8 Global Marketplace Trends Driving Innovation Today
Innovation has always been at the core of business success. We have seen hundreds of well-managed incumbent companies lose their market leadership status to new innovations (and end up completely disrupted and bankrupt).
Which is why in recent years, “innovation” has become a buzz-word, used and applied overwhelmingly by organisations to differentiate themselves from their competition.
Innovation always happens within the context of larger trends in the marketplace.
It is believed that global insights are the starting point to many companies in their pursuit of finding and meeting unmet needs, which is at the core of innovation. Therefore, it is important for business owners, company innovators and marketers to get a sense of how the tectonic plates of the innovation landscape are shifting in order to anticipate the new opportunities for their organisation.
In this article, we have provided a rundown of 8 major innovation trends that have dominated the scene in recent years.
#1 Consumers expect instant gratification
Since the emergence of the internet and immense growth of social media, instant gratification has become the norm, rather than the exception. We press a button and receive Amazon deliveries the next day. We push another button and receive groceries delivered on the same day. Mobile apps bring on-demand cars and F&B options.
Google consumer insight researcher Natalie Zmuda rightly observed that “…people are more curious, more demanding, and more impatient.” Nowadays, consumers expect responses to their questions or concerns quickly if not immediately. This expectation places pressure on anyone selling consumer products or providing services today.
Due to these expectations, it is critical to revisit the way businesses create marketing plans and strategies. Tools such as chatbots that immediately respond to common customer service requests or take orders are becoming more popular, and many companies are replacing the “add to cart” button with a “buy it now” option.
#2 Products becoming Services
According to Benjamin Gamboa, Innovation manager at HP, we have entered the era of
“everything as a service”. More and more businesses have realised that they are able to make most of the profits from services, instead of their product.
- Server: Organisations no longer buy servers, because infrastructure-as-a-service from AWS or Azure makes more economic sense.
- Engine: Jet engine manufacturers such as GE and Rolls Royce now do contracts with airlines based on the model named “Power by the Hour”, where customers pay per hour of use of an engine instead of buying it.
- Transportation: With the proliferation of car sharing services such as GoFun, Car2Go, and ZIP Car, as well as alternative cab services such as Uber and Lyft, we witness the beginning of the transformation from car ownership to mobility as a service.
It is worth noting that services business requires maintaining an ongoing relationship with customers instead of a “sell and forget” attitude. As a business moves towards adding services to its offerings, it will need to adjust its business model, processes, and tools that support them.
#3 Consumer trend toward health and wellbeing
25 years ago, consumers made choices around their diet typically in response to a
chronic health issue (diabetes, cholesterol, weight). Today, we witness a shifting trend of consumers, especially younger generations taking a proactive role in decisions which affect their health and choosing products accordingly. This is reflected in a variety of choices – about diet, sports, wellness and leisure, work, travel and even seemingly unconnected sectors such as fashion
Within these vast options, the industry of healthy and organic food is growing the fastest. For example, low-calorie sweeteners and vegetable snacking are becoming increasingly popular, especially in developed countries. Furthermore, the demand for plant-based protein, as can be found in meatless sushi and vegan takeaway meals, continues to gain momentum. Many large traditional packaged food companies invest in this space, such as General Mills (Beyond Meat), Nestle (Impossible Foods), and Unilever (De Vegetarische Slager).
#4 Consumer data privacy concerns
In 2018, consumer data privacy was in the headlines and on the minds of consumers. Data breaches, cold calling scandals, and data misuse court cases at T-Mobile, Orbitz, Marriott, Target, and many more, have brought security to the forefront in the minds of many consumers. The Facebook and Cambridge Analytica scandal, plus many other security breaches in the private and public sectors has eroded consumer confidence.
Data is becoming more important than ever, and customers are demanding to be in control of their own data to ensure it stays safe. Facial recognition has the potential to supplement data tracking and collection, causing a new set of ethical concerns and potential consumer backlash.
It is worth noting that this trend may result in companies (e.g., from the technology or banking sectors) to start rethinking their business models.
Taking a more stringent approach to data protection inevitably leads to better data management overall, which means that businesses can save money and use their data more efficiently to solve business challenges. At the same time, customer trust is earned and built.
#5 Trend toward sustainable products
Sustainability is no longer just a trend or a wish-list item. In fact, it has become an absolute necessity for consumers. Many recent studies
have shown that consumers are increasingly making purchase decisions influenced by their perception of the sustainability of the products.
” is the current buzzword, referring to companies and consumers who participate in creating sustainable products and services.
There is a distinctive trend of implementing biomimetic approaches – i.e looking to nature to provide solutions to design problems, which has been intensifying steadily. For example, the water-resistancy of chicken-feathers and the biodegradability of milk protein have been cited as viable sources for plastic alternatives.
