Welcome to Trendline, a bi-monthly newsletter created in partnership between The Gettys Group Companies and TrendWatching. Here we examine TrendWatching’s global insights into numerous industries through the hospitality lens, considering the possible implications and applications to our industry.
In each issue, we will focus on one of TrendWatching’s Mega-Trends—their comprehensive list of the ways in which human needs and expectations are changing while defining modern consumerism.
While our global community actively follows the ongoing coronavirus pandemic, we think it’s never too soon to start considering its implications on consumer expectations and the hospitality industry—not only now as we rapidly adjust to a new normal, but in tomorrow’s “future normal”.
As we take a longer view, the significance of brand loyalty can’t be understated. Although hospitality and travel are among the industries that have been hardest hit, our social isolation isn’t permanent; when consumers begin traveling again, we should expect their existing brand loyalties to play a role in their booking decisions.
In this issue, we’ll examine a trend that influences how consumers perceive the value of a brand: Pricing Pandemonium, the fluidity of price and value. Factors like easy, on-demand price comparison and dynamic, targeted promotions are causing consumers to rethink the amount they might expect to pay for goods and services—resulting in a market where a product’s price may fluctuate throughout the day, or where the price for an item on a store’s shelf may not match the price shown in that brand’s app.
Several key factors are driving this change in consumer expectations about the relationship between price and value:
The availability of real-time information facilitates easy, immediate price comparisons across e- and m-commerce platforms, and—as a result—brick-and-mortar stores have to keep up, too.
Brands seek to beat their competition by tailoring offers to individuals’ in-the-moment needs and desires, leading to a consumer expectation that brands will understand and cater to their unique lifestyle.
What Expedia does for booking travel, scores of aggregator sites are now doing for all varieties of consumer goods, adding a new party that facilitates comparison shopping into the relationship between provider and consumer.
Today’s consumers are primed for new methods of trading value; many who used to rely on cash transactions now lead increasingly cashless lifestyles, and cryptocurrencies’ new offerings and regulations continually make news—even if the currencies themselves have yet to be widely adopted by consumers.
Now, we’re also starting to see currency systems that are based upon brand value, a trend that the 2020 Trend Report dubbed Brand Coins. In flexible rewards programs, points are so widely redeemable that they’re akin to their own liquid currency—creating a highly incentivized method of driving brand loyalty and redefining the idea of value. As we advise hotel brands and owners in the creation of tomorrow’s guest experiences, we ask two key questions about this trend:
In order to effectively answer these questions, we must frame them with what matters most to consumers: product quality.
The Gettys Group Companies: It seems like the brand loyalty landscape has become more confusing as more companies have created their own rewards programs, or as mergers force the consolidation of popular rewards programs—such as Marriott and Starwood, or American and TWA. Redemption is confusing, programs are expensive to brands, costs are passed along to members and it’s simply difficult to calculate their actual value. What’s one of the most important factors in a brand loyalty program today?
TrendWatching: The single most valuable attribute is trust: trust in the brand, trust that is earned through offering fair value for that brand loyalty. Just 23% of adults in the U.S. trust Facebook with their personal info, which explains why only 5% express any level of interest in Libra.
Facebook Introduces Libra: A new subsidiary of the company, Calibra, will provide financial services based upon the stablecoin Libra, a new class of open-source cryptocurrency that will be backed by a financial reserve.
The Gettys Group Companies: In the hotel industry, loyalty points are typically earned through hotel stays (or credit cards affiliated with the hotel brand) and also redeemed with subsequent hotel stays; we feel that there’s an opportunity to be far more creative here. What inspiration can we find from brands in other industries that offer rewards beyond discounts, upgrades or freebies?
TrendWatching: In Ireland, Jaguar Land Rover is experimenting with software that rewards drivers who share useful data with IOTA. In exchange for IOTA cryptocurrency that can be used to pay for parking, coffee or charging electric vehicles, users are encouraged to take part in ride-sharing schemes and to report road conditions to navigation providers and local authorities.
IOTA: Designed to execute transactions between devices and the Internet of Things, IOTA is an innovative cryptocurrency project that’s built on a data network called The Tangle instead of blockchain.
The Gettys Group Companies: We’re intrigued by the possibilities of rewarding hotel guests in creative ways while they are on property during a stay. Guests at the highest loyalty levels have come to expect rewards that are nice, yet impersonal: food-and-beverage credits, upgrades to better rooms or access to exclusive hotel areas like lounges or cabanas. How soon before we see AI-driven optionality that allows guests to choose their preferred form of reward—whether they receive that reward on property, or it entices future brand loyalty?
TrendWatching: You may already be a part of Delta’s SkyMiles program and familiar with the optionality they have built into their rewards for Medallion Members, the highest tier of loyalty. Members are empowered to select their most valuable reward format—whether it’s related to upgrades, points multipliers, lounge access, travel vouchers or gifting of status to someone else. They can tailor their rewards to be those that are most impactful to them as individuals.
Delta SkyMiles: Members accumulate points that do not expire and can be used with any SkyTeam partner airline.
TrendWatching: There are many examples of airline rewards programs that allow miles to be redeemed in another sector—like car rental or hotel stays—but none of these programs are nearly as easy to use as some new mobile solutions. Why isn’t redeeming airline points as easy as sending a friend $10 on Venmo? Why can’t you check your points balance in the same way you check your health stats on your Apple Watch?
As brands and their intermediaries compete to control relationships with consumers through a tsunami of offers—aimed at consumers at every level of loyalty—those who are most loyal to these brands expect more recognition, personalization and trustworthiness in return. This is leading to creation of unique, proprietary Brand Coins—or proprietary digital currencies—that allow brands to optimize their control of—and value derived from—their relationships with their loyalists.
As the hospitality industry considers the evolution their loyalty programs, brands will need to consider increasingly unique ways to improve liquidity of rewards, continue the process of building trust with their most loyal and valuable guests and imagine creative new methods for their guests to earn and redeem points.
For a complete list of Mega-Trends and more examples of trends being spotted around the world, please visit trendwatching.com.
Trendline Issue 06 / Ephemeral
As a scarce commodity, consumers’ time needs to deliver maximum value—which sometimes means speeding through a tedious experience, and at other times, relishing a fleeting experience.
How can hospitality brands support the ever-increasing need for guest experiences to contract or expand in time (or at least appear to)?