Hello and welcome to the first FWD of 2018!
As we say goodbye to 2017, we look at who ended the year on a high:
- AirBnB was the hottest ticket in town as 3 million people partied the night away in AirBnBs on New Year’s Eve (compared to just 1,400 eight years ago).
- WhatsApp set a new messaging record with 75 billion messages sent globally using the service on New Year’s Eve.
- Spotify started the new year with 70 million paying subscribers, as it files to become a public company.
However, it is also time to look forward to the year ahead as we hear predictions from experts from the ecommerce world, The BBC and The Guardian on what will be the biggest tech and media trends in 2018…
- Spotify gains 10 million new paid members every 6 months and files to go public on the New York Stock Exchange
- On New Year Eve, three million people partied the night away in Airbnbs, compared to just 1,400 eight years ago and many of them were WhatsApping – a massive 75 billion messages globally were sent using the service
- Instagram is letting a select few users post directly to WhatsApp
Please share anything of interest using #OMDFWD
By Caroline Clancy and Virginia Alvarez
Most of us realise that the world of marketing is constantly changing. Unless we understand our customers’ shifting desires, our attempts to reach them will inevitably fall flat. Many times these changes are temporary, caused by short-term trends. However, over the last few years a fundamental, long-term shift has arisen in consumer behaviour that has wide-ranging implications.
Due to recessions and economic uncertainty, people are reassessing their priorities and asking themselves what they truly value. As a result, we are moving towards a new economy that values experience over possessions. In recent research: [ctt template=”1″ link=”Tv647″ via=”yes” ]3 in 4 millennial’s chose to spend money on an experience or event, rather than purchasing a desired object @HarrisCorp @OMD_EMEA[/ctt] [ctt template=”1″ link=”jzCVA” via=”yes” ]Consumer spending on recreational & cultural services has risen 85% in Western & Eastern Europe over the last 5 years @Euromonitor @OMD_EMEA[/ctt]
This shift is impacting a multitude of industries and has the power to transform even the most established markets.
In fact, Airbnb’s co-founder, Brian Chesky, has observed:
“No longer do consumers want to show off, on Instagram or Snapchat, the wheels of their car or the clothes they wear. But they want to show off the experiences that they’re having. I think, more and more, we’re living in an experience-based economy”.
Material possessions are no longer enough
As a society, we are spending more money to do things, rather than to have things. We then share these lived experiences via social media, in effect, elevating them to the position of status symbols. Whereas once the designer handbag was a sign of success, now a memory from a faraway land is the marker of a good life. We aspire to turn our leisure time into social capital spent on moments that are unique, fleeting and personal.
At Live Nation, the world’s largest event company, two in five (40%) attendees share content on social media directly from their venues and three in five (59%) upload pictures afterwards (Source: WARC Consumers value brand experiences – 13 May 2013).
Plenty of research has shown that experiences bring more happiness than possessions. In fact, even the moments preceding and following an experience are more positively charged than those surrounding the purchase of a product. Experiments have shown that participants elicit more happiness and excitement when anticipating experiences. Whereas, waiting times for possessions are often fraught with impatience. Further research indicates that people also tend to talk more about experiences than they do products and derive more value from doing so.
This has led renowned psychologist Thomas Gilovich to conclude that “spending money on experiences provides more enduring happiness.”
Using this insight, OMD created an immersive theatre experience to launch HTC VIVE. We partnered with Noma Labs to host a once in a lifetime apocalypse event, HTC Virtually Dead, targeted to Millennials in both London and Paris. Tickets sold out in just over a week after showing the first teaser video in London. To meet demand, we extended the time period and put on more shows. Overall there were 900 shows over three weeks bringing in £300,000 worth of tickets, which is equivalent to a popular West End show running for over two years.
How can classic brands survive?
We need to refocus our strategies away from short-term demand and towards long-term desire. Brand experiences can help us drive this change, with luxury labels leading the way.
According to PWC, the annual sales growth of luxury experiences grew by 14% compared with 11% for luxury goods. Moreover, in 2014 The Boston Consulting Group found that experiences which include travel, gourmet dining and art auctions accounted for 55% of the global luxury spending. By creating enhanced sensory experiences for shoppers, luxury retailers have evolved a simple transaction into something more.
A great example of this is The Bentley Inspirator. The experience starts on an iPad in dealerships. You watch a beautiful video full of lifestyle images, off-piste skiing, yachts sailing through the ocean. Meanwhile, in real-time, facial recognition software is measuring your preferences. By the end of the video, a personalised Bentley configuration is created based on your preferences. A playful piece of technology which creates a magical experience by unlocking new information about the customer.
Is technology killing anticipation?
Technology has allowed us to engage with customers in ways we never thought possible. But, it has also fuelled new expectations, resulting in less patience and a rising demand for frictionless experiences. Amazon has calculated that even a one-second delay in page downloads could cost them $1.6 billion each year in lost revenue.
