What are our peers wearing? Whether or not we notice, and make similar choices, can affect our status in life—before we’re even old enough to cross the street solo. Fashion and social capital, of course, are a single facet of a fascinating, multidimensional phenomenon. Trends, and the interconnected world of innovation, influence global markets on the most massive scale; they are ocean currents that shape society.
A record label founder, ad man, teacher, and Raffi fan, Max Luthy, director of trends and insights at TrendWatching, began honing his craft in kindergarten. He took time out to talk to us in advance of his Relate keynote about the interplay of trends and innovation; the collaboration that goes into spotting a trend; and why tech might not save the world but is also unlikely to tank it.
TrendWatching’s mission is to propel meaningful innovation through ideas, insight & inspiration. What does meaningful innovation mean for you?
Improving people’s lives. It's a cliché to say that we have a purpose beyond profit, but we 100% do want to show innovations and other changes in the world that are making things better for consumers, benefitting society, and the environment at large. We'd like to shine a spotlight on the innovators who are already doing that and group those innovations together, highlight the changes that are happening to allow those innovations, and inspire more businesses to develop those solutions.
We do not encourage innovation that would harm the consumer in some way; we care about the consumer and we want to make the world a better place. That's what meaningful innovation is to us. It's not also just something fleeting, but rather something that taps into the core human needs of the consumer and meets those needs in a way that works better than previous offerings. It doesn't have to be saving the planet. It might just be something that entertains me like nothing has ever entertained me before. Something that provides me with value in a way that is better than any of my previous encounters with businesses. Innovations that make life better for the consumer—we like to elevate them and inspire more.
"It doesn't have to be saving the planet. It might just be something that entertains me like nothing has ever entertained me before. Something that provides me with value in a way that is better than any of my previous encounters with businesses." - Max Luthy
Do you prefer or somehow differentiate between trends of convenience, say, Amazon delivering to the trunk of your car, and ones that arguably do tangible good, like when Taobao, the e-commerce site, which launched an elderly-friendly version of its app?
We do inherently get excited about the social good innovations. We see a lot happening to help people with disabilities, whether it's those who are poor of sight, hard of hearing or have mobility issues. When we see businesses catering to their needs, the team is thrilled to cover it. But we also get excited about a more convenient way of delivering groceries. We have a database with over 20,000 innovations backed by over 100 trends in it. Some of those innovations are something like a pop-up shop run by an art student, others might be a healthcare packaging solution. We're very open-minded and it allows us to identify deeper connections. By including the innovations related to convenience, or the pop-up art project or something that's helping elderly shoppers, for example, by tracking all of that, we're able to see more than if we specialized in one category.
What are the similarities or difference between innovations and trends?
Our definition involves the three core ingredients that begin every trend and then one key outcome that professionals should track. First up of those three core ingredients: change. This could be political change, cultural change, technological change, a new piece of hardware, for example. Then, you have social change, economic change, environmental change. We're looking for all of these different areas of change and how they intersect with the second key ingredient, fundamental human needs. These include the desire for status, the desire for connection, the desire for security, for value. Our entire audience has customers with these fundamental human needs that aren't changing from month to month, season to season. We look for where change comes up against those needs, and the subsequent points of tension. We see entrepreneurs, whether it's a five-person business or a company the size of Google, innovate to create new products, services, and business models that alleviate that tension.
They've seen how change interacts with our fundamental needs and said, "OK. We can innovate around this point of tension. We can meet the basic needs better than previous offerings." When they do that, that's where the fourth thing happens: a new expectation. As soon as the customer has experienced a better way of meeting their fundamental human needs, that's the standard. The bar has been set higher and that's what they now expect.
We say, "Look, you have eccentric billionaires firing sports cars into space. You're trying to get your head around blockchain solutions. You are trying to gauge which way the economy is going to go, how the trade war with China might impact your business..." There's so much change to make sense of and it's overwhelming for even those of us in the business of tracking it. We reassure our audiences: It’s really helpful to familiarize yourself with just the core human needs of the customer. Reminding yourself that your customers desire convenience or value—that desire is there for the long run. It helps you use that as an anchor in these seas of change.
I imagine that seeking out trends is not something you can turn on and off—I’m guessing it’s fairly consuming. How did that start with you?
