10 Trends To Watch In 2010

BEFORE WE BEGIN It is hard to believe another year has come and gone. So many interesting trends have emerged this year, and many more are likely poised to do so next year. At Luckie & Company, we spend a lot of time observing and studying trends that impact consumers’ lives. The following is a list of 10 trends we feel have potential to continue growing, maybe even enter the mainstream and start to play an emerging role in daily life in 2010. If nothing else, they’re pretty cool and worth keeping an eye on. For hipsters, trendsetters and early adopters, some of these are going to be old news, but for the majority of us in the masses, some pretty interesting things will start to pop up into our everyday routines.

#1 AUGMENTED REALITY Augmented reality (AR) is a term and application that has been around since the 1990s. To date, it has mainly been used by engineers and researchers to supplement their work and in very simple manners in the visual world for consumers. However, that has started to change with the mainstreaming of webcams and smartphone cameras that allow individuals to unlock AR content and provide a three-dimensional experience for the user, bringing the real and digital worlds together. Earlier this year, Doritos introduced a For the 2009 holiday season, line of Late Night chips. To promote The Home Depot has released a the chips a limited-edition AR symbol special AR gift card. When lined was printed on the back of the Late up with a webcam, the card Night chip bag. Users visited a shows a continuous stream of special Doritos Late Night Web site, possible gifts and saves the gifts lined up the symbol with their in a special section of the Web webcam and unlocked a never- site for further viewing and before-released song and video from information. popular pop-punk band Blink-182. There really seems to be no limit to the potential of AR. In addition to those from Doritos, The Another cool AR Home Depot and Zugara, lots of interesting and application is unique AR ideas are starting to pop up. Papa from Zugara, John’s and Starbucks are using AR to help where online iPhone users find store locations. The December shoppers can try issue of Esquire featured an AR cover that clothes on before unlocked an interactive video with Robert they buy them. Downey Jr. and a commercial from Lexus. GE has featured AR when promoting their smart grid technology. Walmart has used AR to sell tween furniture.

#2 P2P MOBILE PAYMENT Person-to-person payment (P2P) has been happening since the first cavemen exchanged beads for services rendered. In more modern times, friends or acquaintances have exchanged checks or cash when a payment between two individuals was needed. PayPal helped mainstream P2P payment in the online world. Now mobile digital technology is taking this concept to the next level with a variety of applications popping up that allow friends, family and neighbors to easily exchange money via their always present mobile devices. For example: three friends go to dinner and one picks up the tab with his credit card. The other two can simply text or SMS their share of the bill to the party who paid the bill. Will this technology render cash and checks obsolete? Probably not, but it will make them a lot less necessary. POPMoney (pay other MasterCard has launched MoneySend, allowing Citibank is the longest-tenured people money) is a new cardholders to exchange P2P funds via SMS, provider in this space, having bank-centric P2P mobile browser or mobile app. launched the U.S.’s first real-time service that will allow P2P service in October 2008, banks to stay in the allowing account holders to send loop with the growing money to “virtually any U.S. P2P trend (versus mobile phone number.” allowing credit card companies and third- party payment Coming at this trend from another companies to process angle is mobile device maker these transactions). Nokia, which recently launched POPMoney allows bank Nokia Money, a mobile financial customers to link a product that will allow users to In September, Wells Fargo Bank launched a mobile checking account to transfer money to their friends customer-to-customer P2P payment system that their mobile device and and pay bills. Nokia has stated allows Wells Fargo customers to transfer up to pay friends seamlessly. their that their goal is to become $1,000 per day between fellow customers. the world's largest mobile bank. Picture: www.labs.wellsfargo.com

