Eight critical marketing trends to watch and profit from in 200813 min read . Updated: 27 Dec 2007, 12:16 AM IST
Eight critical marketing trends to watch and profit from in 2008
Eight critical marketing trends to watch and profit from in 2008
As 2007 draws to a close, Mint brings you exclusive insights from the global 2008 Trend Report from Trendwatching.com BV, the Amsterdam-based consulting company that relies on a network of about 8,000 trend spotters in some 70 countries to identify promising consumer trends and insights.
The network is based on volunteers who alert the company on trends they have spotted, be it a new male grooming lounge in Dubai to an affordable book publishing service for new writers in Canada. Such ideas are then simply emailed to the firm by the spotters, who register themselves with the company and collect points for every accepted trend. Points then add up to gifts. Mint readers, too, can register by visiting the site, Springspotters.com.
Here are edited excerpts of the 2008 Trend Report to give Indian companies and marketers lots of examples from around the world and, perhaps, new ways to pitch their products and services to Indian consumers. Part I introduces two such trends.
1. STATUS SPHERES
Here’s something trend watchers, chief marketing officers and other business professionals should be able to agree on: in the end, when dealing with (and selling to) people, everything always comes back to status. In a traditional consumer society, he or she who consumes the most, the best, the coolest, the most expensive, the scarcest or the most popular goods, will typically also gain the most status.
Now, you guessed it: the above will still ring true in 2008, and should be on your mind whenever/wherever in the new year—when tracking trends, when mapping out new strategies and when coming up with new products and services for your customers.
In fact, expect 2008 to be the year in which even more brands realize (if not grudgingly accept) that old, mass-era status symbols, from the Audi R8 to the De Beers Talisman Watch Collection are no longer every consumer’s wet dream. After all, as mature consumer societies are increasingly dominated by (physical) abundance, by saturation, by experiences, by virtual worlds, by individualism, by participation, by feelings of guilt and concern about the side effects of unbridled consumption, status is to be had in many more ways than leading a lifestyle centred on hoarding as many branded, luxury goods as possible.
We’ve dubbed the above phenomenon status spheres— a variety of lifestyles, activities and persuasions, which can be mixed and matched by consumers looking for recognition from various crowds and scenes. Getting too vague? Here are some status spheres to keep an eye out for in 2008:
TRADITIONAL SPHERE:Traditional consumption is about buying more and/or better stuff than fellow consumers. Which is by no means dead. In fact, expect the consumer arena in 2008 to still be about hundreds of millions of consumers who do want to consume more, who do covet all things bling and who do crave in-your-face brands.
If conspicuous consumption were ever to subside in mature consumer societies, then count on the emerging middle classes in China, India, Russia, South Africa, Turkey, Nigeria, Vietnam and Brazil to proudly take over the torch. In other words, count on multiple consumption and status arenas to develop simultaneously for years to come.
While the rise of the global middle class is as big a story as they come, the rise of high networth individuals (HNIs) has an equally significant impact on consumerism. Consider the following numbers, from the 2007 World Wealth Report by Merrill Lynch and Co. Inc. and Capgemini. The number of HNIs—individuals with net assets of at least $1 million (Rs3.94 crore), excluding their primary residence and consumables, in the world increased 8.3% to 9.5 million.
The number of ultra-HNIs—individuals with net assets of at least $30 million, excluding their primary residence and consumables, grew by 11.3% to 94,970. China’s HNI population grew by 7.8% to 345,000 people and Russia’s has increased by 15.5% to 119,000. Brazil (120,000 HNIs) and India (100,000 HNIs) also showed continued strength.
With so much (new) wealth and disposable income around the world, not only is there money to be made from selling premium goods, there’s also a constant need for redefining what constitutes luxury, for what constitutes status in bling-driven consumer societies. If millions have access to the same premium goods, to the same premium brands, these premium offerings lose some of their value, as their entire raison d’être was to offer something that others could not get access to. Scarcity is becoming less scarce and wealth is always relative, leading to actual ‘status despair’ among those who are by all means, financially well off.
So, in an arena that has become crowded with middle class and high net worth consumers, expect luxury goods to take on more outlandish forms and shapes, at ever-higher costs.
Our most recent favourite example of status despair was Prince Alwaleed bin Talal bin Abdulaziz Al-Saud of Saudi Arabia buying himself a $320 million Airbus 380, which for another $100-plus million will be turned into a ‘flying palace’ with three bedrooms, private lounges, bathrooms, offices, a steam bath and exercise machines. But even here, commoditization is threatening the Prince’s purchase: Airbus actually expects to sell about 20 VIP versions of the A380.
TRANSIENT SPHERE: Attractive to consumers who are driven by experiences instead of the fixed—those who are driven by entertainment, by discovery, by fighting boredom, who increasingly live a transient lifestyle, freeing themselves from the hassles of permanent ownership and possessions.
We dubbed these consumers Transumers about a year ago, and the trend is still building.
Implications for 2008? An obsession with the here and now, an ever-shorter satisfaction span, and a lust to collect as many experiences and stories as possible, is undermining the perceived value (and thus, status) of fixed goods and services.
