The Next Big Trend: Living in Parallel Universes

Nov 7, 2018

Whenever marketers get together, there will always be conversation about The Next Big Trend – it’s right up there with, “Where’s the open bar?” It’s in the job title – MARKETers need to anticipate where the MARKET is going and lead their companies to innovate. It’s even more important right now because of new technologies becoming available, plus a generational shift as the Boomer generation slowly becomes a smaller percentage of the population with purchasing power. There are hints that we may be coming to a major inflection point in how consumers research and buy products.

Therefore, let’s get on with defining The Next Big Trend and how marketers need to act on it:

The Next Big Trend is marketing in parallel universes.

Perhaps you were expecting artificial intelligence (AI), machine learning, blockchain technology, contactless stores or digital assistants? Those are all vitally important and worthy of study right now, but how you study them and adopt them will be what differentiates you in the marketplace.

Let’s go back to that feeling of being at an inflection point. Will the change be like the time period when cars replaced horses on the road in under 25 years? Or, will it be more like the advent of TV where, for a full generation, consumers continued to listen to radio? That’s where the skill of the marketer matters.

Let’s start with an example that demonstrates what’s going on:

The penetration of online purchasing: Ask any marketer you meet for the percentage of retail purchases made online and most will tell you a number between 40% and 75% – the real number is still under 10% if you follow the official numbers from the US Department of Commerce1 or  13.2% if you follow WWD, which adjusts for food purchases in restaurants.

What marketers are actually referring to is either the growth rate for online purchasing3 or the percentage of consumers who shopped online at least once in the past 12 months.4

Kobie Marketing research indicates that over 86% of Millennials and even 76% of Gen Z still regularly shop in store.5

Why this matters: Many retailers have been assuming that the brick and mortar experience is dead, and in some cases their in store experience reflects that lack of love. With 9 out of 10 purchases still made in store, lack of focus on the in-store experience damages the brand overall. Sears is the poster child for this mistake – their digital experience has actually been innovative for the past 10 years, but their stores have languished, as have their total sales.

What has become apparent in the past year is that the fastest growing big retailers are pushing for innovation at the point of sale in the physical as well as the digital sphere. That is why you see Amazon announcing the launch of 3,000 automated stores by 2020, Walmart testing convenience store-sized “Fuel Stations,” and other retailers as varied as Target, Ikea, and Nordstrom piloting small-format stores.6 This is just one of several important trends in leveraging technology and data within physical stores.

From the perspective of loyalty programs in particular, the retailers and restaurants that implement their programs only through a mobile app see their programs peak at well under 50% in revenue penetration according to earnings reports. However, programs that enable members to interact in store and online, as well as in app, routinely achieve program penetrations in the 70%-80% range. 

More examples of the gap between hype and the real world for major trends:

  • Mobile payment: Banks are rushing to update their apps to add mobile payment capabilities or integrate with Apple Pay, Google Pay and Samsung Pay, who actively market their payment capabilities. But it is worth noting that 40% of all mobile payments in the US are made using the Starbucks mobile app – which makes Starbucks the leader in mobile payment over both Apple and Google.7One of the implications from the success of Starbucks is that integrating a new technology with a loyalty program that recognizes use of that new technology can drive penetration for that technology. The airlines used their programs to similar effect to drive adoption of online booking in a previous generation.
  • Laptops: Similar to in-store shopping, Kobie research indicates that 75% of consumers across generations are still using laptops to research purchases and 68% use their laptops for purchases – this is true even for Gen Z where only 13% are NOT using a laptop at least some of the time.5This means that it remains important to keep an interface for online purchase and loyalty account access that will display well on a laptop as well as on a phone.
  • Digital assistants: A year ago, research reported that over half of the people who had ever tried a digital assistant said they were already making fewer online purchases.8 There were a lot of articles about how digital assistants would become the new retail marketplace. This year the research is more cautious – 20% regularly use their digital assistant for researching products, but only 8% of digital assistant users regularly use it for purchasing.8 Playing music, setting reminders, and reading the news are far more popular uses. For the moment – it may have changed by the time you read this.

Let’s get down to the practical tactical level for how to leverage emerging trends without jumping on a trend that doesn’t catch on.

  1. Know what’s out there – Yes, you need to be learning everything you can about AI, machine learning, blockchain technology, contactless stores and digital assistants. They and others are among the important trends in the loyalty space today.
  2. Fully imagine what each technology could do for your customers – Some of the greatest innovations are reimaginations of what existing technology can do, especially when paired with newer technology. Hilton was able to increase enrollment, redemption, and member purchases with “Money + Points” rewards – the solution effectively consists of adding new web design to existing booking technology.10
  3. Know exactly where your customers are on each adoption curve – Never mistake trial for on-going adoption. Be sure to be clear on what each generation within your customer base is doing for each of the following:
    • What are they engaging with for fun or to stay current?
    • What are they using for research in their daily lives?
    • How are they really closing a purchase and paying for it?

As for that question about whether the coming change in consumer purchasing behavior will be more like cars replacing horses or TV and radio continuing in parallel for a generation – our fearless forecast is that this world of parallel purchasing behaviors in store, online, in app, and via digital assistant will be a continuing reality for the next few years. The winners will make the experience easy and engaging no matter where the consumer walks into their physical or virtual marketplace.

If you would like to speak to someone at Kobie about how your business can benefit from these strategies or other trends in the market reach out to us at – we’d love to hear from you!