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Trends 2008

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Summary of business, marketing and consumer trends effecting business

Summary of business, marketing and consumer trends effecting business

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  • 1. Trends 2008 Mixture of trends, fads, themes and implications Contact: james.myers@ogilvy.com
  • 2. Why bother?  It‟s fascinating  So it is a bit of a personal list  Provides a context to everything we do  … big ideas and ideals  Unfortunately it is a Forth Bridge job  We have 40 or so, 100 would not be a problem.  Lots of sources – too many  This is not original  Contagious, „60 trends in 60 minutes, www.trendwatching.com, McKinsey and so on Last updated 10 Oct 08
  • 3. A trends structure  Economic  Social  Consumer  Business  Marketing environment  Technology  Working environment Last updated 10 Oct 08
  • 4. Four trend drivers  More information for everyone  Technological innovation  Connectivity – it‟s the internet  Environmental concern Last updated 10 Oct 08
  • 5. When you see a trend  Stress-test it  It a trend, super trend or just something transient?  Would you like to know more about this trend?  Challenge it with a counter trend?  What are the implications of this trend?  Introduce your own trend Last updated 10 Oct 08
  • 6. Economic
  • 7. Economic Is stagflation back? Or downturn or recession or depression! Please tick most applicable. Inflation (fuel, food, petrol, intermediate goods) Economic Growth Unemployment  What could this result in?  How will consumers change their behaviour and thinking? Scrambling to save money, more on line calculators, less luxuries purchased, replacement of the TV put on hold? We need a 42” flat screen TV – yeah right. Last updated 10 Oct 08
  • 8. Economic Increasing global co-operation  We live in an economically connected world … China relies on the US to buy its products with the mineral resources it imports from Russia, S America and the African continent.  Less than 20 countries are as wealthy as the top 100 Multi-National Corporations So what could this result in?  Multi-national companies controlling national economies and agenda‟s. They already influence tax regimes. Pollution knows no border so climate change could be the catalyst. And economic policy ineffectiveness – e.g. interest rate changes don‟t make a dent on inflation if you import half your raw inputs Last updated 10 Oct 08
  • 9. Economic The interfering state Low pension contribution. Middle Income binge drinkers. Housing shortage. Child obesity. Financial Institutions And it is going to get worse because interference is now officially OK. A price worth paying if they bail out banks, pension and savings.  So what could this result in?  More stealth like consumption taxes – petrol, prescriptions, alcohol, smoking, congestion charge, hospital parking, my wheelie bin. Does it make it easier for marketers to charge for additional personalisation services. The burden of the state is increasing (how many work in PS compared to a few years ago?) Public sector boom. Last updated 10 Oct 08
  • 10. Economic Life expectancy increasing  Medical advances mean that we will live longer (not necessarily better) – whether we want to is another point.  Percentage of over 65s in population is predicted to increase by 10% in next 10 years.  So what could this result in?  Will doctors be able to ignore their Hippocratic oath or will we see ventilator farms for geriatrics? There are other serious issues, people wont have the wealth to enjoy their retirement, most people‟s pension funds just wont be big enough to keep them going through 30 years of dotage. We may have to work longer. The impact on the NHS will be considerable, even the rich wont be able to afford the £1000pcm health insurance premiums. We could see four generations living under the same roof and equity release (what equity?) becoming the norm Last updated 10 Oct 08
  • 11. Economic Replacement society If ain’t broke, replace it  So what could this result in?  Environmental pressures encouraging us to keep things longer. More sites like www.freecycle.com and perhaps a local sharing site. (especially now) There is a contradiction here! Throw away more, recycle more. Perhaps companies will upgrade for free, some already do. Last updated 10 Oct 08
  • 12. Economic Information for the buyer „Historically information has been asymmetric, distributed in favour of the suppler, now we are getting closer to perfect-ed markets. Residual prices  So what could this result in?  Buyer power, auction everything, falling margins, more rational decision making for high cost items. Last updated 10 Oct 08
  • 13. Social
