Extracting Principles From Practice: Four Factors Of Customer Value Creation

What Can a Century-Old Backpack and a Futuristic Sneaker Teach Us About Modern Brand Building?

Last week, I came across two articles in the New York Times. Both articles discussed products for which customers paid a significant premium, but they were at opposite ends of the tradition-innovation continuum. Which got me thinking: What can these diametrically opposed products teach us about today's consumer culture? And what can customers' intense interest in these products teach us about brand strength in an era of unprecedented uncertainty?

Randoseru

The first article that piqued my interest was about the Randoseru phenomenon in Japan. Randoseru is a traditional backpack that enjoys practically 100% penetration among Japanese primary schoolers. 

The Randoseru originated during the nineteenth-century Meiji era, when Japan was modernizing its culture and economy. It was originally modeled after a Dutch military backpack and became associated with the imperial family's school before spreading nationwide, which explains the word's origins, which derive from the Dutch word "ransel" or the German word "ranzen," both of which mean "backpack."

Paradoxically, considering it’s target audience, a Randoseru is heavy, it’s boxy, it’s large, it’s expensive, and each unit takes over a month to make by a small number of traditional leather artisans. Until recently, it was only made in a small number of uniform colors.

Historical roots: uniformity and tradition: traditionally, boys carried black Randoseru and girls carried red ones. While color options have expanded in recent years, the basic shape and structure have remained consistent for decades.

Ritual and family bonds: Purchasing a Randoseru is a significant family event, often involving grandparents and sometimes even employers. Some companies, like Sony, continue the tradition of gifting Randoseru to employees' children.

Durability and longevity: The Randoseru is designed to last throughout a child's elementary school years, with some manufacturers offering six-year guarantees. This longevity reinforces its role as a childhood memento.

Debates on practicality: There are ongoing discussions about the weight and size of Randoseru, especially for younger children. However, the cultural value placed on endurance and hard work has limited changes to the traditional design.

Societal conformity: The widespread use of Randoseru reflects broader Japanese societal norms, where cultural expectations are internalized from a young age. This conformity is seen as contributing to the smooth functioning of Japanese society.

Educational symbolism: The Randoseru is closely tied to the Japanese educational system, which historically played a role in unifying the nation and instilling a sense of shared identity.

In essence, the article presents the Randoseru as a microcosm of Japanese society, embodying values of tradition, conformity, and shared experiences while also reflecting ongoing debates about individuality and practicality in modern Japan.

A Randoseru is clearly more than a backpack; it represents Japanese cultural expectations and social norms. Its widespread use reflects Japanese culture's emphasis on conformity and the societal value of shared experiences, for which parents are willing to pay a significant premium.

On’s Cloudboom Strike LS

The other article that caught my eye reported on the Cloudboom Strike LS, a ground-breaking new sneaker from the fledgling Swiss brand On.

According to the article, this product has been in development for a couple of years and features:

Spray-on Technology: Using a single, semi-translucent synthetic monofilament that a robotic arm extrudes and heat-fuses to a foam rubber and carbon-fiber sole. This process is called LightSpray (LS).

Minimal Components: Unlike traditional sneakers, which have 150–200 components, the Cloudboom Strike LS has only seven, significantly reducing waste and production time.

Environmental Impact: The sneaker has 75% less environmental impact compared to traditional sneakers, with no leftover materials or toxic glue.

Successful marathoner Hellen Obiri was given a pair to run the Boston Marathon and found the shoes to be so highly effective that she actually won the race in a pair.

According to the article, On aims to disrupt the sneaker market similarly to how Tesla impacted the automotive industry by introducing a product that combines performance with sustainability.

To do this, the company plans to scale production using proprietary parametric design principles and computational engineering, with production cells located close to the market to reduce carbon emissions and waste. This automated process will shorten the time between production and delivery, with the entire shoe being made in just three minutes. On plans to expand this technology to other sports and aims to make the Cloudboom Strike available to a wider consumer base, not just elite athletes.

These shoes aren’t cheap, with each pair costing approximately $330 each. Are they worth this price? claims that the unique design and exclusivity provide athletes with a psychological edge, knowing they have cutting-edge gear. 

