0:00:00.888,0:00:02.976
Thirteen trillion dollars in wealth

0:00:03.000,0:00:05.976
has evaporated over the course[br]of the last two years.

0:00:06.553,0:00:08.850
We've questioned the future of capitalism.

0:00:08.874,0:00:11.226
We've questioned the financial industry.

0:00:11.250,0:00:13.226
We've looked at our government oversight.

0:00:13.250,0:00:14.944
We've questioned where we're going.

0:00:14.968,0:00:16.277
And yet, at the same time,

0:00:16.301,0:00:19.177
this very well may be[br]a seminal moment in American history,

0:00:19.201,0:00:23.526
an opportunity for the consumer[br]to actually take control and guide us

0:00:23.550,0:00:25.726
to a new trajectory in America.

0:00:25.750,0:00:27.475
I'm calling this The Great Unwind.

0:00:27.499,0:00:28.501
(Laughter)

0:00:28.525,0:00:31.126
And the idea is a simple, simple idea,

0:00:31.150,0:00:35.230
which is the fact that the consumer[br]has moved from a state of anxiety

0:00:35.254,0:00:36.412
to action.

0:00:36.436,0:00:40.675
Consumers who represent 72 percent[br]of the GDP of America

0:00:40.699,0:00:44.143
have actually started, just like banks[br]and just like businesses,

0:00:44.167,0:00:48.251
to de-leverage, to unwind[br]their leverage in daily life,

0:00:48.275,0:00:51.226
to remove themselves[br]from the liability and risk

0:00:51.250,0:00:54.126
that presents itself as they move forward.

0:00:54.150,0:00:56.883
So, to understand this --[br]and I'm going to stress this --

0:00:56.907,0:00:59.070
it's not about the consumer[br]being in retreat.

0:00:59.094,0:01:00.454
The consumer is empowered.

0:01:00.478,0:01:03.735
To understand this, we'll step back[br]and look at what's happened

0:01:03.759,0:01:05.654
over the last year and a half.

0:01:05.678,0:01:07.897
So if you've been gone,[br]this is the CliffsNotes

0:01:07.921,0:01:09.545
on what's happened in the economy.

0:01:09.569,0:01:10.573
(Laughter)

0:01:10.597,0:01:13.667
Unemployment up. Housing values down.[br]Equity markets down.

0:01:13.691,0:01:15.297
Commodity prices are like this.

0:01:15.321,0:01:17.569
If you're a mom trying to manage a budget,

0:01:17.593,0:01:20.258
and oil was 150 dollars[br]a barrel last summer,

0:01:20.282,0:01:22.055
and it's somewhere between 50 and 70,

0:01:22.079,0:01:23.242
do you plan vacations?

0:01:23.266,0:01:24.424
How do you buy?

0:01:24.448,0:01:27.368
What's your strategy in your household?[br]Will the bailout work?

0:01:27.392,0:01:30.567
We have national debt, Detroit,[br]currency valuations, health care --

0:01:30.591,0:01:31.888
all these issues facing us.

0:01:31.912,0:01:34.638
You put them all together,[br]mix them up in a bouillabaisse,

0:01:34.662,0:01:37.993
and you have consumer confidence[br]that's basically a ticking time bomb.

0:01:38.017,0:01:40.994
In fact, let's go back and look[br]at what caused this crisis,

0:01:41.018,0:01:43.496
because the consumer,[br]all of us, in our daily lives,

0:01:43.520,0:01:45.996
actually contributed[br]a large part to the problem.

0:01:46.020,0:01:48.800
This is something I call[br]the 50-20 paradox.

0:01:48.824,0:01:51.576
It took us 50 years

0:01:51.600,0:01:55.356
to reach annual savings ratings[br]of almost 10 percent.

0:01:55.380,0:01:56.576
Fifty years.

0:01:56.600,0:01:59.478
Do you know what this was right here?[br]This was World War II.

0:01:59.502,0:02:01.316
Do you know why savings was so high?

0:02:01.340,0:02:04.650
There was nothing to buy,[br]unless you wanted to buy some rivets.

0:02:04.674,0:02:07.604
What happened, though,[br]over the course of the last 20 years,

0:02:07.628,0:02:11.788
we went from a 10 percent savings rate[br]to a negative savings rate.

0:02:11.812,0:02:13.465
Because we binged.

