How realistic is the idea that economic incentives will coax people to choose a single digital ecosystem?
By Brad Berens
Writing near future science fiction lets me exaggerate a handful of features of life today to see what life tomorrow might look like. When I put these exaggerations into a story, it makes me get concrete in a way that looking at data doesn’t.
Recently, I shared a micro-fiction (1,000 words or less), a short science fiction story called “Bubbles,” in which I explored how our biggest tech and retail companies might nudge Americans into joining one community of products and services to the exclusion of all others.
You don’t have to read “Bubbles” to understand this week’s piece, but–spoiler alert–I will talk about the story in what follows because I want to dig into how possible my mild consumer dystopia actually is. In other words, I’m following the bubbles of the story to the surface of reality. (Hence this week’s illustration.)
In “Bubbles,” Dex is a member of the Amazon/Google/Apple* ecosystem. Dex is attracted to Lyla after they swim next to each other at the Stratford Gym, but he can’t find her contact information. At first, he worries that she is a member of the competitor Walmart/Microsoft/Meta ecosystem, but then finds that she belongs to neither.
Ultimately, Dex doesn’t pursue Lyla because it isn’t worth the trouble to figure out how to bridge the gap between his world and hers.
How realistic is this?
On the “not very” side, it’s hard to imagine that any retail business would take only one form of payment: Apple Pay but not Google Pay, MasterCard but not VISA. Most brick and mortar businesses take any form of payment to make a sale.
However, when we’re talking about trillion-dollar companies—like Amazon, Apple, Microsoft, and Google today and the ecosystems in “Bubbles”—they can afford to take a longer view.
It’s hard to order people to change their behavior, but it’s comparatively easy to nudge behavioral changes into existence with money.** If you remember the early days of Uber, the company burnt through much of its $13 billion of venture capital subsidizing rides to change rider behavior, training riders to think of Uber rather than their cars or taxis… only to raise prices after the behavior changed.
The ecosystems of the story could do something similar: paying businesses to be Amazon or Walmart exclusive in the short term to build exclusive communities, only to cut off those subsidies once the communities were established and the new behaviors baked in.
Also, today, there are businesses that don’t take all forms of payment. WinCo, a supermarket chain, doesn’t take credit cards (only cash, check, and debit), presumably because its margins are so slim that it can’t afford credit card processing fees. The first time I stumbled across a boba tea shop that didn’t accept cash, I was surprised… only to learn that there’s no Federal requirement that a business accept cash (some states do require it).
Affective communities + nudges + polarization = “Bubbles”
“Bubbles” exaggerates some recent thinking from McKinsey about how brands and retailers can succeed in our rapidly changing, post-COVID world.
In one recent webinar, McKinsey argued, “When retailers invest in this concept of community, they connect with their customers on the deepest levels. They build relationships that drive loyalty, which, in turn, drives sales.”
And in an earlier article, McKinsey described a “community flywheel” in which (warning, a lot of management consultant jargon is coming… you can skip to the next paragraph if your tolerance is low):
Step one is to identify the communities in which a brand wants to earn the right to participate, whether it’s made up of churchgoing moms in Utah, yoga enthusiasts in London, or vegan parents everywhere. This is an evolution from targeting consumer segments, which are anchored in demographics or individual need states, to targeting communities of people who share similar interests and values—communities of “shared relevance.”
Brand communities are nothing new:*** Harley Davidson, Peloton, and Patagonia are just three companies where affective (emotional) ties around a brand bind groups together. McKinsey’s twist is that it wants brands to find existing communities into which they can insert themselves.
I exaggerate this in “Bubbles” by asserting a tribal dimension to these communities, which isn’t a big stretch given how increasingly polarized American society has become. McKinsey’s anodyne notion of community downplays the sad reality that every time you create an “us” you run the risk of also creating a “them.”
Dex and Lyla aren’t just two people chatting poolside, they belong to different communities that share geography but little else—like the Capulets and Montagues in Romeo and Juliet or Fox News and MSNBC viewers today.
We can already see glimmers of ecosystems here in 2023. Amazon’s acquisitions and buildouts in grocery and health care that connect seamlessly to its ecommerce business are one example. Apple, with its launch of interconnected services on top of hardware, is another. Today, those ecosystems are not mutually exclusive, and it’s easy to be both an Apple user and an Amazon customer.
But what about tomorrow?
Brad Berens is the Center’s strategic advisor and a senior research fellow. He is principal at Big Digital Idea Consulting. You can learn more about Brad at www.bradberens.com, follow him on Post and/or LinkedIn, and subscribe to his weekly newsletter (only some of his columns are syndicated here).
* The least realistic thing about “Bubbles” is that Amazon, Google, and Apple would ever team up to create an ecosystem.
** In this case, I’m nudging readers to buy the “final edition” of the book Nudge by Richard M. Thaler and Cass R. Sunstein on Bookshop.org rather than Amazon via my choice of link.
*** See the terrific book Friction by my friends Jeff Rosenblum and Jordan Berg for more on this.
See all columns from the Center.
November 9, 2023