With many looking back on the decade that was, PENSO is looking forward to the trends that will drive business growth in 2020.

1

Creative and innovative leaders will dominate this decade
For many decades, there have been enduring characters and archetypes that fit their times. These universally familiar characters transcend geography, time and context and become more attractive and prominent. In the 2010s, the Hero was the dominant archetype, from superhero films dominating the box office to outspoken, emotional “heroes”, from Trump to Thunberg, always trying to fight an enemy with solutions either ad-hoc, ill-formed or unclear.

These Turbulent Teens will make way for the era of The Creator archetype, leaders whose purpose is to create something of enduring value, to give tangible form to vision, and to create a culture of creativity and imagination brought to life.

2

Costs have been cut enough – now for innovation and growth
Global growth and innovation is at a low point. Despite all the talk of #disruption, most organisations are using technology to reduce costs and replace resources. Soon, we will have cut as hard as we can ever cut, and be as efficient as we could be. There will be no more room to shrink, before margin pressure becomes unbearable. Only then – and it’s not far off – we will see a counter-trend where we see true digital transformation; businesses making decisions based on growth, selling more online, building better mobile experiences, being more imaginative with content, improving customer satisfaction, delivering delight and magic, and in doing so, delivering sustainable increased margins, based on quality, rather than price.

3

HR, Finance and Business Affairs will start saying yes to digital
For many years, IT departments were the guardians of closely held suites of enterprise software. Anything proposed outside of that, whether it be an initiative or a change, was met with a firm, unyielding “no”. Then, a shift occurred as marketers, product, logistics and other parts of businesses starting building their own personal software stacks, often incrementally, often using their own devices (such a iPhones vs clunky corporate phones), expense accounts and credit cards. IT departments all over the world recognised this and shifted almost overnight from a barrier mentality to an enablement mentality, encouraging software stacks through technology governance and innovation frameworks. This shift is now happening in other departments within business that have a culture of recalcitrance, now also under pressure from software eating their jobs, including: Legal and Business Affairs, Human Resources and Finance.

4

Subscriptions will be both liberating and tiring
Subscriptions have been an increasingly popular business model, moving from magazines and utilities in days gone by, to an ever increasing range of services:

• Mobile Phone Plans
• ISPs
• Subscription TV
• Music
• Software
• Apple Arcade
• Apple News+
• Wine Clubs
• Shaving
• Hardware.

And within these categories, there are even further breakdowns: Subscription TV has a variety of subscription options divided by category: Kayo (Sports) or brand: Disney+.
We’ll see two diverging and opposite trends occurring in this space.

1. Greater fragmentation, as individual providers, channels and networks build their own direct-to-market models as the cost of going to market shrinks. This will mostly occur in the physical product industry, as companies seek to replenish household items on a day-to-day basis.
2. Greater consolidation, as people will be looking for the scale and ease of use of the “one-size-fits-all” subscriber. Yes, there is a role for a big fat aggregator company, possibly in expanding subscriptions beyond video into other media.

5

FMCG companies will finally get on the digital bandwagon
FMCG brands have traditionally sold to retailers, who sold on their behalf. Therefore they have had little need to invest in digital, and their digital skillsets are generally low. However, as retailers are moving towards private-label approaches, and hoarding data and customer information, more FMCG brands are moving into new territory – direct consumer sales.

There are two concurrent opportunities. Firstly, a direct ecommerce sales channel (to the consumer), which allows a direct sales and communication channel. Secondly, gathering consumption / usage occasion data (through the consumer), via sales frequencies, product subscriptions (eg: Dollar Shave Club), smart devices such as toothbrushes, smart rubbish bins (scanning discarded packaging) and more.

6

We will increasingly measure the right things in business
With the large range of measures at our disposal enabled by digital, marketers are misidentifying the real metrics that matter for profitability growth.

The key for business leaders in 2020 is to identify the metrics that matter (TMTM) that drive long term profitability. Just because we can measure more, it doesn’t mean we should be using all of those myriad data sets. Inversely, the metric that matters in any business should be driving business decisions. Evidence-based drivers of profitability are liberating and clear.

7

Leaders will stop listening to, quoting and making decisions based on stupid online comments
Business are taking online conversations too seriously. Too many knee-jerk reactions in business are being driven by bed-wetting executives in many Corporate Communications departments who are concerned not by business metrics that matter, but by ill-informed reactions from people who otherwise wouldn’t have been put through on AM talkback radio.

