One of the consultancies I used to work in would release an annual publication of the trends it believed would shape branding and innovation over the coming year. I’m writing this at the beginning of January 2023 and my inbox is brimming with similar content:
- Gartner is telling me that fully virtual workspaces in the metaverse are about to ‘reimagine’ the office experience, that portable digital identity wallets are going to underpin a more personalised Web3 experience, and that shareholder acceptance of speculative ‘moonshot’ investments will become a viable alternative to traditional R&D spend.
- Meanwhile, the Financial Times is predicting a long war in Ukraine, blackouts in Europe, Donald Trump’s indictment in the US and economic recovery in China.
- And Mintel has identified five consumer trends that will shape the near future, which include ‘hyper fatigue’ (cutting through the noise to reconnect with what really matters), ‘intentional spending’ (a greater focus on fundamental aspects of quality, such as durability and sustainability when making purchase decisions) and ‘international localism’ (buying local as a way to protect ourselves financially, environmentally and psychologically).
These three examples are a mere drop in the ocean: a Google search for ‘2023 trends’ returns over three billion results and we’re not even two weeks into the year. Having trawled through a sample of these results, it strikes me that many of these trends are more reflective of the (vested) interests of the forecasters and the products and services they ultimately hope to sell, rather than a comprehensive, dispassionate attempt to understand what the future has in store for us:
- Accenture’s predictions tend to focus on the transformative potential of technology.
- Capgemini’s suggest a pressing need for organisations to reorganise their supply chains, explore new business models and lead on sustainability (which dovetails neatly with its list of service areas).
- Online auctioneer Catawiki is predicting a decline in demand for gender-specific fashion collections, greater demand for items that evoke Millennial nostalgia and a greater interest in investing in ‘less obvious’ collectibles such as cognac from the 1950s and 1960s… all of which happen to be available on Catawiki.
There are at least three reasons to be suspicious of what’s going on here. Firstly, most of these trends studies are thinly disguised marketing campaigns: their primary job is to shine a light on their creators, rather than to illuminate the future for the rest of us. Secondly, we are bombarded with these trends at the beginning of every year, which means they are either short-lived (how useful is a trend that will be irrelevant in a matter of months?) or simply the latest symptoms of deeper, underlying longer-term trends (in which case, shouldn’t we focus on these instead?). And thirdly, each list is limited by the specific interests of its creator: Accenture’s, Gartner’s and Capgemini’s lists all relate to consultancy services, Mintel’s list is designed to flex its consumer insight muscle, the FT’s focuses on economic and political events and Catawiki’s list is unashamedly fixated on objects you can buy at auction. Each of these organisations is operating well within their comfort zone, and understandably so: we’re unlikely to care about Catawiki’s pronouncements on the future of the workplace, or the FT’s predictions about what’s going to create a buzz at auction.
It’s easy to get the impression that trends analysis has become little more than a marketing free-for-all, but this isn’t how it all began. In 1967, Harvard Business School professor Francis J. Aguilar published a book called ‘Scanning the Business Environment’, which is widely considered to have laid the foundations for modern trends analysis. In the book, Aguilar introduces the idea of ‘environmental scanning’ as the activity of gathering information ‘about important events and relationships in a company’s outside environment, the knowledge of which would assist top management in its task of charting the company’s future course of action.’
The point here was not to focus on the information or knowledge that was already in the company’s comfort zone, but to understand the wider set of forces at work. Around the same time that Aguilar wrote his book on environmental scanning, academics Paul Lawrence and Jay Lorsch were developing a theory that there is no single ‘ideal’ way to organise and run an organisation, but that organisations should evolve to suit the environments in which they compete (known as ‘contingency theory’). The broad idea is that there should be a symbiotic relationship between an organisation and its environment: so, the more dynamic and complex the environment becomes, the more dynamic and complex a business must also become.
This is why trends analysis, or ‘environmental scanning’, has become such a hot topic. The ambition is for organisations to skate where the puck is going, not where it has been: to adapt in anticipation of future changes in the environment, instead of merely responding to past or present changes. Over time, a manager’s job seems increasingly close to impossible: adapt today in anticipation of tomorrow’s unknowns.
