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Alexander Turtschan

SXSW 2024: Addressing the Consumers of Tomorrow

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One of the most fun things about SXSW is that even if you come for a specific type of insight – in our case, anything related to marketing, technology and (digital) culture – the sheer length of the conference allows you to see a lot of different things. Today, NASA hosted an entertaining opening session featuring an all-female panel of NASA scientists and two astronauts with a live video feed from the ISS – there are certainly less inspiring ways to start the day.

Future Consumers

More down-to-earth in the truest sense of the word, but no less insightful, was a session hosted by Joëlle de Montgolfier and Leah Johns of Bain & Company, who took the audience through their Beyond Trends report. Against the backdrop of our rapidly changing society, driven on the one hand by technological breakthroughs and, on the other, by the ecological shifts brought about by climate change, they outlined eight longer-term shifts in consumer behaviour at macro and micro levels; as well as possible solutions for how business leaders can and should respond.

  • Global and local migration will drastically change our cities and living spaces and requires new ways of thinking about the digitalization of essential services such as healthcare or the automation of retail spaces. 
  • The Ageing of societies and the decline of the nuclear family as the dominant social structure in Western societies will lead to various new services for the older, yet active part of the population in the fields of leisure, work, and education. But much of the infrastructure designed around the nuclear family will also have to change, from transport to restaurants and shopping.
  • With an ageing workforce and a much greater willingness of younger generations to change careers, new working models will need to be developed.
  • A steadily growing part of society is becoming more eco-conscious, which is having a dramatic impact on consumption. There’s a stronger focus on DIY and reducing the carbon footprint of travel. Avoiding unnecessary purchases is also a challenge for existing goods and services.
  • With advances in AI and robotics, there is a growing appetite to automate mundane tasks with technology.
  • Consumers of the future will also think differently about health, heavily influenced by the technology available to them – from wearables to track fitness, to ways and means to improve health, performance, and ageing, there’s a wealth of new business opportunities to be found. 
  • Last but not least, emotional support and well-being is becoming a key challenge for our societies as loneliness increases and shared rituals and places of community decline. New sources of companionship and happiness in services and goods can play a key role in solving this issue. 

Designing for tomorrow’s consumers

Jake Brody from Accenture Song took the stage on Tuesday afternoon to outline five trends in designing brand communication in a rapidly changing environment, affected by economic uncertainty, social strife, new technologies and climate change. 

Economic challenges have led many brands to increase prices, often in non-transparent ways – from shrinkflation, to reducing product or service quality – leading consumers to fall out of love with their favourite brands. Regaining consumer trust and providing value, while carefully balancing cost reduction, will be a key challenge for marketing. One possible solution: AI. 

Generative AI will have a drastic influence on every consumer-brand interface. Marketers must figure out ways to preserve their brands’ identities while relying heavily on AI-powered hyper-personalisation, which increases consumer satisfaction through a higher level of feeling understood and cared for. 

Further relying on the latest technological advances comes with its own set of challenges. Especially as consumers grow increasingly weary of the fast-moving tech hypes, from metaverse to AI to spatial computing. Changes feel too fast and people fear that technology isn’t always beneficial to their wellbeing. For marketers, this means putting the consumer’s best interests first when deciding which technologies to implement in communications and brand experiences. 

Another interesting point raised by Brody: Audiences as well as creators and creatives, are becoming increasingly bored and limited by the prevalence of efficiency-driven content and creation. Consumers feel everything looks and feels the same – a dangerous path for brands that lose their ability to differentiate themselves. One possible solution is to set aside what Brody calls a lunacy budget for risky and creative endeavours that spark curiosity and excitement. 

Introducing Generation Alpha

Discussing the future consumer inevitably leads us to Generation Alpha, the emerging key audience born between 2013 and 2024. Joanna Piacenza of Morning Consult offered compelling insights into this very young audience group, highlighting the profound influence of their millennial parents’ experiences. From economic recessions to a global pandemic and the digital revolution: Gen Alpha is being raised during many once-in-a-lifetime events that heavily influence their upbringing. Their parents are shaping a new generation with strikingly different characteristics from previous generations.

