When it comes to the mega trend of GENERATION G (that's G for Generosity, not Greed), there’s no better way for a brand to put its money where its mouth (or heart) is than engaging in Random Acts of Kindness (R.A.K.). Consumers' cravings for realness, for the human touch, ensure that everything from brands randomly picking up the tab to sending a surprise gift will be one of the most effective ways to connect with (potential) customers in 2011 - especially beleaguered consumers in North America, Europe and Japan.
For brands, a serious (and sincere) R.A.K. strategy may mean no longer being seen as inflexible and unwieldy, but as more compassionate and charismatic instead. Something which is, of course, priceless and actually fun.
Fueling the R.A.K. trend is brands’ ability to actually know what’s happening in consumers’ lives(good or bad!), as people publicly and knowingly disclose (from Facebook to Twitter) more and more about their daily lives, their moods or their whereabouts.
Social networks also enable acts of kindness to spread far beyond its recipients, as they will gladly tell their friends and followers about the unexpected good news (see SOCIAL-LITES). Two fun examples to copy or improve on in the next 12 months:
- Flower delivery service Interflora has launched a social media campaign in the UK designed to brighten up the lives of Twitter users by sending them flowers. As part of the campaign, Interflora monitors Twitter looking for users that it believes might need cheering up. Once found, the users are contacted by tweet, and sent a bouquet of flowers as a surprise.
- Dutch airline KLM’s ‘How Happiness Spreads’ Foursquare-based campaign employed a ‘Surprise Team’ to give passengers tailored, unexpected gifts at the airport. Throughout November 2010, as soon as someone checked-in at a KLM Foursquare location within its network of airports, the Surprise Team went online to find more background information about the person, decided upon a suitable gift and gave it them before they flew. For instance, one traveler tweeted he would miss a PSV Eindhoven football game while he was in New York. The Surprise Team, accordingly, gave him a Lonely Planet guide book of NYC with all the football bars highlighted in blue.
Urbanization remains one of the absolute mega trends for the coming decade. Here's just one telling stat: “Today, half the world’s population – 3 billion people – lives in urban areas. Close to 180,000 people move into cities daily, adding roughly 60 million new urban dwellers each year.” (Source: Intuit, October 2010)
How will this change the consumer arena? Firstly, urban consumers tend to be more daring, more liberal, more tolerant, more experienced, more prone to trying out new products and services. In emerging markets, these effects tend to be even more pronounced, with new arrivals finding themselves distanced from traditional social and familial structures, while constantly exposed to a wider range of alternatives.
Secondly, keep a close eye out for ‘URBAN ISLANDS’: just 100 cities currently account for 30% of the world's economy, and almost all its innovation. Many are world capitals that have evolved and adapted through centuries of dominance: London, New York, Paris, etc. New York City's economy alone is larger than 46 of sub-Saharan Africa's economies combined. Hong Kong receives more tourists annually than all of India (Source: Foreign Policy, August 2010). However, metropolises such as Shanghai, Sao Paulo and Istanbul are obviously keen to join the top ranks, too.
Catering to city-citizens in these vast urban entities requires a local, dedicated approach in products, services and campaigns that mirror if not surpass the usual country-specific approach.
To cut a long story short: In 2011, go for products, services, experiences or campaigns that tailor to the very specific (and often more refined, more experienced) needs of urbanites worldwide, if not city by city. And don't forget to infuse them with a heavy dose of ‘URBAN PRIDE’. From Smirnoff’sAbsolut Cities to BMW's Megacity vehicle, urban is the way to go.
Note: As URBANOMICS is perhaps one of the biggest yet still underestimated consumer trends of our times, we’ll expand on this trend in our February 2011 Trend Briefing, so if you haven’t done so already, please sign up for our free Trend Briefings >>>
While consumers have always looked out for special offers and discounts, new technologies and services mean that 2011 will see total PRICING PANDEMONIUM:
- More consumers are constantly connected, and when they hear about new deals online can quickly and easily spread them through their social networks.
- Increasingly, consumers will be part of exclusive networks or groups to either receive special deals or demand them.
- Mobile devices increasingly enable consumers to find or receive dynamic deals right at the point of sale, or to compare prices online. Case in point: Amazon.com just released aniPhone app that allows users to compare prices by scanning the product's barcode, photographing it or saying its name.
