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Consumer trends to expect in 2012 Add to ...

It’s that time of year again. Eggnog time.

I look forward to slowing down and enjoying the season. It’s also a good time to reflect on the past 12 months, and to look ahead at the year to come. I like to take stock of trends my clients and I observed, and to get ahead of those clients by reading the tea leaves on movements and patterns that are expected to emerge.

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It was a very busy year for clients. It started with a bang and they ran flat out until June, raising or optimizing prices, releasing new products, and exploring new markets. Summer was strangely quiet, for all kinds of reasons, ranging from economic jitters about Europe, to concerns about consumer confidence at home. I think executives and marketers were just fatigued, finally stopping for some rest after a 24-month battle to recover from the recession.

It was also a frantic year for consumers. Spending rebounded, at least for the bulk of the year. And in 2011, consumers were introduced to some new technologies en masse: cloud computing and storage, high-definition screens on smartphones, and tablets beyond the iPad. But the expectation of tremendous value never faded, and consumers appeared to flock toward low-priced goods and accessible-premium goods again.

At this time last year, the new trends I thought 2011 would bring were:

  1. Greening the business. The return of green, as a response to changing employee attitudes and a necessity in recruiting talent, more so than a response to consumer pressure.
  2. The talent war. Finding sufficient skilled talent, and managing four generations in any one business – with millennials the major concern, taking the focus off of customers.
  3. Qualitative data. A desire for deep, ethnographic customer data, moving away from a numbers-only decision-making process to a position of rich market understanding.

I’m not sure the green movement roared back in the way I or my clients envisioned, but sustainability is once again en vogue, and the media is paying attention to environmental issues again. The talent war hurting customer experience, and the desire for ethnographic data did play out as predicted. I spent the first half of the year basically in-field full time with my clients’ customers, and those same clients were wrapped up in talent searches, restructuring, and Gen Y management training – to the detriment of customer service. (Note: customers are brave enough to complain about service levels again.)

Here are customer-oriented trends from 2011 that are likely to carry forward:

Content curation and guided choice

Customers are inundated with information and messaging. and they are inundated with choices. They are overwhelmed. Customers are fed up. They are exhausted. And they are not looking for more choice, or more customization options – they are looking for a little help.

‘Content curation’ is a term I heard my clients use a lot in 2011. It means helping sift through loads of options for customers, and presenting them with only a few based on the reviews of experts of some sort. And the model of guided choice – such as the Dell computer purchase process, or the Yogen Fruz menu – seemed to come alive everywhere, replacing models that would have allowed for pure customization.

The consumer world is not likely to become less complex or less noisy, and I see these trends continuing into 2012 and beyond, and creeping into spaces that really need them, such as consumer packaged goods where, for example, soap and laundry detergent options seem endless and therefore stressful to a cohort of customers.

Accessible premium

The idea of accessible premiumization is one I first researched in 2010, noticing an increasing range of offerings with higher-but-not-too-high price points and lovely packaging, in what you could argue are commodity categories. The fundamental characteristics of an accessible premium brand are:

  • Product: measurably better but not fundamentally different from competitors.
  • Price: in the range of two times higher versus the average priced product in the category.
  • Distribution: widely distributed, in conventional malls, grocers, drug marts.
  • Packaging: unique packaging or meticulous presentation.
  • Back story: a well-documented history of the brand or product, founder or production facility.
  • Production: unique production process and product nomenclature.
  • Promotion: niche events such as individual sports and industry parties.

Grey Goose vodka, Fiji water and Coach handbags are older examples of accessible premium brands, and 2011 saw the emergence of more: Hendrick’s in the gin category, J Brand in denim and even Rembrandt in toothpaste. (I know each of these brands was introduced prior to 2011, but they really materialized as mainstream options this past year.)

With consumers searching for value, but still wanting to cling to aspects of a premium lifestyle, I expect accessible premium options to emerge in even more categories in 2012.

Better not more, or apps 2.0

This was the first year I observed customers deleting more mobile phone apps than they downloaded. Some of this is attributable to a trend identified above, and the desire for curated content. But some of this, I suspect, is a search for quality over quantity.

I think 2012 is likely to see more of the same, with consumers searching for high-quality, well-reviewed apps that solve actual problems –apps for their phones, and also applications in the more general sense – tools to make their lives better versus sampling more apps.

Price optimization

A final trend from 2011 I think will carry over into next year is the intelligent move on the part of producers and retailers to take more margin by optimizing prices.

A lot of my clients went in this direction over the past year, having cut all the costs that seemed reasonable in 2010, and feeling confident enough in their ability to retain customers – and in some cases to steal share. Price optimization did not always mean price increases, in fact in many instances prices of some products within a portfolio actually decreased.

If the propensities above are likely to continue into 2012, then what new trends can we expect next year? Here are three my clients are talking about:

Mobile payments

With the mainstreaming of QR codes and near-field communications (NFC) technology in mobile phones, 2012 will finally (in North America) see the start of real mobile payment solutions. All the likely players will dive into this space in meaningful ways – telcos, banks, retailers and consumer brands.

The consumer shift associated with mobile payments may not be revolutionary, but it will be close. Using a phone to pay for parking or movie tickets will literally change the way consumers think about money.

The start of the salt-free revolution

One of my clients is in the food manufacturing and marketing business. She insists salt will be the next target in the war for healthier food options. She’s probably right.

I can see 2012 being the year the first salvos are fired here by mainstream brands.

A-la-carte pricing

Finally, 2012 will see meaningful a-la-carte pricing options emerge in categories where forced bundles traditionally exist. I’m cheating a bit here as Rogers has already announced it will trial this in the cable-TV space.

It’s likely to crop up in other categories as well, such mobile phone plans, and perhaps even in fast-food restaurants where the individual components of value meals may come down in price in order to accommodate more customers reluctant to accept the starch or beverage options and who as a consequence of high individual product prices stay away entirely.

Special to The Globe and Mail

Mark Healy, P.Eng, MBA, is a partner at Satov Consultants – a management consultancy with practice areas in corporate strategy, customer strategy and operations strategy. Mark’s focus areas inside the customer strategy practice include consumer insights, customer experience, innovation and go-to-market strategy. He is a regular speaker and media contributor on topics ranging from marketing to strategy, in telecom, retail and other sectors. Mark is known as much for his penchant for loud socks and a healthy NFL football obsession as he is for his commitment to Ivey and recent Ivey grads. He currently serves as chair of the Ivey Alumni Association board of directors. Mark lives with his wife Charlotte and their bulldog McDuff in Toronto.

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