More broadly, On’s new design is expected to attract sneakerheads and early adopters due to its innovative design and performance benefits. All of which means that On’s new innovation will be positioned as a significant leap in sneaker technology, combining innovative design, environmental sustainability, and high performance to potentially reshape the sneaker industry.

What Do These Disparate Products Tell Us About the State of Today’s Consumer Culture? 

The contrasting examples of a traditional Japanese Randoseru backpack and the innovative On Cloudboom Strike LS sneaker offer a fascinating glimpse into the evolving landscape of consumer culture, highlighting the coexistence of tradition and innovation in modern product design and manufacturing.

Tradition vs. Innovation

The Randoseru backpack and the On Cloudboom Strike LS sneaker represent contrasting approaches to product design and manufacturing, highlighting the tension between tradition and innovation in modern consumer culture.

The Randoseru embodies tradition, with its design remaining largely unchanged for decades. This consistency reflects Japanese society's value for cultural continuity and shared experiences. The backpack's sturdy construction and uniform appearance reinforce ideas of conformity and collective identity. Even as manufacturers offer more color options, the basic structure remains constant, demonstrating a reluctance to deviate significantly from tradition.

In contrast, the Cloudboom Strike LS sneaker epitomizes innovation. Its design challenges conventional notions of what a running shoe should look like, utilizing cutting-edge technology and materials. The shoe's creation process, involving a robotic arm extruding a single semi-translucent synthetic monofilament, represents a radical departure from traditional shoe manufacturing methods.

The Randoseru's production process relies on established craftsmanship, with each bag taking about a month to assemble from six main parts. This labor-intensive approach values human skill and traditional techniques. 

Conversely, On’s production is highly automated, with the upper created in a single step by a robotic arm, significantly reducing human involvement in the manufacturing process.

The Randoseru's enduring popularity demonstrates that consumers still value products with deep cultural roots and historical significance. Its role as a symbol of Japanese childhood and education gives it meaning beyond its functional purpose. The On sneaker, however, appeals to consumers who prioritize technological advancement and performance optimization. Its futuristic design and innovative manufacturing process attract those who seek the latest in footwear technology.

Both products reflect different aspects of sustainability. The Randoseru's durability and long lifespan promote sustainability through longevity. The On sneaker approaches sustainability through its manufacturing process, claiming to have 75% less environmental impact than traditional sneakers.

The coexistence of these contrasting products in the market illustrates the diverse values and preferences of modern consumers. While some seek comfort in tradition and cultural continuity, others are drawn to innovation and cutting-edge design. This dichotomy suggests that successful brands must navigate a complex landscape, balancing respect for tradition with the drive for innovation to meet the varied expectations of contemporary consumers.

Cultural Significance and Identity

The Randoseru backpack and On’s Cloudboom sneaker represent contrasting approaches to cultural significance and identity in consumer products, reflecting different societal values and individual expressions.

The Randoseru backpack holds deep cultural significance in Japanese society, serving as a powerful symbol of childhood, education, and shared experiences. Its uniformity and widespread use create a sense of collective identity among Japanese schoolchildren. The backpack is not merely a functional item but a cultural artifact that binds generations together. As one parent noted, "An overwhelming majority of the children choose Randoseru, and our generation used Randoseru. So we thought it would be nice." This sentiment highlights how the Randoseru reinforces cultural continuity and social cohesion.

The Randoseru's role in Japanese society extends beyond its practical use. It serves as a rite of passage, marking the transition into formal education. The tradition of families purchasing these bags for their children entering first grade underscores its importance in Japanese culture. The ceremony of taking photos with the Randoseru on the first day of school further cements its status as a cultural icon.

In contrast, On’s Cloudboom represents a different type of cultural significance, one rooted in innovation, individualism, and performance. While it lacks the deep historical roots of the Randoseru, it creates its own cultural narrative centered on technological advancement and breaking boundaries. The shoe's unique design and manufacturing process challenge conventional notions of what a running shoe should be, appealing to consumers who value individuality and cutting-edge technology.

On’s sneaker's cultural significance lies in its potential to redefine athletic performance and manufacturing processes. As Nils Altrogge, the director of innovation at On, stated, "She wouldn't give them back," referring to Hellen Obiri's reaction after trying the shoes. This anecdote illustrates how the product's performance can create a new form of cultural significance among athletes and sports enthusiasts.