ONLINE SPHERE: Where to begin? In an online world or virtual world, social status 2.0 is all about who you connect to and who wants to connect to you, tribal-style. It also encompasses status gained from the number of views for one’s photos on Flickr, to the number of friends on Facebook, to one’s gaming skills and levels (just a snippet: Microsoft’s Halo 3 racked up $170 million in sales on its first day of availability, making it the hottest-selling title in video game history. Total sales since September: four million copies) to the good looks of one’s avatar, to finding out about whatever/wherever on anything before anyone else does.
ECO-SPHERE: With the environment finally on the agenda of most powers that be, and millions of consumers now actively trying to greenify their lives, status in the eco-sphere is both more readily available, and increasing in value. A substantial subset of consumers is already bestowing recognition and praise on Prius drivers, while scorning SUV owners, and this will only accelerate as even more design-minded and branding-savvy eco-firms push to the forefront in 2008. Make it green, make it effortless, make it visible if not bold if not iconic, and don’t hesitate to point out your competitor’s polluting alternatives.
GIVING SPHERE: Find us one high-profile billionaire who’s not deeply into “giving" right now. In fact, whether it’s giving away your riches, your time, or sharing your (content) creations with total strangers, giving is the new taking.
PARTICIPATIVE SPHERE: Especially for younger (and younger-at-heart) consumers, participation is the new consumption. For these creative beings, status comes from finding an appreciative audience, which is much the same way brands operate. No wonder that it’s becoming increasingly important to hone one’s creative skills. Status symbols, make way for status skills? What’s going to be your participation strategy for 2008?
ADD YOUR OWN STATUS SPHERE: One thing you can’t go wrong with in 2008 is to ask yourself how your current and new products and experiences will satisfy an audience of very diverse status seekers.
If you haven’t done so already, get rid of the habit of only focusing on traditional status symbols, and you will find there is no end to the number of status spheres you’ll be able to identify.
Definitely part of the traditional sphere, premiumization is not going to go away in 2008. Basically, with more wealth burning holes in saturated and experienced consumers’ pockets than ever before, quick status fixes derived from premium products and premium experiences will continue in full force next year.
What’s new then? How about 2008 being about the premiumization of everything and anything. In other words, no industry, no sector, no product will escape a premium version in the next 12 months. Some poignant premiumization examples to watch out for:
WATER: OK, so we’ve done wine, coffee and tea, which leaves water to get its much-deserved premiumization moment. And we don’t mean of the Pellegrino or Perrier kind: those upgraded bottled water brands have become too mainstream to excite truly premium-obsessed consumers.
So, make way for Evian’s limited release Palace bottle, only available in high-end bars and restaurants. Features a specially designed pouring top and is accompanied by a stainless steel coaster, selling for $15-20 per bottle.
Or how about Bling H20, a bottled water that comes in limited edition, corked, 750ml frosted glass bottles, embellished with Swarovski crystals. Aiming to be the Cristal of bottled water, it’s been spotted at everything from the MTV Awards to the Emmys. The bottles cost from $17 to $480.
Then there is Tasmanian Rain, captured “on the pristine north-west coast of the island of Tasmania, Australia." The water is collected “just minutes from where the World Meteorological Organization records the world’s purest air."
As this rain has travelled eastward via air currents over Antarctica and 10,000 miles of ocean, it contains 17 parts per million of dissolved solids. Tasmanian Rain is collected by a custom-designed catchment facility and never touches the ground. And so on.
BEER: Carlsberg?900?launched this summer in a very limited number of selected bars in Stockholm. Developed in collaboration with 12 top Swedish bartenders, Carlsberg 900 is “brewed from refined virgin hops and selected crystal malt, and triple filtered with a longer cooler fermentation process to ensure a pure, delicate taste." Carlsberg 900 is priced at the premium end of the market, about the price of decent glass of champagne.
FOOD: Further proof that anything can be premiumized: luxury marshmallows. From Dean & DeLuca’s 1-pound Boulé Marshmallow Sampler of lemon chiffon, passion fruit, vanilla and rose-petal flavours ($28) to Pete’s Gourmet dipped and undipped marshmallows, which are $1 a piece!
Meanwhile, get ready to welcome honey to the world of premiumization. Most supermarket honey in the West is imported from China and Argentina, and/or blended from many sources, creating a homogenous taste. But, like water, marshmallows and beer, honey is now striking back with a sweet vengeance, and artisanal honeys are on the rise. Since honey’s flavour and colour are determined by the source of nectar, there’s a huge variety of very local and exclusive types of honey, with floral sources varying from tupelo gum tree and Tasmanian leatherwood to cranberry and orange blossom.
The Savannah Bee Co. Inc., for example, sells its honeycomb jars with this awe-inspiring description: “Filled with honey equalling the life’s work of two bees, each golden cell brims with the concentrated nectar of thousands of rare and remote Georgia flowers." In New York, the Blue Ribbon Bakery Market has installed a honey bar, selling imported raw honey from Mexico. Seasonal (read: limited time only) varieties include mesquite blossom, orange blossom and golden reserve.
