FROM OVERWHELM TO OPPORTUNITY

Just figure out what customers are going to want, and give it to them! Easy, right? Of course not.

Every CEO, startup founder, innovator and marketer is (or should be!) obsessed by the question of where customers are headed. 

One approach? Ask customers what they want, via surveys, questionnaires, panels and more. But what people say they want and what they really want are often light-years apart.

Okay, forget asking people – what about watching them? Sure, this kind of ethnographic fieldwork can yield deep insights, but it’s hard, slow and expensive.

But wait, problem solved!  We have Big Data… But while data is often great when it comes to optimizing what you’re already doing, taken alone it rarely generates the radical insights that can underpin something truly new.

So what’s the answer?

If there’s a secret at the heart of Trend-Driven Innovation, it’s this:

You can know what your customers are going to want next. Not by asking them, watching them, or crunching their data. But by looking at the innovations that they’re lavishing attention on now.

Yes, that’s right. The key to actionable foresight lies in looking at the overwhelming onslaught on innovation – new brands, products, services, campaigns, experiences and more – that now whiz past our eyes and across our screens every day.

But how can that be true? Why does watching, and interrogating, innovations lead to actionable foresight on what your customers will want next?

The answer lies in the expectations those innovations are creating. And to understand why that’s so important, it pays to take a closer look at one fundamental question: what is a consumer trend, anyway?

When we say ‘trends’, we’re not talking about aging populations, the rise of China, or the price of oil. Rather, we mean consumer trends.

These trends are made of three building blocks: (i) basic human needs, (ii) drivers of change, and (iii) innovations.

In short, new consumer trends emerge when drivers of change – technological, social, economic and more – unlock new ways of serving basic human needs, such as connection, safety, value, fun (the list is endless). You can learn much more about that in Trend-Driven Innovation.

Here’s the really important part: you can see new consumer trends emerging when you look at clusters of innovations that are leveraging change to address a basic human need in a new way.

Innovations aren’t trends. But they allow us to see the trends that are coming next. Think Airbnb and the ongoing trend for access over ownership (see the next slide). Patagonia and the trend for radically transparent, ethical business. Ben & Jerry’s and the trend for more human, playful brands.

When an innovation serves a basic need in a new way, it sets new customer expectations. That is, it primes customers to expect something new.

And then the really important part happens: expectation transfer.

Once created by a game-changing innovation, new expectations spread across markets, industries, product and service categories, and demographics. And thanks to the global brain, they spread faster than ever. Eventually, they’ll spread all the way to your door!

That’s why any customer today riding in a car expects the entertainment system to be as intuitive as an iPhone. It’s why customers primed by streaming content (Napster became iTunes became Spotify) now expect instant access to a whole range of physical goods, from cars to clothes.

And, most importantly, it’s why watching innovations – and interrogating them for the new customer expectations they set – is the (not so secret) secret to actionable foresight.