0:02:13.489,0:02:17.282
We bought extra-large cars,[br]supersized everything,

0:02:17.306,0:02:20.014
we bought remedies[br]for restless leg syndrome.

0:02:20.038,0:02:23.944
All these things together[br]basically created a factor

0:02:23.968,0:02:26.556
where the consumer drove us[br]headlong into the crisis

0:02:26.580,0:02:27.853
that we face today.

0:02:27.877,0:02:34.154
The personal debt-to-income ratio[br]basically went from 65 to 135 percent

0:02:34.178,0:02:36.686
in the span of about 15 years.

0:02:36.710,0:02:38.797
So consumers got over-leveraged.

0:02:38.821,0:02:42.002
And of course our banks did as well,[br]as did our federal government.

0:02:42.026,0:02:44.092
This is an absolutely staggering chart.

0:02:44.116,0:02:48.723
It shows leverage,[br]trended out from 1919 to 2009.

0:02:48.747,0:02:51.399
And what you end up seeing[br]is the whole phenomenon

0:02:51.423,0:02:55.279
that we are actually stepping forth[br]and basically leveraging

0:02:55.303,0:02:58.482
future education, future children[br]in our households.

0:02:58.506,0:03:01.606
So if you look at this in the context[br]of visualizing the bailout,

0:03:01.630,0:03:04.126
what you can see is,[br]if you stack up dollar bills,

0:03:04.150,0:03:06.392
first of all, 360,000 dollars

0:03:06.416,0:03:08.935
is about the size of a five-foot-four guy.

0:03:08.959,0:03:13.236
But if you stack it up, you see[br]this amazing, staggering amount of dollars

0:03:13.260,0:03:16.126
that have been put into the system[br]to fund and bail us out.

0:03:16.150,0:03:18.315
So this is the first 315 billion.

0:03:18.339,0:03:20.112
But I read this fact the other day,

0:03:20.136,0:03:23.446
that one trillion seconds[br]equals 32,000 years.

0:03:23.470,0:03:24.787
So if you think about that,

0:03:24.811,0:03:27.307
the context, the casualness[br]with which we talk about

0:03:27.331,0:03:29.584
trillion-dollar bailout here[br]and trillion there,

0:03:29.608,0:03:32.993
we are stacking ourselves up[br]for long-term leverage.

0:03:33.017,0:03:35.669
However, consumers have moved.

0:03:35.693,0:03:37.732
They are taking responsibility.

0:03:37.756,0:03:40.285
What we're seeing[br]is an uptake in the savings rate.

0:03:40.309,0:03:43.024
In fact, 11 straight months[br]of savings have happened

0:03:43.048,0:03:44.695
since the beginning of the crisis.

0:03:44.719,0:03:47.083
We're working our way back up[br]to that 10 percent.

0:03:47.107,0:03:49.037
Also, remarkably, in the fourth quarter,

0:03:49.061,0:03:52.442
spending dropped[br]to its lowest level in 62 years --

0:03:52.466,0:03:55.126
almost a 3.7 percent decline.

0:03:55.150,0:03:59.030
Visa now reports that more people[br]are using debit cards than credit cards.

0:03:59.054,0:04:02.447
So we're starting to pay for things[br]with money that we have.

0:04:02.471,0:04:06.126
And we're starting to be much more careful[br]about how we save and invest.

0:04:06.150,0:04:08.126
But that's not really the whole story,

0:04:08.150,0:04:11.067
because this has also been a dramatic[br]time of transformation.

0:04:11.091,0:04:13.717
And you've got to admit,[br]over the last year and a half,

0:04:13.741,0:04:15.809
consumers have been doing[br]some weird things.

0:04:15.833,0:04:18.124
It's pretty staggering,[br]what we've lived through.

0:04:18.148,0:04:20.844
If you take into account[br]that 80 percent of all Americans

0:04:20.868,0:04:22.264
were born after World War II,

0:04:22.288,0:04:24.021
this was essentially our Depression.

0:04:24.045,0:04:26.850
And so, as a result,[br]some crazy things have happened.

0:04:26.874,0:04:28.224
I'll give you some examples.

0:04:28.248,0:04:32.913
Let's talk about dentists, vasectomies,[br]guns and shark attacks.

0:04:32.937,0:04:34.725
(Laughter)

0:04:34.749,0:04:38.632
Dentists report molars --[br]people grinding their teeth,

0:04:38.656,0:04:41.019
coming in and reporting[br]that they've had stress.