Also emphasizing the unique flavours of different varieties, Bee Raw Honey sells sets of honey samples, packaging the liquid gold in test-tubes that are corked and hand-sealed with beeswax.
CHOCOLATE: More premiumization of the sweet kind is chocolate, which succumbed to this trend years ago, with artisan chocolate boutiques now charging top dollar/euro/pound for wasabi-infused bonbons from San Francisco to Singapore. So, what’s next? How about chocolatiers who are going bespoke? Check out firms such as Melt, Paul A Young and Sir Hans Sloane Chocolate and Champagne House Ltd for some mouth-watering bespoke inspiration, then figure out if the future of premiumization for your industry is bespoke, too. Hey, Puma is already on board.
TOYS: Hasbro’s FurReal Friends Butterscotch Pony seeks to “fulfill every little girl’s dream of having her very own pony." From Hasbro: “Butterscotch is a miniature Shetland pony, with a fur coat and mane that feel just like a real pony. Butterscotch also has built-in sensors all over her body, which enable her to respond to children in lifelike ways. If talked to, she will cock her head towards the speaker quizzically and blink her eyes. She will also react to petting, showing her enjoyment by rubbing her head against a child, twitching her ears and swishing her tail. At over 3ft tall, Butterscotch is more than strong enough to support a rider up to 80 pounds (about 36kg) in weight. Along with her brush and carrot, Butterscotch comes with a special adoption certificate."
AIR TRAVEL: Air travel has become one massive inspiration source for premiumization. We’re not even going to try to list all the business-class-only carriers that have sprung up, some of which are thriving. Also keep a close eye on the premiumization contest in First involving airlines such as Emirates (First Class private suites), Singapore Airlines (12 suites on board of each of its new Airbus 380s) and JetMax (Suite in the Sky).
The battle continues on terra firma: Lufthansa has been operating a dedicated First Class terminal in Frankfurt for a few years now, but got trumped in size and pomp by Qatar Airways’ Premium Terminal in Doha.
STUFF: Hauzen is Samsung Electronics’ new premium home appliance brand. Products include a washing machine, kimchi cooler, fridge and air conditioning system. All appliances are designed by well-known Korean designer Andre Kim. Not available outside South Korea. Yet. Or the Plantronics Voyager 855, the first two-in-one stereo Bluetooth headset with AudioIQ technology for crystal clear wireless sound. Price: $120.
Lenovo now offers the ThinkPad Reserve Edition laptop, encased in leather. The Reserve Edition is based on the recently released 12.1-inch Lenovo ThinkPad X61s, and comes with ‘Blue-Button Instant Access’ for instant messaging with dedicated support staff. Price: $5,000, sold by invitation only.
TRANSPORT: The KABE Royal Tower is a double-decker caravan. The 8.2m-long camper is 4.4m-high, allowing people to stand up straight even on the top deck. The lower deck features a living room, kitchen and breakfast dinette, plus a bedroom with single beds, while the upper deck has a ‘lounge’ with an L-shaped sofa and a cocktail cabinet. A door from the lounge leads out onto the roof of the front section, which serves as a sunbathing terrace. The new double-decker caravan is fully equipped with air conditioning on both floors, a dishwasher and more. Price: €105,000 (Rs59.64 lakh).
Strollers had their premiumization moment a few years ago when Bugaboos and Stokkes burst onto the scene. Now car manufacturers such as Porsche AG want a piece of the premium pie: their stroller folds up small enough to fit in the luggage compartment of almost all sports cars. It comes with pneumatic tires and Carrera S rims for a high-performance ride, as well as a lockable front wheel, a handbrake and parking brake. Price: $690.
IN HOME: Next up—baby furniture. Combining functionality with style, Ooba designs cribs and high chairs that are touted by everyone from the curator of MoMA to French magazines that cater to parents who want to help their children develop a taste for beautiful objects. And toilet paper? Portuguese paper products company Renova sells Renova Black, lauded as the first fashionable toilet paper. Price per roll is €2.17. Renova Black is also available as Renova Red, Renova Orange, and Renova Green.
The Laundress is a collection of high-end fabric detergents and care products. When Lindsey Wieber, a sales executive for Chanel, and Gwen Whiting, a senior designer for Ralph Lauren, realized that their expensive clothes were suffering from dry cleaning, they took matters into their own hands and created The Laundress. Their line of premium fabric care products provides detergents for superior fabrics, from wool/cashmere shampoo to baby detergent. In their own words: “All fabrics are different—everything needs to be treated differently. All of our products were developed for a specific reason." Adding to the sense of luxury, detergents and care products come in four signature fragrances: Classic, Cedar, Baby and?Lady. The Laundress range also includes laundry bags and ‘wet’ swimsuit pouches.
Candles. Did we mention candles yet? Check out Acqua di Parma’s Design Candle Collection, priced at a cool $130 per candle!
Clearly, the list goes on forever. In 2008, no self-respecting brand, even those who market the most mundane of commodities, will fail to introduce at least one premium version of whatever it is they’re peddling. Is your industry or sector next?
Read Part II in Friday’s Mint.