Interesting from a marketing point of view: Gen Alpha develops brand loyalty from a very young age, especially for groceries, snacks and entertainment programmes. This demonstrates their strong influence on decisions within the family dynamic, as they are actively involved in the decision-making process by their parents. This influence even extends to travelling to a destination that the child has seen, for example, on TV. Raised by financially cautious parents (who often openly discuss their household finances with their children), Gen Alpha shows early digital and financial savviness as well as brand consciousness. With a widespread use of tablets and an emerging interest in VR (49% of Gen Alphas own a tablet while 12% already own a VR set), digital immersion is in their DNA.

For brands, connecting with Gen Alpha is challenging and requires an understanding of their digital-first nature and the values they have received from their millennial parents. Early involvement in decision-making means Alphas will have strong opinions, from societal topics to brands. Alpha’s online habits are being formed now, and the habits they form are likely to stay with them for a long time. Acknowledging this dynamic is essential for brands to develop strategies that truly resonate with this emerging audience.

This article was first published on Horizont.

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Alexander Turtschan

South by Southwest 2024: Embracing the Unknown

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In the world of SXSW 2024, poetry collides with planetary exploration, AI intersects with the crisis of journalism, and non-obvious thinking reshapes brand strategy. In Austin, the next crisis, breakthrough trends and opportunities are just around the corner – where innovation meets inspiration at the intersection of art and science.

What would one expect from the opening session of one of the world’s most important innovation and entertainment conferences in 2024? Perhaps discussions about how AI is at the heart of both our challenges and our solutions. But SXSW is a departure from the norm. This year’s event kicked off with two remarkable women from very different fields at the intersection of art and science.

Ada Limón, the United States Poet Laureate, and Dr. Lori Glaze, Director of NASA’s Planetary Science Division, took the stage to discuss NASA’s Europa Clipper mission to explore Europa, one of Jupiter’s moons. The mission is unique as it will transport scientific instruments along with a poetic message to humanity penned by Limón and accompanied by over 2.5 million signatures as part of NASA’s “Message in a Bottle” Campaign.

The conversation largely revolved around topics that were deeply personal to both women: For Lori Glaze, the pursuit of scientific truths lies beyond our ‘small blue dot’ known as Earth; for Ada Limón, the search for answers works through poetry. Intriguingly, their processes are quite similar. Comfort in the unknown, recognising the grounding, uplifting, and inspiring nature of uncertainty, and embracing the journey without knowing the destination, all resonate deeply in these uncertain times.

Breakthrough Technologies and the Journalism Crisis

Another highlight for entirely different reasons was the session on the “10 Breakthrough Technologies of 2024” featuring Elizabeth Bramson-Boudreau from MIT Technology Review. The technologies presented, while expected, included “AI for Everything” at the top, followed by Apple’s Vision Pro, and a mix of advancements in medicine (weight-loss drugs, gene-editing treatments), green energy (high-efficiency solar cells, heat pumps), and computing (from chiplets to exascale computers).

However, Bramson-Boudreau’s fervent introduction about the dire state of media and journalism worldwide stole the spotlight. She described it as an extinction-level event for the industry, highlighting mass layoffs, the closure of numerous established publications, significant cuts in science and technology reporting, and the acceleration of advertising budgets moving towards major platforms. This trend poses a severe threat to the future of society. According to a recent study by the Pew Research Center, the number of Americans who believe that science has a positive impact on society is declining. This is alarming because tackling the pressing challenges of our time, from regulating AI to mitigating climate change, requires an informed and educated public.

This moment calls for advertisers and media agencies to extend their sustainability efforts to include social responsibility, emphasising investment in high-quality news outlets.

Non-obvious thinking in brand strategy 

In the realm of innovation and a changing world, it is often the unexpected twists and overlooked details that lead to breakthrough changes. This was exemplified by keynote speaker Rohit Bhargava, who shared his transformative journey: An unattended book signing in Singapore turned into a pivotal moment when he met a legendary movie producer, who challenged him to look beyond the obvious and embark on a journey of discovery, tackling human issues with non-obvious thinking.