0:04:41.043,0:04:44.465
So there's an increase in people[br]having to have their fillings replaced.

0:04:44.489,0:04:47.783
Gun sales, according to the FBI,[br]who does background checks,

0:04:47.807,0:04:50.901
are up almost 25 percent since January.

0:04:50.925,0:04:55.578
Vasectomies are up 48 percent,[br]according to the Cornell Institute.

0:04:55.602,0:04:58.006
And lastly, but a very good point,

0:04:58.030,0:05:00.606
hopefully not related[br]to the former point I just made,

0:05:00.630,0:05:04.093
which is that shark attacks[br]are at their lowest level from 2003.

0:05:04.117,0:05:05.638
Does anybody know why?

0:05:06.011,0:05:07.193
(Laughter)

0:05:07.217,0:05:08.385
No one's at the beach.

0:05:08.409,0:05:10.305
So there's a bright side to everything.

0:05:10.329,0:05:12.515
But seriously, what we see happening,

0:05:12.539,0:05:15.800
and the reason I want to stress[br]that the consumer is not in retreat,

0:05:15.824,0:05:17.839
is that this is a tremendous opportunity

0:05:17.863,0:05:20.457
for the consumer who drove us[br]into this recession

0:05:20.481,0:05:22.006
to lead us right back out.

0:05:22.030,0:05:25.372
What I mean by that is we can[br]move from mindless consumption

0:05:25.396,0:05:27.424
to mindful consumption.

0:05:27.448,0:05:28.608
Right?

0:05:28.632,0:05:29.707
(Applause)

0:05:29.731,0:05:31.763
If you think about the last three decades,

0:05:31.787,0:05:35.069
the consumer has moved[br]from savvy about marketing in the '90s,

0:05:35.093,0:05:39.070
to gathering all these amazing social[br]and search tools in this decade.

0:05:39.094,0:05:42.423
But the one thing holding them back[br]is the ability to discriminate.

0:05:42.447,0:05:43.784
By restricting their demand,

0:05:43.808,0:05:47.126
consumers can actually align[br]their values with their spending,

0:05:47.150,0:05:50.730
and drive capitalism and business[br]to not just be about more,

0:05:50.754,0:05:51.920
but to be about better.

0:05:51.944,0:05:53.921
We're going to explain that right now.

0:05:53.945,0:05:56.726
Based on Y&R's BrandAsset Valuator,

0:05:56.750,0:05:59.451
proprietary tool of VML[br]and Young & Rubicam,

0:05:59.475,0:06:02.359
we set out to understand[br]what's been happening in the crisis

0:06:02.383,0:06:03.924
with the consumer marketplace.

0:06:03.948,0:06:06.165
We found a couple[br]of really interesting things.

0:06:06.189,0:06:08.616
We're going to go[br]through four value shifts

0:06:08.640,0:06:10.976
that we see driving[br]new consumer behaviors,

0:06:11.000,0:06:13.057
that offer new management principles.

0:06:13.081,0:06:14.891
The first cultural value shift we see

0:06:14.915,0:06:17.541
is this tendency toward something[br]we call "liquid life."

0:06:17.565,0:06:18.715
This is the movement

0:06:18.739,0:06:21.820
from Americans defining[br]their success on having things

0:06:21.844,0:06:23.126
to having liquidity,

0:06:23.150,0:06:25.842
because the less excess[br]that you have around you,

0:06:25.866,0:06:28.018
the more nimble and fleet of foot you are.

0:06:28.042,0:06:30.512
As a result, déclassé consumption is in.

0:06:30.536,0:06:34.471
Déclassé consumption is the whole idea[br]that spending money frivolously

0:06:34.495,0:06:37.233
makes you look a little bit anti-fashion.

0:06:37.257,0:06:39.746
The management principle[br]is dollars and cents.

0:06:39.770,0:06:42.614
So let's look at some examples[br]of this déclassé consumption

0:06:42.638,0:06:44.066
that falls out of this value.

0:06:44.090,0:06:46.387
The first thing is,[br]something must be happening

0:06:46.411,0:06:48.487
when P. Diddy vows to tone down his bling.

0:06:48.511,0:06:49.525
(Laughter)

0:06:49.549,0:06:51.891
But seriously, we also have[br]this phenomenon

0:06:51.915,0:06:53.840
on Madison Avenue and in other places,

0:06:53.864,0:06:56.787
where people are actually[br]walking out of luxury boutiques

0:06:56.811,0:07:00.624
with ordinary, generic paper bags[br]to hide the brand purchases.

