Gemic

Perspectives from a Gemic partner

Could you describe your role at Gemic? 

I’m one of the co-founders of Gemic, which we started about 12 years ago. The reasons behind founding a company like Gemic are manifold, but first and foremost I wanted to combine my interests in people, society and social science with my interest in business. This is becoming more common now, but at that time, you often had to sacrifice one for the other. I always thought that was strange because they share so many common interests, especially when you think about how societies create value. So we decided to build that bridge ourselves.

Using your Gemic lens, what are some of the key transformations you see taking place as a result of COVID-19?

Well, one of the big things we’re monitoring is the tension between local and global economies, and the disparities between who can really benefit from global economic structures. In reality, only a handful of major metropolises can benefit from the capital flows of the global economy. That disparity, especially as it impacts smaller metro, suburban and rural areas, has been thrown into stark contrast by the virus. 

At the same time, we’re seeing large global platforms take on characteristics that would normally be ascribed to regional or national infrastructure, as well as more nationalistic and political significance. So much so, that patronizing these platforms is starting to take on a weighted meaning. 

What are some real world examples of this transformation and of the tensions you’re describing?

We’re seeing a huge migration of life onto large e-commerce platforms like Amazon or Alibaba’s various properties, and for obvious reasons: we are staying home more, we have more time, and we value speed and ease now more than ever. 

These companies have also sharpened their digital offerings and their logistics to a fine point, and the type of convenience they offer has become really important during times of crisis. It turns out, we actually do prefer automation over human interactions sometimes. 

In many places, they’ve also come to replace or fix broken public infrastructures, from roads and bridges to the postal service… It’s no wonder that the US is such a hub for this type of development because much of our public infrastructure is broken. If nothing else, COVID19 has proved that to us. 

“So, we’re slowly seeing and realizing that our everyday living infrastructure is increasingly owned by private companies and platforms – but it’s also clear that they aren’t quite benefiting local economies as much as we thought they would.”

So then the question arises of who do we become and what do we support when we patronize them?

When we use global e-commerce platforms, we don’t see the clear and immediate impact of that cash flow on our local economy, at least not in the same way we might with other smaller businesses.

So, it almost becomes a question of your allegiances. Do you see yourself somehow rooted in a nation state? Or do you see yourself as part of a neighborhood that you need to support and should therefore patronize its businesses?

Or, are you this global person, who’s a free individual without any commitment, who’s able to reap the benefits of global capital flows, the global job market, etc. I think a lot of political struggles we have in our society are about this type of tension. So we will eventually feel this global-local debate on every possible level.

But what do we mean when we say local really?

Ha! That’s a question for another time…

So what do you think will happen to these large platforms? 

It’s hard to say anything for sure right now, but we may start to see global corporations invest in re-making themselves into systems that provide care for people more intentionally at a local level – both because it benefits them and because people will demand it. 

Right now, we are seeing cracks in our old systems become more obvious, and people have more time and space to really question whether things should be the way they are. One of those things is whether or not global corporations are really benefiting us at a direct level in the ways they should. 

As our lives shift onto these platforms – we will expect them to care. This is going to put tremendous pressure on these platforms, but as we hand over more and more power to them, we will expect more than just a service in exchange. We will expect them to be a reliable backbone to our society because – and this may be specific to the US – we can’t necessarily trust the government to provide that backbone anymore. 

That is really interesting – but what would it look like in practice?

Well, I think we’ve seen something like this in the way American corporations stepped up to the plate during WWII, and obviously, there are comparisons to be made to certain companies increasing production of PPE during COVID-19. But, I think the answer goes beyond owning a “moment” of patriotic national pride in production. Winning companies will make longer term change and tangible change that people can feel at a localized level.

For example, when Finland began to urbanize and industrialize at the turn of the 20th century – quite late in comparison to other nations in the region — a large number of farm workers and agricultural laborers flooded into the cities. They were largely disadvantaged, without access to capital and fair prices for many basic necessities. Almost immediately you saw the rise of these worker’s co-ops — cohorts of people who were invested in an ecosystem of retailers, banks, and farms.

