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Trends and Forecasting

Today’s speed to market of new offerings and shortening product lifecycles place a unique pressure on businesses to stay ahead.  Consumer purchasing behavior is shifting more rapidly than ever.

To succeed, businesses need accurate sales forecasts -- based on robust analysis -- and the most up-to-date purchasing and market trends.

We deliver detailed forecasts of consumer demand for technology devices, as well as global technology market trends. 

Our forecasts are built using the world’s largest sample of point of sales data, combined with our global expertise and local knowledge. This combination provides our clients uniquely granular and timely forecasts of future demand – forecasting what products consumers will purchase, in what volume, at what price, and where.  

Forecasting for investors and capital markets

Institutional investors face pressure to perform. To succeed, businesses need visibility to significant trends at the earliest stage(s). Businesses need to acquire reliable and compliant information on where to invest. 

We provide investors with robust forecasts using the world’s largest sample of point of sales data. We predict and document turning points in consumer demand, providing regular, detailed company analyses on technology hardware, semiconductor and consumer durable companies. 

Our forecasts allow investors to make successful recommendations backed up by credible and compliant sources.

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    • 06/11/19
    • Retail
    • Consumer Goods
    • Trends and Forecasting
    • Global
    • English

    Clashing consumer trends battle for energy efficiency – pt. 2

    In part one of this blog series, we identified two clashing trends when it comes to consumers purchasing domestic appliances: Sustainability and Performance. In this post, we’ll try to better understand the interaction of these two core trends and explore their impact on energy efficiency.

    A disputed increase in energy efficiency

    Between 2014 and 2018, the average energy consumption of refrigerators has actually decreased by 2%. This represents a mix effect of different product segments which vary massively in their energy consumption. Side-by-Side fridges consume about 50% more energy when compared to Two-Door Combi fridges with No Frost technology. The trends towards larger and more energy-hungry appliances has almost offset the increase in the energy efficiency within comparable product segments (only 2% average energy reduction remains with this mix effect). Apart from the average energy consumed, if we look at the annual energy consumption of all sold refrigerators in 2018, the total sum of kWh even increased by 7% compared to 2014 (at a unit growth rate of 9%). This means that choosing larger and more energy-hungry appliances (performance/convenience related benefits) eats up almost all the technological efforts put into energy efficient innovations.

    Promising opportunities to save more energy in the future

    Within MDA 5*, almost 60% of energy is consumed by washing machines and refrigerators sold in 2018, which implies a big impact if such markets are subject to a change. Consequently, regulation standards bear quite a potential. For washing machines, the loading capacity plays a pivotal role: A+++ washing machines with 9kg+ capacity consume 18% more energy than a 6kg washer with the A+++ label. Scientific consumer research carried out by the University of Bonn** suggests that “consumers do not put more laundry into their bigger washing machines, but wash (almost) the same amount of laundry independent of the washing machine’s rated capacity.” Hence, these additional 18% of energy consumption is a potential for additional savings in the future. Some countries also present more potential in saving energy than others. In Germany, average energy consumption of A+++ washing machines is below the European average. Meanwhile in Great Britain, an average A+++ machine sold has used 19% more energy compared to the European benchmark. Besides regulatory approaches, there is also hope to stimulate awareness of energy efficiency when it comes to smart home appliances. In case transparency of real energy consumption increases (e.g. via live monitoring), this may stimulate more educated consumer behavior when deciding on a new appliance. As sustainability becomes more and more important to consumers, however, there is also a potential for the industry players to address such “energy savvy” consumers with products highlighting the best absolute energy consumption along with a reasonable capacity (e.g. 5-6kg). Differentiation can be achieved via the lifetime energy savings as well as a lower carbon dioxide footprint during production and lifetime.

    An opportunity arises

    There is a clear battle going on between the consumer demand for performance (capacity) and the need for sustainability. While the rise of Best-in-Class energy labels suggest that energy-efficient appliances are being sold more than ever before, almost all the improvement is lost because consumers continue to purchase larger appliances. It seems that even with low-involvement products like washing machines, the benefits of larger capacity (convenience) can beat the need for sustainability. This holds especially true when energy labels lead consumers to believe that they act responsibly while absolute energy consumption increases. The great thing about this “issue” is that another opportunity arises for brands to target “energy-savvy” consumers with solutions that truly advocates of energy efficiency. Smaller appliances can be promoted to them as an honest energy-saver for the good of our planet. * MDA 5: Washing Machines, Tumble Dryer, Fridges, Freezers, Cooking  **University of Bonn: Angelika Schmitz, Farnaz Alborzi and Rainer Stamminger

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    • 06/03/19
    • Retail
    • Consumer Goods
    • Trends and Forecasting
    • Global
    • English

    Clashing consumer trends battle for energy efficiency – pt. 1

    What are really today’s consumer trends when purchasing Technical Consumer Goods (TCG) such as smartphones, computers, TVs or washing machines? Consumer attitudes observed by GfK Consumer Life® as well as the purchase behavior at retail POS provide us with solid evidence that the most impactful drivers for people to make a purchase are:
    1. Performance: Enabler for rich experiences through high end product features
    2. Simplification: Automating recurrent tasks or making tasks more seamless
    3. Premium: Aspirational products making a statement about own identity
    4. Borderless Shopping: Consumers: I want it now!

