It seems appropriate for my first blog of the New Year to be looking to the year ahead. The trends that I am going to discuss are by no means an exhaustive list, but they are the trends that are going to be significant in 2017.
At this time of year, a lot of people are likely to be thinking about what holidays they wish to go on to beat the post-Christmas blues.
The falling value of the pound and the uncertainty of security will have an impact on the travel industry; holidaymakers are likely to get less for their money when they exchange into foreign currencies, and so going on holiday abroad will be more expensive.
The benefit for marketers working within the UK travel and tourism industry would be a cheaper destination for overseas tourists and costal resorts will be far more appealing to UK citizens, which will all benefit the British tourism industry. Targeting these sectors might be fruitful.
The B2B sector may suffer due to the recent political uncertainty, which may deter corporate guests coming to the UK, who make up the majority of hotel rooms booked by overseas travellers.
The extent to which all of the above affects consumers’ decisions is yet to be seen, but as often holidays are booked well in advance we will find out in the near future.
As a result of the decision to leave the EU, the price of sourcing global produce is likely to go up. This could be a problem for supermarkets that source their meat, fruit and vegetables from abroad. Therefore, consumer patterns may change as they may choose the value supermarkets instead, or at least those that source all their meat from the UK.
We have seen the consequences for supermarkets already with the dispute between Tesco and Unilever over their request for a 10% increase in prices. This led to a day of panic as favourite brands disappeared from Tesco’s shelves. Although they were able to resolve the dispute quickly, this is not the end for price disputes and so consumers are likely to see price increases in the new year.
For brands, the key is to establish whether they focus on price or whether to focus on customers.
A brand which has adopted both these strategies to remain in the premium bracket is Marks and Spencer, who have been struggling to compete with their clothing range.
M&S CEO Steve Rowe proposed and implemented a number of changes last year including a focus on their food sector, as this area of their business generates 50% of profits (BBC News, 2016). I am sure that most of us will agree that we would rather go to M&S for their food rather than their clothing or homeware.
To combat the falling profits in the clothing sector, price cuts and a reduction in price promotions were proposed. A number of stores have also been closed as the company reviewed the viability of the stores themselves.
Other retailers who will take a hit are those who outsource their production, such as Ted Baker whose labour is based in Hungary. The truth to this will come with the outcome of the negotiation of the trade agreements with the EU, the time of which is still yet to be determined, as this cannot happen until the UK has officially left the EU. Ultimately, trading globally could become much harsher and more competitive as the UK is no longer under the protection of the benefit of free trade within the EU.
In 2017, the nature of work may change. Over the past couple of years, we have seen a rise in what has been termed the ‘gig economy’. This term refers to workers who are on a form of a zero-hour contract, getting paid for the ‘gigs’ they do rather than receiving a set wage per hour, applying to people who work for companies such as Uber and Deliveroo.
This change in the nature of employment is not compliant with UK employment law. There is the danger here that wages will be too low and so there will be an increase in inequality, so therefore it has attracted scrutiny as all workers are entitled to the national minimum wage.
A tribunal in October last year ruled that Uber must pay the minimum wage for all their workers and that they are no longer considered ‘self-employed’. In response to this, Uber has sought a legal ruling to class itself as a digital platform rather than a transport provider to avoid this ruling being enforced (Marketing Week, 2016). This acts as a warning to brands to be mindful of how they communicate in response to tackling these issues as they pursue a new way of defining work in the future.
Augmented reality has come to the fore this year, particularly with the success of Pokémon Go. This has been an enlightening development for local businesses who have attracted more customers by becoming a ‘pokéstop’. Further developments in this area will be interesting to see in 2017.
For years the future of tech has been in artificial intelligence. Some argue that Siri, the voice recognition service used by Apple is a form of AI but the key competitor in this area is the online retailer Amazon, with the release of the smart speaker ‘Echo’. Increasingly, businesses are finding ways to offer consumers choice and the ability to simplify daily tasks by communicating with a ‘faceless machine’ (Marketing Week, 2016).
Something else to consider is whether TV will become less relevant in wider advertising strategies. There are those who think that TV ads are going to be less effective as people migrate to using other channels to watch TV programmes. Engagement will therefore be defined by number of views online. However, analysing online metrics has been criticised in light of Facebook inflating their data (The Guardian, 2016), therefore we can question whether people will trust online advertising data that is reported, especially from big companies such as Facebook and Google. This offers a warning to brands to make sure that they are attentive to detail to avoid misreporting that users are more engaged with content than they actually are.
Furthermore, the dangers of communicating false information resides in what has been named ‘post-truth’ politics, awarded the ‘Word of the Year’ by the Oxford Dictionary last year. The term ‘post-truth’ defines the moment when we as consumers are quick to react based on emotion or personal belief rather than by checking the facts.
To feed these beliefs, some newspapers are quick to put out news with misleading content. These particular newspapers have been targeted by the ‘Stop Funding Hate’ campaigners on Facebook who particularly targeted companies who advertise in these newspapers, as this symbolises their support for the misleading articles printed, including those which demonise migrant workers. As a result, many of these companies have stopped advertising in these newspapers. This campaign comes at an appropriate time, as the Christmas adverts released by companies such as John Lewis and Sainsbury’s, designed to inspire a sense of goodwill and unity are in conflict with the money raised from Christmas sales that is being put towards adverts in newspapers that inspire a ‘culture of hate’ amongst its readers.
This offers a positive lesson for marketing as it demonstrates how marketers should appeal to the ‘post-truth consumer’. Customer experience is a topical issue with consistency being key to gain the trust of customers as they will be quick to latch onto any criticism and broadcast their complaints over social media.