Bhargava, the founder of the Non-Obvious Company and a bestselling author, established his company to promote non-obvious thinking – to notice the small, often missed details. In this year’s featured session at SXSW, he highlighted how conventional thinking exacerbates human problems: the increase of loneliness and anxiety in a work-from-home era that limits diverse interactions; the overwhelming overload of choices in every aspect of life; and the diminishing sense of purpose and motivation.

To address these challenges, Bhargava introduced key elements of non-obvious thinking that can be integrated into our daily lives. He suggested that simple actions, like breathing correctly, can enhance creativity and foster innovation. He also emphasised the importance of accepting multiple correct answers simultaneously, avoiding the stress of searching for a single solution.

True to his reputation as an exceptional storyteller, Bhargava closed the session with the story of the Fosbury Flop, a revolutionary technique from the 1968 Olympics that transformed the high jump. This change was sparked by a small shift in perspective – the recognition of the potential of new landing materials – by an athlete who noticed what others did not. It’s in these moments of clarity and creativity, when the conventional gives way to the extraordinary, that non-obvious thinkers have the power to change the world.

The Transition Generation: Emerging Tech Trends 2024

This year’s SXSW may have boasted royal visitors like Meghan, Duchess of Sussex, and Prince Harry, but the real queen of Austin remains Amy Webb, CEO and founder of the Future Today Institute, who presented the Emerging Tech Trends Report 2024.

Unsurprisingly, (Generative) AI was a focal point of the report, seen as a general-purpose technology capable of transforming business and society as fundamentally as the steam engine, electricity and the internet did in the past. However, this transition is distinguished by the simultaneous emergence of two other technology fields: The Connected Ecosystem of Things and Biotechnology. According to Webb, these three general-purpose technologies will initiate a new technology super cycle that will impact every aspect of our lives and redefine our existence.

Yet this monumental change is accompanied by fear, uncertainty and doubt, especially among business and political leaders. The natural tendency towards shorter planning cycles in response to unexpected disruptions contradicts the essential need for strategic long-term planning to maintain control and shape the future.

AI, dubbed the “Everything Engine,” underpins this tech super-cycle. Large Language Models are currently leading the AI wave, but little progress has been made over the year in addressing bias and accountability issues, as speed and scale prove more lucrative for businesses than ethical considerations.

The evolution of AI will transcend language; Large Action Models, capable of predicting next actions based on rich data from sensors, wearables, and other connected devices, represent the next frontier of Generative AI.

First published in Horizont.

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Alexander Turtschan

SXSW 2023 Day 5: Brand Science

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Last recap daily for SXSW 2023 with a couple of great sessions on marketing and pretty pictures from space! Usually, Tuesdays at SXSW see the attendance for the interactive tracks going down, with the music tracks and showcases ramping up – not so this year, every session we attended was completely packed.

I think SXSW will be very, very happy with the attendance this year, after the dramatic decrease of visitors in 2022. At times it felt like the crazy days of 2018 and 2019, it casts a positive outlook on the coming years. More attendees mean more attention from high profile speakers, visitors and brands what keeps the conference as relevant as it is. I think that’s worth the queue times. 

The future of marketing is all about convergence

The day started with a session full of high-profile marketeers on the biggest stage. Conny Braams from Unilever, Jeremi Gorman from Netflix and Tim Mapes from Delta Airlines discussed current trends and developments in marketing strategies for the FCMG, entertainment and service industry. 

I already mentioned in previous recaps this year that convergence was a big meta trend in many fields, with the most interesting things happening at the intersections of different areas. It’s the same in marketing. Conny Braams stated that the way forward for not only FMCG brands was the increased integration between branding, performance and sales. Tackling the challenge of combining brand building while also driving conversion at the same time was the #1 task for marketers and agencies. Unilever’s internal structure already reflects this with a combination of previously separated teams now all working together for the common goal, going as far as adjusting product design for this new reality. 