    More consumer trends with big impact

    Sustainability is another decisive consumer trend, strongly present in the world of domestic appliances such as washing machines and refrigerators. Consumers now seek a significant potential to save energy which means energy labels are an important factor in the decision making process. The energy label in Europe has been a success story in that sense for the past decade – allowing for differentiation of manufacturers as well as contributing to consumers’ peace of mind by saving energy. In 2012, only 24% of appliances in European countries* had an A++/+++ label while the share of sold appliances with “Best-in-Class” labels increased to 62% in 2018. Appliances sold with A+++ rating are washing machines whereas this label is still rare in refrigerators or freezers. But this is only half the truth! On one hand, appliances with comparable size became more efficient in recent years (e.g. Combi fridges with No Frost technology consumed 9% less energy on average in 2018 vs. 2014) whereas on the other hand, more and more consumers turn to larger appliances. Performance is another rising consumer trend when it comes to technical goods. Consumers are also looking rich and convenient experiences, i.e. high capacity fridges helping to stock more food and hence, fewer shopping trips are required. However, more and more consumers feel the responsibility for our environment—global warming initiatives like “Fridays for Future” convey this evolving attitude. GfK’s Consumer Life® study confirms the advance of sustainability: In 2018, 45% of global respondents said that they feel guilty when they do something that is not environmentally friendly. This mindset has grown steadily from 37% in 2015. Obviously, two consumer needs clash here: Sustainability (energy saving) and Performance (energy hungry). Check back for part 2 of this blog to find out how these trends affect energy consumption in home appliances. *Data was acquired from 10 major countries in Europe: AT, BE, DE, ES, FR, GB, IT, NL, PT & SE.

    This blog is a preview of my presentation at
    ECEEE’s Summer Study


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    • 05/29/19
    • Trends and Forecasting
    • Global
    • English

    Is your market segmentation lonely? 5 ways to know

    At their best, market segmentations can serve as blueprints for brand strategy, messaging, and targeting – almost every aspect of a brand’s engagement with its customers. But as sources of data multiply exponentially, every market segmentation needs to work doubly hard to overcome a common affliction: Isolation.

    Is your market segmentation a wallflower at the consumer insights dance?

    Too often, a segmentation is the brain child of the research department – or even a single researcher; however insightful and well designed, this vision of a brand’s key consumers may linger on a shelf because it lacks support. Many people who might help bring a market segmentation to life may not even know that it exists. Such is the fate of the “lonely” segmentation – one that fails to reach out and connect, whose potential is never known or realized. These unfortunate research recluses become wallflowers at the dance of marketing effectiveness, staring at their iPhone 5s while other research projects strut their insights on the gym floor.

    Signs your market segmentation needs help

    The torrent of Big Data now at almost every marketer’s fingertips makes the lonely segmentation’s predicament even more unsettling. There are so many more data sets to interact with, insights to align with. It makes a shy segmentation want to crawl away to a quiet corner with a very big book. Sometimes, as the developer of or advocate for a segmentation, we may have trouble realizing that our creation is feeling left out. To be sure our insights get the recognition they deserve, we need to be clearly aware of the signs and symptoms that a segmentation is running the risk of sitting on the sidelines when it should be coming into its own.

    Symptom #1: Over-reliance on lengthy online surveys

    When you ask your respondent to remain engaged, alert, and providing accurate descriptions of their attitudes and behaviors for 45 minutes straight, you will likely have a problem. Weak data may face questions about validity and have trouble winning stakeholder support.

    Symptom #2: Use of “Black Box” methodology

    The Achilles heel of “hidden” methodologies lies in socialization of the approach and findings. When “trust me” is the central rationale for convincing stakeholder teams of the solution’s validity, the chance of skepticism and tune-out grows.

    Symptom #3: No connection to other data or insights sources

    Given the sea of data sets available to complement a market segmentation solution, not building bridges to other sources is a real lost opportunity.  Fusing to your segmentation can make the difference between a segmentation that is merely “interesting” to one that is actually a “game changer” for the business.

    Symptom #4: Inconsistent or spotty buy-in from stakeholders

    The absence of consistent stakeholder acceptance can be crippling to the effectiveness of any study—regardless of how well conceived or flawlessly executed.

    Symptom #5: Ambiguous activation direction

    The issue here is insight granularity. We need to ensure that we are collecting detail at a low enough level to give clear guidance on very specific tactical executions on the back end. Otherwise, the relevance of your study will be compromised. Making sure that market segmentations deliver maximum value for the business means, first of all, staying vigilant to the signs of disconnection. Keep your eyes peeled for these symptoms of isolation, and you can help assure that your project is poised for real-world success.