Aguilar’s work is significant not just because he recognised the importance of scanning the environment, but because he was interested in what types of information about the environment managers should use as the basis for their plans and strategies. He pioneered a framework that many of us still use today: ETPS analysis (or PEST, as it has come to be known).
Over the intervening years, a number of prominent (and not-so-prominent) management thinkers have evolved the order, meaning and number of dimensions. Initially, ETPS evolved into a more user-friendly acronym STEP (Strategic Trend Evaluation Process) and has subsequently been extended to include additional dimensions, such as the ecological or environmental perspective (an additional ‘E’), the legal perspective (‘L’), labour (another ‘L’) and ethics (yet another ‘E’):
It seems fair to say based on the graphic above that there’s no definitive ‘best’ set of dimensions.
In many of these cases, we’re looking at a reordering of the factors being considered, but the variations above raise an important question: how should an organisation decide which factors to include in their approach to scanning their business environment? One thing we can say for sure is that this decision shouldn’t depend on the organisation’s comfort zone: Accenture and Capgemini may feel most at home identifying technological trends, just as the FT may feel most at home appraising political and economic trends, but social and environmental forces are also critical to the future of their organisations: the decision should be based on the degree of influence a factor has on the future of an organisation and its customers, rather than the degree of comfort or familiarity that organisation has with a particular factor.
To help with this, academics Veronika Silinevicha and Kristine Kalinina of the Baltic International Academy in Latvia suggested the following way to establish the likely strategic importance of a factor in an organisation’s trend evaluation process:
- Assessing the factor’s degree of influence on the organisation’s activities
Silinevicha and Kalinina suggest the following 3-point scale:
- The influence of the factor is small: any change has practically no influence on the organisation (and, by inference, its customers)
- Only significant changes in the factor affect the organisation
- Even small changes in the factor can affect the organisation
- Assessing the probability of change in the factor
Here, the authors suggest canvassing the opinions of relevant experts in each of the factor areas and asking them to rate the probability of change on a 1-5 scale, where 1 means a near-zero probability of change and 5 means a near-certain likelihood of change. A straight average of the expert scores for each factor can then be used to up-weight or down-weight the importance of each factor accordingly.
In my experience, economic and social factors are most fundamental in terms of their influence on the future of brands, although they are easily taken for granted. Technology trends tend to be more seductive (and certainly seem to invoke stronger feelings of FOMO) but I’d argue that the longer-term economic and social forces at work have the most profound impact on brands. Paul Worthington recently made a similar (and compelling) point in his ‘Off Kilter’ newsletter: brands like Uber, Peloton, Airbnb, WeWork and Coinbase are as much the result of low interest rates, low inflation and generational wealth inequality as they are the creation of inspirational visionaries.
Regardless of which PEST factors you choose, the more strategic you are in deciding which factors to focus on, the more useful your trend analysis is likely to be. This is what some management academics call a ‘scanning strategy’. The hallmarks of a good scanning strategy are roughly as follows:
- It should be an ongoing, proactive process: a set of activities carried out as part of the strategic planning cycle and not in response to a specific event or crisis.
- It should be deliberate: beginning with a clear set of prioritisation criteria, such as those described above, to think expansively and then prioritise the factors likely to affect the future of an organisation (and its customers).
- It should be explicit about information required: once the relevant forces have been identified, a set of relevant information needs should be identified.
- It should be explicit and expansive about sources of information: trends reports and white papers are a helpful starting point, but there’s no substitute for direct conversation with experts, backed by robust quantitative data.
- It should be an interactive process: there should be scope for key stakeholders in the strategy process to ask questions, probe for detail and identify additional avenues for exploration.
In all honesty, most of the trend work I get involved in nowadays is carried out in the context of brand repositioning and is consequently a one-off and light-touch approach, rather than the ongoing, in-depth process described above. When I used to spend more of my time on integrating brand, innovation and sustainability strategy, the approach tended to be much more involved and closer to the list above. Nonetheless, even a light-touch trends analysis should bear the above thinking in mind: your scanning strategy can still be deliberate, explicit about information sought and expansive in terms of the sources of insight, even if it isn’t part of an ongoing process.
