ITS BECOMING A CUSTOMER-CENTRIC WORLD!

An Overview of Key Trends Shaping Markets

Complied by Ian Ivey

June, 2014

Contents
Introduction ............................................................................................................................................ 3
Value Propositions - Changing Customer Wants and Needs .............................................................. 4
Customer Megatrends ............................................................................................................................ 7
Overview ............................................................................................................................................. 7
Age Defiance ....................................................................................................................................... 8
Fascination ........................................................................................................................................ 10
Egoism ............................................................................................................................................... 11
Global Living ...................................................................................................................................... 13
Sustainability ..................................................................................................................................... 16
Health & Wellness............................................................................................................................. 18
Gifts of Time ...................................................................................................................................... 21
Other Key Drivers of Change................................................................................................................. 23
Lifestyle Influences............................................................................................................................ 23
Social Networks................................................................................................................................. 26
Disruption ......................................................................................................................................... 28

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ITS BECOMING A CUSTOMER-CENTRIC WORLD

Introduction
Its becoming a Customer Centric World! That means the real power is shifting from businesses to
customers in just about every sector. Many are blind to the change. Any business that doesnt
understand what is happening is likely to face many challenges in future.

In a recent survey of medium to large size

businesses in Trinidad and Tobago (T&T) ,
the majority had a poor understanding of
their Customers and Clients, as shown in
Figure 1.
A business that takes the time to develop
an intimate understanding of its customers,
and their wants and needs, has every
chance of succeeding in future years. A
business that doesnt faces a bleak future,
maybe even failure.
As Figure 2 depicts, the days when
businesses dictated how they would deal
with customers are coming to an end. Now
customers are increasingly dictating to
businesses what they expect from them in
every aspect of their operations and
support infrastructure.

Figure 1: Many businesses dont understand their

Customers and Clients

Figure 2: Everything is becoming customer centric!

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Value Propositions - Changing Customer Wants and Needs

A value proposition is simply a reflection of the price a customer is prepared to pay for a
particular product or service - and the way it is presented and delivered to them. The reason
why a particular customer makes a purchase decision depends upon a number of variables
and may include both real and perceived benefit considerations. The balance between the
two is not constant and changes over time as people age, technology impacts, fads come
and go, personal priorities alter, politics impact, and life-phases change.

However, there is one fundamental differentiating factor that helps make it easier to
determine where a customer is prepared to allocate personal spending. It is the difference
between What I want and What I need.

In Figure 3 ( 1) the consumer who makes the

decision to purchase something based upon
What I want really desires a particular
product or services and is far less concerned
about the price. A simple example is the queue
of people who waited outside retail outlets to
buy the Apple iPhone when it was launched
during 2009. Another example is those who
pay US$ 8,000 for a custom-designed and
manufactured mens suit in Savile Row,
London.

By contrast, the What I need decision is totally price-driven and generally relates to the
fundamental necessities of life such as food, fuel, clothing, appliances, housing, basic
services, and transport. Customers making this type of purchase decision are price-conscious
and will tend to favour a supplier offering the cheapest price or best deal for a particular
product or service.

From a long-term perspective, the What I want decision-making factors are the ones which
are more likely to alter over time as customer characteristics change. It tends to be an area
that is influenced strongly by innovation, trends, and perceptions over time.

One classic example is the high-end fashion industry where change is constant. Another
example is the launch of a new innovative technology, such as the iPhone and iPad, which
has a short lead-time over competitors and achieves a substantial price differential during
that time but often only for a relatively short time frame.

The value propositions in the What I want area tend to be many times higher than in the
What I need area. They also tend to be more unique and less vulnerable to competitive
pressures during the timeframe they are able to maintain a lead position in the market. The
What I need area tends to be more constant and predictable and is generally characterised
by intense competitive pressures as a particular supplier tries to retain a position in the
market relative to other suppliers. A simple illustration of the difference between the two
customer propositions is shown in Table 1.

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Table 1: An illustration of the difference between What I want and What I need in terms of value
propositions
What I want

Product
Manuka Honey
Sea Island Cotton shirt
iPhone
Ginas truffles
Svarasa soap

Purchase focus
Health & wellness
Unique quality
Elite communications
Unique quality
Experiential product

Retail Value
US$ 200.00/kg
US$ 500 each
US$ 599*
US$ 250/kg
US$ 150/kg

What I need

Product
Commodity Honey
Cotton business shirt
Nokia cell phone
Charlies chocolate
Refresh Soap

Purchase focus
Food product
Essential clothing
Basic communications
Food product
Soap

Retail Value
US$ 10/kg
US$ 20-40 each
US$ 70
US$ 12 / kg
US 5/kg

* Price at the time of launching the original iPhone onto the market.

The examples shown in Table 1 illustrate how great the difference in value can be when a
customers decision moves betwen What I want and What I need. The authors have studied
this phenomenon in different parts of the world and estimate that there is generally a shift in
value of about 400% between needs and wants.

The more unique a product or service on offer is, the higher the differential is likely to be, if it
is in tune with the right trend or trends. In simple terms, the changing value proposition from
a customer perspective can be illustrated in a value triangle, as shown in Figure 4 ( 2).

The Unique area of the value

triangle represents products and
services that are customised, oneoff, generally made by only one
supplier, are elite and can be
compared with the special treatment
and attention a customer receives as
a first-class passenger in an airliner.
This part of the market is likely to
cater to about 5% of all consumers.

Figure 4: The value proposition triangle

An excellent example of the Unique is the unusual Masai Barefoot Technology anti-shoe
designed and manufactured by a US company ( 3), or a custom-designed software platform
developed for a major financial group by 3GlobalConnect in the Bahamas that adds
considerable unique value for the client. The value differential is often 1000% + over basic
off-the-shelf commodity products and the associated innovation factor is generally high.

The World-class area in the triangle represents products and services which are of higher
quality but for which there are a limited number of quite specialised suppliers in the market
place. One example in this category is in the area of up-market perfumes associated with
major brand names such as Chanel and Calvin Klein. Another is in the area of high cocoa
(70%+) chocolate products. There are now a number of specialist manufacturers and
suppliers internationally who often use a differentiating factor (e.g. the use of Trinitario or
Criollo cocoa which is specified on the package) to create a more specific connection with
discrete groups of potential consumers. The value differential associated with products and
services in this area of the triangle is often 400% or more compared to basic commodity
2
3

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http://us.mbt.com

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products. The level of innovation is generally quite significant. This part of the market is
likley to service about 15% of all customers according to surveys done by NEXT.

The Commodity area of the value triangle represents by far the greatest proportion of the
total market (80%+) and is characterised by numerous suppliers of basic products competing
aggressively to attract customers to buy their particular products. It represents an area of
the market characterised by aggressive discounting and high profile advertising and
promotional campaigns. Suppliers are under intense pressure to cut costs and provide an
ever better deal in order to attract and retain customer interest on an ongoing basis.
Excellent examples include the international non-specialist automotive sector, home
appliances, basic food products, many mobile phone apps and online software services, and
clothing such as jeans and t-shirts. This area is also generally characterised by relatively low
levels of innovation.

An understanding of the difference between What I want and What I need is of great
importance to product and service providers in small countries. Even though the global
market niches are much smaller in relative terms, the opportunities in the Unique and
World-class areas associated with What I want are those which generally deliver higher
levels of profitability than those associated with the What I need area as they are linked to
much higher value propositions, something which is of real importance in small countries
because of the generally higher cost structures and distances to markets. Examples are
shown in Figure 5.
Figure 5: Examples of how specific products and services fit in the Value Triangle

In order to be able to exploit opportunities in the What I want area in the value triangle, it
is essential to undertand the trends that are shaping future customer expectations as these
provide valuable clues to those areas which are likely to favour high value propositions in
future years and thus the identification of potential niche opportunity areas that might
provide the foundation for commercial success.

