From 2020 to 2021 - what beckons for Market Research?
The year 2020 moves towards an end - time to look backward, perhaps. But not for me right now, too much stuff that was not good and not digested yet.
So looking ahead: what can we anticipate about 2021 - and what might that mean for the Market Research profession?
Here are three predictions for the coming 12 months.
1. Time to be optimistic.
The overall economic cycle is predicted for a global upswing as early as Q2, spurred on by mass vaccination programmes, a return to normal (if digitally-enhanced) business activities and various Government stimulus programmes.
Economists talk of a range between +5% - +7% in global GDP growth. Some even talk about the roaring 2020s.
If this transpires, it has to be good news for market research and analytics.
Companies particularly in cyclical businesses such as food, entertainment, white goods, even travel and hotels may well enjoy a resurge. Many of these are consumer-driven, and will need to invest in insights to understand the needs and wants of their end-customers post-COVID, if and how underlying expectations have changed in an ongoing explosion of e-commerce and digital delivery.
Then there is the huge shift to more eco-neutral, sustainable business models, with the concommitant need to understand new usage expectations - in bio-fuels, for example, or remote scientific diagnostic approaches.
In the purely consumer realm: high savings ratios in 2020 amongst mature economies have meant that many strata of consumer groups are sitting on unspent cash.
They may well look to spend it once confidence returns. This could fuel growth in all sorts of industries - from more basic commodity areas through to luxury goods.
So many potential upsides. But very much not business as usual for MR.
2. The traditional research industry will continue its bumpy restructuring journey - with a sharp divide between high-value niche segments and a continued rush towards tech-fuelled automation and innovation.
There will likely be a continuation of the current industry shake-out.
Global readers may not have read about the recent closure (announced in December 2020......just before Christmas-to-some or financial year-end to others) of two business offices of Kantar Germany in Bielefeld and Hamburg - as well as the sale of its healthcare business unit to IT healthcare business Cerner. Never heard of them? Me neither - but the sale price was a meagre multiple of annual sales.
Presumably new part-owners Bain Capital are looking to improve profitability as part of an ongoing restructuring exercise. What will be left of the research business is unsure. Data on Kantar sales and profitability in 2020 is hard to come by, buried as it is somewhere within WPP reporting.
But the message is clear: margins needs to improve. Period.
What about the other legacy big guys? The shake-up looks likely to continue.
Gfk and Nielsen are similary controlled by private equity, to varying degrees - with the latter sitting on a considerable pile of debt inherited from well over a decade ago. When the largest MR company in the world commands a share price of Euro 16,- it tells you about future profit expectations - not great.
So maybe data isn't gold after all in this traditional sense, extracted slowly and comparatively labour-intensively and therefore expensively.
Data mining needs to be faster, cheaper and more efficient. This is undoubtedly what is capturing the imagination of investors currently - and will likely spur the growth of analytics and cloud-based data crunching. There are lots of new players out there - often heavily backed by IT companies and private equity.
Splunk is one NASDAQ listed company that looks to use AI to churn and make sense of huge amounts of data - never heard of them? Plenty of investors have - its current share price is Euro 152,-
MR and analytics is going tech, as Lenny Murphy of Greenbook fame points out.
3. Value in Making Sense of Data.
So: much of what MR has traditionally been about will be digitalised, automated, especially in quant - assuming it can be standardised, fed to decision makers desks in real time - and they know what to do with it. Machine learning can and does help massively - but as yet it hasn't replaced the role of human intelligence.
Which is where opportunities arise for MR professionals in future.
Decision makers don't want masses of data landing on their desk, however nicely visualised. They want informed, concise recommendations based on solid evidence.
And they need a narrative - what is the data telling us? Behavioural data tells us only half the story - and seldome if ever gets to the why. In fast-changing markets, this is a critical opportunity.
Researchers fuelled by human curiosity can still add value - resurfacing from granular analysis, using data from multiple sources, and shaping an inspiring storyline that galvanises stakeholders.
Adding operational value - on sales, profitability, R&D efforts for example - with the grunt work of data collection, cleaning and sorting all done by a machine extremely quickly.
And despite the widespread reporting of the trend to DIY MR, the client-side insourcing of insights tasks, there is imho an ongoing role for intelligent external expertise that offer something that clientfolk either can't or won't do themseleves.
The following segments and professional roles seem to have the potential to thrive.
i) Consultative approaches that help solve more complex challenges. These could be one that look to turn data into activation plans, for example.
Qualitative agencies are well placed to deliver here, especially those that link up small or thick data to quantification. Qual agencies have expertise in getting under the skin of human decision making and bringing individual human voices to life into businesses context that are almost always driven by numbers.
This invariably throws up new light on traditional business challenges and uncovers new opportunties.
The same is likely true for the analytics units residing in management consultancies, if perhaps more quant driven.
Not to forget the role of commercially-focussed ethnographies, executed more quickly, often powered by digital.
ii) Innovation tasks, new market entry strategies, creative challenges, behavioural shift challenges - all these will require skilled inputs to help imaginative people work well with data sensitively understood, and coming to a successful outcome faster.
That could mean positive futures for the following areas.
Behavioural science will likely flourish, as understanding increases, and its relevance shifts across geographies. Its' acceptance, if bumpy and gradual, is critical at higher level of decision making organisations and Governments.
The COVID-19 challenge has foregrounded how important it is in understanding the mechanisms behind behavioural change.
Semiotics - the same. A niche discipline will continue to grow as case studies are spread, approaches are increasingly pragmatic, linked to business impact. The value of signs, branding and packaging is undisputed and will likely spread from consumer to many emerging industries.
Design Thinking type skills will be in demand - again, likely niche, but with increasing understanding of their potential value in helping speed up innovation processes.
We live in a do-first world, so approaches that involve hands-on, get-things-moving approaches will find audiences and buyers.
iii) Agile, tech-based companies that use automation to help deliver standardised metrics quickly and cheaply on decision makers desks. This may well be the largest share of spend - possibly driven by a new mix of IT folk, finance and business development profesionals.
Potentially more attractive to business owners, financial investors and buyers rather than those looking for a career in the business of understanding.
iv) Data scientists that are specialist in the depths of sorting out heaps of data types - and have a broad and deep understanding of statistical approaches.
v) Segment specialists. If you know the car industry, or are a recognised retail or healthcare expert, you will likely continue to profit from this broader, competitively infused knowledge that often exceeds what resides within companies' sometimes narrower, even blinkered confines.
vi) Marketing and communication experts. Many of the Top 50 most innovative global MR companies listed in the latest Greenbook report are brands that many of us may not have heard of.
Branding is of value in B2B just as much as the B2C counterparts - successful businesses without a cogent narrative, or purpose, will be less valued by potential clients and investors.
There are more - but time to rest my fingers.
Will 2021 be a good year for Market Research? Not in the sense that we know it probably - but overall, in a world more and more data-driven, for those who are up for a different future, definitely.
2021 has to be a better year than 2020, surely ;)
Curious, as ever, as to others' views.