As a consumer specialist investor and advisor operating across the spectrum – from early-stage VC to global retail leaders – we're uniquely positioned to capture signals about how consumer behaviour is shifting and interpret what this means for the industry. We achieve this through a systematic approach to analysing the latest emerging consumer and retail startups, value propositions, and business models from our global innovation 'flow', in combination with an on-the-ground understanding of the strategic and operational challenges being faced by our own consumer businesses and corporate partners. To help our community cut through the noise, we've identified key trends that we believe will remain important and continue to develop for years to come. One of these trends is that of 'consumers as creators', where the average consumer will have creative capabilities beyond what is possible even for large numbers of specialists today.
We are living in a time where it is easier than ever for consumers to create online, whether this be social content or producing a new product, brand, website or game. Many people are using online channels to generate supplementary (or primary) income streams, lowering barriers to entrepreneurship.
There is a sizeable opportunity for businesses to adapt by treating all consumers as micro-influencers and to place much more emphasis on enabling simple word-of-mouth through digital channels. The product experience should also appease a desire to be more involved in the creative process and mirror the tools increasingly available to consumers on other platforms.
We see this trend as an enabler for three key opportunity areas: the empowerment of consumer creativity, peer-to-peer services, and the democratisation of influence.
Empowering Consumer Creativity:
Freely available technologies, particularly that of generative AI, are continuing to reduce the expertise required for users to create genuinely effective content. Whether this be written, visual or audible. Since text-to-image algorithms took off last year, more than 15 billion images have been created. To put this in perspective, it took photographers 150 years, from the first photograph taken in 1826 until 1975, to reach the 15 billion mark. Since the launch of OpenAI’s image-generation model, DALL-E 2, people are creating an average of 34 million images per day. Adobe Photoshop’s suite of AI algorithms reached 1 billion images created in just three months, and Midjourney has the largest user base of any image generation platform with 15 million users. OpenAI has also recently announced that anyone can create their own version of ChatGPT, with no coding required. This is another step towards enabling creative capabilities beyond what would have been previously possible. Capitalising on consumer creativity represents an attractive avenue for new business models. Companies are demonstrating the direction of travel here, from ventures such as the Re:Uniqlo Studio which allows shoppers to repurpose and customise old clothes, to Fashable who have developed the most powerful generative AI toolkit to support meta-physical fashion.
As this trend ushers in a new era of democratised entrepreneurship and creativity, companies will need to adopt technology and a future-thinking mindset to foster a co-creative relationship between brands and consumers. Fashable's pioneering approach in content and design collaboration is a prime example of how businesses can adapt, not just to survive but to flourish. They have embraced generative AI to supercharge co-creative product design, giving brands the ability to generate new original fashion item images without any requirement for a designer. Stay tuned for our interview with Orlando Ribas, Co-Founder of Fashable, where we’ll be discussing how personalisation and co-creation will be success factors for future brands and how customers will no longer be just passive consumers but active collaborators in the design process.
As technology lowers the barriers to entrepreneurship, engaging via peer-to-peer (P2P) services will become increasingly accessible. P2P marketplaces provide a platform for individuals to offer and sell their products on an easy-to-use tech platform directly to other consumers. Herein lies an opportunity for organisations to view peer-to-peer as a ‘frenemy’ rather than as outright competition. For instance, encouraging P2P services within adjacent spaces to products or the brand (post-purchase upkeep, personalisation, rental etc.) can be a powerful mechanism to build a community of advocates and improve overall customer experience without the cost otherwise associated with providing in-house.
Democratisation of influence:
As social platforms facilitate frictionless conversation between individuals, the potency of mega-influencer and brand-led social marketing campaigns has begun to wane. People are looking to micro-communities or friends and family for more trustworthy perspectives. ‘Influence’ is no longer siloed in the brackets of mainstream celebrities or reality-tv stars, ‘influence’ is now scrutinised for authenticity and spread far wider across diverse members of society. Micro-influencers garner the largest Media Impact Value (measurement of overall marketing impact) thanks to their ability to engage audiences in a more meaningful way, whilst representing relatively lower costs for brand partnerships. Brands who effectively extend the umbrella for influencers to micro-, nano- and non-influencers have the greatest chance at building a prosperous, grassroots community. Employees, hobbyists, and customers all form part of a brand community – connecting with like-minded people, growing customer engagement, and contributing to growth.
Now is an opportune time for retailers and brands to explore this trend further and harness technology that will support the move towards the empowerment of consumer creativity, embracing peer-to-peer services, and the democratisation of influence. We’re here to help retail and consumer brands make sense of a changing world, particularly at the intersection of consumer behaviour shifts and emerging technology. If you’re interested in discussing this theme further or would like to understand the opportunities and associated enabling technologies or business models, get in touch with us here.