However, the sustainability of such success will only be realised if a process of continuous
innovation is adopted because, once someone creates a unique space, copycats soon
develop similar alternative products and services which tend to diminish the value of the
market space that the original Unique or World-class business person identified and
commercialised.

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 There is a constant need to be one step ahead - just as large commodity suppliers always
need to be one step ahead in the race to reduce costs or to provide an extra benefit relative
to competitors if they wish to survive in a cut-throat marketplace. By always having
something unique and fresh on offer helps generate that What I want connection with
increasingly choosey customers.

Understanding the customer value proposition, whether already obvious or one that has
great potential, is the true start point for looking at any value chain because the purchase
decisions customers make determine which products and services are likey to be a
commercial success in future years.

One of the best reference books about this theme that you will ever read is The Innovation
Playbook by Nicholas Webb ( 4). It explains how to develop a customer-centric approach to
business that leads to success in both the What I want and What I need areas.

Customer Megatrends
In the Introduction the lack of customer/client understanding that characterises a number of T&T
businesses was mentioned. Without customers and clients a business simply cannot exist. For that
reason, developing an intimate understanding of who they are and how their lives and expectations
are likely to change over the coming years is essential for the success of any business. A customercentric business makes a concerted effort to develop such an understanding by engaging with their
customers. In this section we look at some Customer Megatrends that are reshaping every sector of
business.

Overview

4
5

Because customers are playing a far

greater role in determining which
value propositions fit the What I want
and What I need market categories, it
is important to understand the
underlying trends that are likely to
play a role in shaping their future
wants and needs. NEXT has identified
seven megatrends, shown in Figure 6
( 5), that are likely to be of particular
significance over the next decade or
so.

The factors driving each Megatrend are many and varied and help explain why the massmarket concept is now becoming relegated to history. The days of one-size-fits-all
solutions are rapidly disappearing because customers are becoming more egotistical and
individualistic and demanding greater personal attention with regard to their wants and
needs which are, in turn, shaped by their own personal characteristics - genetic, behavioural,

http://books.google.tt/books/about/The_Innovation_Playbook.html?id=BEqvwcrslZMC&redir_esc=y
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life-phase related and perception-based. We are moving into an age of personalised

customer-centric solutions.

Age Defiance
This is a strong global growth megatrend and revolves around customers searching for
products and services that will help them stay and feel young - whether the basis is real or
perceived. One of the big drivers behind this trend is the rapid ageing of populations in
many parts of the world, not only in developed countries but also a number of rapidly
developing countries such as India and China ( 6). The ageing trend for the population in
Japan is quite dramatic, as illustrated in Figure 7 ( 7).

6
7
8
9
10
11

In T&T the trend is expected to be

almost as strong over the next few
decades and ageing is expected to
have a major impact as early as 2025.

The upper graph in Figure 7 for each

country shows the age distribution in
2010 with the youngest group of
persons at the base and the oldest at
the top of each pyramid. The middle
diagram in each sequence is for the
year 2025 and the lower for 2050 - all
based upon projections of current
patterns of births, deaths and
migration.

Of particular significance in many

countries is the ageing of the BabyBoomer cohort born between 1946
and 1964 ( 8), one of the largest
population cohorts seen in the
worlds history.

The youngest members in this cohort are now 50 years of age and the oldest in their sixties.
This is creating a whole new market opportunity as the over-50s own over 70% of the wealth
in developed economies e.g. 77% in the USA ( 9). A focus on developing new and innovative
products and services that cater to their specific wants and needs is a growth trend. This is a
generation of people which includes many who are determined to try and stay young for as
long as possible. Trends indicate that the majority will live longer than previous generational
groups of the same age ( 10), and perhaps some of the upcoming generations ( 11).

A number of innovative companies are already developing unique and innovative solutions
to suit older consumers. Some examples include:

Figure 7: Projected population pyramids for Japan and T&T

for the years 2010, 2025, and 2050

A slow burning fuse, The Economist, June 25, 2009 http://www.economist.com/specialreports/displaystory.cfm?story_id=E1_TPRRRDQV

http://www.census.gov/ipc/www/idb/
As defined by the United States Census Bureau - www.census.gov
http://thedailybell.com/public/files/Institutional-Reports/anti-aging-report-001.pdf
http://www.economist.com/specialreports/displaystory.cfm?story_id=E1_TPRRRTDN
http://www.heart.org/HEARTORG/GettingHealthy/Overweight-in-Children_UCM_304054_Article.jsp

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o
o

The Jitterbug phone - designed for simplicity and ease of use. It also has large digits to
help those with failing eyesight communicate easily ( 12).
Shops for the elderly that cater to their specific needs - one example is a whole range
of specialist shops in the main street Jizo-dori in the Tokyo suburb of Sugamo, Japan ( 13)
and another example the Internet shop, Senioren Online ( 14), in Germany.
Brain gyms, such as those developed by the US
Figure 8: Vibrant Brains
company Vibrant Brains ( 15) - their services
include the provision of mental exercises and
education to help older generations retain and
improve their mental faculties and to be able to
contribute more effectively as employees as they
may have to work later in life, even into their
seventies, if current trends related to the viability
of many pension funds continue ( 16).

However, the Age Defiance megatrend is not associated only with older generations. It is
also reflected in the development of a range of activities and products that help people of all
ages who are increasingly being driven by a personal need to look and feel young - to stay
that way forever! Following are a few additional examples of Age Defiance related trends:
o Longevity will be the next big wellness trend ( 17).
o Consumers are obsessed with maintaining a youthful appearance and ageing gracefully
and, as the global populations median age increases, that market will progressively
increase ( 18).
o Even younger persons aged between 24 - 35 years,
Figure 9: Mother and daughter trend
particularly young women, are becoming a major
driver behind the Age Defiance trend ( 19).
o Manufacturers are deliberately promoting a mother
and daughter trend (Figure 9) to create an intergenerational demand for anti-ageing products ( 20).
o The market for anti-ageing products (topical, dietary,
and pharmaceutical) is expected to reach US$ 290
billion in 2015 ( 21) and grow at an annual 6.7%
compound annual growth rate out to 2018.
o So called beauty foods - supplements and food
products that target the skin from the inside - are seen
as being a major growth area.

