J Walter Thompson has this year celebrated a decade of annual trend forecasts by releasing the global report, ‘10 Years of 10 Trends’.

JWT Sydney has taken the report, put together in New York, and considered how Australia fits in with the global trends. Two trends in which Australia appears to be leading the charge are 2009’s trend, ‘Mobile device as the everything hub’, and 2012’s trend, ‘Food as the new eco-issue’.

While the global report shows distinct differences between developed and developing countries, certain changes identified in the report as being ‘new’ have been observed in Australia for far longer than other places.

This interview with JWT Sydney head of insights Andrew McCowan focuses mainly on the first trend around smartphone adoption and use behaviour. He outlines the issue taken from this insight around Australians leading the way in smartphone use – companies are struggling to keep up:

“Australia is on the one hand leading in terms of our ability to connect, but in another way its lagging in terms of our corporations’ abilities to leverage that ability to connect.”

Marketing’s Michelle Herbison asks McCowan to shed some light on what makes Australia different when it comes to smartphone use, and to offer some advice for marketers on how to best leverage these changes.

 

Marketing: What is it about Australia that puts us in a position to lead this trend of ‘Mobile device as the everything hub’?

Andrew McCowan: I think first of all, Australia’s been a very early adopter of mobile technology generally. The quality of the 3g and 4g network is very high; we do have very fast mobile broadband, very reliable, high-end, mobile functionality. With over 8 million people having a smartphone in Australia it’s a big, big market. Plus, of course with the early adoption of tablets, and all of the latest subsets of those devices – they are all feeding off one another and allowing us to live this dream about the ‘mobile device as the everything hub’. You start to rearrange your life around mobile devices, so that everything’s digitised, connected. People can use smaller screens to watch videos, shop, play, and do all of the transactions of life through their devices. This is a trend we’ve seen here in Australia, often led by banking, where the adoption of very high-end mobile banking apps is quite high here, and we’re leading in the market.

One of the things that’s really interesting in the report, when you get into the details of it, is they ask a number of questions. We did some research in a number of key markets about attitudes that underpin this study. They asked some questions to get agreement levels on statements like, ‘Smartphones have changed how I keep up with the news’. In Australia, 53% agreed with that statement. It’s similar in a lot of other developed countries – in the UK it’s 63% and in the US its 67%. Whereas, in China, 86% agreed. What’s interesting about that is it’s showing that Australians have already changed their behaviour.

 

M: So how did you get to that conclusion; that Australians have already changed their behaviour, as opposed to, we haven’t changed yet? That we’re not using mobile to its full potential yet?

AM: Well because we know that people using their mobile to keep up with the news, we know that there are high level uses of the device. Everyone’s changed their behaviour – you don’t need a study to necessarily quantify the percentages of people using it; it’s become so common.
So what we believe is that what this research would suggest that because people have had the high-end functionality available for longer, and reliable news available on mobile for a long time, this notion that my life has been changed by my mobile doesn’t feel as dramatic as it does in other markets where its become available more instantly and it’s more of a shock.

Another question was, ‘Smartphones have changed how I shop’. In Australia the agreement to that was 37%, whereas in China it’s 76%. In the other developed markets, its similarly in the high 30s, low 40s; the US is 49%, so not radically radically different from Australia. But again, we know people have changed the way they shop through mobile devices. There might still be a way to go, but people don’t feel like its transforming their lives in quite the same way as they do in other markets.

It’s connecting to the world more than ever, for both good and bad. The good is that you feel so close and connected to your equivalents in other parts of the world and know what’s going on everywhere. For instance, if Macy’s is having some amazing sale in New York, there’s a fair chance a lot of Australians know about it, because they’re reading blogs, their friends are telling them about it on social media. But then the offers might not be available here, so you’ve got this awkward sense that you’re closer than ever but you actually can’t access it yourself. So what does that drive people to do? They either want to get around the system so they can shop using the huge uptake of international retail online services, and of course there’s our famous love affair with video piracy – we’re aware of what the latest show is on American networks within five minutes of it being on air, and we want to see it, straight away. So if you extrapolate that out to shopping behaviour, that tension is there. Australia is on the one hand leading in terms of our ability to connect, but in another way its lagging in terms of our corporations’ abilities to leverage that ability to connect.

 

M: So companies are struggling to satisfy the customers that are becoming more and more demanding.

AM: The customers get more demanding; the customer expects to see this stuff, and they’re not seeing it because we’re a market of 22 million people spread over a huge geography, so installing the absolute latest interactive high-end technology in retail or broadcast leveraging mobile connectedness, that’s all really, really expensive, and hard to justify here. Doing it in the centre of New York or London you have the population to sustain the investment. It’s a recipe for consumer frustration because the consumer doesn’t care about that. They’re seeing their equivalents in other markets getting the advantages. So while the trend in terms of the ‘everything hub’, Australia’s well in advance of the trend, our commercial environment has some real challenges.