#3 2D BAR CODES (AKA QR CODES) 2D bar codes (also known as QR codes) have been widely used in consumer marketing applications in Europe and Asia for the last four to five years, but they are just now starting to make serious inroads in North America. To read one of these codes, consumers use their smartphone camera in conjunction with a bar code reader program to unlock data stored in the code. It might lead to a special Web site or provide extra information about the product, a coupon, ringtone, wallpaper, song or any other bonus feature that can be thought of. These codes can appear in any number of places, including magazines, signs, movie posters, outdoor boards, taxis/buses or anywhere a user is liable to see and scan one. The July 29 In September, JCPenney issue of Sports flipped the idea around Illustrated had and sent mobile 2D bar the special 2D code coupons to bar code at shoppers, who then right, which flashed the code on their unlocked 14 mobile device at checkout extra swimsuit for a discount. This was a During the fall of 2009, pictures. pilot program at 16 Coors Light Canada Houston-area stores. introduced a 2D bar code feature to its Book publishers have been quick to pick up on this trend. The first Mystery Mansion book to carry a 2D bar code, BrandDigital: Simple Ways Top Brands promotion. The bar Succeed in the Digital World, allowed mobile users to buy the book codes, containing directly from Amazon.com after scanning the bar code with their exclusive Mystery mobile devices. More recently, publisher HarperCollins has been Mansion content, were experimenting with these codes. The L.A. Candy book jacket features placed on the outside a 2D bar code that takes readers to a special video and Q&A session of Coors Light cases. with the author. The Amanda Project has a special code on the last page of the book that gives readers clues to the mystery from the perspective of one of the main characters.

#4 SOCIAL MEDIA STOREFRONTS Most retail brands have a social media presence on one or more of the major social media sites. They typically use these social destinations to push news, offer customer service or otherwise engage their customers/fans in conversation. To date, social media e-commerce from these brands has been extremely limited, but may grow very quickly as marketers realize the potential of not only reaching, but also selling to, consumers where they are spending more and more of their time. Facebook and Twitter are likely to be the initial proving grounds for these types of efforts. Recent usage data shows that Facebook’s 300 million users spend a combined 8 billion minutes per day on the site, which has potential to make it one of the biggest shopping destinations ever. In August, Facebook While Twitter is still wrestling In June, Dell was the first announced the planned with how to make money major brand to announce launching of 20 virtual themselves, that hasn’t direct sales from its Twitter storefronts where users stopped numerous account, reporting $3 will be able to shop businesses from exploring million in sales from click- without ever leaving the ways to make money via thrus to its Dell Outlet that respective Facebook Twitter. Having recognized started on Twitter. While page. 1-800-FLOWERS this trend and need, Twitter that’s sofa change for Dell, was the first of these posted a business tutorial to it shows how Twitter has virtual social media help brands discover ways Mega-retailer Sears potential to be a viable storefronts to open, with to move past conversational and Web T-shirt maker sales portal. others expected to roll engagement with their Threadless have tested out in the coming months. customers on the platform. limited e-commerce functionality on their respective Facebook Southwest, JetBlue and United have all experimented pages, allowing fans to with using their Twitter accounts to announce short- shop on Facebook, but term “Twitter-only” fare sales that are completed on check out on their their respective Web sites. branded Web sites. Picture: www.business.twitter.com/twitter101

#5 21ST CENTURY VENDING MACHINES Vending machines are nothing new, having been around since the 1880s selling basic staples such as soda, sandwiches and snacks. But lately, some brands have grasped onto the time-pressed, 24/7 nature of the 21st century consumer and begun to create machines with an increasingly amazing array of options. While DVD rentals and iPod/iPhone machines have become fairly common, they’re really just the tip of the iceberg for this trend. Below are just a few examples of how the ordinary vending machine might bring even more options to life in 2010. The Magnificent Wonder Pizza Vending Hotels are getting in Closed Jeans Machine offers three 9- on the trend too. The Machine is selling inch pizza options that Standard Hotel in Los “instant denim” for are kept cold until Angeles recently $40 a pair. The ordered, then cooked in installed a swimwear machine sells two a high-intensity oven vending machine styles in multiple and delivered in under selling Quicksilver sizes and they’re two minutes. Each board shorts and guaranteed to fit. machine can hold 102 bikinis. For the more $5 pizzas. recession-proof consumer, the U.K. company Afterheels is Some industrious Mondrian South installing shoe vending German farmers Beach provides a machines in nightclubs. have found a way vending machine Targeted at young female to sell fresh eggs, offering 60 items patrons, the machines vend butter, sausage, milk priced between $10 “comfortable flats” for when and produce directly and $1.2M. From heeled shoes start to hurt. to consumers toothpaste and T- And there’s already a through Regiomat shirts to gold competitor, Rollasole, which vending machines. necklaces, condos offers a similar product/ and a Bentley. buying experience.