While the Randoseru reinforces a sense of belonging and conformity, the On sneaker promotes a culture of differentiation and personal achievement. The Randoseru's uniform appearance, despite recent color variations, contrasts sharply with the On sneaker's unique, almost alien-like design. This difference reflects varying cultural values: the Japanese emphasis on group harmony versus the Western focus on individual expression and innovation.

The cultural identity associated with each product also differs significantly. The Randoseru is intrinsically linked to Japanese national identity and educational values. It represents a shared experience that almost every Japanese person can relate to, regardless of their background. On the other hand, the sneaker's identity is more global and aspirational, associated with elite athletic performance and technological progress.

Both products, however, demonstrate how consumer goods can become powerful carriers of cultural meaning and identity. The Randoseru's enduring popularity shows the strength of traditional cultural symbols, while the excitement surrounding the On sneaker indicates a growing cultural appreciation for innovation and sustainability in product design.

The Randoseru and On’s Cloudboom exemplify how products can embody and reinforce cultural values and identities. While one celebrates tradition and collective experience, the other champions innovation and individual performance. Both approaches resonate with their respective target audiences, highlighting the diverse ways in which consumer products can contribute to cultural significance and personal identity in the modern world.

Consumer Values and Aspirations

The contrasting examples of the Randoseru backpack and the Cloudboom Strike LS sneaker reveal significant insights into the values, aspirations, and expectations of modern consumers across different cultural contexts.

In Japan, the enduring popularity of the Randoseru backpack reflects a strong emphasis on tradition, conformity, and shared cultural experiences. Japanese consumers value products that reinforce social cohesion and cultural identity. The Randoseru symbolizes a rite of passage, with parents and grandparents often purchasing these expensive bags as commemorative gifts for children entering elementary school. This practice demonstrates the importance placed on education and family bonds in Japanese society.

The Randoseru's durability and consistent design over decades also highlight Japanese consumers' appreciation for quality craftsmanship and long-lasting products. The average price of around 60,000 yen ($380) for a leather Randoseru indicates a willingness to invest in items with cultural significance and practical longevity. This consumer behavior reflects a value system that prioritizes tradition, quality, and shared cultural experiences over rapid innovation or individualistic expression.

In contrast, On’s new Cloudboom sneaker caters to a different set of consumer values and aspirations. The shoe's innovative design and manufacturing process appeal to consumers who prioritize cutting-edge technology, performance optimization, and environmental sustainability. The use of advanced robotic manufacturing and 3D printing techniques to create a highly personalized product speaks to a growing demand for customization and efficiency in consumer goods.

The Cloudboom’s lightweight design (weighing only 170 grams or about six ounces) and its potential to reduce environmental impact by 75% compared to traditional sneakers demonstrate that modern consumers increasingly value products that enhance performance while addressing sustainability concerns. This reflects a shift towards more environmentally conscious consumption patterns among discerning consumers.

The contrasting price points of these products also reveal interesting consumer dynamics. While the Randoseru's price tag of around $380 is considered a significant investment for a school bag, the Cloudboom Strike LS is priced at $330, positioning it at the upper end of the sneaker market. This suggests that consumers in both markets are willing to pay premium prices for products that align with their values and aspirations, whether those are rooted in tradition or innovation.

The success of both products indicates that modern consumers seek authenticity and meaningful connections with the brands they choose. Randoseru's deep cultural roots and On’s narrative of technological advancement both offer compelling stories that resonate with their respective target audiences. This underscores the importance of brand storytelling and the ability to tap into consumers' desire for products that reflect their identities and values.

Furthermore, the coexistence of these contrasting products in the global marketplace highlights the diversity of consumer preferences and the increasing segmentation of markets. While some consumers prioritize cultural continuity and shared experiences, others value individuality, performance, and technological innovation. Successful brands must navigate these varied consumer expectations by offering products that cater to specific value systems while maintaining broad appeal.

In conclusion, the analysis of these two products reveals that modern consumers are complex and multifaceted in their values and aspirations. They seek products that not only fulfill functional needs but also align with their cultural identities, personal values, and societal concerns. As consumer culture continues to evolve, brands that can effectively balance tradition with innovation, sustainability with performance, and cultural significance with individual expression are likely to find success in the global marketplace.