Forget measuring online sentiment; Twitter is a cancerous, anti-capitalist and destructive social network, where the culture is to destroy and undermine in ever more shocking ways in search of more likes. No valuable business insights can come from monitoring it. We predict that in serious news reporting, journalists will be shamed/ignored for quoting Twitter, and more companies will do what Australia’s Bunnings does and turn comments off on all social media channels.

8

Investment in social media content and influencers will dramatically decline
Over the past three years, organic social media reach has declined so dramatically that many hundreds of businesses based on social media-derived traffic have collapsed. A Facebook post used to reach approximately 15% of its followers. Now less than 2%. If you want to communicate to customers, you’re better off putting a sandwich board outside your office than posting on Facebook or Instagram – unless you put a big media spend behind your posts. Facebook has attempted to disguise this decline by removing like numbers and views from public view, and useless “Influencer Marketing” agencies are re-branding as “Content Creation Agencies”.

9

Facebook is no longer “eating the web”. Google is.
There used to be an expression that Facebook was “eating the web”, as people used to use Facebook as “the front page of the internet”. Major publishers derived upwards of one-third of all traffic from Facebook. However, given the decline of organic reach, the shift towards people-based stories and groups, Facebook is driving only approximately 20% of traffic to major publishers. Google has now stepped into the breach, and we are we’re seeing an increase in traffic from Google. Websites, search optimisation and content is back.

10

The Concierge Economy will help increase margins
Businesses will converge products, services and experiences. An example of this is Concierge Medicine, where organisations such as Private Health Insurance providers sell a subscription to an holistic “health service”.
This may entail buying a subscription of four visits to the doctor per year which may include blood tests, vaccinations, general health checkups and data collection. The visits may spot issues or prevent illness well before anything occurs.
Further, data-driven insights and suggestions may provide better 24-hour health optimisation. From DNA-based advice on how to best eat or exercise, all the way through to providing smart devices, such as Apple Watches, in order to track people’s sleep, eating, heart rate, stress levels and other precursors to general health, this Concierge style business model turns operations into knowledge and knowledge into products.

11

Data will be more strongly regulated (and self-regulated)
Globally, there’s a trend for increased regulation around privacy, evidenced by the European General Data Protection Regulation (GDPR), California’s Consumer Privacy Act (CCPA) and the recently introduced US Consumer Online Privacy Rights Act (COPRA) bill. Regulators have reaffirmed the need for businesses to think about user privacy when managing customer data and are endeavouring to improve user control and provide greater transparency of the purpose of data capture. Regulation is also now focusing on removing deceptive practices in user interface design – known as dark patterns – tactics designed to trick users into handing over their data. With increased oversight, businesses should actively promote a culture of data respect, user autonomy and user decision-making.

12

Organisations will be ever more creative in gathering data on consumers
There are many ways organisations gather data, directly and indirectly from consumers. However, as we see greater restrictions on the ways in which companies directly gather data, we will see an ever greater movement towards creative collection of third-party data. For example, companies are using satellite imagery to look into your backyard and understand whether you have children’s play equipment, or a pool, or solar panels. They are using real estate listing data to look into your home and work out whether you have a gas heater, or air conditioning, or an old kitchen. And, they are gathering Google Street view images to see how old your car is. Overall, organisations are using this information to augment their data and communicate more effectively.

13

User experience will go from personae to path-to-purchase context
Digital experiences have evolved over time; from being content-led, to being contextually relevant, to facilitating 1:1 user interaction through personalised experiences.

However, personalisation can be very-hit-and-miss. Businesses are starting to benefit by removing costly personalisation initiatives and focussing more on contextual relevance approaches. This means user experiences will be increasingly designed around user journeys and paths-to-purchase, and use AI to predict what users intend to do from user input (declared data) and behaviour (inferred data), shifting the attention of a user from how a tool works, to what they want to achieve with the tool or site.

14

Businesses will own APIs instead of customers
If you own data, why bother owning the consumer? Businesses with a sound backend might not need to own the “shop front”.