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13
14
15
16
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19

20

21

http://www.info4cellphones.com/jitterbug-cell-phone-for-seniors.html
http://www.economist.com/specialreports/displaystory.cfm?story_id=E1_TPRRRTTD
http://www.senioren-onlineshop.de/
http://www.vibrantbrains.com/
http://www.reuters.com/article/2014/05/02/us-australia-pensionsage-idUSBREA4102D20140502
http://nutraingredients.com/news/printNewsBis.asp?id=79397
http://www.gcimagazine.com/articles/17221979.html
http://www.gcimagazine.com/marketstrends/segments/skincare/The-Importance-of-Anti-aging-for-Gen-Y225847881.html?utm_source=Related+Items&utm_medium=website&utm_campaign=Related+Items
http://www.consultingroom.com/News/Print.asp?News_ID=2338&Title=World%20AntiAgeing%20Products%20Market%20to%20Reach%20U.S.%20$115.5%20Billion%20by%202010
http://www.gcimagazine.com/marketstrends/segments/skincare/Anti-Aging-The-Trends-and-Challenges-in-New-ProductDevelopment-218560461.html

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o The anti-ageing product range includes ( 22):

Anti-ageing drugs and pharmaceuticals.
Anti-ageing vitamins, supplements and minerals.
Anti-ageing cosmeceuticals skin care, face care, body care, and sun protection
cosmeceuticals.
Hair-care cosmeceuticals.
Hair growth cosmeceuticals.
o Big future growth areas are seen as being:
The cosmeceuticals market (cosmetics combined with nutraceuticals).
Dr Brands - products marketed with references to dermatology, surgery and
botox-like treatments.
Collaborative skin care lines - targeted to complement non-surgical cosmetic
procedures. Pharmaceutical company, Allergan, and Estee Lauder have combined
forces to develop the Clinique range of products.
o High-end retailers say that there appears to be no price resistance associated with Age
Defiance types of products and customers were prepared to go on waiting lists for
expensive products such as Diors US$ 380 for a 15 ml bottle of LOr de Vie skin serum
( 23) when first released in 2007. In 2014, Orlane Pariss Global Anti-Ageing System is
retailing at US$ 550 for just 30 ml of product ( 24).
It is clear that Age Defiance is going to remain a part of the consumer psyche and
discretionary spending in the foreseeable future and that many of the high value proposition
opportunity areas are associated with the What I want area. It is a customer-driven
Megatrend that is likely to continue to strengthen for quite some years.

Fascination

22

23
24
25

Over the past decade or so a number of trend watchers have observed that each new
generation appears to have a greater need for experiences that provide them with
stimulation and fascination. One of the first was German Futurist, Eberhard Denzel ( 25), who
described the emergence of this trend in 1998.
For example, great grandparents may have gone out for dinner at a restaurant as an extra
special treat perhaps once a year. It was something that they talked about many times over
as they remembered the specialness of the occasion. People today eat out regularly and so
the impact of each fascination experience is far less.
o Todays young generations have very short attention spans and
many say they require constant fascination. The intensity of
each fascination experience is also said to be decreasing as
greater numbers of people search for a greater thrill. These
factors are leading to some interesting developments such as:

http://www.consultingroom.com/News/Print.asp?News_ID=2338&Title=World%20AntiAgeing%20Products%20Market%20to%20Reach%20U.S.%20$115.5%20Billion%20by%202010
http://www.mybeautymatch.com/lor-de-vie-diors-most-potent-anti-ageing-line/
http://www.orlane.com/anti-aging-oxygenation-system.html
http://www.denzel.de/

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The 5 second commercial ( 26) to try and prevent people from skipping advertisements
when they are recording and viewing TV programmes - i.e. to reduce the intrusion.
o
The evolution of short videos on YouTube, such as World Builder, which tell a whole
story in 1 10 minutes ( 27).
o
The evolution of new high technology classrooms to create a 24/7/365 community of
interest for primary school students. The concept includes iPods and cell phones as part
of an integrated network with school computers and IT systems ( 28).
o
The growth of extreme sports in areas that are increasingly dangerous and bizarre ( 29).
o
The growth of extreme tourism to places such as Iraq and Afghanistan is predicted to be
a growth trend in future ( 30). Increasing numbers of tourists are seeking places that few
others have dared to visit - one component of the Egoism megatrend.
o
Other types of more extreme and unusual adventure tourism said to be hot in 2014
( 31) include travelling to uncharted territory (space and deep sea), fashion branded
hotels (e.g. Versace and Armani hotels), food foraging tourism, micro-brewery tourism,
marijuana tourism (e.g. in Jamaica), and workcations (combined work and vacation
travel).
o
The growth in use of legal and illegal recreational drugs around the world. The herbal
party pill market has shown strong growth in recent years ( 32).
o
People who have pre-booked trips into outer space with Richard Bransons Virgin
Galactic, which is likely to offer the first seats at around US$ 200,000 each ( 33, 34).
A recent Mastercard survey found the wealthy in Africa, Asia and the Middle east are
increasingly choosing authentic experiences over material possessions ( 35). Experiences
that generate fascination are going to be winners in future years.
However, there are counter-trends emerging which, for example, are leading some people
to search for a simple life ( 36) that offers an escape from the need for so much fascination!
Based upon the five second fascination characteristics associated with many in todays
younger generations, there seems to be no doubt that the demand for fascination is going to
continue to increase and intensify, but this Megatrend will also lead to the development of
some counter-trend related escape opportunities for those who want to live a less frenetic
and demanding lifestyle.
o

Egoism

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28
29
30
31
32
33
34
35
36

People are becoming far more individualistic and self-indulgent. This is a trend that has been in
progress for several decades and seems likely to continue as it has become an inherent
characteristic of the Baby-Boomer generation and the generations that have followed. One area
that reflects this is the rapid decline in female fertility, a trend which first appeared in developed
http://www.commercialalert.org/news/featured-in/2006/07/five-second-ads-try-to-counter-tivo
http://www.youtube.com/watch?v=VzFpg271sm8
http://www.bcps.org.uk/index2.htm
http://jazarah.net/blog/top-20-extreme-sports-from-trend-hunter/
http://www.travelweekly.co.uk/Articles/2009/11/05/32295/industry-leaders-predict-future-tourism-hotspots.html
http://www.travelmarketreport.com/articles/Whats-Hot-in-2014-Taking-Travel-to-New-Extremes
http://www.free-press-release.com/news/200807/1215739311.html
http://www.techmagnews.com/branson-cheap-space-tours-in-my-lifetime.html
http://www.thetechherald.com/article.php/200918/3539/Fashion-retailer-first-Aussie-on-Branson-s-commercial-space-travel-project
http://www.cnbc.com/id/101708710
http://www.aarpmagazine.org/lifestyle/the_simple_life.html

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countries but is now also becoming a strong trend in many of less developed and developing
countries. The fertility rate trends in selected developed countries are shown in Figure 10 ( 37).

Figure 10: Birth rate trends in selected

countries

37
38
39
40
41
42

The Economist recently commented that postponing

marriage and childbirth has been favoured by many
women who want to pursue a career and retain their
independence. There is also an economic consideration
as it has been estimated that a family household with
one child needs 30% more income than a childless
couple to maintain an equivalent standard of living.

In addition males and females can now choose from

an increasing range of lifestyle options. For example,
greater numbers are choosing to live on their own. In
the UK it is estimated that 38% of all households will
have just one occupant by 2026. The figure was just
18% in 1971. In Germany 20% of those over 18 years
currently live on their own ( 38). In large cities, such as
Berlin and San Francisco, 45% of inner city
households had just one occupant around the turn of
the millennium.