Modern technologies (e.g. Uber and drone delivery systems) are built on our desire for instant gratification. These technologies cure pain points in our lives. However, science has shown that anticipation can be far more gratifying than the reward itself. Bizarre as it may sound, there is an argument for designing in a little friction into the service process. Designed friction allows experiences to be anticipated, valued and remembered.
Create your experience and people will follow
We have the ability to design amazing experiences, but we need to be mindful about why and how we design them. From our research, we have seen how it is possible to design experiences that create emotional connections, drive memory creation and kindle the desire to share those experiences with others. Our deepest desires as human beings are to learn and grow. Brands have the opportunity to design in these experiences across their consumer touchpoints.
We must embrace this opportunity to move beyond simply creating consumer interactions which are frictionless, invisible and instead craft experiences with enough tension that they are shareable, memorable and teach us something about ourselves that we didn’t know before.
Interested in more information, contact us at [email protected].
Getting someone to put down the remote control (or smartphone) and pay attention to TV adverts is harder than ever. In the digital age, viewers have limited attention spans, more distractions and countless ways to skip ads. A recent study has found that only 35% of the average paid TV break is actively viewed, instead 19% of people are channel surfing, 18% are looking at other devices and 13% are distracted by food, pets and the TV guide. As always, share what you find interesting with #OMDFWD
And finally….First there was Snapchat…prepare yourself for Rapchat…
Based in Austin, Texas the SXSW interactive conference, much like the city, has a very human-centred design focus. Many presentations focused on how technology is changing our brains rather than the importance of machine learning. The content covered felt like a call for a more mindful approach to building technology and the experiences it drives, although this might be symptomatic of the way presentations are chosen for SXSW with creativity and goodness as two main criteria. There is a need to move the creation of experiences away from a traditional marketing approach, where we look to our businesses and brands for development, to a more human-centred approach which involves consumers in the design.
This shift involves understanding how technology is changing our neurology, as well as our value systems (what had meaning before, no longer has meaning now). With so much at our fingertips, we expect much less friction (think Uber and Tinder) which is changing the hierarchy of our needs and ultimately the reprogramming our brains. Brian Solis refers to this phenomenon as consumers becoming ‘accidentally narcissistic’.
Experience architecture is the future of advertising. You have to be relevant and making a difference in consumers’ lives.
As we strive to make technology more fluid and frictionless, Steve Selzer, Experience Design Manager at AirBnB, stresses the importance for designers to become ‘the friction’ in the design. It is based on the premise that the desire and expectation for a frictionless digital experience is leading to a community of people who no longer have personal experiences in which they encounter friction. Selzer states that it is friction that allows for self-reflection, self-discovery and therefore, growth.
We must encourage people to reflect and learn through behaviour, which could be both physical and digital, and Selzer described 4 ways to doing just that in his ‘Human-Centre Design: Why Empathy is Not Enough’ presentation:
- Design for skill building: Hello Fresh makes the experience of ordering ingredients as easy as possible; however their key focus is getting people to cook and try new recipes.
- Design for Collisions: Lyft, a direct competitor to Uber, differentiates itself through ‘collisions’ by profiling their customers and encouraging them to share rides. This principle brings people together, creating situations where circumstantial neighbours can come together.
- Design for Confrontation: AirBnB encourages hosts to answer any customer service issues themselves. Selzer describes the implementation of this process as forcing people to come out from behind the wall of technology to have conversations with each other. It is the next step beyond collision, which focuses on people resolving their own friction. As a result, the company has seen a direct correlation in the satisfaction scores from hosts and guests who have resolved their own issues without AirBnB intervening.
When it comes to design – think about your back-end as frictionless and your front-end as creating those experiences, which are carefully designed as friction.
The theme around the convergence of frictionless technology with human-centred design climaxed when Jayse Hansen, creator of the Iron Man Interface, got on stage with Meron Grebetz, creator of Meta 2 development Kit, in their curiously titled Iron Man Interfaces: The Next Generation UX presentation. Hansen, unable to build on existing OS due to licence restrictions, has teamed up with Grebetz to test the capabilities of Augmented Reality. The result of their partnership is a headset, which Grebetz demonstrated on stage. Using the headset, he was able to manipulate a 3D brain to millimetre precision, as well as dial in his CTO, who appeared in front of him as a hologram, to collaborate on the manipulation of the brain together. To finish the presentation, Grebetz promised that by SXSW 2017 he will have removed all computer monitors from his office, which he believes diminishes collaboration.
Although the last example is still far away for most of us, we can start to think about how we create human-centred experiences which involve a frictionless back-end and a carefully crafted front-end that creates experiences through friction.
Have questions or want more information, contact us at [email protected].