Traditional retailers have connections with a huge range of wholesalers and suppliers. This gives businesses the opportunity to have a broad wholesale backend and decouple their ability to partner, procure, range and fulfil from the actual customer service and sale layer. In essence, build APIs so that anyone can sell your product without you having to talk to them.

15

The best user experiences will mix context and channels seamlessly
In the past few years, we have seen huge popularity in voice interface through the likes of Siri, Google Home and Alexa. These smart assistants are increasingly appearing on any connected device, including our watches, TVs, speakers and even lighting at home. We will start to see companies ensuring the experience and interaction across all devices can be seamless and achieved through a mixture of voice, gesture, feedback, clicking and swiping. It is important for companies to start thinking across channel and devices in everything they deliver, providing the same tasks can be easily achieved whether the user chooses voice, gesture or a tap. This type of mixed context interfaces is evident across the Google and Apple ecosystems, where a user can use a watch or voice device to do similar tasks that in the past were reserved just for a mobile phone.

16

Content will be delivered as a service
For too long, communicators have approached content creation in a similar way to news organisations. Ephemeral, time-specific and built for high-decay channels such as Instagram Stories or Twitter. This content has little or no half-life. It doesn’t help answer enduring questions people have about category needs, company needs or brand needs. We’ll see more enduring and evergreen content created; build a pool of highly branded content – and let it find the audience, rather than the other way around. And most importantly, ensure that the content is built in a variety of styles and sizes, and Text, Audio, Video, Image, Software and Hardware (TAVISH) formats.

17

Consumers will be able to define their own design layouts as they browse online
We predict there will be an increase in real-time, customisable web interfaces where users can set up their browsing experiences to best suit them.

Rather than force users through a defined site layout and journey, they will be allowed to set it up the way they want on their device. This could include anything such as setting up multiple shopping baskets, calculators, wish lists and split-screen views within one screen for a heavy online shopping session. This experience helps remove clutter on a website to build what you want, rather than what a company wants you to see or an algorithm is trying to predict.

Having these options would allow each user to create a customised, personalised, and comfortable interface for themselves when interacting with your channels.

18

Preference panels will finally mature
As the ability to gather data improves, one area left way behind are poorly designed preference panels. “Unsubscribe” buttons generally give us a binary option: Stay or Go. Preference panels that allow a granular level of data, detail and customisation are growing slowly, too slowly. Given the macro trends of data integrity, personalisation and privacy, we predict a huge change in the way we control and manage our preferences. Imagine the ability to have one email used for marketing, another for authentication, another email used for sensitive information, push notifications used for alerts, and physical calls when you might miss a sale or opportunity? Sounds simple, yet it’s simply uncommon right now.

The Future Laboratory is a partner of PENSO and one of the world’s most renowned futures consultancies.

The Future Laboratory provides a blend of trend forecasting, consumer insight, foresight, brand strategy and innovation, to inspire and future-proof organisations. Here, they contribute two key trends:

19

Elevated Leisure
Popular leisure pursuits are being elevated to new levels through high-spec spaces and destination experiences. Often regarded as a solo activity, virtual reality (VR) is becoming a social experience for more discerning crowds. For example, Otherworld is a VR playground for the senses. Visitors to Otherworld, housed in a disused railway arch in London’s Haggerston, are invited to order drinks and Hawaiian poké street food before selecting a game to play in one of 14 VR pods. State-of-the- art VIVE headsets offer a variety of experiences from climbing Mount Everest to undertaking tedious jobs, shooting zombies and living a day in the life of a fisherman. Heat, air, vibrations and scent effects also help to immerse visitors in their VR game play. Created by secretive technology company The Dream Corporation, the space turns VR into a social pursuit, allowing friends to play against one another in different pods.

20

Emotional Economy
Amazon’s latest voice-tech capabilities allow the AI tool to express human-like personality traits, from happiness to disappointment. With curated text-to-speech functionality, the Alexa emotions update means it can adopt intonations relevant to specific content; an excited tone in response to a trivia question, or an empathetic tone for announcing disappointing sports results. While the brand has previously experimented with personas, launching a ‘newscaster’ voice for US customers in January 2019, new accents and characteristics are also in development. Users are responding well to the tech, with the ‘music style’ – a radio presenter-like voice – perceived to be 84% more natural than Alexa’s standard voice settings. Over the coming year, consumers will seek more intuitive interactions with the technology in their homes and pockets.