These large groups of previously disadvantaged people suddenly had access to a social safety net, resources and capital through cooperatives that would eventually become some of the largest companies in the Nordics. A lot of the Northern European co ops are still massive companies to this day. They’ve kind of lost that characteristic but they were born in a time when there were dramatic social, political, and economic inequalities in society, as there are now because of the virus. 

So, there are examples of how a corporation can provide real benefits for local people at scale. I think it is likely that we will see people begin to look for this kind of tangible, local change from global corporations. The question for corporations then, is how can they build a reliable system that provides people with some sort of care? There are some really interesting parallels and lessons to be learned.

So it’s all about building mutual benefit? 

Yes, it’s about how large global e-commerce platforms, and corporations more broadly, build offerings where there’s some kind of mutually beneficial system. Not just asking how they can serve people, but how they can make change that is visible at a local, personal level. 

The interesting question now for people who participate in the platform economy is, ‘How does this platform guarantee fairness for all parties?’ How do we make you feel like you have a stake in it? That you’re not just a consumer? That there’s come real mutual benefit beyond pure convenience? I think these questions are going to be immensely important.

This sounds like a colossal amount of change in a short period of time – do you think it will really happen? 

Well, I think we may start to see an amplification of something that was already there. These questions surrounding what value global platforms provide to people in their day to day lives existed well before the virus began. We’re just seeing them come to light because we’re spending more time on them and they’re performing increasingly important functions in our lives.

We see some cracks in our current system widening, and things will start to change little by little. Not everything is going to change overnight, but the seeds are there.

So it’s in the best interest of these companies to reconsider how they can best provide people some kind of benefit that creates a sustained, mutual, beneficial relationship between themselves and consumers. I think any platform that could do this would be massively successful. 

Johannes is the Founder and Chairman of Gemic. Based in New York, he advises executives across CPG, fashion, mobility and tech on how to respond to cultural, structural and behavioral change. To do this, he believes in starting with the right questions: What business are industries really in? Where is the value in being an “iconic” brand? In guiding executives toward the right questions, Johannes has helped top-tier companies redefine their markets and create meaningful value for shareholders. Contact him at johannes.suikkanen@gemic.com

Gemic Goes Inside: Grocery Shopping

In the coming weeks and months, Gemic will be delving into the experiences of everyday people, taking a glimpse into how “normal” life is being transformed by C-19. 

This week, Gemic goes inside grocery shopping with Jared — a 30-year-old Digital Marketing manager from Brooklyn. An avid and early adopter of online services like Instacart and Amazon Fresh, Jared has recently found himself switching back to brick and mortar. In this photojournal, he gives us a glimpse into “the why” behind this switch and a window into what grocery shopping means going forward.

So, you went grocery shopping again this week?

Ha ha, yes, I did, once again! It used to be that I only went grocery shopping when my fridge was empty and I had to fill an immediate need. Now, I find myself going when my fridge is still about a quarter full. At that point, I know I probably have enough food to last for a week, but I also have no idea what’s going to happen in a week, so there’s more anticipation and more planning these days.

I recall that you were an early adopter of services like Amazon Fresh, but now it sounds like you’re going to the store more often than not

Yeah, I live walking distance from two major grocery stores, but I had been using Prime and Instacart for convenience. But now, I’m finding that they don’t have any time slots for delivery or that I’m literally gambling with the possibility of items disappearing from my cart in the time it takes to set up the delivery. It’s been a pretty frustrating experience and I’ve found myself just wanting a more hands-on experience. 

Also, I think I’ve decided that for me – a relatively young and healthy person with no pre-existing conditions – it just makes more sense to go to the grocery store. It’s weird because it feels like I’ve had to become some kind of a hunter-gatherer, whereas before I would’ve just waited for things to show up. But now, I prefer going into the store and getting that immediate confirmation of seeing items that I know can work. 