#6 CROWDSOURCING Crowdsourcing is not a new phenomenon. It has been used by artists and writers for years. It was famously used by Russian artists Vitaly Komar and Alexander Melamid to create “the most and least desired” paintings for a number of countries in the early 1990s. Today, the mainstreaming of social media and comfortability of sharing information and ideas within networks and with the world have quickly allowed crowdsourcing to become a popular source of inspiration and collaboration in many areas as the first decade of the 21st century comes to a close. Many marketers are testing the crowdsourcing waters with contests to create commercials, new flavors, new products or product extensions, but some brands have already moved beyond this crowdsourcing entry point and truly tapped the power of collective thinking. Food52.com is using The Royal Opera Several bands have crowdsourced recipes House in London created crowdsourced to create a cookbook. recently used Twitter music videos. The Each week the site to crowdsource the latest is Sour, a names a theme and libretto for a new Japanese band who holds a contest in “people’s opera.” On asked their fan base to which readers vote on August 3, the opera create a video for their submitted recipes. After house provided a brief single “Hibi no Neiro.” 52 weeks of reader- opening line and let the Fans from around the selected winners, they Twitterverse take over, world were given will publish The Food52 Recently, hip London restaurant successfully performing specific instructions on Cookbook. Not only is L’Anima used crowdsourcing to the completed opera in what to do using only this a fun contest, but it select part of their wine list, early September. A brief their respective web- also creates a huge utilizing online video and Twitter video outtake can be cams to record their database of great to let patrons and fans help their seen here. Over 900 actions. London-based recipes for readers to wine experts finalize the list. people contributed. Bloc Party released a come back to. fan crowdsourced live video shot entirely on mobile device cameras. Picture: www.orbitalrpm.com/wp-content/uploads/2009/03/crowdsourcing.jpg

#7 MOBILE CONTACTLESS PAYMENT Contactless payment (via a linked credit card) has been around in one form or another for around 15 years – think of those keychain fobs that Shell and Mobile introduced, allowing customers to keep their wallets in their pockets when paying at the pump. The technology is made possible by a Radio Frequency Identification (RFID) device implanted in a credit card or payment device. Now, the next evolution of contactless payment is rapidly approaching in the form of mobile contactless payment, which will use Near Field Communication (NFC) technology to complete payment transactions. That’s right, your mobile device can now pay for your many purchases and may be one step away from completely replacing your wallet (at least your wallet’s role as a cash and credit card storage device). The only real holdup is getting cell-phone equipment makers to build units enabled with NFC technology. Currently, Nokia is the leading mobile equipment manufacturer for building NFC-ready phones, while other manufacturers lag behind. As consumers wait for these mobile devices to become more readily available, several alternatives have popped up that allow mobile users to convert their existing phones into contactless payment devices. MasterCard has partnered with Blaze Mobile and MetaBank to introduce a sticker that can be applied to any mobile device, activating MasterCard’s existing “Tap & Go” PayPass system, usable at 141,000 merchants. And Mobile Payment Skins has developed a customized mobile skin (the Phoolah), which comes equipped with an NFC Earlier this year, Nokia, chip and is simply used to “wrap” the user’s mobile device. Visa and Malaysia’s largest bank partnered MasterCard has also been aggressively running to introduce the trials of their mobile PayPass contactless world’s first full-scale payment system, with trials running with partner NFC mobile payment banks in 28 countries. In the U.S., MasterCard system. Once set up, has been working in New York City with Best Buy, Nokia handset users Duane Reade, Walgreens, CVS, United Artists can use their device to pay at over 1,800 Theatres, Regal Cinemas, 7-Eleven, Arby’s and merchants in Malaysia. McDonald’s to perfect the technology.

#8 APP WORLD Apple pioneered the idea of mobile applications (apps) with the launch of their iPhone App Store in June 2008. In just 16 months, the App Store has grown to offer over 100,000 apps in 20 categories and has experienced more than 2 billion downloads. But the iPhone only represents a little over 10% of the entire mobile phone market and sits right at 30% of the smartphone market. Currently, smartphone users represent 39% of all mobile users, while recent research shows that nearly 12% of mobile users plan to buy a smartphone in the next 90 days. With the explosive growth of smartphone usage and other wireless carriers finally catching up with their own application offerings, the app life will soon be the way of life for the masses. Currently there are five emerging competitors to the iPhone App Store domination, which are detailed below. Launched in June 2009, The Google Android app the Palm App Catalog market, known as The Market, currently offers 97 apps in is likely poised for the most 16 categories. rapid growth with the massive launch of Android-based In October 2009, Microsoft operating system smart- launched Marketplace for phones (20 phones this year Mobile, featuring an initial and 30 in 2010). Some predict offering of 249 apps for the this platform could overtake Windows Mobile platform. the iPhone platform in the next couple of years. The Market, Nokia Ovi Store was Picture www.apple.com/uk/itunes/billion-app-countdown/ launched in March 2009, launched in May 2009 and currently offers over 10,000 currently offers 2,161 apps BlackBerry App World was launched apps in 15 categories. focused on five core areas: in April 2009 and currently offers 3,183 games, maps, media, apps in 17 categories. messaging and music. Unless otherwise noted, all app store counts are as of the second week of November 2009.