  • 14. Social In search of happiness „We have never been wealthier and never more miserable‟ Happiness Economics is the study of a country's well-being by combining economists' and psychologists' techniques. It relies on more expansive notions of utility than does conventional economics. Although its usefulness is yet to be determined, it has become a subject of interest and often a measure of comparison with the traditional forms of measuring market health such as GDP and GNP.[1] So what happens to rampant (it always is) consumerism, the pursuit of profit, our working week, the work-life imbalance, investing? Last updated 10 Oct 08
  • 15. Social Counsel me, improve me  Make me slim  Make me confident  Make me wealthy  Make me better  Make me give up … with horses*  Seven secrets to …  Help me fight  Improve my  Give me a six pack  Help me be content with myself  Mass personalisation has encouraged it‟s all about me (or you) culture * equine rehabilitation programs Last updated 10 Oct 08
  • 16. Social No more nuclear families  1 in 4 children is brought up within a one household family  „Sandwich generations‟ looking after their parents and their children.  Children staying at home till 30+  Average HH income is still under £30k, average house price over £200k. Work it out.  Flats, flats, flats, flats, apartments, flats, starter home Last updated 10 Oct 08
  • 17. Social Food fascism  Jamie Oliver, Lillian McKeith  28 units of alcohol for men, 21 for women  5 a day; 1 litre of water  No processed foods, Mediterranean diets  Glass of red wine a day is good/not good for you So what could this result in?  The wealthy living longer than they already do. It is not just access to better quality healthcare but they can afford better diets. Will good food continue to demand a premium? Last updated 10 Oct 08
  • 18. Social Other social  Social networks, the time poor, global connections and friendship  Will the nature of friendship change? You have more contact with colleagues 2000 miles away than your neighbours.  Facebook culling is happening near you.  Deficit of trust (again)  We have to include this. McDonalds, policeman, the church and your peers.  Fear of litigation  Courses, more courses, no reviews, lack of personal responsibility. Last updated 10 Oct 08
  • 19. Business
  • 20. Business Un-concentrated markets  Many markets where digital is a significant channel will see a single market leader with smaller minnows targeting the niches. Google and Amazon are becoming the category. And it probably wont just be on line, Mckinsey argue there is little value in being medium sized (whatever that is?). Businesses might as well own the means of production, be big and use scale to their advantage or be small and nimble, outsource a variety of functions and being able to change their strategy and cost structure quickly. Market Leader Last updated 10 Oct 08
  • 21. Business Commercial transparency "Old economy fog is clearing: no longer can incompetence, below-par performance, ignored global standards, anti-social & anti-eco behavior, or opaque pricing be obscured. In its place has come a transparent, fully informed marketplace, where producers have no excuse left to underperform. TRANSPARENCY TYRANNY for some, TRANSPARENCY TRIUMPH for others." - trendwatching Trip adviser, adviser everything, price comparison, mobile price comparison on line recordings, mobile films uploaded, social network links … peer2peer Adviser, brand terrorism. Last updated 10 Oct 08
  • 22. Business Environment “One of the most complete and speedy revolutions in consumer attitudes ever seen” Ethical funds are now outperforming traditional funds. Last updated 10 Oct 08
  • 23. Business It‟s not what, it‟s how you do it  Unique selling Proposition (USPs) are few and far between. There are so many me-too products and manufacturers can copy so quickly that marketers are struggling to differentiate their products. Every marketer should aim to turn their product into a service or experience. USP now stands for unique service proposition. Last updated 10 Oct 08
  • 24. Business Re-intermediation Re-intermediation, putting the middle man back into the chain, not dis-intermediation is the opportunity. Aggregate and simplify. Last updated 10 Oct 08
  • 25. Free-conomics  „The disrupter‟s motto is “be the first to give away what others charge for‟ – Chris Anderson  Good, fast, cheap is no longer good enough we have to be different do something extra.  Youtube destroying TV, Skype is destroying traditional telephony. What can you give away free? Last updated 10 Oct 08
  • 26. Business Business  Outsourcing  Focus on what you do best, core competencies. It is getting easier and easier to let third parties manage anything from your IT to HR. You can establish an international company in your garden  Competitor co-operation  Affiliate culture and the need to establish relationships will encourage businesses to work with partners and traditional competitors. It‟s rampant in technology.  Vertical integration  Modern supply chain systems make it easier for businesses to integrate with each other regardless of their place in the supply chain. Last updated 10 Oct 08
