Trust deficit is high. World over, consumers trust governments, organisations and brands less than any other time in recorded history. A research by Pew revealed that Americans' trust in the government is lowest in 60 years. Another study showed that only one third of the consumers globally felt that they could trust the brands that they are buying.
The same study showed that brands that earn consumer trust reap the benefits disproportionately. This trend of trust deficit and greater rewards to brands that are purposeful and authentic shall continue. Radical transparency could be one way to convince the consumers and build that trust. A concept first articulated by Ray Dalio of Bridgewater, it has been embraced by the likes of Patagonia and Fitbit — in one case to share what and how they source their raw material and in another to share how they use consumer data.
Simplicity in times of complexity
The world creates a mind-boggling amount of data with each passing day, hour and minute across various platforms. IBM estimates that 2.5 quintillion bytes of data are created every day. The number of TV channels in India has increased from 1 to 1,500 plus in the past 40 years. The number of brands and SKUs is in thousands and millions respectively. Spotify offers 50 million songs and Netflix 10,000 plus movies. In short, a consumer has lots of choice.
At the same time, multiple research suggest that no consumer really wants 300 million SKUs or 1,000 plus brands. She wants, what I call, “narrow spectrum” choice. The twin trends of greater complexity (supply driven) and desire for simplicity (consumer driven) are going to co-exist and increase. The two ways to break this compromise is through hyper-personalisation and curation. This would require consumers to share their personal data— which could become a challenge in times of trust deficit!
Loners & communities
If there is one thing that can be predicted with high degree of certainty, it is population. In the past three decades, the population has increased from 5.2 billion in 1990 to 7.5 billion by 2019 and expected to increase by another 500 million in the next decade. At the same time, the extent of nuclear families and singles has continued to increase. India now has close to 70 per cent of households as nuclear families while half of American adults are unmarried and about 15 per cent live alone. At the same time, several studies suggest that loneliness is on the rise (though technically speaking living alone and being lonely are correlated but distinct social conditions)
One of the basic human needs is belongingness, fulfiled by being a part of a family or a group. In the absence of familial groups, "tribes" are going to get formed on shared experiences, likes and dislikes. Communities are going to become increasingly important and could be online or in real world— or most likely spanning both.
Blurring boundaries & co-creation
Imagine ordering a pizza (medium sized, thin crust, onion and capsicum topping, extra cheese) from Domino’s or amakai handvo
from Swati Snacks on Swiggy. Or getting a woollen suit made from Raymond (or Brioni) made to measure service. Are these products or service or both? The consumer is executing such activities in a truly hybrid environment, amidst multiple channels of purchase and fulfilment; in a media environment that is also complex and convergent;
In each of the situations above— the consumer is involved in creating the final offer. It could be something as simple as specifying the pizza to the last spec or discovering the latest design with the tailor at Raymond. When consumer needs are unique in this hybrid environment, those who engage and involve the consumer in co-creating the final offer are likely to be winners. And for those who can involve the community in the co-creation would win the jackpot.
The consumer trends
of the future are not going to be clean and linear. They are going to be at times contradictory (loners and community, complexity and simplicity); they are going to be interlinked with each other (personalisation and data sharing, low trust). Organisations that appreciate the non-linearity and interconnectedness will start at an advantage. Those who can break the compromise with the right use of technology, data and most importantly, human empathy and intelligence stand a better chance to survive and thrive.
MD & senior partner; head, consumer & retail practice
BCG Asia Pacific