One of the concerns about the Egoism megatrend is the negative impact it is having upon
society as people focus more on themselves and less on others ( 39). At the same time, it does
open up a whole range of new business opportunities which Eberhard Denzel says are driven
by a desire to be different to everyone else; to have done something or bought something
that no-one else has and make them feel jealous; to have travelled to a place that few have
been to and tell others of the experience; to own a car no-one else can afford; and so the list
goes on. Following are a few examples of this trend:
o The online virtual world, Second Life, is a place where
egoism is alive and well and people can play roles that
they cannot necessarily play in real-life. It is the place
where a woman, Ailin Graef, became the worlds first
virtual millionaire by doing virtual business in a virtual
world ( 40). It is also the place that has caused several
murders in the real world as a result of online
relationships that developed.
o Affluent consumers are becoming sated with traditional
products and services, and are looking for the unique
things that differentiate them from the rest ( 41).
o A recent survey of 25,000 Australians aged 11 - 24 years of
Figure 11: Image issues in
age found that their greatest concern was their personal
Australia
body image ( 42).

http://www.economist.com/specialreports/displaystory.cfm?story_id=E1_TPRRRTTR
http://www.dw.de/record-number-of-single-households-in-germany/a-16095252
http://www.onlineoriginals.com/showitem.asp?itemID=135
http://www.businessweek.com/the_thread/techbeat/archives/2006/11/second_lifes_first_millionaire.html
http://luxuryforecast.com/luxury-travel/in-and-out-luxury-hotel-trends-for-2014/
http://www.missionaustralia.com.au/news/media-releases/215-body-image-main-concern-for-young-australians

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The egoism trend is also starting at a younger age. For example, 9 - 14 year-olds were
originally targeted by a website called Miss Bimbo - an online game where visitors were
encouraged to dress their character up as beautifully as possible and maintain a target
weight using pills so they could win beauty contests. They could also choose cosmetic
breast surgery to enhance their characters. At one stage in France there were 1.2 million
users of this site and in the UK 200,000 ( 43). Today the site has just under 3 million
registered users and illustrates some of the forces shaping the minds of young people.
Figure 12: The Miss Bimbo website - originally aimed at tweens (9-14 year-olds)

Anything that panders to the self-interest of the individual is driving this growth megatrend.
However, there are several counter-trends that are also emerging. These include the
sustainability movement (e.g. LOHAS) as well as numerous online communities of interest
where people share ideas and help each other to make decisions or cope with challenges in
life. There are also some indications that increasing numbers of young people may have
more of a social conscience than their parents and that this may provide some degree of a
counter-balance to the path the Egoism megatrend might follow in future years ( 44).

Global Living

43
44
45

This is a strong trend which crosses over between the real and
virtual worlds.
Greater numbers of people, including from the Caribbean, are
working in a global environment, even if they live in a specific
location, through virtual channels. Others live a life that involves
extensive travel to many places as contractors or global players. A
good example in the latter case is Anthony (Tony) Paul ( 45),
Managing-Director and Principal Consultant with the Association of
Caribbean Energy Specialists Limited based in Trinidad and Tobago.
He has been involved in projects in many parts of the world
including Tanzania, Ghana, Nigeria, Senegal, Togo, Iraq, Timor
Leste, and Peru.

Figure 13: Tony Paul

http://www.missbimbo.com/
http://smallbusiness.foxbusiness.com/marketing-sales/2013/12/12/social-conscience-key-to-attracting-young-consumers/
http://www.localcontentchambertt.com/about-the-chamber/board-of-directors/

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Many online communities of interest and social networks, such as LinkedIn, Facebook,
YouTube, Pinterest and Instagram, are global and their participants interact with each other,
even if vast distances apart, on an instant real-time basis.
Increasingly these interactions are becoming more visual and online real-time video links
(such as Skype and ooVoo) as well as video capable mobile phones. These are fast becoming
a standard part of personal, household, and business communications and will become
increasingly sophisticated in future years. Mobile Apps are adding new dimensions to many
virtual groups e.g. driving the re-emergence of a fun global social network called Bebo ( 46).
The Global Living megatrend includes a number of associated trends such as:
o The nostalgia trend (see Figure 14) where expatriates seek the good old things from
home or people yearn for things that they had experienced or enjoyed in the past. The
retail group, Manufactum in the UK and Germany, is an excellent example of a business
connecting with consumer nostalgia needs both online and through real world retail
outlets ( 47). Another is the long-established Irbit motorcycle manufacturing company in
Russia which is now attracting a global niche following ( 48). A third is the very successful
Aunt Bettys Puddings company in New Zealand which achieved global success and was
then bought out by a major food group, Hansells, a few years back ( 49).

Figure 14: Examples of the Nostalgia Trend

o

o
o

46
47
48
49
50

A growth trend favouring ethnic and cultural products and services which complement
peoples experiences overseas or provide something unique that is not associated with
a persons traditional ethnicity or cultural heritage. One good example is the Walkers
Wood food processing group in Jamaica which now markets traditional Jamaican
products as far away as New Zealand and Australia ( 50).
Technology that enables people to move from place to place in the world and stay in
touch 24/7/365, such as Samsung and iPhone mobile and tablet interfaces.
Another piece of technology that has recently come onto the market and provides a
solution for those who have to travel frequently is a wireless battery charger for a wide

http://www.bebo.com/
http://www.manufactum.com/home.html Photo NEXT Archives, Manufactum retail store in Berlin, August 2009.
http://bluebird.typepad.com/my_weblog/nostalgia/page/2/
http://www.teara.govt.nz/en/photograph/25149/steamed-puddings
http://www.windiestrading.com/

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range of devices that removes the need for transporting numerous device-specific
chargers around the world ( 51).
It may not be too long before an individual person
may be able to have a virtual presence in other
parts of the world, as holographic technologies
continue to evolve. Richard Branson launched Virgin
Digital to an audience as a virtual presence a few
years back ( 52). However, this was a primitive
version of what might happen before too long as
true 3-D holographic technologies evolve further.
Mobile handsets that are capable of projecting,
capturing, and sending holographic 3D images have
Figure 15: Holographic phone
already been developed ( 53).
demo from Graphlex Inc., India
Another associated trend is the evolution of combined digital and real-life profiles that
enable individuals to generate a global presence. One excellent example is Trinidad and
Tobago fashion designer, Claudia Pegus, who has created an extensive digital profile
online ( 54).
Figure 16: An overview of the digital profile Claudia Pegus has established online ( 55)

51
52
53
54
55
56

A trend associated with the development of virtual digital profiles is a move towards
more visual interactive technologies that are likely to move beyond the corporate world
where they are already becoming leading-edge tools ( 56) into smaller businesses and
households.

http://www.pcworld.com/article/156526/powermat_joins_the_wireless_charger_fray.html
http://www.eyeliner3d.com/virgin_digital_launch.html
http://www.youtube.com/watch?v=hoBa1p8wQk4
http://www.google.tt/search?hl=en&q=claudia+pegus&btnG=Search&aq=f&oq=
NEXT Archives 2014
http://www.informationweek.com/news/mobility/messageing/showArticle.jhtml?articleID=205917459

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One of the big challenges for the aviation sector is its reliance on fossil fuels. Some feel
this could impact upon the shape of global living in future ( 57). The more optimistic feel
that technological developments will revolutionise the aviation sector and lead to a
more sustainable future ( 58).
o Whatever happens in aviation, it seems likely that the virtual global component of
peoples lives might become more important relative to the physical travel component
once virtual technologies offer increasingly more realistic immersion-like experiences such as 3D and holographs.
o Technology has certainly increased the global connectedness of the human race as
evidenced by the evolution of borderless zones such as Facebook, Pinterest, Instagram
and LinkedIn as well as thousands of more specialised virtual zones. Facebook is now
the second largest country in the world in terms of population China has 1.36 bn
people, Facebook 1.31 bn users ( 59) and India 1.24 bn people.
The traditional job is also disappearing and so people now have to focus on how to generate
income. For many that will require a broader based and often more globally connected
work-style ( 60).
There is no question that the Global Living megatrend is going to continue to evolve and
shape the future wants and needs of many customers and clients. However, a significant
part of that global lifestyle future is likely to become technology driven as finite global
resources continue to come under pressure and increasingly become a limiting factor in the
real world sphere.
o

