And she's a role model for your seven-year-old daughter, she's her cool older sister, and she's their cool aunt. That's all fabricated at scale through consistent relationship conversation. Every touchpoint — whether it's social media, digital, the product itself, the Easter eggs, the anticipation, the gamification — it's all strategically placed to end up with a deeply one-on-one relationship feeling, but done globally at scale. And so she can stand in an arena of 70,000 people and every single person in that arena thinks she's just singing to them. And that's the return on investment. That's the return on investment on consistent relationship, customer experience, connection.

[00:50:15] Phillip: Ken Hughes, pleasure meeting you. I'm so glad that you joined us here on Decoded. Where can people get Taylormaking? Where can people get the book?

[00:50:24] Ken Hughes: The book is on Amazon, and people keep asking me for an audiobook. Don't have time. I'm going to ask Taylor Swift to read the audiobook. It'll just be faster. The books on Amazon do. It's a good book. It's a good... Says the author. {Laughter} It's 12 chapters. It's the playbook of connection in terms of any brand, any business, whether your mom and pop business on the corner, owning your laundrette, or whether you're a global business. It is a book on how you better connect with the modern consumers. Yeah. It is a good fun read, and there's good fun stuff in there, like playlists and secret hidden videos. I had to write a book full of Easter eggs too. And so yeah, it's a good book and kenhughes.com for all the other stuff. I have YouTube channel and you know, you enjoyed today's content and you want have a look at some more, hit me up there.

[00:51:03] Phillip: Appreciate it. Thank you so much.

[00:51:04] Lindsay: Thanks, Ken.

[00:51:05] Ken Hughes: You're very welcome. Love it.

[00:51:10] Phillip: Thank you so much for joining us. Thank you to Ken for sitting down for this interview with us. Next time on Decoded, we're diving into the collapse of the linear shopping journey. We're no longer in linear funnels anymore. I believe we're heading into loops. And so we're gonna unpack that because commerce happens anywhere and everywhere now. And what that means, I believe that the collapse of linear shopping journeys means that we have to engage in a new better way, and that means we're in the age of context. So join us next time as we explore commerce in the age of context when buying journeys collapse. And that'll be with consultant and writer Melissa Minkow, and I am Phillip Jackson with Lindsay Trinkle. The future of commerce is what you make it, and future commerce helps you to shape that future.