A MAGAZINE ABOUT ENGINEERING SERVICES & PRODUCT INFORMATION # 1 2012

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CUSTO M ERS OF THE FUTU R E

Online customers are changing the world Mike Walsh explains how

Q&A MIKE WALSH

CONSUMER EXPERT

Consumers of the future wont know how life would be without the internet, smartphones and being permanently online. But the future is, according to consumer expert Mike Walsh, already here. We will look back on this time and say that this was a revolutionary shift.
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ike Walsh may be a futurist, but you wont nd him making predictions about what technologies and gadgets we will be using in 2050. What is of most interest to the 35-year-old Australian, who travels the world observing rsthand the latest trends and ideas, is how human beings will behave in the future. And not the distant future, but tomorrow. Walsh studied law before getting involved in the emerging eld of online consumer behaviour. Following senior strategy roles at News Corporation in Australia and Asia, he became intrigued by the differences between digital consumers in emerging markets and those in the west. Today he is CEO of the consumer innovation research agency Tomorrow and a sought-after international speaker. Walsh talks to Future about how companies should engage with tomorrows consumers; why they need to behave like viruses; and how

the web will affect the next generation of consumer products. You believe that the key to understanding the future is not technology and systems but rather people. Why? When I try to predict who the winners and losers are going to be in industry, or which technological platforms are going to succeed, it always comes down to human behaviour and often the cultural dynamics of individual countries or populations, and how they see reality. This is often the best indicator of both trends and whether things are going to work or not. Look at Intel. They have about 100 anthropologists on staff. It is surprising in a way because they do not have a direct retail business they are manufacturers. But they are plagued by this question of what is the future of technology. If they cant understand that, they dont know what kind of devices they are going to need to be making processors for. The consumers of tomorrow will be the rst generation brought up not knowing a world without the web and social media: how will this fact affect their behaviour as consumers?

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FACTS

Mike Walsh

Title: CEO of Tomorrow Ltd., author and speaker. Hobbies: Photography. But I shoot with lm, not digital. Favourite website: Wikipedia. Author of: Futuretainment: Yesterday the World Changed, Now Its Your Turn. Websites: www.mike-walsh.com www.futuretainment.com www.facebook.com/mikejlwalsh

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Q&A MIKE WALSH

CONSUMER EXPERT

We will look back and say that this was a revolutionary shift that this generation had their brains reshaped by exposure to technology. New research shows that young kids use the internet as a replacement for short-term memory. When we were at school, the smartest kid was the one who knew the answer to every question. But when you have a room of 30 kids with smartphones, you could almost argue that their intelligence is commensurate with how fast their ngers can type. So this is a whole new generation of consumers in the way they discover brands, the way they expect to be communicated to, the way they communicate with each other. Older business leaders still think of the internet as a channel. But the internet is not a channel. If you were someone who was born after 1994, the internet is around you all the time. So all consumers now are

The ability to constantly launch new products, adapt and offer diverse variations on customer needs will triumph over limited-release, perfectlyengineered products with long development phases.
Mike Walsh, consumer expert

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trends for the consumer of the future,according to Mike Walsh

networked across a range of platforms, and that changes the way they interact. How should a company, such as a car manufacturer, react to the new generation of consumers? The next generations new behavioural tendencies are already impacting every stage of the product lifecycle. What is driving these changes is more than any one simple trend like mobile, the web or even platforms like social media. There is an expectation shared by young consumers today that their devices whether they be phones or cars should not exist in a vacuum. Objects should connect. The car of the future will not simply just have a clever iPhone dock and connection with Facebook it will be inseparable from the customers own networks. So how will the consumers of

Consumers in the future will be tough to categorize denitively. They will have multiple contradictory roles mothers, social gamers, mobile virtual workers all separate but linked with threads of common, distributed identity. Tomorrows consumer will be augmented through mobile and digital technologies. When they look at a product, they will be also looking through the eyes of every consumer who has ever held it, with access to their ratings, opinions and recommendations. This will radically redene the power relationship between brands and purchasers. Teenagers in China often have more in common with their counterparts in Brazil than they do with their parents. Networking platforms are creating a new global sense of interconnectedness that makes a mockery of old world divisions like regional coding, movie release schedules and product versioning. But paradoxically, national and cultural identity will continue to be a powerful building block to global uniformity.

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the future choose their cars? The real question for young consumers buying their rst car will be not so different to previous generations but it must be updated to meet 21st century lifestyles. Namely, how can this new vehicle extend the range of possibilities for life experience? Much of what is happening with the internet and social media now is around communication and marketing. How will the internet affect products in the future? One of the biggest trends we are going to see in the near future is what is being called the Internet of things Everyday objects being . equipped with sensors that are then linked to the internet. There are going to be some amazing developments as products that are currently in a sense stupid because they are not connected to anything become more interlinked. Where will we see this trend rst? One of the rst areas youre going to see this is in the energy space. There are huge investments being made in smart grids and smart power meters that will, for example,

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throttle down your air conditioner at peak periods if you want to save money on your bill. Most of our household appliances will be equipped with small wireless chips that will allow them to monitor not only energy use, but to actually start to really understand usage patterns for appliances. Standalone GPS units will soon be close to dead because almost every smartphone not only has a GPS but will be increasingly used as a control device for the rest of the technology in the car. Your phone will unlock your car and it will become the biometric key to your entire network of devices. Many Western companies are taking the products they sell in Europe or the US, reducing their functionality, and then selling them in the developing world. Is that the right approach? This is a very contentious question. Often the things that Western companies take out of products are the ones that those markets actually want. Chinese consumers, for example, are increasingly afuent and they actually want often higher specs and are prepared to

pay for them. In a lot of these emerging markets we are seeing a lot of innovation. There is a wonderful trend in China shanzhai, which means bandit technology. Mobile phones which started off as copies started to exceed their original specication, and I think that within ve years some of these companies will start to develop premium brands themselves. This is what happened to Japan after the war. They started making cheap stuff and then quickly moved up the food chain. In your opinion, why has a company like Apple been able to attract the consumers of today? In my view, Apple has excelled at one very important capability simplifying the complexity of technological change into very simple customer propositions. To achieve this they sacriced features, functionality, user freedoms and even product options, but in doing so they were able to take previously confusing product categories like tablets, smartphones, MP3 players, set top boxes, and reassure consumers that changing their behaviour to incorporate the new technology

was both worthwhile and exciting. You have said that companies should act like viruses constantly releasing and testing new products and ideas to keep ahead of distraction and indifference among consumers. Please expand. We respect Apple for its highly engineered, perfectly designed iPhones. Each year, consumers wait eagerly for the new model but despite its wide appeal, it is not a phone that necessarily suits everyone. Compare that to what is happening right now with the Android platform. There is an explosive diversity of phones being built using Android, from $40 low-cost units right up to a top-of-the-line $20,000 Tag Heuer Link device, all running on the same operating system. What can companies learn from this? In the future I believe the ability to constantly launch new products, adapt and offer diverse variations on customer needs will triumph over limited-release, perfectlyengineered products with long development phases. 1
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