Sustainability

57
58
59
60
61
62
63
64

As shown in Figure 17, the worlds resources are being used up at 150% of the rate that they
are being replaced and, if nothing changes, the rate of use is likely to exceed 200% of the
replacement rate by 2030 and 300% by 2050 ( 61, 62). In addition, climate-change caused by
human activities has become a major international issue. There are also concerns about
future global food supplies and the availability of limited resources such as water, energy,
and rare earth metals - which play a critical role in many emerging technologies.
There is no question that the whole issue of sustainability is becoming a concern for
increasing numbers of customers and citizens. A number of surveys undertaken in recent
years illustrate this trend. Of particular interest is the fact that the citizens in developing
countries such as Mexico, China and India have much higher levels of concern than those
living in fully developed economies (e.g. 63).
Even in the USA, there is now (finally) growing concern at a high level about the future costs
if climate change is not addressed ( 64).

http://www.breakingtravelnews.com/news/article/golden-age-of-air-travel-at-an-end/
http://www.channel4.com/news/five-big-ideas-that-could-change-the-future-of-air-travel
http://www.statisticbrain.com/facebook-statistics/
https://www.linkedin.com/today/post/article/20140623011119-22726740-jobs-are-over-the-future-is-income-generation-part-2
http://www.panda.org/about_our_earth/all_publications/living_planet_report/
http://www.environmentalmanagementnews.net/StoryView.asp?StoryID=1035206
http://wwdmag.com/International_Survey_Finds-Water-Top-Environmental-Concern-newsPiece19004
http://thehill.com/policy/energy-environment/202141-kerry-costs-of-inaction-on-climate-change-catastrophic

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Figure 17: The greatest challenge the world faces over the next 20 years restoring a balance
between resource availability, replenishment and consumption ( 65)

65
66
67
68
69
70
71
72

As a result there is a significant emerging customer-driven trend driving the development of

niche markets which have a strong focus on moving towards a more sustainable future.
Some examples of such niches include:
o The development of a sustainable fisheries authentication system and branding e.g.
for the New Zealand hoki fishing industry ( 66).
o The development of a sustainable forestry authentication system and branding for
timber ( 67).
o The growing demand for organic products in all
market areas, not just food, as illustrated in Figure 18
( 68).
o Growing interest in close to home food products
with low food miles. Whole Earth Grocery is a US
success story built upon healthy food and a strong
focus on go buy local ( 69).
o The emergence of sustainable communities built and
managed energy production and supply systems in
Figure 18: Recyclable bio
various countries including Nepal, Germany, and
plates and cups
Austria ( 70).
o Green electricity which increasing numbers of consumers choose to purchase at a
higher cost, especially in European countries ( 71, 72). In several German states (Schleswig
Holstein and Mecklenburg Vorpommern), the installed renewable energy capacity now
exceeds current demand by 200 300% in both states.

http://www.panda.org/about_our_earth/all_publications/living_planet_report/
http://www.fish.govt.nz/en-nz/Press/Press+Releases+2009/June2009/Hoki+fishery+recovering+well.htm
http://www.sfiprogram.org
NEXT Archives, Oeko Laden, Thun, Switzerland, September 2008.
http://gobuylocalblog.com/blog/2013/4/17/anatomy-of-a-sustainable-business-whole-earth-grocery-co-op
http://www.finfacts.com/irelandbusinessnews/publish/article_10008702.shtml
http://www.the-infoshop.com/report/dc101278-b2c-green-energy-toc.html
http://www.steckdose.de/oekostrom.html

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The growing demand for Fair Trade products. Global sales were more than US$ 4.8
billion in 2012, up 21% compared to 2011 ( 73).
o A shift from the throw away consumer society to products for life. A leading example
is the German pool furniture manufacturer, Richard Henkel GmbH, which guarantees
lifelong service for its products ( 74).
o The increasing number of green housing, zero energy, and sustainable building
developments that are now happening in many parts of the world including the UK,
USA, Abu Dhabi ( 75), the Palestinian territories and Dominica.
o The growth of green and ethical investment funds.
o The rapid growth of asset sharing businesses e.g. Zipcar ( 76). Younger persons dont
value car ownership as much today as earlier generations did and tend to favour other
greener forms of transport and sharing options ( 77).
The Sustainability Megatrend is likely to strengthen over the next decade as increasing
evidence about the impact the human race is having on the environment heightens
individual concerns about the future for both themselves and their offspring. More young
people are becoming involved in environmental and climate-change initiatives around the
world in both developed and developing countries ( 78).
There is also a counter-trend driven by traditional attitudes and egoism that denies that
such concerns are my problem. There are some individuals who will continue doing what
they have always done come hell or high water. Several surveys suggest around 25% of
people might have such an attitude (e.g. 79).
o

Health & Wellness

73
74
75
76
77
78
79
80

This is a strong growth Megatrend internationally and is being driven by numerous factors
including:
o Ageing populations.
o Age defiance.
o A rapid increase in chronic disease problems (largely self-inflicted).
o The global obesity epidemic.
o The declining health of young people in many parts of the world, especially in the highly
developed countries where some predict that the young people of today may live
shorter lives than their parents.
o Concerns about the environment and a disconnection from the global biosphere which
is leading to increases in sales of natural products (e.g. 80).
o The soaring costs of healthcare and inequities in delivery, particularly in the USA. If
nothing changes the costs of healthcare in the USA could reach 25% of gross domestic
product by 2025, 37% in 2050 and 49% in 2082 - up from just 16% in 2007.
o Consumers are trying to eliminate anything toxic from their lives ( 81).

http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/2012-13_AnnualReport_FairtradeIntl_web.pdf
http://www.architekten24.de/adresse/11506-henkel-wellness-spa-ausstattung-gartenmoebel/index.html
http://www.swissinfo.ch/eng/science_technology/Abu_Dhabi_s_eco_city_gets_Swiss_touch.html?siteSect=511&sid=110401
http://www.zipcar.com/
http://www.economist.com/node/21563280
http://www.un.org/apps/news/story.asp?NewsID=31774
http://www.foodnavigator-usa.com/news/printNewsBis.asp?id=84052
http://www.advertiser.ie/athlone/article/15555

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81
82
83
84
85

This is driving a number of trends at the personal level, which are reflected by the following
findings:
o A recent survey of almost ten thousand people in Brazil, Bulgaria, Canada, Germany,
India, Malaysia, Serbia, Slovakia, Russia, the Netherlands, Turkey and the USA examined
where people sourced their healthcare information, how often they visited the doctor,
how well they followed the doctors advice, their use of non-pharmaceutical products
and a number of other areas ( 82). The following came out of this particular survey:
62% of people in India, 56% in Malaysia, and 52% in Slovakia come to the doctor
prepared with a diagnosis.
59% of Canadians say that doctors are just one source amongst several that they
use to make personal healthcare decisions.
82% of Malaysians seek a second opinion other than their doctor when it comes to
choosing a healthcare solution.
10% of Americans now use the Internet to help make personal healthcare
decisions.
66% of Russians say they would prefer to take natural medicines rather than drugs.
More than 50% of all those surveyed had a similar preference.
The majority of Germans also favour alternative medicines over pharmaceutical
based medicines. They see them as being less aggressive and offering more holistic
and long-term healing. An increasing number of doctors have an extra degree in
natural medicine so that they can offer a range of solutions to their clients.
US residents are divided 50/50 when it comes to choosing between pharmaceutical
and natural solutions.
Almost three times as many Brazilians use acupuncture compared to the average
for all countries surveyed.
One rapidly growing consumer group that supports the development of sustainable
businesses and societies is described as being a group of influential and leading-edge
thinkers representing Lifestyles of Health and Sustainability - LOHAS ( 83), also known as
Cultural Creatives ( 84).
It is estimated that 50 million LOHAS exist in the USA with a further 29 million in Japan. They
support a marketplace currently estimated to be worth US$ 355 billion in the USA and USD
546 billion worldwide and which is growing at a 10% annual rate ( 85).
The LOHAS ares impacting upon tourism destinations because they expect to be able to
maintain their green and healthy lifestyles when travelling. They want to stay at
environmentally friendly facilities and ones that recognise the connection between green
and health. They are choosing destinations that offer healthier eating options, serve organic
and/or local cuisine, use environmentally friendly cleaning products, and which explain what
they are doing to conserve natural resources.
Consumers are becoming better informed about their personal health and increasing
numbers are making their own decisions about value for money. Most are looking for a