0:07:00.648,0:07:03.625
We see high-end haggling in fashion today,

0:07:03.649,0:07:06.126
high-end haggling[br]for luxury and real estate.

0:07:06.150,0:07:08.522
We also see just a relaxing of ego,

0:07:08.546,0:07:10.798
and sort of a dismantling of artifice.

0:07:10.822,0:07:14.669
This is a story on the yacht club[br]that's all basically blue collar.

0:07:14.693,0:07:16.867
Blue-collar yacht club --[br]where you can join,

0:07:16.891,0:07:20.126
but you've got to work in the boatyard[br]as condition of membership.

0:07:20.150,0:07:24.811
We also see the trend toward tourism[br]that's a little bit more low-key:

0:07:24.835,0:07:27.962
agritourism -- going to vineyards[br]and going to farms.

0:07:27.986,0:07:31.611
And then we also see this movement[br]forward from dollars and cents.

0:07:31.635,0:07:34.350
What businesses can do to connect[br]with these new mindsets

0:07:34.374,0:07:35.541
is really interesting.

0:07:35.565,0:07:37.410
A couple things that are kind of cool.

0:07:37.434,0:07:41.127
One is that Frito-Lay figured out[br]this liquidity thing with their consumer.

0:07:41.151,0:07:44.554
They found their consumer had more[br]money at the beginning of the month,

0:07:44.578,0:07:45.987
less at the end of the month.

0:07:46.011,0:07:48.024
So they started to change their packaging:

0:07:48.048,0:07:50.070
larger packs at the beginning[br]of the month,

0:07:50.094,0:07:52.114
smaller packaging at the end of the month.

0:07:52.138,0:07:54.857
Really interestingly, too,[br]was the San Francisco Giants.

0:07:54.881,0:07:57.126
They've just instituted dynamic pricing.

0:07:57.150,0:08:00.369
It takes into account everything[br]from the pitcher match-ups,

0:08:00.393,0:08:02.236
to the weather, to the team records,

0:08:02.260,0:08:04.664
in setting prices for the consumer.

0:08:04.688,0:08:09.719
Another quick example of these types[br]of movements is the rise of Zynga.

0:08:09.743,0:08:12.023
Zynga has risen on the consumer's desire

0:08:12.047,0:08:14.059
to not want to be locked in to fixed cost.

0:08:14.083,0:08:16.843
Again, this theme is about variable[br]cost, variable living.

0:08:16.867,0:08:18.739
So micro-payments have become huge.

0:08:18.763,0:08:21.342
And lastly, some people are using Hulu

0:08:21.366,0:08:23.438
as a device to get rid[br]of their cable bill.

0:08:23.462,0:08:27.052
So, really clever ideas there[br]that are being taken ahold of

0:08:27.076,0:08:29.247
and that marketers[br]are starting to understand.

0:08:29.271,0:08:31.901
The second of the four values[br]is this movement toward

0:08:31.925,0:08:33.230
ethics and fair play.

0:08:33.254,0:08:36.391
We see that play itself out[br]with empathy and respect.

0:08:36.415,0:08:38.036
The consumer is demanding it.

0:08:38.060,0:08:41.226
And, as a result, businesses[br]must provide not only value,

0:08:41.250,0:08:42.402
but values.

0:08:42.426,0:08:45.599
Increasingly, consumers are looking[br]at the culture of the company,

0:08:45.623,0:08:47.368
at their conduct in the marketplace.

0:08:47.392,0:08:49.060
So we see with empathy and respect

0:08:49.084,0:08:51.880
lots of really hopeful things[br]come out of this recession.

0:08:51.904,0:08:53.295
I'll give you a few examples.

0:08:53.319,0:08:55.844
One is the rise toward communities[br]and neighborhoods,

0:08:55.868,0:08:59.582
and increased emphasis on your neighbors[br]as your support system.

0:08:59.606,0:09:03.653
Also, a wonderful by-product[br]of a really lousy thing,

0:09:03.677,0:09:05.045
which has been unemployment,

0:09:05.069,0:09:07.870
is a rise in volunteerism[br]that's been noted in our country.