Brands will continue to respond with a host of innovative new business models and pricing strategies in the next 12 months, building on:
- Group buying. The two billion consumers now online can exercise their collective buying power, helped by the host of services and social networks that make it easier than ever to organize and act. Keep an eye on 2010's big success story Groupon or their competitor Living Social. Indeed, group buying sites are springing up everywhere, from GoNabit (that covers Arab markets such as Kuwait and Dubai), to Big Lion (Russia) and Daily Deal (Germany). Or consider these two examples as confirmation that group buying is here to stay: in September 2010, Chinese group buying site Taobao sold 200 Smart cars in 3 1/2 hours, while in October 2010 Walmart used Facebook to run their own group buying offer, which got the 5,000 'likes' needed to make the deal happen within 24 hours.
- Member sales. The old 'club' format (think of Costco) has been given a new lease on life online, where niche communities thrive. Making some memberships limited or invitation-only, only increases the perceived exclusivity; SOCIAL-LITE consumers enjoy the social aspects of shopping, while for brands, offering reduced prices privately to small groups confoundsTRANSPARENCY TRIUMPH. Designer fashion brands were some of the first to offer heavily discounted ranges to select groups, via sites such as vente-privee.com, Gilt Groupe andiDeeli but member sales are now expanding to areas such as travel (Jetsetter) and home furnishings (One Kings Lane).
- Flash sales. Both groups and member communities frequently use time-limited offers that encourage impulse buys. By limiting the time available, and frequently only making sales available to members, brands are able to shift excess inventory quickly. DellOutlet andThreadless have seen great success with Twitter flash sales, and in November 2010 flash sale site Hautelook integrated its offers into its Facebook page, so that consumers could take up the day's deal without leaving the site. Indeed, with so many daily deals, there are now sites like Yipit and MyNines that aggregate all the deals.
Less of a flash sale and more of a weekend-sale is retailer J. Crew's online factory store. Open every weekend from midday Friday to midnight Sunday (EST), the site offers a limited selection of some of J. Crew's most popular pieces, produced exclusively for the factory, at reduced prices. - Local discounts. With more and more consumers being able to broadcast their location, either publicly via Facebook, Twitter or other dedicated location-based services, brands can offer deals directly to consumers virtually at the point of sale. These can be rewards for performing certain actions (Shopkick and Checkpoints), geo-located promotions (PlaceCast), or just geo-enabled apps such as UK-based Vouchercloud. Indeed, despite the hype around check-in game services such as Foursquare, B2C brands are finding that the best way to incentivize customers is to offer them deals (witness Gap's promotion to launchFacebook Deals).
- Dynamic pricing. Traditionally practiced by the airline industry, improvements in real-time information are now allowing other sectors to experiment with innovative dynamic pricing models, such as the US-based Off and Away, which auctions hotel rooms, and Swoopo, a German 'entertainment shopping' site where every bid placed extends the auction's time period.
Expect an increasing number of 'Western' brands to launch new products or even new brands dedicated (if not paying proper respect) to consumers in emerging markets. After all, it's where the money is right now, and Western brands are still favored over local ones, so the combination of perceived quality with a bit of local tailoring, love or exclusivity makes total sense*.
* Like all consumers, these Chinese, Indian or Brazilian consumers will appreciate products that are tailored to their needs, wants and desires, either for practical reasons (shape, size, features) or because of the deep-rooted desire for recognition (cultural pride, heritage, lifestyles).
This MADE FOR CHINA (IF NOT BRIC) phenomenon is just one of the many sub-trends spawned by the macro trend of economic and consumption power shifting towards emerging markets. Just to remind you:
- China's retail sales, the main gauge of consumer spending, rose 18.7% year on year to USD 183 billion in May 2010, following a 15.2% rise the previous year. (Source: Chinese National Bureau of Statistics, June 2010)
- China’s retail sales may outstrip those of the US by reaching USD 5 trillion in 2016. (Source: Chinese People’s Political Consultative Conference, September 2010)
- Affluent Chinese consumers prefer foreign brands: 52% of consumers whose annual income exceeds RMB 250,000 (USD 36,765) trust foreign brands more than Chinese ones while just 37% said they prefer the latter. (Source: McKinsey, September 2010)
- Levi's dENIZEN Jeans brand, targeting Asians/Chinese consumers with slimmer fits.
- Dior's very expensive Shanghai Blue Phone, only available in Shanghai stores.
- Hermès’ new Chinese brand, Shang Xia; its luxury stores sell ready-to-wear and decorative arts inspired by Chinese culture.
- Chloé’s limited edition Marcie handbag to celebrate their fifth anniversary in China.
- BMW’s limited edition, orange metallic M3 Tiger to celebrate the 25th anniversary of its M3 model in China, which coincided with the Chinese lunar calendar (the year of the tiger).