http://stanford.wellsphere.com/healthy-living-article/food-buying-and-healthy-living-trends-2009/640080
http://www.synovate.com/news/article/2008/06/global-healthcare-survey-reveals-rise-of-patient-power.html
http://www.lohas.com/
http://www.lohas.com/new-cultural-creatives-survey
http://lohas.groupsite.com/main/summary

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better quality service at a lower cost. ICTs are flattening the world and making healthcare
into a more globally functional business ( 86).
In 2014, the global health and wellness market is expected to continue to be driven by
demand for natural products, with consumers becoming increasingly sophisticated in their
expectations. Not only do they want less of the bad stuff (and this now includes gluten,
lactose, etc.), but they also want more of the good, such as protein, vegetable and functional
properties. Emerging economies, characterised by poverty and wealth co-existing side by
side, are driving global health and wellness growth. Food fraud has crept into the spectrum
of First World consumer concerns.
The Top 10 Global Consumer Health and Wellness Trends for 2014 ( 87):
1. Protein rules.
2. Enhanced natural merging with free from e.g. GMOs, preservatives, artificial
colours, and artificial flavours. For example, General Mills recently removed GMO
ingredients from its popular Cheerios cereal line. Ben and Jerrys are moving to 100%
non-GMO ingredients in their ice cream products. Both are examples of companies
responding to changing customer demands.
3. Meat reduction is the word.
4. More veggies please!
5. Sugar reduction by stealth in food but openly in beverages.
6. Emerging markets drive global health and wellness growth.
7. Cold pressed juice is the new premium.
8. Probiotics are conquering the southern hemisphere.
9. Wholegrain controversy.
10. Health and wellness products under suspicion of fraud.
Figure 19: Health and Wellness Trends Products that fit and dont fit

86
87

In Figure 19 the product on the left, made in the USA, only contains three natural ingredients
and no preservatives. The product on the right, made in T&T, contains many ingredients including some which an increasing number of customers would not consider to be natural.
This latter product is not aligned with the strong growth personal health and wellness trend

http://www.wfs.org/2008health.htm
http://blog.euromonitor.com/2014/04/top-10-global-consumer-health-and-wellness-trends-for-2014.html

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and a customer desire to avoid additives that they perceive may be harmful.
The health and wellness trend applies equally in the Caribbean region as anywhere else,
according to a 2013 Survey. Amongst other things, it showed that a majority of Caribbean
consumers would pay a premium for fresh produce that was either organic, pesticide free,
and/or free from other chemicals, as shown in Figure 20 ( 88).
Figure 20: Caribbean health and wellness preferences found in a 2013 regional survey

Increased customer concerns about personal health and wellness is an area that offers

numerous high value proposition opportunity areas. Many of the examples referred to
demonstrate how the Health and Wellness Megatrend is intimately interlinked with the
other six consumer Megatrends described in this report. All the evidence is pointing to a
considerable strengthening of this trend over the coming years.

Gifts of Time

A feature of a numerous consumer studies is how many of those surveyed say that they
never have enough time to do all the things they want to do, whether perceived or real. This
Megatrend is growing in strength and becoming a key shaper of many consumer decisions.

Figure 21: Waiting for a gift of time

88

https://www.dropbox.com/s/zbjgo8tpyoj69xe/Adding%20Value%20to%20Local%20Foods%20Survey%20Final.pdf

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The time crunch factor is being reflected in the following ways:

o People are sleeping fewer hours and trying to cram more activities into their day. In the
USA the number of people sleeping less than 6 hours a night rose from 13% of the
population in 2001 to 20% in 2009 ( 89).
o In Australia 82% of couples with children under 15 years of age where both parents are
working always or often felt rushed or pressed for time. 67% of couples without children
under 15 years of age felt the same pressures ( 90).
o Parents are also prioritising activities to suit their lifestyle needs as best as possible and this
often has a cost. For example, 75% of parents in the UK say they dont have enough time to
play with their children ( 91).
o The top ten luxury travel and lifestyle trends for 2014 includes a growing trend towards
providing solutions which help busy people save time, especially when they want to relax .
At the turn of the millennium German Futurist, Eberhard Denzel, predicted that any business or
organisation that provides consumers with a gift of time would benefit at the expense of those
that did not. Since making that observation, the consumer desire for gifts of time has grown
and been driving a number of market niches including:
o Mobile communications so that people can remain connected 24/7/365 and make many
decisions on the move, including business and organisational decisions.
o Online banking and e-commerce channels remove the need for standing in queues or
travelling to physical bricks and mortar banking and retail outlets to make transactions or
purchases.
o Door-to-door delivery services.
o Online portals such as Ask.com and Kayak.com which enable people to find out more about
products and services before they make a purchase without having to leave home ( 92).
o Household help services such as Hire-a-Hubby to get odd-jobs done around the house as
there is never enough time to do them ( 93).
o Robots designed and programmed to help the elderly as the so-called sandwich generation
tries to cope with pressures from both their ageing parents and their own offspring. The
Japanese are leading developments in this field ( 94).
o Sales of take-out ready-to-eat and pre-prepared meals are increasing strongly ( 95).
o The Megatrend is also driving a return to central city living in some parts of the world as
people seek to reduce the need for long commutes.
Two local companies that focus on giving their customers a gift of time are:
o
Market Movers who provide an online ordering and
door to door delivery service for mainly locally
sourced health and wellness focused selection of
fresh and gourmet products ( 96).

89
90
91
92
93
94

95
96

http://news.thomasnet.com/IMT/archives/2009/04/americans-losing-sleep-over-economy-performing-poorly-at-work.html
http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features50Sep+2009
http://www.guardian.co.uk/society/2009/aug/03/play-time-limited-parents
http://www.ask.com/web?q=cameras&search=&qrsc=0&o=)&l=dir
http://www.hireahubby.com.au
http://www.economist.com/news/special-report/21599528-robot-around-house-doesnt-just-have-be-handy-it-has-be-likeable-tooseal
http://www.bbc.com/news/magazine-21443166
http://www.dmarketmovers.com/

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o PPR Electronics who provide an online ordering, door

to door delivery with a mobile credit card payment

service for laptop purchases ( 97).
There are many businesses and organisations stealing peoples time by making them wait in
queues, by failing to deliver at the promised time, by running out of stock, by installing voice
menus at the customer interface and making it difficult to speak to a real person, and being
inflexible in their approach when it comes to delivering to individual needs.
For example, I went to buy an expensive watch at a jewellers shop in Long Circular Mall, T&T,
recently. They had a good selection of models. The expandable watch strap on the watch I chose
was loose and so I asked if they could remove two links. They said they could not do it at their
Long Circular Mall shop and that I would need to travel to their Ellerslie Plaza shop to have this
done. That would have taken an hour of my valuable time (that lost time would have cost me
personally more than the value of the watch). I went upstairs to a second jeweller and chose a
top line watch. Again, the expandable strap was loose and the woman behind the counter said I
would have to go to their shop at Westmoorings to have several links removed. She was not
trained to do it. That would also have taken an hour of my time. As a result I refused to buy a
watch from either shop and instead bought one on my next trip overseas where removing a
link or two at the counter was just standard service. These two T&T retailers have no
understanding of how precious time is becoming to their existing and potential customers and
both are essentially killing their businesses by stealing a customers time.
There is no doubt that the Gift of Time Megatrend will play a significant part in shaping
customer demands and business and organisational responses over the next several decades. A
lot of change is needed in T&T to align with this powerful Megatrend.