0:09:07.894,0:09:11.564
We also see the phenomenon --[br]some of you may have "boomerang kids" --

0:09:11.588,0:09:13.225
these are "boomerang alumni,"

0:09:13.249,0:09:15.982
where universities are actually[br]reconnecting with alumni

0:09:16.006,0:09:18.787
and helping them with jobs,[br]sharing skills and retraining.

0:09:18.811,0:09:21.359
We also talked about character[br]and professionalism.

0:09:21.383,0:09:25.126
We had this miracle on the Hudson[br]in New York City in January,

0:09:25.150,0:09:29.126
and suddenly Sully has become[br]a key name on BabyCenter.

0:09:29.150,0:09:30.220
(Laughter)

0:09:30.244,0:09:32.640
So, from a value and values standpoint,

0:09:32.664,0:09:35.617
what companies can do is connect[br]in lots of different ways.

0:09:35.641,0:09:37.533
Microsoft is doing something wonderful.

0:09:37.557,0:09:41.395
They are actually vowing to retrain[br]two million Americans with IT training,

0:09:41.419,0:09:44.521
using their existing infrastructure[br]to do something good.

0:09:44.545,0:09:47.006
Also, a really interesting[br]company is GORE-TEX.

0:09:47.030,0:09:49.740
GORE-TEX is all about[br]personal accountability

0:09:49.764,0:09:51.713
of their management and their employees,

0:09:51.737,0:09:55.295
to the point where they really[br]kind of shun the idea of bosses.

0:09:55.319,0:09:58.084
But they also talk about the fact[br]that their executives --

0:09:58.108,0:10:01.180
all of their expense reports[br]are put onto their company intranet

0:10:01.204,0:10:02.383
for everyone to see.

0:10:02.407,0:10:04.126
Complete transparency.

0:10:04.150,0:10:06.426
Think twice before you have[br]that bottle of wine.

0:10:06.450,0:10:07.507
(Laughter)

0:10:07.531,0:10:10.304
The third of the four laws[br]of post-crisis consumerism

0:10:10.328,0:10:11.813
is about durable living.

0:10:11.837,0:10:14.374
We're seeing in our data[br]that consumers are realizing

0:10:14.398,0:10:16.126
this is a marathon, not a sprint.

0:10:16.150,0:10:19.009
They're digging in and looking[br]for ways to extract value

0:10:19.033,0:10:21.126
out of every purchase they make.

0:10:21.150,0:10:24.065
Witness the fact that Americans[br]are holding on to their cars

0:10:24.089,0:10:27.951
longer than ever before:[br]9.4 years on average, in March.

0:10:27.975,0:10:29.126
A record.

0:10:29.150,0:10:33.126
We also see the fact that libraries[br]have become a huge resource for America.

0:10:33.150,0:10:36.992
Did you know that 68 percent[br]of Americans now carry a library card?

0:10:37.016,0:10:39.481
The highest percentage ever[br]in our nation's history.

0:10:39.505,0:10:43.126
So what you see in this trend[br]is also the accumulation of knowledge.

0:10:43.150,0:10:44.869
Continuing education is up.

0:10:44.893,0:10:47.531
Everything is focused[br]on betterment, training,

0:10:47.555,0:10:49.340
development and moving forward.

0:10:49.364,0:10:51.901
We also see a big DIY movement.

0:10:52.424,0:10:56.588
I was fascinated to learn that 30 percent[br]of all homes in America

0:10:56.612,0:10:58.126
are actually built by owners.

0:10:58.150,0:11:00.008
That includes cottages and the like,

0:11:00.032,0:11:01.200
but 30 percent.

0:11:01.224,0:11:04.236
People are getting their hands dirty,[br]rolling up their sleeves.

0:11:04.260,0:11:05.427
They want these skills.

0:11:05.451,0:11:09.015
We see it with the phenomenon of raising[br]backyard hens, chickens and ducks.

0:11:09.039,0:11:11.727
And when you work out the math,[br]they say it doesn't work,

0:11:11.751,0:11:13.051
but the principle is there;

0:11:13.075,0:11:15.790
it's about being sustainable[br]and taking care of yourself.

0:11:15.814,0:11:18.425
Then we look at the High Line[br]in New York City,

0:11:18.449,0:11:21.217
an excellent use of reimagining[br]existing infrastructure

0:11:21.241,0:11:22.400
for something good,

0:11:22.424,0:11:24.459
which is a brand-new park[br]in New York City.

