In his annual look at the major forces shaping the marketplace of the new year and beyond, J. Walker Smith, Executive Chairman, The Futures Co., describes a waning era of consumer control – a “pivot to passive” in which consumers will step back and assume a much less active role.
TREND There will be a shift away from a consumer-centric, consumer-driven marketplace. This will be the result of consumers gradually and willingly relinquishing the major role they have come to play in the marketplace (think user-generated content, reviews and tips, collaboration, co-creation, crowdsourcing, wikis, etc.). Walker puts this changing of the guard in historical context. “Consumers went from being attentive to our marketing – watching our ads, paying attention to our brands, and taking their cues from marketers – to actively taking the driver’s seat in the 90s. We were all going to create our own content, collaborate with one another; everybody was going to self-invent everything for oneself. We presumed we’d all get into the game, but we are seeing that a few people are actually participating and controlling – not the masses. That so many social media sites have closed over the years or have lost their mojo shows us how hard it is to get consumers actively involved and to sustain that level of active engagement in the marketplace.” Among the forces driving consumers from active to passive engagement is their increasing desire to unplug, to press the pause button, to streamline their involvement,” Walker notes. “In our Monitor data we are seeing a decreasing percentage of people agree that they can’t live without their cellphones. Overall, there is a rising demand for ‘headspace,’ for some relief. Consumers are saying, ‘I want some time off, a moment to reflect, to be able to step back. I don’t want to be actively engaged all the time.’”
OPPORTUNITY People use restaurants for a myriad of reasons and one of them is for a change of scene and “headspace.” Remember that in terms of unplugging and escaping, one guest’s tranquil ambiance is another’s crowded scene, so know your audience (age is an important clue) and create their kind of haven. Regardless of ambiance, don’t overburden customers with an excessive number of choices – options are important but overload is easy when there are too many or they are presented in a cluttered way. Consumers are looking for someone to take the wheel, so to speak. For example, well-trained servers can be a huge advantage and chef’s recommendations and/or set menus may be a welcome relief.
TREND Passive, not active, digital use will drive the future. Walker also cites a fundamental change in the way consumers will interact with technologies. “We have thought that digital technologies are all about total immersion – do it all, have access to all, and have control over it all. But the future will be about consumers’ passive engagement with technology as well. Sensors are the future, not screens. Screens require active engagement – you have to touch a screen, you have to key into it, you have to be involved in it. Sensors involve passive monitoring – they will detect everything and feed back information.” For example, diabetics wear devices that monitor blood sugar and automatically dispense insulin; many other examples are already in the marketplace or are being tested – smart vending machines will measure temperature or use facial recognition to determine what kind of user is present in order to vary what is offered and how it’s priced; sensors in clothing will measure and monitor our physical state; a headset will monitor EEG levels and measure the user’s mood, then tell their iPod what music to play to fit – all by passive monitoring. “These kinds of devices will contribute to a new era of information for marketers who will have access to better data and better analytics tools than ever before – enabling them to predict the right fit/products for consumers and, in real time, how to price or configure an offer. This dynamic pricing based on real time analytics will lead the charge.”
OPPORTUNITY Walker describes a sophisticated scenario involving marketers tracking and analyzing data from sensors in many forms. But at the core is the value of information – information you may have about consumers that they don’t need to tell you, from their spending patterns in your restaurant to their social media conversations. It’s important to gather information and listen in order to constantly refine what you offer. And a restaurateur can be a kind of human sensor – don’t forget the value of “reading” customers in your dining room.
TREND Consumers are passive in their spending as well. Another sign of diminishing consumer engagement in the marketplace, he says, is that “money is not circulating and consumers remain wary. Pew Research found earlier this year that consumers believe the economic system is no more secure today than it was before the financial crisis.” While Walker reports that the National Journal/Atlantic Magazine research found 60% of the middle class is concerned about falling out of the middle class, he adds that in every income bracket there is some degree of financial anxiety due to uncertainty in the marketplace ahead. So, with confidence and finances weakened, consumers have pulled back and slowed spending as well.
OPPORTUNITY There is a market for “money-is-no-object” luxury experiences, but the ongoing challenge is to entice cautious consumers to spend in restaurants, particularly those in the middle class where a lot of uncertainty resides. Options can play a role in price points as well – make sure there are items with approachable pricing incorporated on the menu to appeal to that audience.
TREND Control in the marketplace will revert back to marketers, whose goal will be “conversion.” Consumers are happy to step back from the energy drain of self-invention, to relinquish control. “People are finding ways to consume and live their lives in a more passive way and that is transferring control back to marketers,” says Walker – to those that offer the goods and services that consumers consume. Marketers will play a more active role and will measure their successes differently. “We used to think about ‘audience,’ ‘share of market,’ ‘brand equity.’ Currently we think about and measure ‘engagement,’ which has become a buzzword in the marketing profession. It has been about ‘active engagement,’ about consumers doing something, being engaged. It’s not as if that’s going to disappear, but engagement becomes far less important in an era where passive consumerism is the name of the game. Moving forward, the keystone metric will be ‘conversion,’ creating and taking advantage of opportunities to turn consumers into customers.”
OPPORTUNITY Passive consumers will require marketers (including restaurateurs) to be more active. Think about how to reach your target market and how you can convert them into customers. What situations should you be ready to maximize? Working mothers heading home? Cash-strapped Millennials looking for a place to have a drink with friends? Relevant text and email campaigns as well as targeted tweets can grab their attention and convert them into action. Another conversion opportunity for restaurants is mobile- and location-based search, including location-based mobile apps that help people find restaurants, bars, happy hours, etc. around them. It’s essential that your mobile site functions well – that maps and directions are accurate and that click-to-call/reserve/order functions work seamlessly. Make sure restaurant locations are correctly listed in all mobile directories and guides (Google+, White Pages, Yelp, etc.) and investigate location-based apps such as AroundMe.
For J. Walker Smith’s FutureView LIVE Replay, click here