- Last but not least, and the inspiration behind the naming of this trend: Apple's Shanghai store employees started wearing red t-shirts with the slogan 'Designed in California, Made for China' written in Mandarin. The message is a play on the words that are found on the back of all iPhones: 'Designed by Apple in California, assembled in China'.
Online culture still is the culture, and thus we'll see a rise in online status symbols in the next 12 months (after all, status symbols reflect the zeitgeist like nothing else). What started with showing off the number of visitors to one's Flickr pages or blog now also encompasses the number of one's Facebook friends (or any other social network), Twitter followers, Foursquare check-ins and a host of other metrics that indicate one's 'wiredness'.
In the next 12 months, you can’t go wrong supplying your (online-loving) customers with any kind of symbol, virtual or 'real world' that helps them display to peers their online contributions, interestingness, creations or popularity.
Indeed, one extra element to watch out for is new status symbols that straddle the 'real' and 'online' worlds. From physical manifestations of digital status (think personalized Facebook and Twitter memorabilia), to online recognition of physical activities (status updates or badges based on real-world visits), consumers will seek to display their online status symbols in all arenas. Some fun (yet telling) examples:
- Twournal enables users of Twitter to transform their tweets and pictures into a real-life published journal. In addition to creating their own 'books', users can also buy and sell publications from other users.
- US based CrowdedInk offers an app that allows users to generate mugs filled with pictures of their Facebook friends or Twitter followers. Users only need to enter their username and a preview of the mug is automatically generated in minutes.
- Location-based social game Foursquare awards members with badges for performing tasks, including the Supermayor badge (awarded when someone is mayor of 10 different places at once), the Entourage badge (awarded when checking-in with 10 friends), the Gym Rat badge (awarded when someone has checked- in on 10 trips to the gym in 30 days), and even the Last Degree badge (awarded when checking-in at the North Pole ;-).
- Nerd Merit Badges are real-life, physical representations of a user's online achievements through Foursquare. The fully embroidered, velcro-backed badges sell for approximately USD 6. And Foursquare's own online store now offers similar real-world buttons.
As good health is now as important to some consumers as having the biggest, newest or shiniest status symbols, growing numbers of consumers will expect health products and services to prevent misery if not improve their quality of life, rather than merely treating illnesses and ailments. Some signs of the times:
- 73% of US consumers consider being physically fit important to being ‘well’, with 74% including ‘feeling good about themselves’. (Source: The Hartman Group, August 2010)
- An estimated 500 million people worldwide are expected to be using mobile healthcare applications by 2015. (Source: Reasearch2Guidance, November 2010)
- There were nearly 17,000 health apps available in major app stores in November 2010, with 57% of them being aimed at consumers rather than health care professionals. (Source: Research2Guidance, November 2010)
- The heaviest use of health or medical related apps is by young adults: about 15% of those aged 18 to 29 have such apps, compared to 8% of users aged 30 to 49. (Source: The Pew Internet Project, October 2010)
Also, both regular and dedicated medical social networks give audiences a platform to share, compare and discuss their personal health issues with other consumers.
Last but not least, the 'consumerization' of health means that more consumers will choose products with embedded health benefits that are actually well designed, desirable, accessible, fun, tasty, interesting or storied. Some examples:
- The Strollometer is a device that tracks all aspects of a new mother's strolling routine. On the display screen of the gadget, moms can check their speed, distance traveled, time spent exercising, average and maximum speeds, and the temperature outside. Once the strolling session is over, moms can then enter their data on the Fit4Mum.com website and see their results in terms of calories burned.
- Sleep On It is a mobile app that allows users to track their nightly sleeping patterns. The free tool can determine what factors may be affecting their sleep and how much sleep they need each night to feel rested and energized. Sleep On It allows users to track the length and quality of their sleep, as well as time spent snoozing and mood to see how sleep impacts their overall health and quality of life.
- Philips DirectLife is a small, lightweight, wearable monitor that builds up a detailed record of users' daily activities. Users' data is uploaded to their personal DirectLife site, showing how many calories were burned throughout the day. Users track their progress against their personal targets, and have access to an online personal coach. Users can also compare themselves to other members and connect with the online community to encourage them to share tips and stay motivated.
- Both Microsoft and Sony have recently released motion-sensing game controllers: the X-BoxKinect and Playstation Move. The systems use cameras (and a controller for the Move) to detect users' movements during gameplay. The controllers were designed not only to heighten the gaming experience but also, much like the Nintendo Wii, to add a physical and healthy dimension to it, with games like EA Sports Active 2 and Get Fit with Mel B.
