Last year, IGT partnered with Foresight Factory to predict the major consumer trends for 2018. Ahead of our new predictions for 2019 (check the blog for this report in the new year), let’s look back about how some of those predictions developed.
All statistics and research used in this post are courtesy of Foresight Factory.
Trends that are in the mainstream
Last year’s prediction: “Quest to Purchase - During the past decade, companies focused their efforts on making transactions seamless and removing any barriers on the path to purchase. Consumers are now used to buying things with one click and zero purchasing delay. However, there is a trend toward ‘elective barriers to purchase,’ suggesting that many consumers will welcome the opportunity to work to receive their favorite brand.”
Year-end assessment: In 2018, consumer appetite for this trend stayed strong. On average, 40 percent of APAC (Asia-Pacific) consumers say that they aspire to be more “open to new challenges,” as do 35 percent of European consumers. In 2017, it was 40 percent APAC and 33 percent in Europe.
One example of brand innovation came in July 2018. The North Face®, an outdoor product company, opened a pop-up shop in the Italian Alps, only reachable on foot after a two-hour hike. Open for eight days, the alpine pop-up gave visitors a chance to buy iconic collectors’ pieces, donated by notable explorers. This offered dedicated fans the chance to buy one-off items.
This trend is broadening and entering the mainstream. In an age of unparalleled convenience and access, managed scarcity and exclusivity whets consumer appetites.
Action: Invite players to engage more by offering them new types of pre-play challenges, such as tasks, puzzles, and treasure hunts.
Last year’s prediction: “Harnessing the free-range shopper – With an abundance of choice and enticements available, consumers have been demanding lightweight commitment in their buying relationships for some time. In 2018, consumers will seriously review long-term and overly complex commercial entanglements. Instead of complex commitments with pages of fine print to read, terms and conditions will become simpler and emphasize ease of both entry and departure.”
Year-end assessment: This trend is strengthening. In 2017, 46 percent of weekly lottery players in Great Britain (44 percent total population average) agreed that they have “actively avoided buying a product or service in the past because the contract tied me in for a long period of time.” In 2018, agreement in Britain has jumped to 60 percent of weekly lottery players (55 percent average).
New innovation in the UK reflects this. In June 2018, Vodafone, a British telecommunications conglomerate, announced that its customers will be allowed to leave new contracts penalty-free up to 30 days from joining, for any reason. Originally, the cooling-off period was the mandatory 14 days, but Vodafone is seeking to improve its customer service ratings by acting on the “free-range” trend.
Action: Provide players with more opportunities to flex their long-term arrangements. An opportunity to pause a direct debit, or increase participation when a jackpot is rolling, would potentially retain a player who might otherwise have opted out.
This trend is mainstreaming. It is part of the larger shift in the consumer landscape – a future where flexibility and control are the core drivers of long-term loyalty.
Last year’s prediction: “Fine to be Fallible – The world is increasingly at ease with the notion that failure is a necessary prerequisite to success and an acceptable consequence of being human.”
Year-end assessment: In 2017, an average 68 percent of lottery players in Germany, Great Britain, Sweden, China, and the U.S. agreed that they openly admit to their failings This figure was lowest in China (61 percent) and highest in the U.S. (74 percent). Across markets, the level of agreement is stable, with China and the U.S. still the furthest apart. (In 2018, 58 percent of weekly lottery players in China say that they openly admit to their failings, versus 76 percent of weekly lottery players in the U.S.)
Brands are messaging that it is okay to fail as a prerequisite to success. For example, Nissan partnered with Vice Australia, an online publication, to create a video series called “Illuminated.” The videos follow two themes: Mind and Matter. Mind examines the psychological blocks Millennials face such as fear of failure, while Matter shares short masterclasses. Both themes explore the hurdles faced by young people in their careers, and demonstrate how technology and psychology can help them to pursue their dreams.
Action: Consumers are aware of the odds of winning a jackpot. In IGT’s Attracting New Players 2018 research study, “the odds of winning are too long” was found to be one of the primary barriers to play. This trend invites lotteries to re-think communications centered only on the big win and offer a holistic message which includes the ritual and excitement of taking part, the anticipation of the draw, and the support of good causes.
This trend is in the mainstream, and it will continue to play a part in how brands authentically communicate with consumers.
Trends that are still building momentum
Last year’s prediction: “Custom at all costs – Consumers remain extremely price-sensitive and continue to seek the best deals possible at every touchpoint. Price flexibility remains a key and determining feature of the consumer landscape, and in 2018 and beyond, there will be a growing tendency towards flexible, time-sensitive, lifestyle and lifestage-personalized pricing models to differentiate and entice.”