#9 NICHE USER-GENERATED HUMOR Five years ago everything changed with the launch of YouTube. Suddenly anyone and everyone could publish video of the world around them. Thanks in no small part to the success of MTV’s Jackass, YouTube very quickly became the place to find user-generated videos that could keep viewers laughing, smiling and cringing for hours. Soon thereafter came sites like CollegeHumor, Funny or Die, Break and a host of others where everyone with anything funny to say or show could be seen. The commonality of these sites was the broad nature of humor displayed. In the last six months or so, there has been a growing popularity in single-focused humor sites, almost niche in nature. Some of these more focused sites have very quickly received large, dedicated followings and even a level of celebrity or fortune for their creators. Could these new micro humor channels be a sign of how online consumers want their humor dished out moving forward? Probably one of the better known (and more Txts Frm Lst Nght is what it sounds like: questionable) of these sites is People of Walmart, user-submitted texts (generally from which features less than flattering user-submitted twentysomethings) that were sent or photos of everyday folks in their local Walmart received the night before, in many cases stores. The site tends to focus on poor fashion in a somewhat inebriated state. Most of choices, bad haircuts and strange vehicles in the the texts have a scandalous feel or fall into parking lot. Within a month or so of launching as a the “too much information” category. joke amongst friends, the site went viral and has Launched in the spring, the site receives received plenty of mainstream press. an average of 4 million hits a day and secured a book deal mere months after In August, a 29-year-old guy named Justin posted his first tweet on launching. a new Twitter stream he had created, shitmydadsays. It was meant as a joke between Justin and a few friends to capture the continuous stream of humorous observations and sayings his 73- year-old father offered up during the course of any given day. The site quickly went viral and now has over 800,000 followers. It also garnered Justin a book deal and possible TV series.

#10 GOODNESS There is no question that it has been a rough 18 to 24 months for brands and consumers alike, which has stretched the limits of niceness and even charitable giving for many. While the U.S. has always seen a strong level of volunteerism and philanthropy from consumers and brands, a new evolution is taking shape that can help remind consumers about the everyday goodness they can participate in. This new evolution of goodness seems based in the idea of brands empowering their customers to be both the giver and receiver of goodness versus the brand doing the giving. At the core of it is the simple act of making someone smile through a nice gesture or simple deed. In 2010, Disney will offer A Canadian credit union free admission to up to recently gave its members one million guests who $200,000 in $10 bills and have completed a day of asked them to create a “feel volunteer work in their good ripple” by using the $10 local communities to make someone’s day (i.e., through the “Give A Day, buying flowers for the grocery Get a Disney Day” store clerk, paying for the program. coffee/meal of the car behind Picture: Paul Hiffmeyer/AP Photo them at a drive-thru, giving it to a homeless shelter, etc.). Launched in September, Australian baby onesie manufacturer Baby Teresa In 2006, Toms Shoes started their One For One has a very simple premise program, giving a pair of shoes to a child in need for customers: buy one of for every pair purchased. This fall they went a step our onesies and we will further, allowing customers to help deliver the donate one to a baby in donated shoes. The first donation stop was need. Their goal is to help Argentina, with future shoe drops scheduled for clothe a baby in every Ethiopia, South Africa and the U.S. country in the world.