Plus, a lot of stuff in my nearby store is local, so I feel like it’s merchandised for me and my neighborhood, not for just anyone and everyone on the internet. It’s the difference between ‘eggs for you!’ and ‘internet eggs.’ 

So what does your actual shopping routine look like now?

Well, I obviously spend more time getting ready, but I’m trying not to go overboard. I’m wearing my mask and my regular clothes. I’m not wearing gloves because I prefer to just touch the things I need to touch and wash my hands afterward, rather than have a false sense of security from the gloves. 

I’ve also started making grocery lists. When this all started, I was literally going to the store and buying everything I could carry, but now I feel like there’s been more consistency and leveling off. It’s almost a sense of normalcy if that makes sense? I don’t expect things to get any worse, so I’m just buying what I need to get by. Part of that is going in with a better understanding of what’s essential – what’s a ‘must-have’ or ‘a need’ vs. just ‘a want’ or a panic purchase. The list helps with that, and I feel more confident that the store will have something of value.

And where are you doing most of your grocery shopping now?

I go to Amazon 360, or rather, Whole Foods 360! Whole Foods is basically the Amazon grocery store in my mind. I figure that because it’s Amazon, they’ll have more options and better variety. That said, I’ve found myself buying a lot more of the Amazon or Whole Foods brand stuff because it’s cheaper and better stocked than other brands.

Can I just say though, that this experience has really made me miss Target, of all places! My Target was always overcrowded and I was always complaining about the people in there, but I didn’t realize how much it meant to me before now. The idea of a one-stop-shop where you could literally buy a latte, a lamp, and frozen pizza – imagine! I really look forward to the day when I can take walks through Target again.  

On that note, how has the in-store experience changed for you?

I definitely have a greater sense of ‘am I going to catch something in this place’ since the risk of catching something is still very real. At the same time, I can’t live in that kind of fear, so I just choose to proceed with caution and pay very close attention to hygiene. It helps that everyone is wearing masks and there’s more regulation over how many people can shop at once. Also, it’s Whole Foods, so people are relatively polite about keeping a safe distance.

That said, you can’t help but notice the slightest bit of competition with other shoppers. It’s those moments when you lock eyes with someone who is also walking toward the last loaf of bread. I’m not necessarily worried about the stores running out of food, but it’s jarring to see empty shelves or shelves with just a single item. I’m seeing that a lot with things like pasta sauce, jelly, frozen foods, deli meats…gone! What are people doing with all the pasta sauce?

That may be why I’m starting to notice brands that I never noticed before. For example, there’s this healthy food brand called Evol – apparently, they’ve been around for a while, but I never noticed them until now, as the shelves are so bare. 

Who or what’s behind all those empty shelves?

I think it’s a combination of panic buying and issues with the supply chain, especially when it comes to labor. It’s crazy to think people might be getting sick to keep me fed. 

I suppose that’s another reason why I’ve been doing more grocery shopping in-store than online – because when I push that delivery button, I know that someone is going to have to go collect those 30 things, put them in several different packages and send them to me. Before, it was a question of people in factories and warehouses in suspect working conditions, but now it’s a question of someone putting themselves and their loved ones at risk to make my packages get delivered, which is unreal. How do you negotiate that as a society, much less a consumer? I don’t know, but I think it’ll be the next frontier for workers’ rights. 

In the meantime, I find myself asking whether I can just find the item I’m looking for on my own, or if I can get it through some other means beyond delivery – at least when it comes to food and drinks. 

How else do you think this experience might change the way you approach grocery shopping?

That’s a good question and to be honest, it will probably depend on how this plays out. Here’s what I can say for sure: I have a much deeper appreciation for what it takes to get food on the shelf and for the workers who make that happen. 

I think we’ve all been spoiled by a culture of on-demand and this moment feels like a good reset on that. Reckoning with the fact that I’m not always going to be able to get exactly what I want to get exactly when I want it, is actually helping me reassess what’s essential. I wouldn’t be surprised if I stopped buying certain things altogether, because I’m realizing they’re not very useful or they don’t add some other value to my life. 