  • 27. Business Business  Instant feedback  It‟s easier for businesses to get immediate feedback from partners and suppliers. EPOS, supply chains, viewing figures, on line research, text response. Businesses need to be and can be more flexible.  Business organisms  Info-structure not infra-structure is the most important asset. Amazon‟s relationship is driven by data. New technologies e.g. unified messaging, convergence, make businesses like these extremely agile and mobile.  Social networking for everyone  For corporations, why not? Must be better than knowledge management systems. This is already happening. Last updated 10 Oct 08
  • 28. Consumer
  • 29. Consumer Minority everything Minorites have a voice, they also have a value to marketers because they are now easier to reach. It‟s the long tail idea again.  So what could this result in?  Media buying will focus more and more on contextual, less on volume. Marketers will want to know how small and discrete the segment is not how big it is. Last updated 10 Oct 08
  • 30. Consumer ASD for everyone  Impatience – we expect everything now. We don‟t watch just TV we read the paper at the same time and surf, we can have it on demand. Books are only read on holiday or on trains – assuming we are not on the mobile. Even our groceries get delivered. Everyone complaining of not enough me-time.  So what could this result in?  Expect to me new types of time saving services and convergent devices. But remember time saving devices can be a curse, you could be expected to do more with the time available. Last updated 10 Oct 08
  • 31. Consumer Escalating expectations  We work longer hours, spend more time commuting, can purchase most things 24x7, supermarkets are open 100hrs plus a week – we have the time, want it now generation.  Fast, good and cheap is no longer good enough. Businesses have to offer consumers something more!  So what could this result in?  The customer is right, the customer is king, the customer is getting out of control. Are we seeing a power shift to the buyer? Like procurement. Expect more brands to put service at heart of their offering. Majority of FS advertising in 07 promoted their service credentials. Last updated 10 Oct 08
  • 32. Consumer Affiliate me  Customers get paid for information with on line surveys, blogs, adwords, co-buying, social shopping. Everything has a price. Here„s a sign of the times. A US eBay seller called destiny222 is flogging her $103,245.11 (£50k) debt accumulated on stuff like her house, ...read Telegraph 29 April 08  So what could this result in?  eBay has taught them that everything has a price. They are quick learners. Customers selling their custom to the marketers. Last updated 10 Oct 08
  • 33. Consumer Virtuous thrift  Baked Potatoes and Fishfingers for supper.  But now we will feel good about it - because everyone else is doing it.  Lidl and Aldi not Sainsbury‟s or Waitrose Things you will hear at dinner parties in 2009 “The serrano Ham and Chorizo at Lidl is better than Sainsbury’s and M&S – fact. You should try it” P.S. It is.  So what could this result in?  Less conspicuous consumption (even if you have the money). Thrift in the media – holidays/eating/home improvement on a shoestring. Substitution spending so more visits to McDonalds less Pizza Express. Last updated 10 Oct 08
  • 34. Consumer  Peter Pan-ism  The obsession with youth, and staying youthful. Gap years taken later and later.  Pre-maturity  Children getting older younger.  Born to be wired  You know this. Teenagers grow up with technology, connectivity, change and obsolescence are taken for granted. My 4 year old can turn on the PC, access her favourites, play games, recognise all the key buttons – of course she can‟t read yet. Thank god.  Frugality  The fear of living too long. Already talking about the frugal rich. Last updated 10 Oct 08
  • 35. Marketing
  • 36. Marketing Mass uniqueness  Personalisation is now expected, people demand choice even though they don‟t know what to do with it – the paradox of choice. Do we really want that much choice?  Many businesses claim never to sell the same product or service. • www.sevencycles.com, cars,  But perhaps what we really want is uniqueness. Personalisation is a shallow alternative.  What could this result in?  Wiki design. I design it, you make it. It could never happen … colour mixing is an example of it happening already. „Grow your own white goods‟ – Telegrapgh 12-05-08. It is happening today. Last updated 10 Oct 08
  • 37. Mobile is still coming  2005, 2006, 2007, 2008 the year of mobility  Much more text than email sent every day  50m, 60m, 70m mobile devices in the UK?  Costs are falling  Mobile BB for a fixed fee under £20pcm  Do we need the killer application to start the ball rolling  Mobile price comparison?  So what could this result in?  Phones with 80gb memory, instant sales, mobile price comparison, mobile reviews. Last updated 10 Oct 08