Future Consumer Trends

The analysis of the Randoseru backpack and the Cloudboom Strike provides valuable insights into future consumer trends, highlighting the evolving preferences and expectations of discerning consumers.

Personalization and Customization

The On Cloudboom Strike LS sneaker exemplifies the growing demand for personalized products. Its manufacturing process, which uses a robotic arm to create a shoe tailored to an individual's foot, points to a future where mass customization becomes the norm. Consumers are increasingly seeking products that are uniquely suited to their needs and preferences, moving away from one-size-fits-all solutions.

Sustainability and Ethical Production

Both products reflect the increasing importance of sustainability in consumer choices. The Randoseru's durability and long lifespan promote sustainability through longevity, while the On sneaker claims to have 75% less environmental impact than traditional sneakers. This trend suggests that future consumers will prioritize products with minimal environmental footprints and ethical production practices.

Technology Integration

Clouboom’s innovative design and production process indicate a growing consumer interest in products that incorporate cutting-edge technology. As technology continues to advance, consumers will likely expect more integration of smart features and advanced materials in everyday products.

Cultural Authenticity

The enduring popularity of the Randoseru demonstrates that consumers still value products with deep cultural roots and authenticity. Even as globalization continues, there will likely be a countertrend of consumers seeking products that connect them to their cultural heritage or offer unique cultural experiences.

Performance Optimization

On’s sneaker's focus on lightweight design and performance enhancement reflects a trend towards products that optimize user performance. Future consumers, particularly in the sports and fitness markets, will likely continue to seek products that offer measurable improvements in their activities.

Storytelling and Brand Narrative

Both products showcase the importance of strong brand narratives. The Randoseru's cultural significance and the Cloudboom’s innovation story demonstrate that consumers are drawn to products with compelling backstories. Future marketing strategies will likely focus more on creating and communicating meaningful brand narratives.

Blending Tradition and Innovation

The coexistence of the traditional Randoseru and the most innovative sneaker in the market suggests that future consumers will value products that successfully blend heritage with innovation. Brands that can honor traditions while incorporating modern technologies and design principles may find particular success.

Health and Wellness Focus

The emphasis on performance and comfort in On’s new sneaker reflects a broader trend towards health and wellness. Future consumers are likely to prioritize products that contribute positively to their physical and mental well-being.

Transparency and Traceability

As consumers become more conscious of product origins and manufacturing processes, there will likely be an increased demand for transparency in the supply chain. The detailed description of Cloudboom’s production process suggests that future consumers will expect clear information about how their products are made.

These trends indicate that future consumers will be more discerning, valuing products that offer a combination of personalization, sustainability, technological innovation, cultural relevance, and transparent production processes. Brands that can adapt to these evolving consumer preferences will be well-positioned to succeed in the future marketplace.

Product and Idea Marketplaces

Modern brands that excel in both the marketplace of products and the marketplace of ideas demonstrate a unique ability to capture consumer attention and loyalty. The Randoseru backpack and the Cloudboom sneaker offer contrasting examples of how brands can operate effectively across these two dimensions.

In the marketplace of products, the Randoseru backpack stands out for its durability, craftsmanship, and functional design. Its sturdy construction and spacious interior make it well-suited for daily use by schoolchildren. The backpack's longevity, often lasting throughout a child's entire primary school education, speaks to its quality as a product. On the other hand, the Cloudboom excels in the product marketplace through its innovative design, lightweight construction, and personalized fit. The use of advanced robotic manufacturing and 3D printing techniques allows for the rapid production of customized shoes, meeting the demands of performance-oriented consumers.

In the marketplace of ideas, both products tell compelling stories that resonate with their target audiences. The Randoseru backpack embodies traditional Japanese values of conformity, unity, and social cohesion. It represents a rite of passage for schoolchildren, symbolizing the beginning of their educational journey and the shared experiences of generations. This cultural significance gives the Randoseru a powerful narrative that extends beyond its functional attributes.

Conversely, On’s new Cloudboom represents ideas of technological progress, sustainability, and individual performance optimization. Its innovative manufacturing process aligns with contemporary concerns about environmental impact and efficiency. The brand's emphasis on personalization and cutting-edge design appeals to consumers who value individuality and seek products that enhance their capabilities.

