future thinkers update
 

2020 Vision

by Paul Hudson
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Open Ideas profiles future consumer

By Paul Hudson

The digital revolution has resulted in dramatic changes in consumer behaviour and unless businesses fully understand the scope and significance of those changes, they will be unprepared to engage with the consumer of the future.

Mahatma Ghandi said: “The future depends on what you do today.” His words have resonance for business leaders in the 21st Century who must act now to devise strategies for engaging with a new breed of consumer.

To succeed, they require a greater understanding of current behaviour and of the forces that have effected remarkable change in today’s adult consumers and which are driving more radical change in the next generation.

Our ‘Open Ideas’ event drew on our extensive research into multi-generational consumer behaviour and the impact of technological change to deliver unique insights into the multi-faceted nature of future consumers.

The future consumer is highly demanding, constantly connected, ever-mobile, and hyper-local in their behaviour. The forces that have shaped this new breed are the all-pervasive and constant presence of the internet; the rapid adoption of mobile devices, especially smartphones; and explosive growth in social networking.

The rise of the ‘connected consumer’ affords an opportunity for constant brand engagement but there is a risk of alienation if your engagement methods and content are not relevant and delivered in a format which suits the consumer’s evolving needs.

Being ‘connected’ has afforded consumers both greater choice and control, via product browsing and price comparison, while Facebook and Twitter have given them a powerful voice to praise, criticise and rate business in a highly public manner. Google’s search facility was like turning on a light - consumers could suddenly see what they were looking for and now social networking sites provide a megaphone to shout to the world.

This has shifted the balance of power from an adult/child dependent relationship between business and consumers to a more challenging grown-up relationship and businesses must recognise and adapt to this new dynamic.

While connected consumers like having control over their personal data, they are conflicted over how much control to cede for the sake of convenience in the form of more personalised service and offers. The price of convenience is leaving a trace of personal preferences, a contentious issue for many consumers. In the future, the businesses which tackle this issue transparently and in a way which clearly demonstrates benefits for consumers will emerge as winners.

Mobile devices have wrought some of the biggest changes in behaviour - for digital natives, the internet just is mobile. Having no mobile engagement strategy is like saying you don’t open for business on a Thursday.

Yet, business is still playing catch-up in the mobile sphere and there are illogical gaps in strategy as a result. For example, mobile ads are 80% more memorable, with consumers still able to recall them after 15 days - yet, 79% of major advertisers do not have a mobile-enabled website.

The numbers on mobiles are compelling - there are now 7 billion mobiles in the world and in the UK smartphone penetration has passed 50%. For under-18s especially, mobiles represent the key to their lives, 75% said they could not live without them. Under-18s have the boldest vision of how all-important mobiles will be in future, envisaging a world in which their mobile controls a range of other devices.

Mobile, or M-commerce, is not the same as E-commerce; it is less about transaction and more about browsing and gathering intelligence, although this will evolve with the arrival of mobile wallets using Near Field Communications technology.

We know that 70% of UK consumers access the internet via mobile and that figure is growing, so services distributed or marketed via the internet need to be optimised for that channel. Overall, mobile is the most important trend of the digital age - businesses simply cannot afford not to have a mobile strategy.

A major trend affecting the future consumer is the convergence of social, locational and mobile - known as SOLOMO. This has spawned the ‘hyper-local’ consumer and some of the smartest investors on the planet, including legendary fund manager Warren Buffet, are investing in services which serve a local need.

While the internet is universal, everyday life is local and people really want to know about their local community. Brands which tap into that desire and market relevant local offerings will have a competitive advantage.

We know that 84% of smartphone users want recommendations for what to do in a new place and value the opinion of other consumers more than brands. Consequently, to influence opinion, brands need to develop ‘brand advocates’ who will win over new converts.

The ‘hyper-local’ trend is still emerging and is hampered by limited location optimisation technology and lack of universal network coverage. However, as it develops it has the potential to enable more businesses to proactively market location-specific deals designed to transform a browsing visitor into a paying customer.

The pace of change is accelerating - we are doubling the rate of technological change every decade. Business survival necessitates a rapid and flexible response which means stepping out of the comfort zone, even if your business enjoys a seemingly entrenched dominant position today. The average lifespan of a company was 65 years in 1920, today it is 15 and even once-mighty giants like Kodak have foundered by reacting too slowly to technological change.

Companies most at danger of obsolescence in this new reality are those which delegate responsibility for change, have rigid legacy operating environments and make conservative management decisions. Other danger signs are businesses with hierarchical structures which mean senior management are remote from the consumer as well as those paralysed by capital constraints.

As businesses hurtle towards this somewhat daunting future, these are the five key trends they must address:

1. Locally-empowered consumers will transform business

The show-rooming trend is the tip of the iceberg - mobile browsing and price comparison will continue to increase. Locally targeted offers will become the norm.

2. Consumers will become ever more demanding

Constant connectivity has fostered the ‘now culture’ which means instant gratification is expected. Businesses which struggle with impatient and well-informed customers will fail.

3. Consumers will expect seamless service across channels and screens

Brands must deliver a universally good service regardless of channel or device. They need to consider device connectivity and focus on the overall quality of customer experience.

4. The communications boom is here

Multi-channel consumers demand more communication, not less. Under-25s communicate with businesses 7% more than over-25s and use all channels, digital and traditional (phone and email). The future is channel proliferation not channel substitution.

5. The Future Generation are on their way

Under-18s are the most prolific and skilled multi-channel communicators we have ever seen, especially via social networking. They dictate terms on channel choice and personal data disclosure which makes them harder to reach and control. Devising a strategy which recognises this is essential.

   
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