  • 38. Marketing Experience shopping  Whilst the internet has taken the fun out of shopping and many of the shops out of the high street. More retailers are trying to enhance the shopping experience. Make it fun, make it something people want to do.  What could this result in?  Go to the clothes showroom, buy something and the items are delivered to your home. Next you cook your own meal following instructions from a live Gordon Ramsey hologram. Next it‟s the club, like the music? OK we will email it to the cab for your ride home. Last updated 10 Oct 08
  • 39. Marketing Consumer in control  It‟s web 2.0, the user generated content chestnut. Brands are no longer in control. but how much control can they cede. If you lose all control, it follows your margin will decline to zero.  Don‟t believe me. Agency procurement, supermarket buying strategies. Who is in control, who makes the money? So where is the incentive to produce?  What could this result in?  Brand losing total control, margin dipping close to zero. So where is the incentive to take risks? Perhaps every customer will become owners, every time you buy we give you more equity? Tesco could apply this model to their clubcard customers tomorrow. Terry Leahy – please ring me. Last updated 10 Oct 08
  • 40. Marketing Digital engagement agencies  How much can our (smaller) clients achieve utilising social networking, advertorial, forums, email, organic search, blogs, wikis, reviews, affiliate and partner programs, weblinks? Quite a lot. It has energised B2B marketing.  So what could this result in?  Small (and bigger) businesses have a ready made marketing strategy and in certain markets you may not even need traditional media. Last updated 10 Oct 08
  • 41. Marketing Brands as facilitators …  Many more brands now talk category. Cycle websites don‟t just sell cycles, they sell cycling lifestyle. It is the big ideal, they just don‟t realise it. We think the world would a better place if everyone got on their bike.  Once there was room for two or three shops on each high street, but now we can only fit 10 on every screen.  How many cycle lifestyle websites do you need?  So what could this result in?  It is more of a question. How many brand butlers, brand facilitators can we stomach? Advisers, help desks, demo‟s, widgets, comparisons. Surely not everyone can do it, is it winner take all again. Last updated 10 Oct 08
  • 42. Technology
  • 43. Technology Portable lives  Memory sticks are relatively new. Three years ago 250kb was the norm now they would laugh at you. 8mb is common place. It wont be long before you can have your total hard drive on a stick, you may not even need a PC just a dumb client to access a few software packages from. All your life, your wealth, all your music, all your banking information, your personal interests … on a stick. And what if were wireless enabled. What could this result in?  Personality theft would be big, instant dating in night clubs with compatibility tests; at least you wont have to ask what music do you like? Last updated 10 Oct 08
  • 44. Technology Getting smaller  Nano-technology, everything is getting smaller. RFID chips or something better in anything from pallets to clothes tags means you can track everything from your supplier through your distribution system to the till.  What could this result in?  Tracking components from factory to sale to home, perhaps self repairing fridges. Messaging telling you it could be time to replace your no1 tank top. You have worn it for 360 hours already – you loser. Last updated 10 Oct 08
  • 45. Technology Intelligence not required  Big Blue beat Kasparov in the mid 90s, poker sites are have software dedicated to spot players using decision making software, robotics is making leaps and bounds, on line advertising can be automatically optimised. Neural networking can find non linear patterns in vast datasets. Luckily, humans retain some advantages.  The ability to ask questions (Picasso)  Thinking outside the parameters set by experience  What could this result in?  Don‟t know, need a computer to work this one out. But perhaps we place a greater premium on social skills, caring professions, counselling? Last updated 10 Oct 08
  • 46. Working
  • 47. Working environment  Going plural  The need for leisure time, break down of the 9 to 5 constraint  Super rocket fast Home-working  Commuting, office costs, work life balance, technology  Fake professionalism on the increase  HIPs, Conveyancing, para legals, community support office, classroom assistants  Feel the need for re-education  50 years working, redundancy, skills becoming obsolete, obsession with self-improvement.  Task groups becoming the norm  Unified messaging, Lockhead skunkworks Last updated 10 Oct 08