The success of these products in both marketplaces demonstrates the importance of a holistic brand strategy. Brands that can deliver high-quality, functional products while also conveying meaningful ideas and values are better positioned to thrive in today's competitive landscape. As consumer preferences continue to evolve, brands that can adapt their products and messaging to align with changing values and aspirations will likely see the greatest success.

Current and Future Value

The Randoseru backpack and the Cloudboom Strike LS exemplify how modern brands operate in both the "now" and "tomorrow" moments, catering to immediate needs while promising long-term benefits.

In the moment of "now," the Randoseru backpack excels functionally through its durable construction and spacious design, capable of carrying heavy textbooks and school supplies for years. Aesthetically, it maintains a classic, uniform appearance that aligns with Japanese school culture. Ethically, the Randoseru's long-lasting nature promotes sustainability by reducing the need for frequent replacements.

On’s Cloudboom similarly performs well in the "now." Functionally, it offers exceptional lightweight performance, weighing only 170 grams. Aesthetically, its innovative design appeals to consumers seeking cutting-edge footwear. Ethically, the sneaker's advanced manufacturing process potentially reduces environmental impact by 75% compared to traditional methods.

Looking towards "tomorrow," the Randoseru promises long-term benefits that extend beyond its functional use. It serves as a cultural touchstone, symbolizing a child's educational journey and fostering a sense of belonging and shared experience. A high-quality Randoseru, which can cost around 56,000 yen, is worth the investment due to its durability and cultural significance.

The Cloudboom’s "tomorrow" benefits lie in its potential to revolutionize footwear manufacturing. Its personalized fit and efficient production process hint at a future where consumers can access highly customized products with reduced environmental impact. The brand's focus on innovation positions it at the forefront of sustainable and technologically advanced footwear.

Both products demonstrate how brands can balance immediate performance with long-term value propositions. The Randoseru's enduring popularity, despite its high cost, shows that consumers are willing to invest in products that offer lasting cultural and practical benefits. Similarly, On’s premium pricing suggests that consumers value innovative products that promise future-oriented benefits in terms of performance and sustainability.

The contrasting approaches of these products highlight the diverse strategies brands can employ to succeed in both the "now" and "tomorrow" moments. While the Randoseru relies on tradition and cultural significance to ensure its relevance, On’s new sneaker leverages cutting-edge technology and sustainability to appeal to forward-thinking consumers. This diversity in approach underscores the importance for brands to align their products with the values and aspirations of their target markets, both in the present and in the future.

Four-Factor Analysis

The analysis of the Randoseru backpack and the new Cloudboom shoe reveals their strengths across four key factors that contribute to brand strength: products, ideas, today, and tomorrow.

1. Products:

Randoseru:

• Durable and sturdy construction, designed to last throughout elementary school

• Spacious interior capable of carrying heavy textbooks and school supplies

• Consistent design with minor variations, maintaining a classic appearance

Cloudboom Strike LS:

• Extremely lightweight, weighing only 170 grams (about six ounces)

• Utilizes advanced robotic manufacturing and 3D printing techniques for personalized fit

• Innovative design optimized for performance

2. Ideas:

Randoseru:

• Embody traditional Japanese values of conformity, unity, and social cohesion

• Represents a rite of passage for schoolchildren, symbolizing the start of their educational journey

• Reflects the importance of shared experiences and cultural continuity

Cloudboom Strike LS:

• Symbolizes technological progress and innovation in footwear manufacturing

• Represents a commitment to sustainability and reduced environmental impact

• Embody ideas of personalization and individual performance optimization

3. Today:

Randoseru:

• Meets current functional needs of Japanese schoolchildren for carrying school supplies

• Aligns with present-day Japanese school culture and uniform requirements

• Satisfies consumer demand for high-quality, long-lasting products

Cloudboom Strike LS:

• Addresses contemporary consumer preferences for lightweight, high-performance footwear

• Meets current market demand for personalized and technologically advanced products

• Aligns with growing consumer concern for environmental sustainability

4. Tomorrow:

Randoseru:

• Promises long-term cultural and emotional value as a memento of school years

• Ensures durability and longevity, reducing the need for frequent replacements

• Maintains relevance through its deep-rooted cultural significance

Cloudboom Strike LS:

• Positions the brand at the forefront of future footwear manufacturing technologies

• Offers potential for further advancements in personalization and sustainability

• Sets a precedent for more efficient and environmentally friendly production methods in the footwear industry

Both products demonstrate strengths across these four factors, albeit in different ways. The Randoseru excels in its cultural significance and long-term value, while the On sneaker stands out for its technological innovation and future-oriented approach. This analysis highlights how diverse strategies can contribute to brand strength by catering to different consumer values and market segments.