Most of the trends analysis I come across in my work has already been ‘done’ by a specialist consultancy and there’s an expectation that I will use it to ensure a brand positioning or strategy is future-proofed (as far as that’s possible). Often, these trends are drawn from a wider repository, rather than being tailored to the client and I’d suggest a couple of watchouts based on my experience of working with them:
Few (if any) trends are unambiguously positive
This is the aspect that surprises me most about a lot of the trends work I see: they make the future sound awesome. Perhaps it’s because marketers like to focus on positives, or maybe it’s because we all want to feel hopeful about the future.
I prefer realism to idealism.
If I see a set of trends that paints a utopian picture of the future, I feel like I’m only being told half the story. As I write this, I’m reading through a 121-page presentation that’s telling me the future will be more sustainable, more authentic, more shoppable, more convenient, healthier and more community-focused. The presentation is punctuated with inspiring examples of emergent businesses and brands that are leading the way in demonstrating the potential of these trends. The impression I’m left with is that brands in the future will simply exist to help each of us to live our ‘best lives’ (a phrase I’ve heard a lot of over the past few years, along with ‘being our best selves’).
I suspect that every one of these ‘trends’ has a hidden downside that hasn’t been articulated, and that ignoring these hidden downsides introduces additional risk in the form of unforeseen, unintended and undesirable consequences. I’ve written elsewhere about the unintended downsides of seemingly unambiguously positive trends like the move towards a sharing economy. Not only is it unrealistic to paint such rosy pictures of the future, ignoring negative trends and undesirable consequences limits brands’ ability to manage risk and meet social, political, economic and technological challenges head-on.
Symptoms are easily confused with their underlying causes
‘Intentional Spending’ is amongst Mintel’s 2023 global consumer trends. The trend is summarised in the following way:
‘Factors like flexibility, durability and sustainability will play increasingly important roles in consumers’ value equation.’
Let’s assume this is true: why focus solely on spending? Wouldn’t this also suggest that people are becoming increasingly motivated to live (rather than just consume) in a more intentional way? Surely there must be something deeper going on here, which affects not just how we consume but every aspect of how we make decisions about our lives, our work and our relationships? If Mintel has identified a shift in the way people are consuming, then there must be some underlying change in how we are choosing to spend not just our money but our time and our energy.
This matters from a brand strategy perspective. If ‘intentional spending’ is really as far as the trend goes, then brands can respond by improving the ethical and environmental credentials of the products they sell. But if this is part of a bigger shift towards ‘intentional living’ then brands may need to rethink their entire business model, since people might decide they don’t want to ‘consume’ a product or a brand at all. ‘Intentional spending’ can be met with a superficial response, whereas ‘intentional living’ could represent an existential crisis for a brand. Don’t let yourself be fobbed off with a sexy sounding set of symptoms.
The strongest trends tend to be multidimensional and interconnected
Trends presentations are often organised by ‘macro trend’, each with its own set of sub-trends. For example, I’ve seen a lot of trends presentations over the past few years that consider ‘wellbeing’ to be a macro-trend, with sub-trends such as ‘the quantified self’ and ‘mental health’.
This sort of thing feels fairly neat and easy to deal with, but ends up being of limited use from the perspective of brand strategy and positioning. ‘Wellbeing’ isn’t really a trend in any meaningful sense of the word: health and happiness have been a permanent preoccupation across civilisations (Aristotle, for example, had a lot to say on the subject 2,300 years ago), while the ability to measure and track personal health data in real time only really becomes interesting and useful from a brand perspective once we consider the broader psychological, social, economic, political and even environmental impact of this technology: does the ability to constantly measure oneself generate even greater levels of anxiety? How does it affect relationships? What privacy issues does it create and how are these likely to be legislated? And what sorts of businesses models is this technology likely to affect (such as health insurance and social care)? Not only is it misleading to represent ‘trends’ as discrete, neat little packages, but the most powerful insights often lie hidden in the relationships explored above:
The connections are often more important than the dots.