Melanie Howard, Chair, Future Foundation speaks to DMA about what Future Foundation is all about. She shares notes on consumer behaviour patterns that will impact the businesses in Asia in the digital space.
Can you talk in detail about the work that Future Foundation does?
Future Foundation is a consumer insight and futures consultancy that has been researching internationally since 1996 and now covers 24 markets through quantitative research globally. We also conduct qualitative research with leading industry experts, online focus groups and trend-spotters on the spot in more than 50 countries providing constant up-to-the-minute feedback on key trends and the latest commercial innovations of new products and services. The core of our business is an online trends database called nVision for the UK, EU and Global markets, and we have nearly 200 blue chip subscribers globally including brands such as Coca-Cola, HSBC, BBC and Telefónica. To a large extent we are an internet business ourselves. The key output of our service is generating actionable insights that can inspire clients to be more creative by helping them anticipate future consumer needs ahead of their competitors and capitalise on future growth opportunities. We design and deliver many tailor-made workshops to help clients apply insight more effectively in their business.
How do you go about developing these insights?
Defining trends from the array of evidence and ideas that we gather can provide a short-hand way for brands to help consumers resolve the inevitable contradictions in their lives. These contradictions in the consumer world are created by growing aspirations, changing values and access to a wider range of products and services, whilst having only finite resources in terms of time, money and energy with which to satisfy all the competing demands in their daily lives. We are publishing a book this year, called The Big Lie which explores the real basis of the conflicts in consumer decision making and how brands can help resolve these.
We also facilitate a professional insight community that helps us define the Future of Insight, through a series of workshops based on sharing the latest best practice in the area of applying insight more strategically to ensure business success.
What are the current consumer behaviour patterns that are driving brands towards digital marketing?
Digital media and communications are already becoming completely integrated into everyday consumer behaviour in such a way that no brand can 
afford not to be addressing digital marketing as a key component of its interaction with the customer. Whilst the internet and broadband access have been hugely significant, the spread of smartphone and mobile internet in recent years is probably having the biggest impact on purchasing behaviour, allowing people to stay constantly in touch with their key networks, research products and services on the move, and check out the latest recommendations and discounts. Whilst comparing to Western and Nordic Europeans it is still early days for the Asian consumers in interacting actively within the retail environment via their mobile phones, we are seeing a maturing pattern in Asia.
How different are the consumers in Asia?
In many ways the Asian consumers are leading the mobile revolution, we are seeing over 60% of penetration and use of smartphones amongst urban middle-class populations in China, South Korea and India. Attitudes to using mobiles for cashless payments are highly positive and in many ways the lack of existing financial infrastructure is encouraging a more rapid uptake of advanced applications. Women are as advanced as men in using mobile technology throughout the consumer markets in the Asia region. As the Future Foundation’s Chinese trend spotter notes: “Technology like apps on mobile not only bring convenience to life, but it’s also a great helper of working. Meanwhile, as consumption is a necessary part of life, it has permeated the whole life. Women naturally make use of technology as a tool of life.”
How would you rate APAC as a market for luxury brands based on the consumer behaviour here?
Consumers from the APAC region certainly have a strong and growing appetite for luxury goods and services. From the Future Foundation’s global research results, we can see a powerful correlation between growing wealth, optimism in the future and aspirations to possess designer labels and the latest technological devices among these APAC consumers.
Like many other analysts we can confidently predict favourable growth in these two sectors in the near future. There is of course regional differences in terms of what will best fulfil the consumer’s needs for luxury experience. For instance, Japanese and Australian consumers would rather consider going on expensive holiday as the best description of luxury to them, whereas it is living in a nice area for Indian consumers, and wearing designer clothes for Chinese and South Korean consumers.
We will also have to analyse this topic from the angle of future GDP and personal net income growth in the APAC countries. Between 2013 and 2018, the projected percentage increase in real GDP growth per capita is 44% in China, 37% in India and 25% in Indonesia, comparing to around 5% in Western European countries like Portugal, France and Netherlands. It is often observed that consumers from emerging economies with growing spending power will steer towards materialistic possessions before maturing their brand taste and consumption knowledge, and the eventual shift in their spending orientation towards more enrichment-based consumption.
Do give us some examples of how luxury brands are selling in Asia?
There are some interesting examples of ways in which luxury is being offered to consumers in the region. Qvendo is an online shopping club which offers Indian consumers high-end western fashions at discounted prices. Membership of the club is free and the company (which is based in Germany) says it hopes to fill a gap in the Indian market by delivering in-demand western fashions at reduced prices, with typical discounts of up to 60%.New items are added on a weekly basis, typically as part of time-limited sales.
Probably better known is Johnnie Walker’s Whisky House in Shanghai which is intended to serve as an “embassy for whisky culture that involves, educates and inspires its influential guests”. Accessible by invitation only, the house features interiors made from a range of materials and other resources used in the whisky-making process, Inside, visitors are also able to purchase a special 1910 Commemorative Edition - “an ultra exclusive ‘for sale by invitation only’ blend” which is not available anywhere else and which costs £1300.