I think my brother would have noticed that I was irritatingly good at spotting someone's character traits and how they might be part of a wider shift that was occurring. It's hard to put your finger on when it starts happening. But I would notice that the shoes that you bought—that you thought you bought because you were you and liked them—that there was something bigger going on behind the scenes. On the playground.
I started an independent record label... We were doing very, very left field, indie music, and to get your band on the radar of Pitchfork, you had to have a knack for spotting the weak signals of what kind of sounds, what kind of band names, what kind of texture and meaning was coming out. It's so amorphous and hard to put your finger on. That was one of the earlier places where I started working in this field without realizing it.
I grew up in the DC punk scene, and one of my long-term gigs was being a part-time music critic for Time Out New York. When you're pitching your editor at the music desk of a publication, it's not just the quality of the artist, there's also that trend element. Is the band part of a trend, but is it a copycat thing, is it of the moment, but different enough to work?
I think it's so interesting you mentioned that. Again, for artists in a scene like punk, of course, most would admit the belonging to something bigger than themselves. There are some artists who are happily derivative and say, "These are our experts and we try to combine them." If you're a music journalist, that is exactly the same skill set: spotting those connections and perhaps where their influences have come from, and maybe you're seeing people on the East Coast who are doing similar things to people on the West Coast when those artists themselves haven't always identified that.
People in scenes have intense natural instincts. If I had a dollar for every time I’ve heard something like, “That band's just a complete Jawbreaker ripoff,” or “Sleater-Kinney was doing that 10 years ago”... People have a detector for when you're just copying. I think that speaks to values, too. In indie or punk rock, core values might be originality and authenticity. But in commerce, it might be, “What kind of value can you offer me? Can you give me the same thing at a better price or with more benefits?”
Yes, at least in the business landscape, people are a bit more at peace with the fact that you can pretty much copy something and build a better version of it and that's legitimate.
TrendWatching is very clear about working as a team. Can you speak to the process of a team coming together to decide upcoming trends?
It was really helpful for us when four members of the team were tasked with translating our process into a book, Trend-Driven Innovation. The process until that point had been unspoken. That is where it was very much dissected and torn apart and put back together and improved upon, because we wanted to create a process that anyone could do. That’s when we realized, "You can't just say, I'm seeing a lot of articles about this or I'm seeing a lot of startups in this space."
Now anyone working in the company in theory knows that a trend should really tap into a core human need. There should be maybe long-term shifts and even more immediate drivers of change. There should be innovations happening and there should be new expectations that result from those three things entwining. We're now more well equipped. We put aside the guru attitude—you had it or you didn't, and it was all behind closed doors. By showing our process, far more members of the team can shine.
Our global reach is thanks to our spotter network. The founder of the company, Reinier Evers, created this company to be “freemium” before that term was used. Likewise with crowdsourcing our content. There were so many passionate readers of his original newsletter who kept emailing him and sharing things that they were seeing, so we created our own Web platform where people could send these innovations and share these local insights.
"Now anyone working in the company in theory knows that a trend should really tap into a core human need." - Max Luthy
It's now moved to Slack, which is really cool. There are channels for food and beverage, travel, retail. I can see some advertising planner from Stockholm, from Mexico City, they can all be sharing what they're seeing and interacting with each other. They've been at the heart of the company's global reach and understanding, identifying the trend. Once we see what they're sharing with us, that's when the analysts and the team can start to say, "OK. Does this meet our criteria?" Also, we do have to ask ourselves, as a journalist would, "Is this going to be interesting for our reader and also help them deliver better products and services for the customer?"
Does longevity matter? What if a trend is a trend for like a week, and then it just crashes and burns?
It matters. People say, "How do you know it's a trend and not a fad?" It’s an understandable question. This could be a $10 million investment for a company—they want to know it isn't some flash in the pan. Again, we use the fundamental human needs as our anchor. We'll say, "Look, if you are really meeting my desire for status, by following this trend and launching something inspired by this trend, if you are making my life more convenient, if you are delivering better on value, it's not going to be something that I throw away immediately."
You can't really put your feet up—you're not going to hit a home run and then kick back and chill for five to 10 years. It’s better to work on making your organization adaptive, responsive, and iterative, rather than worrying if things that are short term or long term shift. That said, it’s certainly not easy to be continually evolving.
