In this Future Digest we explore brands embracing extreme transparency, the growing resentment towards elites, the threat of greenwashing, the risk of relying on carbon capture to reach net zero, the unfair value exchange and the changing labour market.
Act
The Zoe Report highlights how traceability and transparency are becoming new consumer engagement tactics for beauty brands. They point to a recent IBM study which found that 73% of people view traceability of products as being very important to them. Beauty brand Apoterra spotted this consumer shift early on and introduced a batch numbering system in 2015, allowing consumers to access detailed information on when the product was made, where each ingredient was sourced, and which organisation certified it.
Two of the world's billionaires went to space this summer. And while their achievements are remarkable from a technological point of view, most of the world was less than impressed. A backlash followed quickly, questioning why in times of economic and environmental crisis we should celebrate two men taking a private trip into space for pleasure.
Increasingly businesses feel the pressure to have a point of view on sustainability and want to talk about their actions. However, this is also leading to a surge in greenwashing. Edie reports that a study of the websites of 12 of the biggest British and European fashion brands, including Asos, H&M and Zara, has found that 60% of the environmental claims could be classed as "unsubstantiated" and "misleading". Earlier this year, the European Commission did a sweep of company websites and found that 42% of businesses made green claims that were exaggerated, false or deceptive and could potentially qualify as unfair commercial practices under EU rules.
A Yale study is the first of its kind to demonstrate that some people learn to express more outrage over time because social media algorithms reward this type of behaviour. However, not all social media platforms look to amplify outrage in order to grab and keep people's attention. Daren Tsui, founder of the social platform IMVU sees an opportunity in creating a positive space that promotes creativity and helpful behaviour. The platform is currently trialing a new function called "With Me" where people can get kudos from other users for helping.
Explore
Carbon capture has quickly become a very popular solution for businesses trying to mitigate their carbon emissions. It doesn't require any fundamental business model changes and it works as a marketing tool to boost the brand's sustainability image. However an article in MIT Technology review warns businesses there are serious issues with the solution, cautioning that it is not the silver bullet so many want it to be. The issues are that carbon removal is not cheap, simple, scalable, or reliable, making it unlikely this technology will make a significant difference in decarbonisation of society.
In an article for The World Economic Forum Adelyn Zhou breaks down how blockchain technology can automate and accelerate the shift towards more sustainable business practices. Remote sensing data (e.g. satellite imagery) can be used to track and monitor people's and businesses' sustainability efforts. For example, by analysing satellite imagery, governments can see whether farmers have applied regenerative agricultural principles. By connecting this data to blockchain, a smart contract can be automatically triggered and pay a particular person or business when the analysis of the imagery meets the criteria set out in the agreement.
Netflix has announced it is expanding its offer with gaming. While the company has dabbled in interactive content and gaming before, it has never really committed. By entering the world of gaming, Netflix can tap into the growing gaming market (a forecasted CAGR of 9.64% for the next 5 years), can further monetise its IP and most importantly create even deeper engagement with fans who can explore their favourite characters across media.
Apple and Facebook have been fighting each other for a while over privacy and using people's data. Last May Apple, rolled out its latest privacy feature which enabled iPhone users to opt out of apps tracking them. Facebook was not amused and took to advertising to sway the public. A couple of months since the introduction of the new option and the results are in and it seems like Apple has won this one. According to Flurry Analytics, 85% of worldwide iPhone users have opted out of apps tracking them on their phone when prompted, with the proportion rising to 94% in the US.
Monitor
WIRED reports on research that suggest that self-driving cars lead to more driving. They also found that people with self-driving cars live further away from work, potentially further exacerbating the move away from cities.
Karen Schrier is an Associate Professor and Director of Games and Emerging Media at Marist College who advocates for using games outside of the world of entertainment. In her article in The Conversation, she argues that games could play a role in civic society. More specifically she believes that "games can help people practice important skills related to civics and public life, like communication, empathy and compassion, critical thinking and problem-solving."
A group of esteemed mental health professionals is urging president Biden to not only focus climate change efforts on new technology and infrastructure, but also on mitigating future mental health problems. The devastating wildfires and floods we witnessed this year caused tremendous physical damage, but have also caused collective trauma. In a future with more frequent extreme weather events, there will need to be health systems to help people with climate-related psychological health problems.
The labour market in developed countries is going through a period of transformation. As the economy is recovering from the pandemic, many businesses are struggling to find people to fill vacancies. Simultaneously, the number of people working in the gig economy in the US has increased by 34% compared to 2020, bringing the total number of independent workers to 51 million. This is equivalent to a third of US employment. While being your own boss has its benefits, it does mean that a significant proportion of the workforce is without a safety net. The problems with the gig economy were further highlighted by the recent flip flopping of OnlyFans who decided to stop hosting sexual content, but then reverted this decision. People using platforms like OnlyFans, Uber, etc have to give up a significant cut of their income, but get little in return. They receive no insurance or pension benefits and can see their source of income vanish from one day to the next without safety net if the company decides to make changes.
Consider
Transparency and traceability as tools to build trust with consumers are becoming increasingly important. In times of misinformation and misleading claims, consumers across categories want to have clear data on the products they buy so they can make a more informed decision. As such businesses should explore how they can open up to consumers and become more trusted.
Carbon capture solutions are not as scalable and powerful as many businesses hope they are. As such businesses should first and foremost aim at reducing their carbon footprint by adapting their operating model in order to reach net zero goals.
The global gaming market is now bigger than the global movie industry and North American sports combined. And while traditionally associated with entertainment, gaming and its principles are much bigger than that. Games are starting to be used in healthcare as we covered in our previous newsletter. Games can be also engage people in political topics and gamification is used in basically every app on your phone. Even the world of business turns to games to improve their strategy or innovation, for example in war games. As gaming grows and our society continues to digitise, we can expect the metaverse to expand beyond entertainment and enter different aspects of our life, such as work, and society.
Brands want to build a loyal community, but online trolls are never far away. As a result, some brands have decided to make their communities less open in order to create a more intimate and positive space. To further nurture their community, brands should explore how they can reward those community members that help out others.
The pandemic laid bare the differences between those who are well-off and those who aren't. While the wealthy jetted off to their second homes or went holidaying on their yacht others were stuck in small urban homes, struggled with child care, were worried about their health and faced job insecurity. This created resentment towards those better off, for who it seems there are different rules. Bezos and Branson going into space further reinforced this image. For brands that rely on an aspirational image, this raises the question on how they market themselves without alienating people or coming across as tone deaf.
For a long time brands have assessed people's privacy attitudes through surveys and qualitative research. This presented a murky picture where people had some understanding of the value exchange (I'm happy to give up my data in exchange for free products and services). However, the real life experiment by Apple shows that many people don't believe the value exchange to be fair anymore. Brands should ensure they clearly communicate to their customers what their data policy is and how this will ultimately benefit the customer.
The labour market is evolving such that the risk is being transferred from the employer to the employee. In this scenario, consumer spending becomes more volatile as income assurances disappear. Businesses will need to monitor spending power trends and anticipate how volatility would affect their category and brand.