Marzo 2016

Trends review 2015The 12 lessons that 2015 leaves us

ContentIntroduction: Why Trends Review?

Millennial Consumer or how to make a virtue from a need2My standard is NOW3

A vulnerable citizen looks for refuge1

2

From anger to long friendship5Transfer of references among categories4

Customer Centric: the paradox of the enterprises 6

Self-Learning as an opportunity for brands8The Low Cost metamorphosis 9

Educated for comparison7

Don’t ask me what you already know11The micro-moments of Smartphone: shuttles or self-sufficient?12

Internet privacy: from the fear of Big Brother to the market of data10

Introduction: Why Trends Review?

Why Trends Review?

4

In the last years, it has become a classic that, at the end of December or early January, numerous consulting firms publish prognostics of trends that will define the beginning of the year, normally since a technological perspective.

The Cocktail Analysis wanted to go a step beyond and build over what the consumer has taught us during 2015:

1. We believe in the importance of understanding nowadays reality as a first gauge of the consumer trend in the future.

2. As a consumer knowledge agency that we are, we are passionate about going deeply in consumer’s behavior and that our analysis focuses and rounds around the consumer and not so much in the potentialities of the technology.

5

So, in this perspective The Cocktail Analysis has developed a document that gathers the 12 lessons about the Spanish consumer in 2015, it’s important to mention:

● They were developed in a transversal way from our studies for different clients.

● While we identify them as lessons acquired in 2015, logically its origin can be traced in the previous years.

● They may be actionable insights for brands, companies or organizations.

In this regard, they will be presented as follows: learning, description, facts that endorse / exemplify, and implications for brands.

We hope that it will be of your interest !!!

Why Trends Review?

12 lessons that 2015 leaves us

1. Vulnerable citizen looks for refuge

8Vulnerable citizen looks for rfuge//

And the perception of little likelihood of return to the model of the Welfare State.The individual vulnerability feeling prevails

Public universities have lost more than 1500 million Euros of funding in the past four years

Source: nuevatribuna.es - 21/01/2015 http://goo.gl/jdkQYp

The consumer/citizen identifies as one of the main consequences of the crisis, the weakening of lots of support networks, specially regarding the institutions of the classical Welfare State.

Facing some years ago, there is the feeling that this will become a structural and ultimate status, which produces fear regarding an eventuality of not having covered certain needs and / or desires in the short or medium term.

The tax authority foresees that the piggy bank of pensions will run out of funds by 2018

Source: El Confidencial - 24/02/2016 http://goo.gl/nuPn47

They are addressing and solving needs (transportation, energy, health, etc.) that were traditionally addressed by the public welfare from the private and collaborative perspective

Private & common alternative for public emptiness

With more or less acceptance, citizenship perceives inevitable that the market and civil society will end up taking care of those need neglected and / or abandoned by the public sector areas.

9Vulnerable Citizen looks for refuge

Som Energy: consumer cooperative green energy

www.somenergia.coop/es/

Caja Rural Pension Plans

Santander Bank: Generación Encontrada

https://youtu.be/zYHNBRfp5OA

https://www.youtube.com/watch?v=8jHiRYxJqSM

www.somenergia.coop/es/

10Vulnerable Citizen looks for

refuge //

Beyond the ideological thoughts, it is assumed –since the feeling of no return-

that the private or common initiative develops competencies up to this

moment proper of the public sector.

The feeling of no return

2. Millennial consumer, or how to make a virtue from needs

(...) more than a third of

employees (34%, 6.7

million) are seiscientoeurist

as. For them, being mileurista

is an utopia.

12

The inability of the Millennial population to become part of the labor market under conditions that allow them to access large goods, leans toward the micro-consumption or short consumption- (electronics, small trips ...).

These micro-consumption meet small immediate goals without compromising a future that from a personal point of view is anticipated uncertain and unstable (intermittent labor careers and cycles of abundance and "shortage" in the personal finance).

Source: bez.es - 02/02/2016 (http://goo.gl/cs8a0M)

El Mileurismo como utopía – Joaquín Estefanía(El País - http://goo.gl/RZYVJz)

Variation of the workforce in the last four years, by age segment

Millennials have given an answer in terms of consumption values for the structural disability to access high cost products

The experience of use and enjoyment without purchase

Millennial consumer, or how to make a virtue of need //

13Millennial consumer, or how to make a virtue of need

//

Millenials look for the benefit of use & enjoyment without the compromise that implies the ownership or the long-term agreements.

