In this Quarterly Briefing, Spark Lab Futures Advisor Frances Valintine summarises recent advances in the business world while challenging assumptions and long-held views.
Over the first quarter of 2019, we saw the consolidation of several key themes that have been emerging over recent months.
The overarching theme in the first few months of 2019 is the concept of trust. The 2019 Edelman Trust Barometer, a global study of trust, captured this sentiment through the significant rise of employees who are now looking to their employer as the most trusted organisation.
Compare this to previous years, where trust was still held in non-government organisations, big business and the media. Organisations that live by a key purpose, where values were clear and where CEOs consistently demonstrate transparency, are more trusted than all other institutes.
The most powerful words of the first quarter of 2019 came from Greta Thunberg, a sixteen-year-old student from Sweden who talked about sustainability and the environment with the phrase “our house is on fire”.
Her powerful words shared an entire generation’s frustration with business and political leaders who are ignoring the impact of climate change. Erosion, deforestation, pollution and the loss of over 200 animal species every day were just some of the powerful issues discussed by Greta. Her words echoed through the world, resulting in millions of youth protesting the lack of action against climate change.
The focus and debate on the future of our planet has never been so present. This is the time for active adoption of a comprehensive sustainability plan by every New Zealand business. An entire generation of youth is demanding businesses to make sustainability a key factor in every decision they make. From reducing packaging to transparency on manufacturing processes, the use of diminishing natural resources to carbon production, businesses can no longer ignore the power of a new generation of consumer.
Without effective sustainability plans and a public commitment to improve business practices to reflect “value” beyond just financial gains, businesses are at risk of being seen as irrelevant, irresponsible and disconnected.
The start of the second quarter comes off the back of other major industry disruptions.
The first was the rise of Apple as a challenger bank as they moved further into the fintech space. Even within the world of digital banks, Apple launched its credit card with a significant advantage by removing all fees. Combined with the vast data profiles on their customers, Apple’s dominance in the banking sector should be watched closely.
Retail NZ reported that 55% of New Zealand retailers did not meet their first-quarter projections. Business confidence across the board is also down, and 40% of businesses expect it to be harder to get credit in the coming months. Commercial and residential construction has taken a dip, and domestic construction is now at the lowest levels since 2009.
While many legacy businesses are choosing to ignore the step-change in consumer expectations, some global players are responding to a new demand by adopting or developing new products and services:
Behaviour trends in the first quarter captured a shift driven by Generation Z, those under 22 years. This generation is turning their backs on fast-fashion and cheap clothing. They’re moving in unprecedented numbers to second-hand and thrift shops for their clothing.
Common to all these businesses leading the change is their reliance on the internet, data and interconnected platforms to meet customer needs. While technology enables these changes to take place, the real driving force of disruption is people and the rise of new values.
With over half the world population under the age of 30, who live their lives connected to the internet, they’re now able to review, research and challenge marketing claims and business decisions.
If competitors can provide options that better reflect the new generations core values of equity, fairness, sustainability and transparency, then they’re more likely to move than at any other time in history.