1. Baby boomers are back
Baby boomers – the generation born between 1946 and 1964 – are one of the largest generations on earth, with about 76 million people in the U.S. alone, and the wealthiest generation in history in the US, owning roughly 70 per cent of the wealth there. In fact, McKinsey estimates that boomers will be the biggest contributors to U.S. spending growth in categories such as food (92 per cent), housewares (73 per cent) and apparel (56 per cent) by 2018. It makes perfect sense for marketers to pay more attention to boomers; shrewd companies are beginning to notice the sizeable wealth that baby boomers have accumulated throughout their lives.
We can already see signs that baby boomers are having a huge impact on the industries that the second coming of age touches directly, where they can see immediate potential to reshape their lives. Pension and insurance providers need to accommodate their changing lifestyle needs.
Healthcare providers stand to benefit from boomers’ willingness to adopt new technologies such as tele-health, mobile-health services and wearable monitoring devices. Such digitisation of healthcare is widely considered to cut costs for providers as well as improve services for patients. Those who can respond to boomers’ needs will potentially gain market share and be able to charge premiums for the value they add.
The key is understanding what boomers are looking for and offering features and upgrades that will appeal to this demographic without putting off younger buyers.
As they reach middle age and later life, unlocking boomers’ potential requires an understanding of their experiences that is deeper than the one most companies have, based on, for example, focus groups or just data analytics. It means diving into what it means to be a boomer today and what they aspire to tomorrow. If companies can understand the needs of the boomer it will help them gain market share and 2017 can suddenly be a very good year for them.
2. Retailers must get ready for increased number of returns
Online retail sales are estimated to reach $1.88 trillion worldwide this year with the UK, China and Norway on top. The number is expected to rise to $2.2 trillion in 2017. For retailers, this means a boost in sales; however, the ever-increasing number of items being bought online puts a huge amount of strain on their websites, logistics, delivery and returns processes. And the demand is not always only home-grown; due to the global nature of the internet, international visitors are attracted to their websites, shopping around for cheaper deals outside their local markets or for items they cannot get at home.
As we have turned into a ‘buy and bring back later’ society, many people buy whatever they can when the price is right, and then take back unwanted or ill-fitting items at a later date. This means a high volume of returns, which can be a logistical challenge for retailers.
Those retailers are becoming wise to the way shopping is changing and are factoring the increasing number of returns into their planning processes: they are investing in the returns process and making it part of their wider business models with the ultimate aim of increasing customer satisfaction. A smooth returns process will play a big part in retailers’ success in 2017 and beyond.
3. Value of VR and AR
For many Virtual Reality (VR) still sits strictly within the realms of science fiction and the world of gaming; however, there is very perceptible shift towards real-life opportunities for both consumers and businesses. This comes as the world’s first VR operation took place at the Royal London Hospital in 2016, and as the head of content at Oculus Rift announced that the next six to twelve months will bring some industry-changing software to VR that will shape how we all interact with it.
VR has emerged as an application of choice across multiple industries, both for bespoke experiences such as live events and to aid teaching and learning. It is no secret that in every profession or trade, knowledge retention is a key issue in education and training. People retain 10 per cent of the information they read, 20 per cent of what that they hear but 90 per cent when they physically interact with the subject matter. VR could be the solution to this. What you read or hear in a classroom could then immediately be put it into practice with VR, speeding up the pace of learning.
The sudden popularity of the Pokémon GO game earlier this year demonstrated the potential of Augmented Reality (AR). The technology, however, is much more than a game. Surgeons are already using AR during operations to show a three-dimensional computed recreation of the body part they are working on.
For most traditional industries, it is not yet the right time to make bet-your-brand investments in VR or AR. Nevertheless, businesses should turn their attention to these technologies now or risk losing out on a key learning period in an increasingly digital, diverse and competitive world.
In short, 2017 may be the year of the breakthrough of VR and AR in various industries and for several purposes. Not every industry is ready yet, but those that are see the tremendous possibilities VR and AR can offer. It is vital for businesses to keep a close eye on these technologies to avoid missing out in this exciting learning period in an increasingly digital, diverse and competitive world. To do this, they should work with experts to find ways to merge strategy, design and technology seamlessly, either incorporating them into existing business strategies or creating new ones.
Vivek Daga, Vice President and Head, UK & I, Cognizant
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