Meet the need without the toll of the property

This situation opens the door to new proposals for leasing, collective properties, shared uses and innovative ways of renting.

In products of high and medium value, new generations of consumers try to

avoid property leaning to "Rent experiences of use."

Millennial: the benefit of use and enjoyment without going through

the property

14Millennial consumer o cómo hacer de la necesidad

virtud //

3. My standard is NOW

16

Waiting periods have become a source of anxiety that the user perceives “preventable”Little tolerance to not immediate

Whether as a consumer, user, or customer, it has been standardized the instantaneity as a settled reality, demanding it to all areas and categories of their daily life (from the answer in WhatsApp, to the content access or the delivery of an online purchase).

This instantaneity is also accompanied by the demand for permanent control over the specific situation they are facing and the status from their communication, order or transaction are in every moment: if their message has been received (and read), where their purchase is, how long their taxi will take to arrive, etc...My standard is the RIGHT NOW //

17

The immediate service and instant communication are taken for granted: the expectations have become risk factors in relationships, whether commercial or personal.

Immediacy is a standard for the consumer, but still a difference between companies.

36% of Spaniards left an establishment without buying anything if they find a queue in the checkout

Source: State of Retailing Study-2015

(Epson)

36% Buyers that don't expect more than three seconds before abandoning an e-commerce web or travel

Source: Forrester Consulting on behalf of Akamai Technologies (Online Consumers )

40%

My standard is the RIGHT NOW //

Stress factor that drives and electrifies organizations. Great potential for

innovation accompanied by service attention, POS management and

logistics.

The dictatorship of NOW!

18My standard is the RIGHT NOW

4. Transfer of referents among categories

Directivo responsable servicio Post-VentaEstudio para cliente TCA (2016)

20

They are those companies that provide the best experience, regardless of the sector in which they operate.

The reference is not necessarily the leader in same the category

The standard assessment of a service is no longer the best player in each category: references and requirements are transferred among categories. Thus, disruptive companies are establishing demands requirements, whether in service or technology. Expectations regarding to incorporate innovations are transferred instantly, to every moment of the customer journey.

Likewise, during the product development “the minimal viable product” is a consideration, for the consumer there is a “minimum assessment criteria” among categories.

(...) the consumer does not understand that when they come to our post-selling, they don’t need to have a selection process and a definition of the visit (time, location, type of visit), this is different from what happens when going to Sanitas or when buying a ticket.

I don’t understand how the people over the phone can tell me exactly, each second, the consumption of my mobile data, but when talking about the light, the gas and the water. They need to do “an estimation”Electricity Company CustomerStudy for a TCA client (2016)

Transference of referents among categories //

21

The consumer expects to find best practices of each category in all their consumption.

The meaning of "competitive environment" is expanded

It is in the use of technological solutions where the consumer takes for "granted" and with more intensity the transference: once a device / technology solution provides a significant benefit in a category, it is claimed of the rest of the companies.

They already has it

They will buy it before 12 months

They will buy it in the next 1-3 years

Source: Engaging the Digital Consumer in the New Connected World-2015 (Accenture)

Devices they own and  the intention of acquiring it

1212 17

12 17 11

12

8

17 14

9 1316

9

10

8 14 14

8 12 10

Wearable fitness monitor

SmartWatch

Camera or System of Internet

surveillance Car entertainment system

Smart thermostat

Health device wearable

3D Printer

Personal Drone

40

41

7

417

7376

3814

386

16 13

355

284

16

10

They will buy it in the next 3-5 years

Transference of referents among categories //

A significant disruption of service that transforms the customer experience in

any category, it is requested immediately to all other

Transference among categories

5. From anger to long friendship

24

Facing any issues, the consumer is prepared to the worst

They are not used to take care of the experience in the management of errors.

Only 25% of respondents worldwide said they feel that employees "are on their side".

Investigación global sobre la experiencia del cliente (AchieveGlobal)

25%Consumers and users have accepted errors and problems as part of usual relationship with brands. It is part of the humanization of organizations: fallible, "smelling" the people behind.