"Look, if you are really meeting my desire for status, by following this trend and launching something inspired by this trend, if you are making my life more convenient, if you are delivering better on value, it's not going to be something that I throw away immediately." - Max Luthy
Is there an example that you can share of a consumer trend that you appreciate or value, and one that makes you nervous about technology or what's happening in the world generally?
We're in this moment of frustration and anger toward big tech. It came off the back of a decade of a “big tech will save us” stance. They'll save our roads. They'll sort out gender imbalances. By having open platforms, or open discussion, there will be no more marginalized groups with unheard voices. The past 24 months have been this big wakeup call.
Several years back, MIT Technology Review had Bono on the cover proclaiming that big data will save us all. Basically, technology plus politics equals a better world. In 2018, a new assumption you hear is technology plus politics make a worse world.
I don't think it goes either way. We're going to continue to see nefarious uses of AI, for example, and we're going to continue to see really positive uses of AI. We should not assume Mark Zuckerberg's going to save the world and we should not blame him when the world is in trouble.
Could you pull back the curtain a bit on how businesses can apply trend research?
I think the main thing is to have a open discussion about it. Once you've been informed, that's the process we would call scanning for which trends impact your business. Then, you need to focus on which trends are most relevant. We create a tool for this: the consumer trend radar, which is really another process. As fancy as it sounds, again it's a really simple tool to get you to discussing how various trends impact your business. Is it a product impact? Is it a business model impact? Is it the marketing impact? Does it impact your vision and how urgent is it? Is it something that you need to respond to now? Is it something you need to respond to three years from now, 10 years from now?
We have created our own process for analyzing how and where, and which trends impact your business. I think there's no shortcuts to it. I would never say it's this one-step process. You need to get people in the business who have shared experience of the business, as diverse backgrounds as possible to discuss how these trends are going to impact your organization and where the challenge is and where the opportunities are.
Which companies are consumers setting their customer service and CX expectations around?
In terms of convenience, Amazon remains king. In terms of understanding the consumer as intimately as possible, right now, I'd say Spotify. I'd love to name some unknown brands here, but in terms of showing an effort around every single piece of the customer experience, I have loved watching Nike move into their direct to consumer space because you get to see how they apply their innovation, which usually results often in product or marketing innovation. You get to see how seriously they're now owning the entire customer journey through their direct to consumer apps and physical locations, the new Nike By Melrose store is awesome.
Could you give us a sneak peek of upcoming trends for 2019?
There are three I can allude to. One I've already mentioned by name so I can start with that. In 2018, I think over 60% of eCommerce sales are via mobile, according to eMarketer. Mobile commerce innovation is often around making for a faster and more seamless retail experience and rightly so!
However, with magic point of sale, we see brands leveraging new hardware and new software capabilities to juice up the experience as well, today you can offer truly rich magical experiences as a point of purchase via mobile devices. Beyond mobile devices, you can now also harness the other smart devices we have in our lives, from speakers to televisions and you name it. I think that's one of the first trends that really goes beyond just convenience and price transparency—digital retail is now becoming experientially rich and magical.
Another trend we'll be exploring is the demand for super-human resources. Typically, you expect the HR department to make sure the business is looking after and managing the well-being of their employees. Now, as we've seen, the AI and algorithms that I mentioned earlier that consumers thought were going to save them, save the planet, save their money, help them get the cheapest flight... we've seen the dangers of letting these run the market, and placed too much faith in them in terms of reflecting our own biases and discriminating in new ways.
"I think that's one of the first trends that really goes beyond just convenience and price transparency—digital retail is now becoming experientially rich and magical." - Max Luthy
We're seeing a huge effort from tech companies to show, "OK. Our AI is going to be ethical, and it’s going to have a positive impact in the world. We are innovating and working carefully in this space to ensure that." That's going to be an inevitable response to the last 24 months that we’ve all witnessed. If you used to make lewd comments to Siri, there was this playful response. Now Siri will respond and say, "That's inappropriate." And you're now expecting Alexa to respond to your children more when they say, "Please." We are this point now where we expect these super-human resources.
The last one would be lab rats, the next frontier in self-improvement. A lot of brands might not think that wellness impacts them or this shift within the wellness space. Essentially, today's consumer expects every business to help them at a personal level become a better version of themselves. You don't need to be a supplement company or make yoga pants to have been caught up in this expectation. To delight in 2019, empower consumers to test new approaches, and do fixes that enhance their lives.