Brand Assessment Rubric

We’ve developed a simple rubric to enable brand owners to assess their brand’s strengths using the four-factor framework. This rubric helps us understand a brand’s performance (relative to competitors) across two dimensions:

1. Today and Tomorrow (Time)

   - Today: Focuses on the brand's current performance, relevance, and ability to meet immediate consumer needs.

   - Tomorrow: Emphasizes the brand's future potential, long-term strategy, and ability to adapt to changing market conditions and lead change/transformation.

2. Products and Ideas (Tangibility)

   - Products: Represents the tangible offerings of the brand, including physical goods or services.

   - Ideas: Encompasses the intangible aspects of the brand, such as shared cultural values, narratives, and emotional connections.

By assessing a brand across these four quadrants, brand owners can gain a comprehensive understanding of their current strengths and future potential, balancing tangible product offerings with intangible brand elements across both present and future time horizons. 

A New Brand Strength Assessment Rubric

1. Score your brand on each factor from 1 to 10, with 1 being the weakest and 10 being the strongest.

2. Compare your scores to those of your main competitors.

3. Identify factors where your brand scores lower than competitors or below 7, as these represent opportunities for innovation.

This rubric is based on the analysis of brand strength factors discussed in the previous sections. It incorporates elements such as product functionality, quality, and design; brand messaging and values; meeting current consumer needs; and having a vision for future relevance.

For example, in the "Products" factor, a strong score would reflect exceptional functionality, quality, and innovative design, similar to the Cloudboom’s lightweight and personalized design. A strong score on Ideas would indicate a clear, compelling brand narrative that resonates with the target audience, such as the Randoseru backpack's embodiment of traditional Japanese values.

The "Today" factor assesses how well the brand meets current consumer needs and market trends, while the "Tomorrow" factor evaluates the brand's long-term vision and strategy for future relevance. These factors help brand owners consider both immediate performance and future potential, as discussed in the "Present and Future Value" section.

By using this rubric, brand owners can systematically evaluate their brand's strengths and weaknesses across these four crucial factors. This assessment can guide strategic decisions and highlight areas where innovation could significantly enhance brand strength and competitiveness.

What Have We Learned?

In today's complex consumer landscape, brand strength is no longer a one-size-fits-all proposition. The success of products as diverse as the randoseru and the Cloudboom Strike LS shows that brands can thrive by excelling in different aspects of our four-factor model.

We encourage brand owners to experiment with this framework to assess their brand's strengths and weaknesses, identify opportunities for innovation, and develop more customer-centric strategies. Whether building on centuries of tradition or pushing the limits of technology, successful brands in the modern era must strike a unique balance between the four factors of products, ideas, today, and tomorrow. 

As we move forward in an increasingly complex and rapidly changing consumer landscape, we believe that a new approach to brand assessment will be critical for businesses looking to build and maintain strong brands with the relevance and resilience to thrive not only today but also tomorrow.

Implications for Marketers

1. Synergize your brand’s functional and cultural benefits

2. Make a clear-minded assessment of the foundational strength of your brand, be it tradition, innovation, or another key driver of customer value-creation

3. Craft compelling brand narratives around this key driver of value-creation

4. Meet your customers’ current needs while also anticipating their future aspirations

In today's complex brandscape, brand strength is no longer one-size-fits-all. Whether you're building on centuries of tradition or pushing technological boundaries, success lies in getting the right balance across product performance, aspirational ideas, meeting the needs of today, and articulating a clear vision for tomorrow.

How does your brand measure up on our four-factor scale? Share your thoughts in the comments, and let's discuss strategies to strengthen your brand for both today and tomorrow.