At the same time, they have also been used to mismanagement of errors and they got very surprised when the problems are solved with warmth and efficiently.

From annoyance to a long friendship //

25

Management of errors, crucial for an optimal experience.

According to consumers, the best two positive employee behaviors were "apologize" (28% of comments) and "be polite" (17%).

Global Reseacrh about customer experience (AchieveGlobal - 2013)

Sometimes, an adequate resolution “at the right moment", with an appropriate emotional tone might mean a really differential added value in the customer experience and on the brand image, especially for those companies that are not leaders in their category (in the case of leaders, the degree of discomfort by the incidence is not lowered despite great attention).

The two main negative employee behaviors that were mentioned: "being rude" (23% of comments) and give an "automatic or false" response (17%).

From annoyance to a long friendship //

The number of incidents does not necessarily affect satisfaction with the

company: companies with a larger number of incidents may have a better

NPS, thanks to their management of incidents.

An adequate error management can improve the NPS

6. Customer Centric: The paradox of enterprises; the most vulnerable employees are also the protagonists.

28

The customer- centric attitude involves a shot of stress in organizations that lies especially in the human touch point of direct contact with customers (attention & commercial)

The Customer-Centric enterprises place a great strain on the front line of service

Consumers and their demands to organizations ( the standard of

the Now, level of demand transferred from other

categories, relevance of the management of incidence)

operate as a stress factor that tense the companies, take them to the limit, blowing their seams

and question both, organizational structures as processes.

And that stress is managed essentially from the profiles of

first line.

The easy and routine things will not need

qualified staff, but P2P interactions will become more sophisticated, and

companies should be aware and having

adequate staff to handle these situations.

Achieving this symbiosis requires people who do

actually have certain skills, but also requires

that companies give them a special

treatment, invest in their development and really place them in the "front

line" within their organizations.

Fuente: Laura Abarquero (Director Client Strategy.

ING Spain&Portugal)

Customer Centric: The paradox of the enterprises //

29

The responsibility to provide optimal customer experience lies on highly precarious profiles, outsourcing, worse working conditions, high turnover, etc.

The responsibility lies with the more precarious profiles

Average annual salary in Spain (2013) and variation in acquisitive power over the previous year

80.330€Senior Executive Mid-level managers

36.552€Employees

21.307€

Source: Evolución de las retribuciones durante la crisis 2007-2014 (ICSA y EADA Business School)

+3,42% - 8,56% - 4,72%

Customer-Centric: The paradox of the enterprises //

The most vulnerable employees, the protagonists. The commitment for the

"first line" is not limited to the design of attention processes, onboarding or sale:

it also involves a professional revaluation of the profiles in contact with

the customer

Customer-Centric: The paradox of

enterprises

7. Educated in comparison

32

In certain sectors (insurance, mortgages, flights, ...) where the comparators have achieved to place themselves as reference mediators, the consumers have learnt to assess the offer, exclusively by the consumer contemplated criteria, where the price is central. This dynamic standardizes the market and impacts on shaping the offer: companies decide to develop a "minimum comparable product" that allows contrast with other competitors in the category from the available platforms.

Insurances buyer

Relevant when the consumer is in front of products that are difficult to understand (insurance, mortgages, ...) or products whose offer is unmanageable (cars, travel, ...).

Buyers: Solving the complexity of the decision at the same time that they provide standardization to the market

Educated in comparison

rastreator.com

momondo.es

Travel Buyer

33

The "Education" of consumers that has been driven by comparators force the companies to deploy a progressive enhancement of the product when they already have the consumer in their environment (lead) or when is already a customer: is the moment of the ancillary, cross selling or loyalty programs.

At the same time, new products with disruptive character that are launched using categories set by comparators does not face only the acknowledge of the consumer but also the standardizing logic of the comparison. Educated in comparison //

Also, they hamper the launch of disruptive products because of difficulties in introducing new assessment criteria.

Comparators tend to force an initial simplification of the product

Usage-Based Insurance: Global Study

(Ptolemus - 2016)

Vehicle policy app that varies depending

on driving habitsAdventure Travel agency flexible, personalized and oriented to the

integration with destination (public transport, family accommodation, ...)

pasonoroeste.es

They solve the complexity of decision making of user, while they assume a

great challenge to innovation in product configuration.