 

M: So have you got some points of suggestion on what companies need to do to keep up?

AM: Well it suggests that companies need to be very mindful that that’s what their consumers are being exposed to. The old models need to be rethought now, and it may not be possible to be as instant as the consumers would ideally like, but you can certainly show willing to deal with the fact that consumers are expecting more immediate responses. That’s using the technology as much as you can. There are a lot of challenges for bricks and mortar retailers because there’s all the questions around the hours they’ve got to work and how long they’re open and all of those day-to-day challenges, but thats the new business environment they’re in. If they’re not adapting to that and not offering new flexibility, then that’s going to be a real challenge for them.

 

M: Would you say, considering our small population, and now this increased ability to be able to connect with, as you say, companies over in New York or London where they’ve got greater capabilities, is that quite a big threat to local business?

AM: Well it’s a threat and an opportunity. The treat is if they don’t do anything about it, they risk being overwhelmed by global operators for whom servicing Australia from a big hub elsewhere is feasible. The opportunity is that local brands that can provide a viable commercial solution now are going to be transforming industries. I would never say it’s going to be terminal for Australian retailing or Australian businesses because there’s always value in the locals; people value Australian products. They don’t necessarily want to just plug into global and ignore local but they will if they’re not given an opportunity, and that’s where business can now start thinking.

 

M: I’m just thinking, the fact that people are feeling so much more connected to the rest of the world, have a little bit more understanding of how the world operates – you know, less ‘anti-America’ – maybe people are a little bit more tolerant of ignoring local business for the sake of getting a cheap deal from overseas?

AM: Well we’ve seen in other research we’ve worked with that, certainly among Gen Y and under, the sense that there’s a unique Australian culture that needs to be defended is weakening. That’s not to say they’re not proudly Australian because they are, but the sense of uniqueness is diminishing and you’d imagine a lot of that is a counterpoint to the level of connectedness, because people have been changed for a while. There’s been a number of studies over the last 10 years, that often inner-city teenagers, say in Sydney, act and feel in many ways closer to inner-city teenagers in downtown Hong Kong or downtown New York than they do to older people out in the bush in Australia. There’s this sort of global community of youth that they are fully subscribed to, and through social media, through gaming, and of course through new mobile devices, that kind of tendency is accelerating.

 

M: At the other end of the spectrum, the Baby Boomers, how are they feeling in terms of this more mobile connected situation?

AM: The Baby Boomers are the other big demographic cohort that are changing as a result of social change, and we know from other research that they often will say they feel ignored by marketing and that brands don’t reflect them well and there’s a real sense that they’re kind of left out of the activity.

This kind of connected, interconnected world – certainly there’s a subset of them that are very plugged into it, and there’s no reason why more of them can’t be or won’t be – but they’re feeling that they’re not having the services and offers that appeal to them and that speak to their evolving needs. It’s walking the incredibly fine line that they want to be associated with a youthful spirit but at the same time they don’t want it set up that the world is all young, because they’re not young anymore. There’s a balance that needs to be struck and brands haven’t been very successful at that so far.

 

M: OK, so can you give us a few final words on where you’re expecting things to be going in the future regarding this connectedness? We haven’t touched on the younger generation, who are probably going to come up a lot more prominently.

AM: What’s clear is that the forces that are driving this change are representing a significant opportunity and threat to the way that brands behave in Australia. Consumers can use this new connectedness to be informed and act about brands and make choices in ways that weren’t possible before.

That’s a huge opportunity because brands can get ahead of that, but that does require a different way of looking at their consumers. It requires a different way of thinking about how you connect with people, and how you respond to complaints, how you manage people’s regular interaction with brands.

Younger adults are clearly at the cutting edge of that, and they’re the ones who are demanding the increasingly 24/7 always-on, instant gratification mindset, and so that’s where those sort of opportunities will be most prominent most rapidly, but thats not to say there aren’t’ opportunities for other age groups as well.

It’s changing basically how people interact with brands. Those that don’t adapt will have real challenges because people’s patience with old systems and old ways of doing things, the tolerance of waiting, is rapidly evaporating.

The old model of managing annual plans and managing the occasional mass comms burst – there’s a role for that, but there needs to be more than that as well, so that brands can stay connected and take advantage of the fact that these transformations are happening.

 

M: Definitely interesting challenges. Thank you so much, Andrew.

AM: No worries at all.