It’s around this time of year that those of us in the business of predicting consumer trends sit down to forecast what the upcoming year might bring with it.
At this time last year, industry experts called for a record-setting year of travel and new growth in experiential entertainment. All of which now seems shockingly naive to us. When we’re reminded of the phenomenal uncertainty of the world, failed predictions like these raise the question: is there any point to making these kinds of predictions at all?
In short: the answer is yes. Although there are always unforeseen circumstances that can throw a wrench into the best laid plans, chaotic times like these tend to mostly accelerate existing trends, as opposed to prompting entirely new ones. Take for example the rapid growth of eCommerce. Although much of the world being forced into their homes caused a spike in eCommerce, its growth has been happening for a long time and the events of 2020 merely sped it up.
This article isn’t just about making predictions, but about reframing how we make them. Here are our tips for making and reading predictions for the new year:
Chaos accelerates change, but doesn’t create it from nothing.
To best be able to predict the future, you should understand the trends that are already occurring in the present.
Times of economic chaos like the Dot Com bubble of the early aughts, the Great Recession, or the current recession caused by COVID, accelerate change. Just like it takes years to make an overnight success, though, many trends we see accelerate during times of crisis already have a solid foundation. In 2008, the financial industry in the United States was built on shaky grounds and there were people on the inside who could see the collapse coming (watch The Big Short). More recently, things like remote work and eCommerce were already becoming more prevalent and more accessible before the pandemic struck.
Changing conditions cause changes in behaviours.
When looking at a change in behaviour, you have to consider the underlying circumstances that cause that change.
This may sound like stating the obvious, but the effects of changes in consumer behaviour generally have causes. Those causes can be direct, like how a contagious global pandemic made people want to travel less, but they can also be more subtle. An early struggle in making online purchases was that people weren’t comfortable giving out their credit card information online, so sellers gradually made it easier and easier for people to do that, leading to situations like Amazon Prime where the card is remembered so consumers can just make purchases. An event like the pandemic can force these behaviour changes quickly, but it’s important to understand what specific conditions are changing for each prediction.
The key to predicting the future is understanding the present.
To be able to see what is coming, you have to pay attention to what has already happened, and now it is easier to do that than ever before.
As we mentioned above, the changes that happen in times of chaos don’t come out of nowhere. That means the best way to predict what will happen is to understand what is already happening. Especially in the age of big data, it’s also easier than ever to see what societal changes are happening in real time. It’s possible to see trends like traffic congestion in downtown cores or changes in purchasing habits during a lockdown (even more so with purchases being online), meaning we are able to better understand current trends than ever before.
Predictions are not guaranteed
When unforeseen circumstances do arise, you have to be ready to adapt to them and amend any predictions accordingly.
As the events of 2020 have proven, there are always unforeseen circumstances that can arise. The predictions that were made for what this year would look like followed the rules above and were very likely to come true, but many of them did not. Game-changing events do occur and there is nothing we can do to prepare for them, but that is alright. It is important to understand that predictions are not facts.
So is there anything we can know for sure about what the world will look like?
Despite it being nearly impossible to know what will happen for sure, there are some pre-existing trends that have been accelerated by the pandemic and some conditions that could lead to other trends. Here are some of them:
People will continue to work remotely. Even before everyone was forced home, remote work was becoming increasingly popular across many industries for a variety of reasons. With workplaces forced to make everyone work from home, inertia is no longer keeping many people in the office and remote working in some form is here to stay.
eCommerce will continue to grow. If you have a product to sell, you better have a way to sell it online. eCommerce was already growing at an incredible pace pre-pandemic, and having consumers forced to stay at home and discouraged from interacting with people has pushed them online even more. For a deeper dive into what eCommerce will look like, we actually released a Whitepaper on that exact topic.
Last-mile delivery will get even more important. Right now, last-mile delivery is more important than ever as people are expecting goods faster than ever before. Retailers and logistics companies need to keep up with this trend to compete with Amazon prime’s ultimate convenience.
There will be a reckoning in retail. Not all retailers will survive the pandemic, nor should they. As a category, retail has been increasingly reliant on private equity and massive amounts of debt. Interestingly, small mom-and-pop shops may be able to survive through things like curbside pickup and community engagement because their overall burden of cost is balanced by the scale of their business, but they may not have the cash to wait forever for business to pick up again.
Pent up demand (and supply): The “other side of COVID” is likely to reveal new retail opportunities as significant amounts of street level retail space will be available and the next generation of entrepreneurs may find easier access to once hard-to-grab locations. Those that have been validating their offerings via digital means during the pandemic may be best positioned to realize growth potential on the flipside with equivalent pent up demand from shoppers who will be eager to use shopping as a social and recreational experience (once we’re all confident to do so again).
A shift towards contactless retail experiences was already starting to take place before the pandemic because of the convenience and cost-savings for big retailers. As people increasingly want to limit their interactions with others and contact with touchpoints like cash, the shift is accelerating.
A new hurdle for environmental issues. The fight against single-use plastics was just beginning to make traction when the pandemic hit. Now the focus has shifted towards more single use items as people prioritize feeling safe and “virus free” over environmental issues. This may not continue as the world recovers from the pandemic, but it is currently happening, but is something the world will have to reckon with. In resource-dependent economies like Canada, a push to restart the economy may also come into conflict with hopes for a green recovery.
Brands need to have a digital presence. We’re 25 years into “digital” and it’s no longer just a channel. It’s become the single most important way to create a brand and connect with consumers. Although there are many theories about what a “new normal” could look like post-pandemic, the new normal of digital-first brands is already here.
One of the many things 2020 has made us re-evaluate is the art and science of predicting the future. In an industry where it’s our business to make predictions, it’s necessary to constantly challenge how we do that and to remind ourselves that even the wildest predictions come from somewhere. Even when predictions are wrong, clever and agile problem solvers who react to unforeseen circumstances will always come out on top.
If you need a team of problem solvers to help you set your stride in 2021, get in touch with us today.