Comparators and their “teachings”

8. Self-Learning as an opportunity for brands

36

The result of three fundamental realities: the lower relevance of academic credentials, availability and accessibility to micro-content

The impulse and the self-learning boom

Internet has made cheaper and universal the access to learning environments. This accessibility, particularly used by younger people, often takes place outside apart from the classical education institutions, without taking in consideration the "credentials" that formally education provides.

Self-Learning as opportunity for brands//

4,8

La sociedad de la información en España (Fundación Telefónica - 2014)

Media

10

20

30

40

50

De 14 a 19

años

De 20 a 24

años

De 25 a 34

años

De 35 a 44

años

De 45 a 54

años

De 55 a 64

años

De 65 a 99

años

28,537,2

33,1 33,132,6

26,5

14,7

4,8

People over 14 years who have made online courses from May to July 2014

37

Brands can play their role within self-learning environments

Learning environments (Youtube, MOOC, blogs ...) are spaces of access to valuable content, propelled content equally, educational organisms..., but where the brands and organizations can play an important role is from educational programs to micro-contents associated to their products / services.

Source: VII Estudio Anual de Redes Socialeshttp://goo.gl/mlfGtG

(The Cocktail Analysis- 2015)

www.google.es/landing/activate

miriadax.net

Self-Learning as opportunity for brands//

The consumer / citizen self-learning attitude facilitates a relationship with brands / organizations supported on a proposal content, whether micro, or

even "study plans" of certain ambition.

Brands as learning facilitators

9. The metamorphosis of low cost enterprises

40

The saturation of Low Cost players makes that the affine consumer, without abandoning the centrality of price, also contemplates criteria such as customer experience or quality of service / product

Enriching assessment criteria

The Low Cost's consumer (almost all, in at least one category) has learned to sophisticate its relationship with a conglomerate of companies that compete with the same model (in any category there are several LowCost). Whether by this sophistication of the relationship or by a more economic breathing space, begins to be receptive to use new selection criteria in addition to the price that is now taken for granted.

The metamorphosis of low cost enterprises//

Satisfaction with operator services (0-100)

Source: encuesta “Satisfacción con los operadores de telefonía” (OCU-2014)

Voice

co

vera

ge

Data

Co

vera

ge

Cust

ome

r sup

port

Invo

icing

SATI

SFAC

TIO

N

86787881

7674

7368

7769687162

5956

61

8976737170

5552

57

9183747474

5555

56

8577767470

6462

67

41

The expectations are higher: they take for granted the price, but some specific brand criteria appear, of shopping experience or service, of product configuration ...

Being cheap is not enough anymore

Part of the exercise of Low Cost companies is to identify the possible

existence of sub-segments within a

target that has been maturing relationship and thus fragmenting.

Source: Libremercado.com - 10/06/2015 (http://goo.gl/WDNn9v)

Source:02B.com - 10/01/2016 (http://goo.gl/JIHhJd)

Ryanair bets for a "most stylish" cabin.

DIA creates a new brand aimed at fresh produce

The metamorphosis of low cost enterprises //

The new challenge for Low Cost lies on identifying and implementing those

elements of value for a client, which in turn, has become sophisticated and

diversified.

The expectations are higher, being

cheap is not enough anymore.

10. Internet privacy: from the fear of Big Brother to the market of the data

44

Cookies have indicated to the consumer the relevance of their digital behavior.

From suspicion to value

In recent years, several regulatory developments have been imposed as mandatory warns for users about the capture of their browsing data through cookies.This, along with the expansion and standardization of services based on navigation knowledge, which end up being perceived by the consumer, have favored the user become aware of itself and their data as a business object. Internet privacy: from the fear of Big Brother to the market of the

data //

Spain

30

40

50

60

70

80

90

100

20

10

Italy

Total Europe

Netherlands

Germany

France

UK

Denmark

% - Think that their personal data have economic value

State of Privacy Report (Symantec - 2015)

45

Since special offers, personalized services or an extremely individualized attention.

The consumer demands a tangible performance at the data capture

Likewise, the consumer requires maintain the control of their information in order to respond to failures or dissatisfaction of their expectations with the withdrawal of concessions.