In 2011, GENERATION G(ENEROSITY) will continue to give. Consider EMERGING GENEROSITY, which is about brands and wealthy individuals from emerging markets (yes, especially China) who will increasingly be expected to give, donate, care and sympathize versus just sell and take. And not just in their home countries, but on a global scale. It's a profound cultural change and a consumer demand that their counterparts in mature markets have had a few years to getting used to. Some fun stats:
- 86% of global consumers believe that business needs to place at least equal weight on society’s interests as on business’ interests.
78% of Indian, 77% of Chinese and 80% of Brazilian consumers prefer brands that support good causes, compared to 62% of global consumers.
8 in 10 consumers in the India, China, Mexico and Brazil expect brands to donate a portion of their profits to support a good cause. (Source: Edelman, November 2010.) - The number of millionaires in India in 2009 grew 51 percent, to 126,700. (Source: Merrill Lynch, June 2010.)
- 88-year old Yu Pengnian became China’s first billion dollar philanthropist in April 2010. The Yu Pengnian Foundation today has USD 260 million of bank deposits, and a Hong Kong and Shenzhen property portfolio worth just under USD 1 billion, which is expected to contribute USD 50 million of cash each year to the foundation. (Source: Hurun Rich List, October 2010.)
- In September 2010, Bill Gates and Warren Buffett hosted a dinner for China's ultra-rich to promote philanthropy. The event was similar to their efforts to get US billionaires to pledge to give away at least half their wealth, although the two denied that they were recreating the pledge or pressurizing people to give, merely using the event to answer questions and discuss issues around developing a culture of philanthropy. (Source: Washington Post, October 2010.)
Two years ago, we highlighted NOWISM: consumers' lust for instant gratification being fuelled by ever quicker, more accessible real-time products and services.
We also noticed that NOWISM was part of a larger cultural, social and technological trend towards greater spontaneity. With lifestyles having become fragmented, with dense urban environments (URBANOMICS!) offering consumers any number of instantly available options, and with cell /smartphones having created a generation who have little experience of making (or sticking to) rigid plans, 2011 will see full-on PLANNED SPONTANEITY.
Expect to see consumers rushing to sign up to services (the PLANNED part) that allow for endless and almost effortless MASS MINGLING with friends, family, colleagues or strangers-who-may-become-friends-or-dates (the SPONTANEITY part ;-)
What's next? Look beyond Twitter, and expect (younger) consumers voluntarily opting in to passively and continuously share their location*, in return for truly smart suggestions about what they could be doing or who they could be meeting up with. Will consumers accept their mobile data being collected, aggregated, analyzed and shared? If the benefits are interesting, fun or life-enhancing enough, then most likely yes.
*According to Jeff Jonas at IBM, mobile devices in the US are creating approximately 600 billion geo-spatially tagged 'transactions' a day (that's every call and text, not just web connected smartphones!)
For consumers, knowing where they are and what's / who's around them is the key to PLANNED SPONTANEITY. That's about to get a whole lot easier, as geo-location becomes a key feature of social networks and web apps (from existing providers adding location information, such asFacebook's Places, Twitter's locator, and Google's Hotpot, to dedicated services like Foursquare,Gowalla and Brightkite). Examples:
- Geomium takes data from local review sites like Yelp and Qype, and combines it with social information to not only allow users to both see which of their friends are nearby, but also to find nearby event and venue information and deals.
- LikeOurselves lets individuals with shared interests find each other via mobile groups. The service also allows users to quickly create a group and locate members within 20 miles of their location, enabling on the fly meetups.
- Fast Society is a New York-based startup that has returned to Twitter's roots, aimed at simplifying communication between friends on-the-go. The service is SMS-based, and groups last between 3 hours and 3 days, increasing the spontaneous nature of the offering.
- Unsocial aims to be a facilitator for people to meet others that share the same profession or industry. Unsocial works using a location-based algorithm - by opening the app and logging in a user is able to press the 'People' button, after which the app will display relevant matches nearby
The number one challenge for governments, consumers and businesses (recession or no recession) remains the quest for more environmentally sustainable societies and economies. When it comes to 'green consumption', expect a rise in ECO-SUPERIOR products: products that are not only eco-friendly, but superior to polluting incumbents in every possible way. Think a combination of eco-friendly yet superior functionality, superior design, and/or superior savings.