Lastly, I don’t think I’ll ever take Target for granted again. 

Building More Resilient Markets, with Care

We are starting to realize all the ways in which everything is connected.

Quarantine in Mumbai is disrupting the global distribution of labor, since many people working in the city’s claim processing centers don’t own laptops and can’t work from home. 

Limited access to clean water in places like Flint, Detroit and Newark is interfering with personal hygiene, expanding the spread of the virus and the scope of the public health emergency.

Slow-downs in the construction and service industries are preventing many migrant workers from sending remittances, transmitting the economic crisis in richer countries to poorer countries throughout South America, Asia, Africa and Europe. 

And so it has been – through a systemic contagion across people, communities, supply chains and beyond – that C19 has found the perfect conditions for crippling markets and economies.

It is within this context that businesses must locate their role within the broader social systems, and act to make these systems more resilient. 

This kind of “systems thinking” draws material connections between the supply, the demand and the structural conditions across employment, education, health, mobility, information and technology within a given market. It reimagines a market as a market ecology, rather than a matrix of segments and competitors. Most importantly, it draws correlations between the health and resilience of that market ecology with the health and resilience of the business sector – acknowledging that when a key structure within the system is compromised, the whole system is at risk. 

Approaching growth through this kind of systemic framework will certainly challenge the orthodoxies within many corporations, upending pre-COVID notions around who businesses really serve and how businesses really generate value. For example, what would it mean for a grocery chain to focus on community access to nutrition, rather than just selling food and bev? What would it mean for a social media company to help build ecosystems – of restaurants, schools, grocers, banks, other households – in addition to building networks? There is nothing like a crisis and the threat of market collapse to raise these kinds of questions and put established value propositions into perspective. 

Inevitably, many companies will steer backward, seeking to regain some sense of pre-COVID “normalcy.” But the allure of that familiar status quo comes with the risk of another contagion in the relative short term – and so far, there is no evidence to prove that markets would fare any better in the second round. Therefore, the question that businesses must now ask themselves is not just whether they can go back to business as usual, but whether they should. 

Within Gemic, we see an opportunity for businesses to shift toward a more systemic logic that connects business growth and sustainability to the health and investment in the broader social systems within which they operate. 

Practically and symbolically, we find a useful starting point for this shift in the strategy of Care, which has been in shockingly short supply over the past few weeks. 

Beyond health-care, the discourse, practice and principle of Care has been infiltrating every domain: world leaders are adopting lofty rhetoric of Care to placate the citizenry while performing Care through expansive economic stimuli; meanwhile, the balance of world powers is shifting, as geopolitical influence begins to reflect how effectively countries can Care for their citizens, communities and infrastructures; on social media, acts of Care have become a form of currency; whereas on the ground, people are sacrificing personal freedoms to show Care for the collective; and to ensure their survival, more businesses are trading in new promises of made / served / packed “with care.”

In a world where systemic Care is proving to be the best defense against systemic contagion, how can companies employ Care to help rebuild and reinforce their key markets?

We see several essential starting points:

  • Beyond defining a company purpose, define a POV on Corporate Citizenship
  • Beyond achieving scale and efficiency, strive for durability across human labor, supply chain, distribution and demand
  • Beyond affordable offerings, provide accessible experiences of Care in uncertain times   
  • Beyond developing the best experiences for users, develop enduring relationships with people and communities
  • Beyond practicing hygiene standards, develop an ethics of hygiene that helps people to rebuild healthy relationships to themselves, others and the environment
  • Beyond supporting economic recovery, collaborate to ensure support for capitalism, as continued crises threaten to divide societies into winners and losers

While each company will need to approach these starting points in ways that make sense for their unique business, every company will need to move forward with care-based strategies that strengthen the systems in which they operate and safeguard their business in times of crisis.