    Learn to make your segmentations popular

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    • 05/13/19
    • Technology
    • Trends and Forecasting
    • Global
    • English

    A growing demand for ethical innovation in technology

    The reckoning of the importance of ethics in tech and the need for new approaches to steer innovation in the right direction have been rapidly gathering steam, and not just among regulators. For example, last year saw the formation of the Center for Humane Technology, a coalition of ‘deeply concerned tech insiders’ aiming to re-direct the course of technology away from extracting our finite attention towards a better alignment with humanity. And in April, the European Union released its guidelines for achieving “trustworthy” artificial intelligence (AI), a milestone in putting ethical guardrails around the development of technology.

    Approaching ethics in tech

    In March, Stanford University, the birthplace of the term ‘artificial intelligence,’ launched the Stanford Institute for Human-Centered Artificial Intelligence (HAI), a sprawling think tank whose mission is to “advance AI research, education, policy, and practice to improve the human condition.” Industry behemoths have also started to take actions. Both Google and Microsoft, for instance, released ethical principles for the development and use of AI in the past year. A re-assessment of the industry’s status quo is in order, gauging from consumer sentiment as well.  Consumers’ attitudes towards technology seem to have reached an inflection point. As pointed out by my colleague Kathy Sheehan in her recent blog post, concerns about data privacy and tech addiction have soared amidst high-profile data misuse, privacy breach scandals and mounting evidence of the effect of technology on mental health (incl. World Health Organization’s classification of gaming addiction as a mental health disorder last year). As AI grows ever more powerful and increasingly extends its reach into our lives, consumers also increasingly recognize the risks it poses to humanity: According to a survey conducted last year, the majority (59%) of Americans feel that AI has the potential to be good but comes with some inherent risks. A shift of perception towards technology is crystalized in recent research from GfK Consumer Life. Today, just above half of Americans (53%) feel optimistic about the effect of technology on society, down 10 percentage points from the record high registered in 2008. While technology remains Americans’ top source of optimism on a list of 13 aspects of life measured – from the healthcare system to the quality of the environment – the 10-point drop also makes it the fastest declining area of optimism among all.

    Time for realignment

    Although some question tech companies’ ability to self-regulate, it’s clear that inaction isn’t an option. Failing to address consumers’ growing concerns about technology risks falling out of touch with potential customers, and falling behind competitors who demonstrate the will to put their customers’ – and humanity’s – best interest in mind. Goodwill matters to the consumer. Data from GfK Consumer Life reveals that people are increasingly socially conscious – “helpfulness” and “social responsibility” are among the fastest growing personal values globally. And a rising number (43% globally, up 10 pts from 2011) state that they only purchase products and services from brands aligned with their values and beliefs. So how should companies re-align and consider ethics in tech innovation? A few thoughts to consider.

    Put humans in the center, not technology

    At the core of the tech realignment is a paradigm shift from a tech-centric to a human-centric approach. Long have tech companies been caught in the cutthroat race to churn out novel products enabled by the latest technology designed primarily to maximize usage. But an ethical approach to address some of glaring issues of technology – from tech addiction to its role in social isolation – would require companies to pause and question the long-term impact of its innovation on the wellbeing of its users and the society. Some have already started to do this. In February, OpenAI made its step towards pushing ethics in tech with the company’s rare announcement of a ‘non-release.’ Concerned about the powerful technology being potentially misused to create fake news, the research firm announced that it would not release a version of a text generator they developed. It’s also worth noting that, ethics aside, a tech-led approach is increasingly at odds with consumers’ changing sentiment towards technology. As the excitement over technology’s promise gives way to a sobering reckoning of its side effects, there are signs that consumers are growing more solution-oriented and less enticed by novel technology in their product adoption. Global research from GfK Consumer Life shows that “providing a solution to a problem” has surpassed “harnessing the very latest technology” as a top association of true innovation among consumers.

    Design with inclusivity in mind

    There is widespread evidence that AI has been struggling with a bias issue, from facial recognition technologies that are less effective in detecting people of darker skin to an AI-powered hiring tool that discriminates against women. The increasing spotlight shining on such issues will drive greater scrutiny over algorithms. Growing consumer social consciousness will also help drive the demand for inclusive technology free of bias—an inclusion of ethics in tech progression. “Equality” has emerged as a top tier value globally, now #15 on the list of 50 personal values that GfK Consumer Life has been tracking consistently, up from #22 in 2011. As pointed out by numerous experts, having broader representation in the design, development, and test of technology may be part of the solution.

    Step up on data privacy and security

    Mark Zuckerberg’s announcement in March to shift the focus of Facebook to a ‘privacy-focused’ platform marks a drastic and telling change of course for the social media giant. It reflects the changing tide in the public’s sentiment towards privacy, which will likely impact companies well beyond social networks. According to the GfK 2018 Smart Home study, privacy has emerged as a top barrier for the adoption of smart home products, trailing only slightly after cost and ahead of worries about interoperability between devices, product knowledge and more. It is in fact the top hindrance for the adoption of digital home assistants like Amazon Echo or Google Home Assistant. As the digital age deepens with more products becoming connected and reliant on user data to deliver optimal, personalized customer experience, digital privacy and security is set to become an ever more important front of competition for companies. With growing concerns now harder than ever to ignore, the need for ethics in tech is now.

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Molemo Moahloli
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