Fuente: Transformación digital en banca: la perspectiva del consumidor (The Cocktail Analysis - 2015)http://goo.gl/gjcfWQ

Promotions based on their use of the

card, in establishments

they usually visit

Investment products

based on the customer

data

Home insurance if

they just take out a mortgage

% - Spaniards respondents very interested that their bank would offer

them proactively

51%28%

Car insurance if they just take out a loan to purchase a vehicle

22%23%

Internet privacy: from the fear of Big Brother to the market of the data //

The consumer has not only lost the "fear of being watched”, but also demands

"the best deal" in exchange for its data.

The consumer willing to negotiate for its information

11. Don’t ask me what you already know

48

This is a derivative of the learning of "data market" and "standard of right now" if you know me don’t make me wait or repeat information

If you know me… then anticipate

The user is accustomed to receive any kind of offers and advertising adapted to its profile (needs and demands), its hobbies and even its navigation.

In occasions they get upset if they need to introduce profiles, interests or product preference settings in sites they have previously visited.

Don’t ask me what you already know //

Save data of its last purchasesQue guarde los datos de mis últimas compras

5 10

15

20

25

30

35

40

50

45

55

60

65

Need to register o the siteTener que registrarme en la páginaReceive personalized offers regarding my purchases

That all my searches are saved so, while I navigate I can see related advertising

% - Spanish respondents report they agree or strongly agree with each of these aspects of

eCommerce

Source: encuesta “Los hábitos de compra online de los consumidores españoles”

(IAB - 2015)

49

Transverse to all categories: financial institutions, retailers, the hotel chain where I usually stay, the usual websites...

It is recognized the interest for the anticipation

Beyond the benefits of the personalized offers, the claim is anticipate the consumer desires, translated in the customization of the product, service and navigation (when the interaction is digital). Customization

will be more important for me

in the coming years

Personalization and targeted

offers encourage my brand loyalty

I am glad that the brands register my purchase habits in order to give me a tailored advertising and personalized

offers

% - Spanish respondents that report they agree with the following statements

Source: State of Retailing Study (Epson - 2015)

79% 73% 73%

Don’t ask me what you already know //

Anticipation to consumer desires and needs becomes a structuring element of

a good customer experience.

If you know me, anticipate my

desires...

12. The Micro-moments of the smartphone: shuttles or self-sufficient?

52

The Smartphone is the Hub which pivots presence management and relationship to the digital realm.

The Smartphone, the device by excellence in micro-moments

The Smartphone has become and consolidated as the device by excellence when it is talking about filling some “micro-moments” (or no-moments, those which happen among tasks or activities: displacements, waitings, short breaks…). Those instants are dedicated in the accomplishment of some tasks that do not need great concentration neither imply great compromise: consultations, locations, communication, little purchases or micro transactions...

Occasionally, more demanding activities are conditioned to time disposal and of other device.

51% 41% 41%

36% 33% 26%

Among those who see content on smartphone, moments and places that access to it.

Out of home; in transportation, during

meal time, ...

At home when I can not use the TV (in bed, in the

kitchen, ...)

On vacations or weekends out of home

At home when the TV is being used by others

At home, even if the TV is not being used

At other people home

Source: VIII Oleada Televidente (The Cocktail Analysis - 205)

http://goo.gl/1ql9q5

The Micro-moments of the smartphone: shuttles or self-sufficient? //

53

The understanding of needs (intentions) and contexts of use should guide the design of the service and the role of the Smartphone: starting point or complete experience.

The Smartphone, the starting point

A starting point always determines the route: the Smartphone is the

first contact to activities that imply greater concentration and

commitment (contracting,

assessments ...), whose design should include an initial start on the mobile

device even if they are concluded in another

https://www.youtube.com/watch?v=QvMqzRilvnY

Another alternative in terms of design is to facilitate at maximum processes

that can be solved from the Smarthpone (click & close)

These micro-moments are critical touch points within the current

customer journey, and when they are together, ultimately determine how the

trip ends up.

Source: Micro-Moments: your guide to winning the shift to mibile (Google - 2015)

https://goo.gl/6aXaH2

Contexto

Inmediatez

Intención

MICRO MOMENTO

The Micro-moments of the smartphone: shuttles or self-sufficient? //

1) Designing for "guiding" its closure in other device different than where

initiate the process2) 2) or simplify at maximum to finalize

them in the Smartphone itself.

Strategies at the micro-moments

Thank you.

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