0:11:24.483,0:11:28.574
So what brands can do, and companies,[br]is pay dividends to consumers,

0:11:28.598,0:11:30.126
be a brand that lasts,

0:11:30.150,0:11:31.539
offer transparency,

0:11:31.563,0:11:34.057
promise you're going to be there[br]beyond today's sale.

0:11:34.081,0:11:36.126
Perfect example of that is Patagonia.

0:11:36.150,0:11:37.864
Patagonia's "Footprint Chronicles"

0:11:37.888,0:11:41.686
basically goes through and tracks[br]every product they make,

0:11:41.710,0:11:43.500
and gives you social responsibility,

0:11:43.524,0:11:47.063
and helps you understand the ethics[br]behind the product they make.

0:11:47.087,0:11:48.869
Another great example is Fidelity.

0:11:48.893,0:11:52.579
Rather than instant cash-back rewards[br]on your credit or debit purchases,

0:11:52.603,0:11:57.499
this is about 529 rewards[br]for your student education.

0:11:57.523,0:11:59.610
Or the interesting company Sunrun.

0:11:59.634,0:12:00.789
I love this company.

0:12:00.813,0:12:02.880
They've created a consumer collective

0:12:02.904,0:12:05.250
where they put solar panels on households

0:12:05.274,0:12:07.369
and create a consumer-based utility,

0:12:07.393,0:12:09.091
where the electricity they generate

0:12:09.115,0:12:11.739
is basically pumped back out[br]into the marketplace.

0:12:11.763,0:12:13.499
So it's a consumer-driven co-op.

0:12:13.523,0:12:17.197
The fourth post-crisis[br]consumerism that we see

0:12:17.221,0:12:19.538
is this movement[br]about "return to the fold."

0:12:19.562,0:12:21.361
It's incredibly important right now.

0:12:21.385,0:12:23.969
Trust is not parceled out, as we all know.

0:12:23.993,0:12:26.185
It's now about connecting[br]to your communities,

0:12:26.209,0:12:27.971
connecting to your social networks.

0:12:27.995,0:12:29.709
In my book, I talked about the fact

0:12:29.733,0:12:32.408
that 72 percent of people trust[br]what other people say

0:12:32.432,0:12:33.883
about a brand or a company,

0:12:33.907,0:12:35.949
versus 15 percent on advertising.

0:12:35.973,0:12:39.693
So in that respect, cooperative[br]consumerism has really taken off.

0:12:39.717,0:12:42.700
This is about consumers working[br]together to get what they want

0:12:42.724,0:12:43.900
out of the marketplace.

0:12:43.924,0:12:45.901
Let's look at a couple of quick examples.

0:12:45.925,0:12:47.498
The artisanal movement is huge:

0:12:47.522,0:12:50.579
everything about locally[br]derived products and services,

0:12:50.603,0:12:52.387
supporting your local neighborhoods,

0:12:52.411,0:12:55.387
whether it's cheeses,[br]wines and other products.

0:12:55.411,0:12:58.069
Also this rise of local currencies.

0:12:58.093,0:13:01.068
Realizing that it's difficult[br]to get loans in this environment,

0:13:01.092,0:13:03.151
you're doing business[br]with people you trust

0:13:03.175,0:13:04.354
in your local markets.

0:13:04.378,0:13:08.246
So this rise of local currency[br]is another really interesting phenomenon.

0:13:08.270,0:13:11.892
And then they did a recent report[br]I thought was fascinating.

0:13:11.916,0:13:15.089
They actually started, in certain[br]communities in the United States,

0:13:15.113,0:13:17.140
to publish people's electricity usage.

0:13:17.164,0:13:20.475
And what they found out is when[br]that was available for public record,

0:13:20.499,0:13:23.569
the people's electricity usage[br]in those communities dropped.

0:13:24.511,0:13:27.126
Then we also look[br]at the idea of cow-pooling,

0:13:27.150,0:13:31.345
which is the whole phenomenon[br]of consumers organizing together

0:13:31.369,0:13:35.262
to buy meat from organic farms,[br]that they know is safe and controlled

0:13:35.286,0:13:37.472
in the way that they want it[br]to be controlled.

0:13:37.496,0:13:41.063
And then there's this other really[br]interesting movement in California,

0:13:41.087,0:13:42.570
which is about carrot mobs.

0:13:42.594,0:13:45.640
The traditional thing would be[br]to boycott, right? Have a stick.

0:13:45.664,0:13:47.010
Well, why not have a carrot?

