Friday, April 07, 2017

Peak Diversity: The Mass Market Is Dead

Most large companies serve a mass market. When whites were the vast majority of the American population, appealing to diversity was a way of maintaining a mass market without offending the core audience. Those days are over. There is no longer a mass market. The white consumer population is falling. Companies need to sell more to minorities to maintain growth. Minorities no longer want to be token add-ons to white advertising or white policies, they want their own. Blacks want black ads and policies that favor blacks, Spanish-speaking people want Spanish language programming. Advertisers tried race-mixing. This is interpreted as a conscious decision to force race mixing on the Alt-Right, but it might be a way to increase diversity (we got black and a white actor in the commercial, and they're gay with an asian baby. No one can complain!). That backfired and more people complained, plus the sheer number of them caused more people to notice that ads are social programming.

The big loser will not be consumer companies, but mass media outlets. Coca-Cola will be happy to deliver niche advertising to separate markets, they already do it for separate countries. Mass media companies will see advertising rates drop as the audience fractures. Mass media events such as the Super Bowl will showcase increasingly bland and unoffensive messages. I don't know if anyone keeps statistics, but I predict an increase in ads featuring only animals. Anecdotally, I think that is true already, but I have no data.

Case in point Target, who was damaged by a single blog post unapproved by the CEO.
The blog post, published in April 2016, publicized a policy that said transgender customers were welcome to use the bathroom or fitting room that matched their gender identity.

"Everyone deserves to feel like they belong," the post said. "And you'll always be accepted, respected and welcomed at Target."

Target CEO Brian Cornell never approved the post and found out about it only after it was published, according to The Wall Street Journal.

He later told colleagues that he wouldn't have approved the decision to "flaunt" the policy and that the backlash was "self-inflicted," The Journal reported.

The boycott cost the company millions in lost sales and added expenses. Shopper traffic and same-store sales started sliding for the first time in years after the blog post, and the company was forced to spend $20 million installing single-occupancy bathrooms in all its stores to give critics of the policy more privacy.

Sales fell nearly 6% in the three quarters after the post compared with the same period last year, and same-store sales have dropped every quarter since the post.
Marvel comics tried increasing diversity to attract a new audience. Instead of creating new products, it trashed its existing comics. Result: no one was happy.
One reason for increasing character diversity is to expand Marvel's audience, according to Augie De Blieck Jr., a columnist at Comic Book Resources.

"Marvel has relied on an ever-dwindling population to market its books to. Overwhelmingly, that's white men now in their 30s and 40s, who were reading comics during the last comic booms," he told CNBC via email.
Is diversity to blame for Marvel's sales slump – or just a lack of imagination?
Last week, David Gabriel, Marvel’s vice-president of sales, told the comics industry trade reporter Milton Griepp that he had heard complaining from retailers about the company’s strategy of publishing books starring women and people of color in high-profile roles such as Iron Man, Captain America and Thor. The grousing, he said, correlated with a drop in sales.
The Guardian article is a great example of why companies should avoid convergence, in addition to immediately shrinking the size of the market, SJWs do not understand how capitalism works:
In fact, why give legacy comics fans what they think they want at all? The notion that the longtime readers somehow have a greater claim on a comics character than the new fan – and that both outrank the artist – has plagued the industry for as long as there have been superheroes; people who spend 20 or 30 years reading the adventure of a single character develop proprietary feelings that have nothing to do with the nature or intricacy of the creative process. Comics fandom has huge problems of sexism, entitlement and plain old cruelty, and it often pours out its vast reserves of ambient rage on the artists themselves.
Converged companies will collapse at increasingly fast rates in the coming years because the information economy allows for rapid market fracturing. A publisher no longer requires capital investment in logistics to reach a large enough audience to generate profits, and lower capital costs reduces the amount of sales needed for profitability. Companies that segment the American market will do OK. People won't complain if Marvel creates a new transgender hero, anymore than they objected to a black character. They will object to being sold a product they don't want, or a message they don't agree with. Successful companies will segment, essentially operating as several companies serving different audiences. Converged companies will collapse trying to sell a niche message or product to a mass audience, or they'll rapidly become a nice company by refusing to serve the largest single market: whites.

Finally, diversity appeals are starting to increase conflict as resources become scarce. IN this case, Intel is shedding workers while promoting diversity. Instead of giving more opportunity to minorities, they are taking opportunities away from whites. The diversity policy is exactly the same in both cases, but the results are totally differnt.
Intel CEO's pay rises to $19.1 million over security costs
The decision to bolster the security program came as Krzanich in April last year said some senior executives had faced backlash for the company's stance and efforts to increase diversity, according to a TechCrunch report. The company spent $1.86 million on personal security for Krzanich and another $275,200 to protect his residence.

Threats were targeted against the CEO and certain other executives, and in some cases their family members, according to a filing, which didn't provide details on the specific arrangements. By comparison, Intel spent $39,600 for Krzanich's security in 2015.
Initially, rising security costs increases the virtue signaling. Look at how these people reacted! As the security costs mount and the personal toll rises, corporate boards will start rethinking their policies. Exactly as predicted by Anonymous Conservative's r/K Selection Theory

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