Why the need for ECO-SUPERIOR? The number of consumers actively seeking out 'green' products is reaching a plateau, as mainstream consumers start to question the value and efficiency of going green:
- While 40% of consumers say they are willing to purchase green products, only 4% of consumers actually do when given the choice. (Source: Journal of Marketing, September 2010)
- 58% of global consumers think that environmentally friendly products are too expensive, while 33% of global consumers think that environmentally friendly products don't work as well. (Source: GfK Roper, September 2010)
- While the volume of green products available to US consumers increased by 73% between 2009 and 2010, only 5% of products were not found to include some 'greenwashing' claims. (Source: Terrachoice, October 2010)
Expect to see a number of leading brands switch from purely marketing their products' sustainability and eco-friendliness (with its niche reach) and taking aim right at the heart of traditional alternatives: stressing the superior quality and design, increased durability and/or lower running costs of products in ways that will appeal to even the most eco-skeptic, self-centered or financially-challenged consumer.
ECO-SUPERIOR examples? How about the Ovopur, a well-designed natural and environmentally friendly water purification device, or the Stealth Toilet, which contains a flushing system that only uses 0.8 gallons of water per flush - saving the average family approximately 20,000 gallons of water each year, or the Renault DeZir; a 'green' concept supercar that travels from 0-60 in five seconds, or Philips' 12-watt EnduraLED bulb...
Meanwhile, our ECO-EASY trend, which we highlighted in our 10 trends for 2010, is still going strong. This is what we said a year ago:
"While the current good intentions of corporations and consumers are helpful, serious eco-results will depend on making products and processes more sustainable without consumers even noticing it, and, if necessary, not leaving much room for consumers and companies to opt for less sustainable alternatives to begin with. Which will often mean forceful, if not painful, government intervention, or some serious corporate guts, or brilliantly smart design and thinking, if not all of those combined. Think anything from thoroughly green buildings, to a complete ban on plastic bags and bottles, to super-strict bluefin tuna quota — anything that by default leaves no choice, no room for complacency, and thus makes it 'easy' for consumers (and corporations) to do the right and necessary thing".
Here's just one ECO-EASY example that recently caught our eye:
- In September 2010, Italy's famous Cinque Terre national park announced that the use of plastic water bottles by tourists and visitors was forbidden in an attempt to preserve the coastline from pollution and litter. Instead, visitors will be able to purchase reusable metal flasks which they will be able to fill up with still or sparkling water from public fountains.
We covered the re-emergence of fractional ownership and lifestyle leasing business models (no more dodgy timeshares!) in our TRANSUMERS briefing way back in 2006. Brands like Rent the Runway (fashion) and Avelle (handbags - formerly Bag, Borrow or Steal) and P1(luxury cars) have shown that for many consumers, access is better than ownership. Indeed, over the past few years, there have been few industries that haven't got the 'Netflix treatment', from textbooks to jewelry toeducational video games to calculators.
For consumers, the appeal is obvious:
- Traditional ownership implies a certain level of responsibility, cost and commitment. Consumers looking for convenience and collecting as many experiences as possible want none of these things.
- Fractional ownership and leasing lifestyle businesses offer the possibility of perpetual upgrades to the latest and greatest, the ability to maximize the number and variety of experiences, and allow consumers to access otherwise out-of-reach luxuries.
- Owning bulky, irregularly used items is both expensive and unsustainable, especially in dense urban environments where space is at a premium. With more consumers having mobile access to online systems, it becomes easier to book items whenever and wherever they are needed (see PLANNED SPONTANEITY).
- Expect to see more and more big brands getting in on the action. Take for example car sharing, one of the great successes of the OWNER-LESS trend, with car clubs springing up all around the world: Zipcar is the market leader, but similar services can be found everywhere from Australia (GoGet) to Brazil (Zazcar). Big brands, having seen the success of these smaller startups are increasingly getting in on the action: Hertz launched their car sharing service Connect back in December 2008, and now Daimler has added Hamburg andAustin, Texas following the successful pilot of their car2go pilot in Ulm (Germany). In July 2010, Peugeot launched its Mu 'mobility' service in the UK after successful launches in France, Germany, Italy and Spain. Customers can rent cars, scooters, vans or even bicycles.
- Local authorities are finding that shared solutions allow them to expand their services at a lower cost, and in a sustainable manner. Public bike programs have been the global hit of 2010, with schemes launching in Minnesota, London, Mexico City, and across the Ruhr in Germany. Now, governments are exploring new forms of transportation, with Paris (who pioneered bike sharing) launching Autolib, an electric car sharing scheme in September 2011, and the New York City Department of Transportation announcing in October 2010 that they had partnered with Zipcar.
P.S. The brief introduction above only looks at brand/ government offerings. There is also a whole host of P2P sharing sites that are springing up to facilitate renting and sharing between consumers, with everything from homes to fashion, to cars (and car parking spaces) available. Watch this space for a full Trend Briefing on the rise of OWNER-LESS.
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