WHY THESE TRENDS MATTER While these trends will surely make life a little more interesting or fun for consumers, they are important for marketers to understand and adapt into their marketing plans when appropriate. And while some of these may not seem like they have direct marketing connections, they are still important to understand as this is how consumers will be interacting with brands and each other on a regular basis in the coming years. 1. Augmented reality: really picks up where virtual reality leaves off, but without the bulky glasses, headphones or other haptic feedback devices. This trend seems like it will fall into the categories of entertainment and information, the latter being used as a mashup of existing information resources to produce things like three-dimensional maps, store locators, travel guides, etc. On the entertainment side, opportunity in the gaming, music and video space feels unlimited. 2. P2P Mobile Payment: P2P mobile payment is the next logical evolution of whipping one’s wallet out to give a friend a 10-spot. It cuts down on the need to carry cash or plastic or write one of those increasingly archaic paper checks. It also makes it easier to quickly settle a friendly wager when your favorite team loses. 3. 2D Barcodes: are all about information and choice, giving consumers more opportunity to interact with a product, brand or service. This goes hand-in-hand with the App World trend as more and more consumers turn to smart mobile devices; their expectation of instantaneous connection, information and entertainment will continue to expand at an accelerated rate. 4. Social Media Storefronts: with 300 million Facebook users spending a combined 8 billion minutes a day on the site, it makes perfect sense to offer shopping opportunities that don’t require fans to leave the friendly confines of the Facebook community, while fitting seamlessly into the experience they are already having. Not to mention they’re already predisposed to the brand, being a “fan” and more likely to buy.

WHY THESE TRENDS MATTER 5. 21st Century Vending Machines: this is clearly about convenience for consumers and new sources of revenue for brands. With over 17,000 machines, Redbox DVD rentals may be the most recognizable of this new generation of vending machine (and possibly the final nail in the coffin of traditional brick-and-mortar video rental stores). Pizza, shoes, jeans; the vending machine code has been cracked and the sky’s the limit for smart marketers and entrepreneurs to reach customers with 24/7 access to the products they want. 6. Crowdsourcing: is about giving the consumer ultimate control. It also plays into individuality as like- minded individuals are likely to be attracted to similar crowdsourcing opportunities, creating an acceptable outcome that feels personalized to each individual. It can be a risky and rewarding proposition for any brand to undertake, but it is a necessity as brands slowly cede control of who they are to their true brand managers … the customers. 7. Mobile Contactless Payment: this trend has potential to be huge. Contactless payment has been around for years, but it has always required an additional fob or device to complete the transaction, thus stymieing its mainstream adaptation. The credit card companies finally adapted the RFID technology to work on actual credit cards and now have figured out how to make it work via NFC chips on mobile devices. Consumers are becoming tethered to their cell phones and mobile devices almost like articles of clothing (never going anywhere without them). As smart mobile devices continue to become the norm, they are likely to start replacing wallets and money clips like cell phones replaced watches. 8. App World: the current iPhone advertising says it all: “There’s an app for that.” As more and more consumers migrate to smartphones, an increased functionality and meaning in day-to-day life will be expected. Brands will need to adapt to this potential all-in-one device so that they can be front and center when needed.

WHY THESE TRENDS MATTER 9. Niche User-Generated Humor: humor comes in many forms. What some find funny, others find offensive. But no matter what the humor niche, there always seems to be an audience. For decades TV shows have been built around selected comedians and their brand of humor. So why not a 21st century spin on this concept, featuring user-generated material in the digital space. As long as there are book deals to sign and TV shows to be made, these types of niche sites will surely proliferate and continue to provide a daily chuckle to their users. 10. Goodness: 2010 has got to be better, right? January 1 will mark a turning point for consumers and brands alike to put the last 24 months of economic turmoil behind them and look to brighter days. Small acts of goodness may be inconsequential on their own, but when multiplied by the power that well-known/respected brands can put behind these acts, they may have the power to become difference-makers on multiple levels.

A SPECIAL THANKS AND SOME LINK LOVE For providing insight and inspiring us, many thanks to our partners at Iconoculture. And friends at TrendHunter, Trendcentral, Trendwatching, Springwise, PSFK, BoingBoing, Mobile Marketer, Gizmodo, Engadget, FierceWireless, GIGAOM, Wikipedia, Wired, Mashable, Fast Company, Paste Magazine, The New York Observer and Pew Internet & American Life Project.

CONTACT AND MORE INFORMATION If you are interested in learning more about Luckie & Company and how we think, please visit our Web site, www.luckie.com. We publish five monthly newsletters. Four “Trend Tracker” newsletters that take a quick look at what’s new and interesting in the Banking, Snacking, Telecom and Tourism industries and one “Generational News & Views” newsletter that takes a quick topical look into the lives of Gen Y, Gen X and Baby Boomers. If you would like a complimentary subscription to any of these newsletters, please e-mail david.stutts@luckie.com and mention your newsletter of interest in the subject line of your e-mail.

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10 Trends To Watch In 2010

by David Stutts

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