Consumer Trends to Watch in 2011, Part 1

Stephen DeAngelis

December 29, 2010

A company called trendwatching.com labels itself as “an independent and opinionated trend firm,” that scans “the globe for the most promising consumer trends, insights and related hands-on business ideas.” As you can tell from its self-description, the company is not your typical staid organization. In the introduction to an article on consumer trends to watch in 2011, the authors from trendwatching.com write:

“Another new year, another roller coaster of threats and opportunities. We tend to focus on the latter as, amidst currency wars and defaulting nations, there are more opportunities than ever for creative brands and entrepreneurs to deliver on changing consumer needs. From Brazil to Belgium. No rest for the wicked in 2011!” [“11 Crucial Consumer Trends for 2011“]

I was directed to trendwatching.com’s web site from article I was reading on the Consumer Goods Technology (CGT) web site entitled “11 Crucial Consumer Trends for 2011,” 7 December 2010]. The CGT article provides a good overview of 11 eleven trends discussed in the longer trendwatching.com article. For discussion purposes, however, I’ll be using the original trends briefing provided by trendwatching.com. In Part 1 of this two-part series, I’ll discuss the first six trends. I’ll finish up with the final five trends tomorrow. The first trend might surprise you.

1. Random Acts of Kindness –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 in 2011 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 2011:

“• 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.”

Obviously, not every company can afford to dedicate teams of people to reading tweets and scanning Facebook. The trend does, however, underscore what a lot of analysts are saying about social media — get on board or get left behind.

“2. Urbanomics — 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 in 2011 and beyond? 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’s Absolut Cities to BMW’s Megacity vehicle, urban is the way to go.”

The statistics are telling and the trend is clear. I was particularly intrigued by the fact that “just 100 cities currently account for 30% of the world’s economy, and almost all its innovation.” The term “urban islands” is also a wonderful visualization of a complex concept. My only comment about this trend is that the write-up is obviously encouraging companies to go after affluent urbanites (middle class consumers and above). Many of the residents of the world’s urban islands, however, remain gripped in poverty. As I have noted in past posts on development, there is money to made selling to the so-called “bottom billion.” They probably don’t have much urban pride, but they nevertheless deserve attention.

“3. Pricing Pandemonium — While consumers have always looked out for special offers and discounts, new technologies and services mean that 2011 will see total PRICE 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 an iPhone app that allows users to compare prices by scanning the product’s barcode, photographing it or saying its name.

“Always-on connectivity is changing consumer spending habits in myriad ways. For example, coupon clipping required planning and dedication, hence wasn’t that popular with consumers more interested in the here and now (see NOWISM), but now is a near-effortless online activity. Furthermore, whipping out one’s smartphone at the counter, getting the latest deal via GPS, or barcode scanning is well, smart. And therefore a source of status rather than shame. 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, which will become even bigger in 2011 (especially when part of Google 😉 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 confounds TRANSPARENCY 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 and iDeeli 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 and Threadless 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 launch Facebook 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, the German based ‘entertainment shopping’ site where every bid placed extends the auction’s time period.”

Wow, that’s a lot to digest. The first point to make, however, is that Groupon turned down Google’s $6 billion acquisition offer. To learn more about Groupon and the Google offer, read my post entitled All Things Google: Beyond the Search Engine. Although the folks at trendwatching.com are encouraging businesses to embrace this pricing pandemonium, it appears that some retailers are frightened by the prospect [“Phone-Wielding Shoppers Strike Fear Into Retailers,” by Miguel Bustillo and Ann Zimmerman, Wall Street Journal, 15 December 2010]. On to trend 4:

“4. Made for China (If Not BRIC) — In 2011, 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)

“So who has already jumped on the MADE FOR CHINA band wagon? Check out the following examples:

“• 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, coinciding 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’.

“P.S. Brands like Honda (Li Nian), Nissan (Venucia) and GM (Baojun) are busy introducing ‘cheaper’ brands in China, too, as many consumers in emerging markets still do have less to spend than their counterparts in mature consumer markets. And yes, that’s yet another ‘Emerging Markets’ sub-trend.”

Although authors of the article concentrate on China, they are right in implying that other emerging market countries are also worth watching. See my post entitled Knowing Your BRICs and CIVETS, in which I describe those countries that are now being closely watched along with the BRIC countries.

5. Online Status Symbols — Online culture still is the culture, and thus we’ll see a rise in online status symbols in 2011 (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 2011, 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 in 2011 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.”

This trend appears more likely to take hold among the very young or the very old. I can see kids at school as well as wheelchair-bound residents of rest homes wearing their “Nerd Merit Badges,” but the whole “there is no ‘U’ in Internet” movement will probably remain a niche market. That doesn’t mean that enterprising entrepreneurs won’t be able to make money exploiting it.

“6. Wellthy — 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 in 2011 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: Reasearch2Guidance, 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)

“In 2011, count on even more monitoring technologies becoming portable or even wearable, as well as getting cheaper (the smartphones held by many consumers are now more advanced than most dedicated medical devices). 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.

“• Phillips 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-Box Kinect 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.”

I believe that this trend is going to be a lasting one. In a post entitled Shortages of General Practice and Family Doctors are Impacting Emergency Health Care, I discussed the fact that general practice physicians are already in short supply and the shortage is predicted to increase. Some analysts believe that one way to reduce doctor workload while increasing patient care is to use more remote patient monitoring. As noted above, consumers are starting to monitor themselves and are likely to become increasingly more comfortable in a healthcare environment permeated by remote monitoring devices.

A side note on the value of motion-sensing game systems: The father of one of my employees became deathly ill when he was infected with Methicillin-resistant Staphylococcus aureus (MRSA) following surgery for bladder cancer. The infection concentrated around his hip replacement hardware requiring it to be removed. Months of languishing pain and diminishing health followed. Eventually he had surgery to replace the hardware removed from his hip. Following that surgery, he was sent to rehabilitation facility to recover. Lying in his bed, he heard women laughing down the hall. When he inquired as to what was going on, the CNA told him that some women were bowling on the facility’s Wii gaming system. His eyes lit up and he informed his caretakers and family that he wanted to go play as well. He went from being bedridden to bowling. From his first game, Wii played a part in his remarkable recovery.

In the next post, I will complete my discussion of the trendwatching.com list of consumer trends to follow in 2011. If you can’t wait or want to learn more about that company, go to http://www.trendwatching.com/. You can also get regular updates from the company. As “one of the world’s leading trend firms, trendwatching.com sends out its free, monthly Trend Briefings to more than 160,000 subscribers worldwide.”