Other Key Drivers of Change

Lifestyle Influences

97
98
99

People live increasingly mobile lifestyles and many dont want to disconnect when underway. eBay allows mobile phone users to monitor sensitive auctions that they have an interest in while
underway. Fandango and Moviefone are driving transactions that are convenience driven ( 98).
Combined Internet and mobile banking provides customers with a gift of time and is aligned
strongly with that major consumer driven growth Megatrend.
In this context Internet and mobile banking satisfies this need by being ( 99):
o Fast (no waiting in queues).
o Convenient (a range of financial transactions can be done from the comfort of home or
while on the move).
o Cost-effective (especially for the banks but also for customers who receive a gift of time
that can be used for other more productive purposes compared to the time waiting
standing in a queue to receive branch service).
o All time accessibility (24/7/365 24 hours a day 7 days a week 365 days a year).

http://pprelectronics.com/
http://www.mobilecommercedaily.com/mobile-commerce-payments-growing-mpayy-exec/
http://current-trends-now.com/2010/01/internet-banking-is-becoming-%E2%80%9Cneed-to-have%E2%80%9D-service/

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Flexibility (by being able to access and process a range of products and services without
having to go to a bank e.g. loan approvals, creating and closing accounts, trading stocks,
shares and securities).

One of the biggest shifts occurring is from consumer to prosumer which essentially
means that customers are rapidly becoming king or queen and manage their own
customised networks of product and service providers to suit their own particular needs
( 100). It is a trend towards markets of one where each consumer becomes the centre of his
or her own value network.

In this context, social networks and peer influences are playing an increasingly important
role as prosumers seek trust, transparency, value creation, web pro-activity, and stability.
For example, following the global financial crisis the biggest hurdle the banking and finance
sector has faced is restoring and maintaining customer trust levels. Some still have a way to
go!

Futurist Don Abraham says there are eight consumer trends (in developed countries in
particular) that are likely to reshape markets between now and 2018 ( 101). They are:
o In search of enoughness Consumers rethink their life goals and what they work for.
o New Americanism America reconsiders its place in the world (as the BRIC countries in
particular - Brazil, India, China and Russia - become more dominant).
o Sensing consumers Technology exposes hidden aspects of daily life.
o The transparent self Biological and other advances reveal the body and minds inner
workings.
o Just in time life Ubiquitous information flows reshape how people socialise, work and
shop.
o Women in charge Women overtake men educationally, leaving them better prepared
for the 21st century workforce (this is particularly the case in the Caribbean 70% of the
students at UWI are female. Males are dropping out of the educational system at a
frightening rate and few are thinking about the potentially serious negative future
consequences of this trend).
o Virtual made real Boundaries between virtual and real worlds become more porous.
o Education revolution Traditional institutions go virtual and modular.

The differences between generations, illustrated in Figure 22, are also becoming stark and
will impact upon the shape of future markets. In 2020 Gen Y will be playing a major part in
how the future plays out in many parts of the world. How they are being empowered today
will have a very significant influence on the future impact that they have economically and
socially ( 102).

100
101
102

http://www.slideshare.net/dinisguarda/trust-7-trends-about-the-future-finance-dinis-guarda
http://haoodnla.com/article/lxy09217655y9j01/194249
http://www.strategy-business.com/article/00022?gko=2c2d5

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Figure 22: Growing differences between the generations

Gen Y is not a 9 to 5 generation when it comes to employment. They prefer to work in

multiple employment roles and determine their hours of work and play within, for example,
a results-only working environment (ROWE). It is a model that provides the ultimate in
working hour flexibility and a work anywhere environment for the majority of employees
( 103).

Many in Gen Y and Gen Z have a totally different way of doing things when it comes to
communicating. They do less live talking (face-to-face) and the majority of their
communication in a more detached way through virtual interfaces - iMing, Facebook,
Instagram, Pinterest, Skype and numerous other channels. Electronic technology is just part
of life for these generations ( 104), and sometimes they are a little carefree about the way
they use such technologies.

Real things are becoming more important. Huge historically virtual businesses, such as
Google and Microsoft, are now developing substantial hardware based businesses. For
example, Google is building 3D virtual glasses, computers and tablets, as well as driverless
vehicles. They have also invested heavily in renewable energy ( 105). Microsoft now also
markets hardware such as tablets and computers and has taken a large stake in the mobile
phone sector by taking over Nokia and integrating their entire devices and services business
( 106). One of the reasons is that the value of much software, including mobile apps, is
approaching zero, unless connected with something tangible that has real value ( 107).

However, the wealthy in some parts of the world are reported to be ditching products and
services and looking to find unique, self-satisfying experiences ( 108) a sign of what Danish
Futurist Rolf Jensen said in 1999 would happen as we move into the age of The Dream
Society.

103
104
105
106
107
108

http://www.npr.org/templates/story/story.php?storyId=124705801
http://edition.cnn.com/2010/OPINION/02/08/rosen.texting.communication.teens/index.html
http://www.cnbc.com/id/101417698#.
http://www.microsoft.com/en-us/news/press/2014/apr14/04-25nokiapr.aspx
http://stratechery.com/2014/business-models-2014/
http://www.cnbc.com/id/101708710

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Social Networks

109
110
111
112
113

A whole new way of doing things in just about every sector is emerging internationally and
leading to the development of strongly customer-centric or peer-to-peer networks which
recommend or dont recommend just about anything and everything.

Many traditional businesses have a history of being conservative and almost arrogant in
their approach towards satisfying customer needs. Some still have an expectation that their
customers will continue to do business with them, even if the service they have received is
poor. The reality is that customers are finding other ways to satisfy their wants and needs,
including through the numerous peer to peer (P2P) networks which now span the world.

There are increasing numbers of people who are concerned at the massive profits banks
have been making in ways many view are detrimental to society. This is leading to some
banking customers seeking to earn a better and more ethical return through social lending
networks rather than through traditional banks where they receive meagre interest rates at
the same time the banks appear to make huge profits.

Two leading US P2P lenders are Lending Club and Prosper which offer loans with fixed rates
to borrowers at 20% less than traditional banks. Low rated credit card customers have been
paying as much as 30% interest on their debts. Groups such as the Lending Club and Prosper
have taken out the corporation as the middleman ( 109).

The concept of P2P lending is spreading rapidly around the world. Pioneers were Zopa in the
UK, Prosper in the USA, Smava in Germany, and Boober in Holland. More recently PPDai is
offering P2P lending solely online in China. Because credit risk assessments are not available
for most Chinese, this social lending group is focusing largely on standardising and
facilitating loans between family members and friends - a market area that is much larger
that personal loans from banks in that country ( 110).