#6 Cash is beginning to lose its status
In many parts of the world, particularly among a certain set of lifestyle-driven companies, cash is gradually losing its status. Across markets and locations, evidence suggests that this trend is occurring with increased speed. In Sweden, for example, barely 1% of the value of payments is made using coins and notes
This is hardly surprising given the advantages that a cashless society brings, not only to a consumer wanting to make fast payments at anytime from anywhere, but also for governments and regulators who want to eradicate criminal and illicit activity.
Meanwhile, companies are seen to be vigorously expanding in the mobile payment and digital wallet space. For instance, Alipay, a smartphone based system devised for Taobao, an online platform run by Alibaba - with over one billion product listings, sales on the Taobao Marketplace (and its sister organisation, Tmall.com) exceed $400 billion US (3 trillion yuan) an amount greater than all US retailers and e-commerce sites combined. Besides, Venmo, the mobile payments firm now owned by PayPal, is approaching $10 billion/quarter in payments processed
. This shows that consumers are increasingly adopting mobile payments and financial services technology in general.
Despite the efforts to move to a cashless society, cash is still prevalent in many emerging markets, defined as regions with rapidly evolving economies and increasing digital access. These countries represent 85% of the global population, leaving considerable room for payments innovation and for firms to enter to grow their global market share
#7 Customers are buying experiences
Customer Experience Matters.
The CISCO report "Customer Experience in 2020
" reveals that 70% of purchasing decisions will be based on the consumer experience
While true that the consumer values aspects such as price and promotion, the true reputation of a brand is achieved through the generation of emotional experiences that contribute to the loyalty and purchase decision of people.
The consumer’s satisfaction and overall experience (often referred to as the “customer journey”) with a company is a key driver of brand loyalty. Customer experience is more than just products, it is about the atmosphere and interactions that pulls individuals to a particular store.
The rise of Amazon originally created a serious question about whether fast, easy, and varied e-buying would eventually replace traditional brick-and-mortar retail, however, the last year has turned the conversation to something more complex. Amazon, Warby Parker, and other born-digital brands have increased their investment in physical stores, bowing to the undeniable fact that some experiences — or components of the experience — simply can’t happen in the digital sphere.
Riding on this trend, brands that dare to provide in the coming years not only a successful buying experience, but a stellar after-sales phase, are those that will have lasting marriages with their consumers.
#8 Moving to mass customisation
In the 20th century, Henry Ford famously announced that his Model T was available in any colour customers wanted so long as it was black. As we observe today, the 21st century is about mass personalisation. From creating product offerings, to crafting marketing messages - consumers expect to have everything their way, customised just for them.
Below are some famous companies which used personalisation strategies to maximise their profits:
The company made headlines when it leveraged mass customisation capabilities to deliver thousands of uniquely-branded bottles in its "Share a Coke" campaign. The campaign, which used a list containing 250 of the country's most popular names, aimed to have people go out and find a bottle with their name on it, then share it with their friends. The personalisation effort worked, and the company increased its sales volume to numbers not seen since 2000.
Since then, it included its expansion to 1,000 names, nicknames, song lyrics and holiday destinations. In some instances, Coca-Cola even created packaging that had names in Braille, integrating more diverse audiences into the programme. Today, Coca-Cola runs a Share a Coke website, where items can be customised and purchased directly.
Almost everybody who has a Netflix account has seen an example of personalisation. Netflix routinely suggests programming based on user interests which is achieved by examining their viewing history. It constantly remind users that there are plenty of viewing options available even after they've just completed binge-watching one of their favourite shows. The Company claims that its recommendation system saves the company $1 billion every year.
Toutiao, one of the flagship products of Bytedance may be the largest app you’ve never heard of. Over 120 million people in China use it each day. The average user spends more than 74 minutes daily, which is more than the average user spend on Facebook, and more than twice what they spend on Snapchat. Yet what’s most interesting about the app isn’t that people consume such varied content all in one place… it’s how Toutiao serves it up.
It uses machine and deep learning algorithms to source and surface content that users will find most interesting. Toutiao’s underlying technology learns about readers through their usage – taps, swipes, time spent on each article, time of the day the user reads, pauses, comments, interactions with the content and location. Today, each user is measured across millions of dimensions and the result is a personalised, extensive, and high-quality content feed for every user, each time they open the app.
As business owners and marketers, let’s look at delivering a level of customisation that elevates user experience to something informative, motivating or entertaining. Your existing customers will also appreciate the extra attention and reward you with more business.
The aforementioned trends in this article was derived from The Innovation Trends Report 2019 by Bret Waters, Stanford University.