Five Trends of the Future Consumer15 September, 2015 / Articles
Last week I had the pleasure of attending Copenhagen Institute for Future Studies’ Summer University, “The Future Consumer and Marketplace. ”CIFS is an international, apolitical, and not-for-profit organization that is one of Scandinavia’s largest Future Studies think tanks. Founded in 1970 by Thorkil Kristensen, a former OECD Secretary-General and Danish Finance Minister, the Institute is now an international and interdisciplinary organization that seeks to create change, progress, and innovation informed by research.
The opportunity presented a pleasant change from standard (at least for me) US-centric views of the future and, coupled with a small group setting (5 people!), produced an experience that was eye-opening. Following are five of the more thought-provoking topics discussed:
- From a Hierarchy of Needs to an Array: Maslow’s Hierarchy of Needs has stood the test of time. Until now. In the Western world, consumers are able to settle all levels of Maslow’s hierarchy to some basic degree, freeing them up to choose the level(s), or need(s), against which to focus their energies and resources to achieve a higher degree of fulfillment. For businesses, this results in a consumer landscape that appears more fragmented than ever as some people search for solutions to fulfill their social Jobs-to-be-done (problems or goals related to Belonging and Esteem/Respect) while others actively seek solutions to their emotional Jobs-to-be-done (problems or goals related to Self-Actualization and Transcendence).
- Multi-Hyphenate Identities are the Final Nail in the Coffin of Segmentation: Despite a plethora of approaches – demographic, psychographic, lifestyle – no segmentation scheme has ever been perfect and companies are usually forced to settle for an approach that is actionable but inaccurate. But as demographics shift, the definition of “family” expands, and hybrid lifestyles become more common, we increasingly adopt “multi-hyphenate” identities that put us in segments that were once considered mutually exclusive (e.g. a divorced father with shared custody is a single man some weeks and a single father other weeks). For business, this creates a world where traditional segmentation ceases to be effective and increases the risk that messaging crosses into stereotypes that alienate the very consumers they are trying to reach.
- Innovation should Focus on Jobs-based Solutions: As demands for the pace and magnitude of business growth increases, companies face greater pressure to drive awareness and adoption of their solutions. With the elimination of a key tool (segmentation) to drive the business, it is essential that companies design and deliver solutions that are so laser-focused in their purpose that they draw customers to them and sell themselves. At Innosight, we call these Jobs-based solutions – products or services that help customers solve a problem or achieve a goal so well that they are an obvious choice versus competing solutions.
- 60 is 30 with Money: In 1950 people experienced three phases of life – childhood, adulthood, and old age. As time went on and more people began going to college, waiting to marry and start families, and living longer, three phases became six – dependent children (minors living at home), dependent adults (people 18+ who remain partly or completely financially dependent on their parents), freedom 1 (financially independent adults), parents, freedom 2 (empty nesters) and old age (80+). Most interesting, and important for businesses, is the emergence of the Freedom 2 life stage which mirrors Freedom 1 in terms of spending levels and focus. For example, Danish couples 60+ years old spend more on wine, travel (e.g., tours, hotels, campsites), and experiences (e.g. restaurants, theater, concerts, museums) than any other household type, including Freedom 1 households.
- Time is the New Luxury: Western consumers are richer in terms of money and material resources than ever before and, enabled by technology, able to do more with less. Yet most feel busier than ever and the quest to juggle work and family leaves less and less room for “time off” (e.g. vacations, relaxation, hobbies). This shift – from material objects as scarce resources from which pleasure or indulgence is derived to “time off” as a scarce resource – is making free time the ultimate luxury good. This is evident by the overall increase in consumer focus on immaterial features and solutions like design, stories, values, and experiences which require time to be enjoyed and a decrease in the demand to own and collect things once considered luxury items like cars, designer goods, and even homes.