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April 2016

BA Business Life

"If you want to know what people will want next, stop looking at customers and start looking at successful businesses and the expectations they create", says David Mattin.

How to spot a trend

by David Mattin

If you want to know what people will want next, stop looking at customers and start looking at successful businesses and the expectations they create, says David Mattin

Back in January, UK-based catering company Hunter VIII Hunter launched a new app called The Drop Off. It allows users to order a ready-made luxury dinner party — including food, wine, flowers and candles — to their door in less than 24 hours. Meanwhile, November saw skincare brand Clean & Clear run a campaign aimed at teenage girls in India: the brand released a back-to-front video clip intended to be played on a smartphone and viewed via a mirror; the clip then peppered its teenage viewer with empowering messages such as 'I am fearless'. The same month saw the launch in Copenhagen of AirDonkey, a kit — including a smartphone-enabled lock — that allows any user to effortlessly rent their bike out to strangers.

Three glimpses of the unceasing merry-go-round that is consumerism in 2016. Today, any professional inside a startup, brand or agency — or a nonprofit or public service — is long accustomed to the hyper-accelerated pace of innovation that sees new products and services arrive (and disappear) at light speed. Along with that comes the sense that consumer behaviours and mindsets change faster, more unpredictably — chaotically, even — than ever. Put together, it's an avalanche that can feel overwhelming. How is any professional supposed to make sense of it all, let alone devise a winning response in the shape of a new brand, product, service, or something else entirely?

But what if it is possible to do just that? Indeed, what if the answers you seek can be found by looking — with fresh eyes — at the very overwhelming thing that seems so foreboding? The truth is that delighting customers time after time doesn't have to be the preserve of a chosen few with seemingly magical intuition. Instead, it can be a simple, replicable process that anyone can do — including you.

But back to the overwhelm. In the end, all that anxiety boils down to one simple question. It's the problem that every startup founder, CEO, marketing executive, product developer and more is (or should be) obsessed with: what will my customers want next? Given the Holy Grail-like importance of the question, it's no surprise that there are a number of established answers.

One conventional approach? Ask customers: in other words, traditional market research. But, as Steve Jobs famously observed (obligatory Steve Jobs quote coming up), in an environment of rapid change, you'll rarely get a useful answer: "Our job is to figure out what they're going to want before they do. People don't know what they want until you show it to them. That's why I never rely on market research. Our task is to read things that are not yet on the page."

OK, put asking people aside. How about watching them as they go about their lives? This kind of ethnographic fieldwork can yield deep insights, but it's hard, slow and expensive. But wait, problem solved — now we have Big Data! Yet while customer data is often great when it comes to optimising what you're already doing, taken alone it rarely generates the radical insights that can underpin something truly new. So what's the answer?

The answer is a radical new way of looking at the consumer arena; a methodology built around a simple, powerful and counter-intuitive truth: in a consumer arena characterised by relentless change and hyper-competition, to anticipate what people will want next, stop looking at customers and start looking at businesses.

More specifically, the key to actionable foresight lies in looking at the overwhelming onslaught of innovation — new brands, products, services, campaigns, experiences and more — that now parade before our eyes and across our screens every day. But how can that be true? How does watching innovations lead to actionable foresight? The ultimate answer lies in the customer expectations those innovations are creating. And to understand that, we need to take a closer look at consumer trends: what they are, how they emerge, and how to spot them.

A consumer trend can be defined as a new manifestation — in behaviour, attitude or expectation — of a fundamental human need or want. In short, something new that people are doing in order to get something they've always wanted. Accept that definition, and it follows that new consumer trends emerge when external change — a new technology, a social change, an economic change — unlocks a new way of serving an age-old human need: for connection, security, value, excitement (it's a long list). And here's the important part — and the reason why the entire methodology is built around watching innovations. You can see new trends emerging when you look at clusters of game-changing new products, services, campaigns and ask: how are these innovations leveraging external change to address a basic human need in a new way?

An example: rewind way back to 1999, and remember how illegal music streaming platform Napster leveraged an external change called the internet to serve the basic human needs that are novelty (more music!) and convenience (instant access!). If you'd seen — and properly analysed — that innovation and others like it back then, you could have spotted the epic trend for access over ownership that first spread to content (think iTunes, Netflix, Spotify) and then on to physical products, too (think services such as BMW DriveNow, which allows users to access rather than own a BMW).

But there's still a piece of the methodological puzzle missing. How does a cluster of innovations that serve a basic need in a new way become a trend with the power to spread across the globe? The answer lies in two words: expectation transfer.

When an innovation serves a basic human need in a new way, it sets new customer expectations: it primes consumers to expect something new. Once created, new expectations spread across markets, industries, product and service categories, and demographics. And thanks to the global brain, today they spread faster than ever. Eventually, they'll spread all the way to your door.

One example? Look at the way Uber leveraged smartphones to serve the basic human needs for convenience and value in a new way when it comes to transport. That now iconic innovation helped establish new expectations of instant, one-touch, smartphone-fuelled service, and those expectations have since spread to countless other industries and markets. Handy, the US-based on-demand home services startup, raised $50m in November. In China, Edaixi, an on-demand laundry app, has raised $100m. Look, also, at the Amazon Dash buttons — smart buttons for the home that enable instant purchase from Amazon — and how they tap into new expectations of one-touch service. Look, indeed, at The Drop Off, the instant dinner party app that supplied the first sentence of this article.

So Uber helped to create new expectations and those expectations spread, becoming the now well-established trend known as on-demand. That's expectation transfer: the mechanism by which new innovations from around the world shape what your customers will soon expect from you.

A constant tsunami of innovations is setting new customer expectations every day. You can think of each innovation as a bet on the future, intended to cater to both current and anticipated customer needs and wants. Watching as many innovations as possible allows you to tap the collective intelligence of the business crowd around the question: what will customers want next? When you spot a cluster of similar innovations, you'll know that you could be on to an interesting new signal of where customers are heading. Interrogate that cluster against the framework discussed — in short, against the new customer expectations those innovations create — and you'll be empowered to spot the consumer trends that signal where your customers will head next.

A couple of helpful clarifications. First, remember that innovation-led trend spotting is not about the success or failure of the innovations you spot (see the box on this page for more on this). Second, don't dismiss innovations that seem niche or even ridiculous — they can often be weak signals of powerful new emerging expectations. Remember when couch-surfing was just for students and broke travellers? Now, Airbnb will let you rent the Villa Machiavelli in Tuscany for £5,164 per night.

Start to interrogate every innovation you see for the new customer expectations it creates, and pretty soon it will become a habit. And that habit becomes something more: a new way of seeing the world that turns the overwhelming flood of innovations into a goldmine of opportunity. Whether you're planning your startup, devising strategy inside a Fortune 500 brand, ideating a new product, working on a campaign for a nonprofit, innovating inside public services — the list is endless — trends can revolutionise your ability to serve your customers with new products, services, campaigns and more that are deeply grounded in their latest expectations, and that they'll love.

Of course, to capture that revolutionary power, you can't stop at the trend-spotting framework outlined in this article. You'll need to apply the trends you spot. That means turning them into winning new innovation ideas, and then executing. But just as trend spotting can be boiled down to a simple, replicable process, so too can ideating around trends, and building a trend-driven culture within your organisation.

But that's all ahead. Today, your journey starts with a simple question that gives you fresh eyes: what new customer expectations does this innovation create?

Keep asking that question, and the answers will take you to amazing places.

David Mattin is head of trends and insights at trendwatching.com. He is a co-author of Trend-Driven Innovation, published by Wiley. More information: trenddriveninnovation.com