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Published on December 15th, 2008 | by Tom

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In the New Networked Economy, Authenticity Is a Category Killer

By 2011, the world will reach the Jump Point and three billion people — the world’s entire workforce — will be connected for the first time in a single, seamless, networked economy. That means more people will conduct more business every day with people they do not know and will never meet. In this coming world order, the most authentic brands and companies — the most genuine and the most trusted — will win. Phonies beware.

In an age when long-tailing economics mean that anything is available anytime, purveyors of bona fide stuff will prevail: People hunger for authenticity.

In fact, in the Network Economy, authenticity is not only a competitive weapon, it is a bunker buster. Even in price sensitive markets, in head-to-head competition, the brands perceived as more authentic will always win.

Take Langston’s for example. Langston’s Western Wear is an institution in Oklahoma. Since 1913 it has provided denim, boots, hats, and accessories to the working men and women of the Southwest. We’re talking the real McCoy here: durable, well made cowboy and rodeo clothing — not that bedazzled junk you get in SoHo boutiques. Now, through its Website store, Langston’s is gaining the attention of a rabidly loyal global audience — customers in far-flung places like Osaka and Shanghai who hunger for a genuine slice of the American West. Knock-offs they can get locally, with "Made in Malaysia" labels discretely sewn in. What these newly minted middle class consumers crave, what they will pay a premium for, is authenticity — the killer app of the Internet era.

That quest for the genuine — and the mistrust of traditional marketing — helps explain the growing power of peer-to-peer friendcasting sites like ThisNext. People trust each other more than they do the slick pitches of Madison Avenue. But, in a world where billions of people sell to and buy from each other directly, something more than word of mouth is going to be needed.

To help consumers discern the genuine from the ersatz, an “authenticity economy” is sprouting up around the net. Organizations like the California Certified Organic Farmers help you tell whether your veggies are truly organic. At GreenSeal they can help you be assured that your products are environmentally friendly; and RugMark will reassure you that no child labor was involved in that Nepalese rug you want for the dining room.

The gold standard of product certification is TransFair USA. The Oakland-based nonprofit is the only third-party certifier of Fair Trade products — such as coffee, tea, chocolate, grapes — in the United States. According to Kim Moore, Director of Business Development-Coffee/Tea & Beverages, FairTrade USA audits transactions between U.S. companies offering Fair Trade Certification™ to products and their international suppliers in order to guarantee that farmers and farm workers aren’t exploited; that farming practices are sustainable and don’t promote pollution or deforestation; and that overall the authenticity of "fair trade" is upheld.

Expect non-government authenticity-certifying organizations like FairTradeUSA to grow in importance as people-to-people trade increases online. But don’t think the importance of authenticity is lost on governments. In January, the European Union enacted its Unfair Commercial Practices Directive, which imposes a general ban on unfair business practices in the EU, including false blogging, fake reviews, and astroturfing.

Whether or not a legislative ban in Europe can do much to police the Internet is not the point here — the real issue is that the market itself will decide. These are transparent, information-rich times. The Networked Economy favors those brands that define "true blue" in their respective spaces, and those companies that become the authentic standard-bearers in their segments.

To paraphrase Hemingway, consumers now have built-in BS detectors. Be phony and you will be found out. Cut corners, lie, cheat, or hurt others, and you will be shunned. And no amount of marketing spend will wash away your sins. In fact, as they might say down at Langston’s in Oklahoma, the worst thing you can be today is “all hat” and no credibility.



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