0:13:47.034,0:13:50.338
So these are consumers organizing,[br]pooling their resources

0:13:50.362,0:13:53.126
to incentify companies to do good.

0:13:53.150,0:13:55.947
And then we look at what companies can do.

0:13:55.971,0:13:59.424
This is all the opportunity[br]about being a community organizer.

0:13:59.448,0:14:02.415
You have to realize[br]that you can't fight and control this.

0:14:02.439,0:14:04.049
You actually need to organize it.

0:14:04.073,0:14:06.598
You need to harness it.[br]You need to give it meaning.

0:14:06.622,0:14:09.834
And there's lots of really[br]interesting examples here.

0:14:09.858,0:14:14.651
First is just the rise of the fact[br]that Zagat's has actually moved out of

0:14:14.675,0:14:16.903
and diversified from rating restaurants,

0:14:16.927,0:14:19.126
into actually rating health care.

0:14:19.150,0:14:21.279
So what credentials does Zagat's have?

0:14:21.303,0:14:22.473
Well, they have a lot,

0:14:22.497,0:14:24.341
because it's their network of people.

0:14:24.365,0:14:26.908
So that becomes[br]a very powerful force for them

0:14:26.932,0:14:29.126
to make their brand more elastic.

0:14:29.150,0:14:31.407
Then you look at the phenomenon of Kogi.

0:14:31.936,0:14:34.913
This Kogi doesn't exist.[br]It's a moving truck.

0:14:34.937,0:14:36.536
It's a moving truck through L.A.,

0:14:36.560,0:14:39.056
and the only way you can find it[br]is through Twitter.

0:14:39.080,0:14:40.137
(Laughter)

0:14:40.161,0:14:41.314
Or you look at

0:14:41.338,0:14:46.400
Johnson & Johnson's "Momversations,"[br]a phenomenal blog that's been built up,

0:14:46.424,0:14:50.554
where J&J basically is tapping[br]into the power of mommy bloggers,

0:14:50.578,0:14:55.026
allowing them to create a forum[br]where they can communicate and connect.

0:14:55.050,0:14:59.889
And it's also become a very valuable[br]advertising revenue for J&J as well.

0:14:59.913,0:15:04.127
This, plus the fact that you've got[br]phenomenal work from CEOs,

0:15:04.151,0:15:06.691
from Ford to Zappos,[br]connecting on Twitter,

0:15:06.715,0:15:08.126
creating an open environment,

0:15:08.150,0:15:11.188
allowing their employees[br]to be part of the process,

0:15:11.212,0:15:12.920
rather than hidden behind walls.

0:15:12.944,0:15:17.149
You see this rising force[br]in total transparency and openness

0:15:17.173,0:15:18.961
that companies are starting to adopt,

0:15:18.985,0:15:21.292
all because the consumer is demanding it.

0:15:21.316,0:15:23.262
So when we look at this and step back,

0:15:23.286,0:15:27.478
what I believe is that the crisis[br]that exists today is definitely real.

0:15:27.502,0:15:30.126
It's been tremendously[br]powerful for consumers.

0:15:30.150,0:15:33.713
But at the same time,[br]this is also a tremendous opportunity.

0:15:33.737,0:15:37.204
The Chinese character for crisis[br]is actually the same side

0:15:37.228,0:15:38.395
of the same coin.

0:15:38.419,0:15:40.126
Crisis equals opportunity.

0:15:40.150,0:15:43.644
What we're seeing with consumers[br]right now is the ability for them

0:15:43.668,0:15:46.304
to actually lead us forward[br]out of this recession.

0:15:46.328,0:15:51.126
So we believe that values-driven spending[br]will force capitalism to be better:

0:15:51.150,0:15:53.030
it will drive innovation;

0:15:53.054,0:15:55.155
it will make longer-lasting products;

0:15:55.179,0:15:57.775
it will create better,[br]more intuitive customer service;

0:15:57.799,0:16:00.676
and it will give us the opportunity[br]to connect with companies

0:16:00.700,0:16:02.771
that share the values that we share.

0:16:02.795,0:16:04.814
So when we look back and step out at this

0:16:04.838,0:16:08.126
and see the beginning of these trends[br]that we're seeing in our data,

0:16:08.150,0:16:10.999
we see a very hopeful picture[br]for the future of America.

0:16:11.023,0:16:12.191
Thank you very much.

0:16:12.215,0:16:14.031
(Applause)