Year-end assessment: Consumers’ awareness of price differences and actions to maximize have remained strong. In 2017 and 2018, the global average is 66 percent for lottery players who look up prices / use a price comparison website at least weekly.
There hasn’t been a corresponding widespread move by retailers to more price personalization to suit consumers’ needs, but brands are still innovating in this direction. Retail formats that enable personalized pricing already exist but are not yet the norm. In Amazon’s 4-Star brick-and-mortar store, price tags for items are on digital tags that can be updated dynamically. In the Amazon Go checkout-free store, prices and discounts could be tailored to each shopper’s account as they scan items with their phone.
Action: For lotteries, opportunity may lie in offering players the optimal game or bundle of games to suit their preferences on any particular occasion, thereby maximizing their odds of winning or offering the biggest potential win for the stake they have available.
Artificial Intelligence (AI) assistants are now entering the mainstream, and lotteries could offer consumers the ability to discover which lottery product best meets their preferences on a given day. For example, a player could ask their AI assistant, “Which game gives me the best odds of winning over $1 million today?” and receive a recommendation on the optimal game to play. Likewise, a player could ask the AI assistant which lottery game offers the best chance of winning a prize of any amount for a $2 stake.
Last year’s prediction: “Engineered Empathy – ‘Cold’ brands will be given the cold shoulder as the ability to empathize and engage on a human level will become a core and advocacy-building consumer expectation. As consumers seek human, or human-like interactions, the race is on to perfect AI and produce emotionally intelligent bots that can and offer near-human interactions.”
Year-end assessment: Empathy is still desired by consumers and is a popular brand value, but AI metrics have not increased in 2018. However, brands continue to innovate towards more empathetic digital services as usage and acceptance of the voice interface continues to grow.
In August 2018, life insurer Prudential launched LINK, a personalized, direct-to-consumer financial product that offers financial planning and recommendations for insurance, annuities and investments. Through LINK, customers have access to a financial professional by phone, video, online chat or face-to-face at any time.
This is a trend to watch because major technology brands are advancing AI capabilities, and consumer expectations are expected to leap in the near term. Read more about the “AI Leap” in IGT’s 2019 Trends Special Report due to be published in January.
Action: Experiment with new AI technologies and be ready to optimize advances in this technology to create more emotionally rich interactions with players.
Trends that are branching out
Last year’s prediction: “Truth as a Commodity – Truth, trust, and believability are all under serious pressure in a consumer landscape that is developing a healthy disrespect for traditional sources of authority. With a variety of information sources readily at hand, the existence of claim and counter-claim on any given issue means that settled, mainstream truths are in short supply for consumers.”
Year-end assessment: In 2017, Foresight Factory research found that 22 percent of lottery players had used a fact-checking service, and a further 34 percent were interested in doing so. Consumer skepticism of received information is still high. In 2018, 54 percent of global consumers and 58 percent of weekly lottery players say that they find it difficult to know what information to trust online.
Brands are innovating ways to win consumers’ trust. In a continuation of its Real Beauty Pledge, Dove announced in June 2018 that a “No Digital Distortion” mark will appear by early 2019 on all branded content globally – across print, outdoor, in-store, digital and social – to represent that the image has not been distorted.
As with empathy, truth is still desired by consumers, but truth-verifying metrics, especially blockchain-based metrics, are yet to become mainstream practice.
Action: Emphasize fair and secure lottery operations, using data and third-party verifications to assure consumers that they are dealing with a trusted organization. Additionally, and as part of communicating a holistic message, lotteries could explore how their regulated status, stringent security, independent verification, and distribution-fund processes can provide added value to customers, as a new opportunity for engagement.
Last year’s prediction: “Anti-automation – Automation and AI will bring welcome speed and convenience. But it will disrupt employment and leisure, too. There has been growing fear of the disruption that automation and evolving artificial intelligence will bring. Will we see the political, consumer, and commercial resistance to our much-heralded automated future?”
Year-end assessment: 2018 has not seen many brand innovations boasting of human-first products and workforces. Automation is still replacing many blue-collar jobs, but AI has not yet displaced a similar portion of white-collar jobs. There are, however, the beginnings of a “techlash,” directed at how tech companies use consumers’ data, and the addictive nature of certain technology and applications.
In response, Apple is giving consumers tools to set sensible usage limits and habits on their devices, and Nokia has brought back “old-school” back-to-basics handsets for consumers seeking an escape from the digital overload. The Nokia 3310 Feature Phone includes all the features the device had upon its first release in 2000.
Action: Emphasize the human and transformational aspects of lottery, from players and sellers to the recipients of funding for good causes, and the controls that are offered to players to allow them to remain in control of their play behavior.