Fynanz is technology provider of turn-key private student lending networks that basically
enables private lenders to lend to students. One such network is www.cuStdentLoans.org
( 111).

State-backed non-profit lending groups are also appearing in the US. For example, the
Metropolitan Economic Development Association in Minneapolis is helping small businesses
access loans after they have been refused by traditional banks, even when they have solid
credit ratings ( 112).

P2P lender Ripple says that the trustworthiness of traditional banks is open to question given
the recent global financial crash. They use a model which allows anyone to act as a bank
and grant credit within the Ripple system to anyone they know. There is no need for the
involvement of a traditional bank in any way ( 113).

Kiva is another social lending network that began focusing on making small loans (US$ 25
75) to entrepreneurs in poor countries but is now also lending to unbankable clients in the

http://www.mybanktracker.com/bank-news/2010/02/02/peer-to-peer-loans-the-next-best-alternative-to-banks/
http://technode.com/2014/04/14/p2p-lending-service-ppdai-gets-millions-dollars-series-b-funding-risk-control/
http://www.fynanz.com/company
http://www.pressherald.com/business/nontraditional-lending-fills-gap-for-small-businesses_2010-03-06.html
http://www.masternewmedia.org/news/2005/06/27/p2p_can_cut_banks_out.htm

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USA. By March 2010 more than 500,000 investors had lent USD 130 million to borrowers
through Kiva. It was incorporated as a non-profit in November 2005 ( 114).

114
115
116
117
118
119
120

In recent years P2P social network based lending channels have increased and include
Kickstarter and much more locally focused groups such as PledgeMe in New Zealand( 115).

Social media is now becoming a powerful tool that can make or break a company or
organisation. Consumers are increasingly using social networks as valuable sources of
information about how good or bad a company, product, or service is as seen through the
eyes of their peers. This is a trend that is going to be of critical importance in the future
business world ( 116).

People are talking about businesses on social networks such as Twitter. The question is are
businesses monitoring what people are saying about them and responding accordingly? The
answer so far seems to be not many ( 117).

Businesses ignore social networks at their peril. For example, in 2009 United Airlines staff
wrecked an expensive guitar belonging to a Canadian musician after refusing to allow him to
carry it into the aircraft cabin. They then prevaricated when it came to putting things right.
Dave Carroll, the musician concerned, was able to video the ground crew damaging his
guitar. He turned it into a music video which went viral internationally and quickly attracted
over 14 million views on YouTube ( 118). It is a blunder that United Airlines cannot erase.

Many multiple product/service provision portals, such as TripAdvisor, allow customers to

provide comments and ratings when it comes to the products and services supplied by
businesses that market on the Internet. For example, here is a comment on the international
travel booking site, http://www.hotels.com ( 119) about a well-known hotel in Tobago.
Location was good along with the view. Staff were for the most part unhelpful and not
outgoing with the guests. Prices at the bar seemed to fluctuate depending on time of day
and/or bartender as we were not on the all-inclusive plan. Breakfast was ok, nothing
spectacular. I would recommend the sister hotel next door as it is far more modern. Here is
another about the Bacolet Beach Club in Tobago. Just what we needed after Carnival in
Trinidad. Quiet, secluded, massages in the room and delicious food. Beware of the restaurant
charges, however. They tried to overcharge us (twice!), and it wasn't a cheap meal in the first
place!

Compare the above comments with the 5 out of 5 star experience tourists have recorded at
the Jamaica Inn in Ocho Rios and their very positive reviews ( 120) e.g. Jamaica Inn was an
exceptional escape from our routine hotel adventures. From the wonderful service we
received to its mixture of native and English/American cuisine, to the luxury of its own beach
and an outstanding danceable nightly entertainment program, it was a vacation that
renewed our spirits and had us planning for a return trip in the near future.

http://www.kiva.org
https://www.pledgeme.co.nz/
http://www.activ8inc.com/b2evolution/index.php?p=30&more=1&c=1&tb=1&pb=1
http://thebankwatch.com/2008/04/07/innovation-happens-at-the-edges-banks-are-you-watching/
http://www.youtube.com/watch?v=5YGc4zOqozo
http://www.hotels.com/ho128431/grafton-beach-resort-black-rock-trinidad-and-tobago/
http://www.hotels.com/hotel/details.html?pa=5&pn=1&ps=5&tab=reviews&destinationId=718070&searchDestination=Ocho+Rios&h
otelId=213433&rooms[0].numberOfAdults=1&roomno=1&validate=false&previousDateful=false&reviewOrder=date_newest_first#re
views

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Customers increasingly have the power to make or break businesses through the
recommendations they make to their social network peers. It is becoming one of the most
powerful market shaping forces in the world.

Many marketers do not understand how social networks work and still try to hard sell.
Social networks are essentially owned by the people who are part of them. They are
essentially a place to share stories and not a place for hard selling. Those who try the latter
are likely to be quickly unfriended!

Disruption

Perhaps the biggest change over the past decade or two has been the rising power of the
consumer and how this is impacting upon the way that companies do business, as illustrated
in Figure 23. This is leading to what is called disruptive innovation.
Figure 23: A big shift in the power balance has been taking place

Historically companies had the power to dictate what they would or wouldnt do for their
customers because they had local market power. But that is changing fast as the world
becomes more interconnected and now customers increasingly decide which businesses
succeed and which fail at home and abroad.

For example, the giant Kodak group failed because the top executives did not understand
how digital camera technology would make photography easy for everyone and eliminate
the need to process films, i.e. they failed to understand what their customers wanted.

Internet shopping services, such as Aeropost and eZone in the Caribbean region and Amazon
and Ali Baba internationally, are creating serious challenges for traditional high street
retailers who are often located in traffic congested areas where little or no parking is
available nearby and who dont have access to the same range of stock items that an online
retailer has. Many retailers face a bleak future for the reasons above, as well as their often
poor customer service. They are not trying to understand what customers want.

In terms of disruption driven by technology, think about paper tickets which were once
made by commercial printers. Now they are fast becoming electronic.

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Figure 24: The big move towards paperless ticketing

There are many business sectors that are under threat because of changing consumer
lifestyles, workstyles and preferences. Some examples of sectors that are going and what is
likely to be coming to replace them are shown in Figure 25.
Figure 25: Examples or sectors facing a decline (going) and likely to grow (coming)

121

One of the things that may create the biggest disruption to markets and businesses in the
coming years is the growing inequity between the worlds rich and poor. Just 85 people in
the world possess as much wealth as the 3.5 billion poorest ( 121).

http://www.forbes.com/sites/laurashin/2014/01/23/the-85-richest-people-in-the-world-have-as-much-wealth-as-the-3-5-billionpoorest/

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Figure 26: The 99% is becoming disillusioned and restless.

This is leading to the emergence of businesses with a purpose i.e. more value than profit
driven. The online handcraft business network, ETSY, is an excellent example ( 122). It seems
likely that we will see strong growth in purpose-based businesses in future years because
of growing consumer disenchantment with greedy corporations.
Disruption is going to reshape almost every market sector and any business that is unaware
of the threats to their future position in the market faces the risk of becoming irrelevant to
their customers and clients.
The majority of medium and large size T&T businesses which participated in the 2012 CARIRI
Business Future Fitness Survey, as well as those that didnt, have a great deal of work to do
to ensure that they become more customer-centric and dont become blindsided by the
disruptive forces re-shaping their traditional market spaces.

122

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