Tim Mapes from Delta even went one step further – for him, every Delta employee is a brand ambassador and potential brand touchpoint. For Delta, generating first party data through their frequent flyer program with its corresponding app is one central pillar of this strategy – the other one: making the data available to customer facing roles, so consumer facing staff can use it to deliver more authentic and informed interactions with each individual traveller. 

Another big topic of discussion was the rise of retail media: for Unilever retail media is a perfect tool to control the elusive last mile at the store where crucial purchase decisions actually happen – that was previously controlled exclusively by retailers. Digital retail and retail media let’s the brands take much more control here – assuming the interactions with consumers are not purely transactional, but creative and entertaining and brands get access to the data generated. Again, convergence is key for future marketing. 

The five laws of brand science 

My second session of the day was a highly interactive and entertaining talk by Ethan Decker from Applied Brand Science. In his presentation, Decker went over five laws of brand science, that marketers should be aware of – backed by years of research and data. 

He offered an interesting way on how marketers laud customer loyalty as the pinnacle of marketing – despite the fact, that most consumers, for most categories, will buy a repertoire of brands and the more someone buys from a category, the bigger that repertoire gets. For many verticals, it also makes little sense to chase deep consumer connection, because people simply don’t care what their e.g. toilet paper brand of choice does on social media or what their brand purpose might be. 

Decker stated that shoppers are “mental misers”: the average consumer simply is too lazy to deal with hard and complicated questions when making a purchase decision and suggested that marketers should focus on the easy questions shoppers are asking themselves when buying from a category. 

Additionally, when it comes to light / medium / heavy buyers, the curve for almost all brands looks like a banana. High amount of single time / low frequency buyers, very few medium and heavy buyers – negative binomial distribution, or simply: the good old long tail. For growth, market penetration is 5 to 15 times more important than buying frequency according to a study conducted by Bain & Company, so marketing should focus on that lever first. 

Advanced Space Photography 

One thing to love SXSW for: they don’t shy away from giving keynote spots on the biggest stage to topics most of us know very little about. In this case: NASA and an all-female panel of astrophysicists sharing insights on the first few months of operating the James Webb Space Telescope. In addition to showing some of the mind-blowing pictures taken by the JWST in recent months, the panel discussed the massive effort of international collaboration between 14 countries to make this happen, the scientific breakthroughs this already led to and their deep-rooted love for discovery and human curiosity. 

Advertising’s guilty secret

SXSW is a great spot for inspiration and creating new food for thought from various disciplines. But at the end of the day we are still advertisers, so it’s always refreshing to see sessions that speak the truth about our day-to-day work. Today, Welsh advertising expert and CEO of Creature London, Dan Cullen-Shute together with Ivonne Kinder from Avocados from Mexico, gave us exactly that: A critical look at what the advertising business has morphed into, at least at award shows. Looking at the recent Cannes Lion Grand Prix winners, 90% of them were purpose-driven, which of course is a honorable messaging and there’s nothing wrong with that, but often these great award ideas either never reach a broader audience outside or aren’t linked to an equally good media strategy.

Dan spoke many truths today: Advertising is brilliant. We can make things that have genuine cultural touchpoints, boost the economy in needed areas, spark happiness and connect communities. The cherry on top: There are not many other jobs where the level of seriousness and ridiculousness can be the same. It should always be our mission to leave the industry better than we found it, in one way or another, so let’s get back to that: Make people laugh again, create epic things, even be totally ridiculous if appropriate. Get back to the heart of what we do and love – creating awesome stuff that makes brands grow and touches the hearts of our audiences. 

Random observations from Day 5:

  • Props to the SXSW organizers for enabling encore sessions for popular talks – and double props to the speakers of being just as engaging in round 2. 
  • It’s surprisingly hard to find good filming locations at SXSW – unless you want to give your video interview on the latest trends in tech & marketing strong 80s Dallas vibes – as the main color scheme of every conference hotel is beige, even the one built in 2017. 
  • I don’t know if it’s the overall inflation, the fact that Austin has been attracting thousands of highly paid tech workers in recent years or simply SXSW price gauging – but getting food is making your credit card bleed. 
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