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1. STATUS SPHERES

After our coverage of Trendsetting’s report in 2007, we thought it worthwhile to include their report on 2008, some of which makes interesting reading. At the beginning of 2007, our coverage of the report included:

"Here's something trend watchers and other business professionals should be able to agree on: in the end, when dealing with (and selling to) people, everything always comes back to status. In a traditional consumer society, he or she who consumes the most, the best, the coolest, the most expensive, the scarcest or the most popular goods, will typically also gain the most status."

Now, you guessed it: the above will still ring true in 2008, and should be on your mind whenever/wherever in the New Year—when tracking trends, when mapping out new strategies and when coming up with new products and services for your customers. In fact, expect 2008 to be the year in which even more brands realise (if not grudgingly accept) that 'old', mass-era status symbols, from the Audi R8 to the De Beers Talisman Watch Collection are no longer every consumer's wet dream. After all, as mature consumer societies are increasingly dominated by (physical) abundance, by saturation, by experiences, by virtual worlds, by individualism, by participation, by feelings of guilt and concern about the side effects of unbridled consumption, status is to be had in many more ways than leading a lifestyle centred on hoarding as many branded luxury goods as possible.

We've dubbed the above phenomenon STATUS SPHERES: a variety of lifestyles, activities and persuasions, which can be mixed and matched by consumers looking for recognition from various crowds and scenes.

TRADITONAL SPHERE

Traditional consumption is about buying more and/or better stuff than fellow consumers. This is by no means dead. In fact, expect the consumer arena in 2008 to still be about hundreds of millions of consumers who do want to consume more, who do covet all things bling, who do crave in-your-face brands. Oh, and even if (a big if*) conspicuous consumption were ever to subside in mature consumer societies, then count on the emerging middle classes in China,** India, Russia, South Africa, Turkey, Nigeria, Vietnam, Indonesia, Mexico and Brazil to proudly take over the torch. In other words, count on multiple consumption and status arenas to develop simultaneously for years to come.

However, while the rise of the global middle class is as big a story as they come, the rise of high net worth individuals (HNWIs) has an equally significant impact on consumerism. Consider the following numbers, from the 2007 World Wealth Report by Merrill Lynch and Capgemini:

With so much (new) wealth and disposable income around the world, not only is there money to be made from selling premium goods, there’s also a constant need for redefining what constitutes luxury, for what constitutes status in bling-driven consumer societies. If millions have access to the same premium goods, to the same premium brands, these premium offerings lose some of their value, as their entire raison d’être was to offer something that others could not get access to. Scarcity is becoming less scarce and wealth is always relative, leading to actual STATUS DESPAIR among those who are by all means, financially well off.

So in an arena that has become crowded with middle class and high net worth consumers, expect luxury goods to take on more outlandish forms and shapes, at ever-higher costs. Our most recent favourite example of STATUS DESPAIR was Prince Alwaleed bin Talal bin Abdulaziz Al-Saud of Saudi Arabia buying himself a USD 320 million Airbus 380, which for another USD 100+ million will be turned into a 'flying palace' with three bedrooms, private lounges, bathrooms, offices, a steam bath and exercise machines. But even here, commoditisation is threatening the Prince's purchase: Airbus actually expects to sell about 20 VIP versions of the A380.

* As we’ve pointed out many times before, one mistake both trend watchers and brands make all the time, is to assume or pretend that a certain ‘trend’ will affect or be embraced by ALL consumers. No. Remember, in life and in trends: beauty (or ugliness) is in the eye of the beholder.

** The Chinese middle class consists of those people who have a degree of economic independence, but not a great deal of social influence or power. The term often encompasses merchants and professionals, bureaucrats, and some farmers and skilled workers. Definition of middle class in China: managers, professionals, skilled technicians and service workers earning USD 2,500 to USD 10,000 a year each. It is expected to grow from 100 million people in 2005 to 200 million people by 2010, reaching 315 million by 2015. (Source: Insight Bureau.)

TRANSIENT SPHERE

Attractive to consumers who are driven by experiences instead of the fixed—those who are driven by entertainment, by discovery, by fighting boredom, who increasingly live a transient lifestyle, freeing themselves from the hassles of permanent ownership and possessions.
Implications for 2008? An obsession with the here and now, an ever-shorter satisfaction span, and a lust to collect as many experiences and stories as possible, is undermining the perceived value (and thus status) of fixed goods and services.

ONLINE SPHERE

Where to begin? In an online world or virtual world, social status 2.0 is all about who you connect to and who wants to connect to you, tribal-style. It also encompasses status gained from the number of views for one's photos on Flickr, to the number of friends on Facebook, to one's gaming skills and levels (just a snippet: Microsoft's Halo 3 racked up USD 170 million in sales on its first day of availability, making it the hottest-selling title in video game history. Total sales since September 2007: 4+ million copies) to the good looks of one's avatar, to finding out about whatever/wherever on anything before anyone else does.

ECO SPHERE

With the environment finally on the agenda of most powers that be, and millions of consumers now actively trying to greenify their lives, status in the eco-sphere is both more readily available, and increasing in value. A substantial subset of consumers is already bestowing recognition and praise on Prius drivers while scorning SUV owners, and this will only accelerate as even more design-minded and branding-savvy eco-firms push to the forefront in 2008. Make it green, make it effortless, make it visible if not bold if not iconic, and don't hesitate to point out your competitor's polluting alternatives.

GIVING SPHERE

Find us one high-profile billionaire who's not deeply into 'giving' right now. In fact, whether it's giving away your riches, your time, or sharing your (content) creations with total strangers, giving is the new taking. For an excellent overview of the world's most generous philanthropists (trendsetters par excellence!), check out BusinessWeek's recent special on the topic.

PARTICIPATIVE SPHERE

Especially for younger (and younger-at-heart) consumers, participation is the new consumption. For these creative beings, status comes from finding an appreciative audience, which is much the same way brands operate. No wonder that it's becoming increasingly important to hone one's creative skills. Status symbols, make way for STATUS SKILLS?

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