Keeping on top of the present is a big enough task for most of us. So when it comes to predicting the future, you have to take your hat off to the likes of GfK. Yet the countless hours of hard work and dedication put in by the industry analysts can sometimes be overlooked. As a journalist, a neatly packaged set of statistics from an analyst’s press release is pretty much a freebee to turning around good, interesting and relevant content. Likewise a retailer, vendor or distie could be forgiven for ignoring the work that goes into the numbers that are then used to shape their future business models.
In reality, as technology director Imran Choudhary explains, ‘thousands of consumer surveys are conducted… mountains of market data is sifted through’ and ‘a six-month old A.I. called Betty’ are all working together to look into the future at GfK.
“There are four main components to creating a market report, or future trends outlook,” Choudhary says. “How we get the ball rolling is by looking at the sales data. Going through it and finding out what is selling right now and how that compares to before.”
Director of client insight POS Neel Bhalsod adds: “By looking at consumer data we can shape which way to take the research. From the data we can already see where trends are beginning to develop and where areas are dropping off.”
After gathering the data – which is an ongoing process – the team at GfK draws on its industry knowledge. As Choudhary explains, one of the most important steps is to talk with clients, understand what the industry is excited about and then see if that reflects in the consumer sphere.
“Between us we have many, many years of experience so we usually have our finger on the pulse and know what to look for,” he says. “That is a great advantage for us as we can refine the data to look for what we think is important. Once we have established a trend from the point of sales data, we will then conduct our consumer research surveys. However, that is not the only way of going about it. Sometimes we start with a blank slate and ask consumers what they are likely to buy in the year ahead, it is a different way of doing it but it can generate some different areas that we may not have thought of.”
And at GfK, the surveys are conducting in a more scientific manner than say the election polls. For each market, or country, involved in a survey GfK surveys at least 1,000 people. After conducting their initial research, they then carry out a further round of surveys with ‘leading edge consumers’. These are people that GfK considers to be ‘influencers in their peer groups’; people who self identify as being ahead of the curve and who are vocal with their opinions.
“Talking with leading edge consumers is a great way at predicting future trends,” Choudhary adds. “From what a leading edge consumer is saying, or more importantly buying, today we can assume that the market will catch on in say two or three, or four years time. These are the people who are doing things first. They come from a range of backgrounds but they all self-identify as being vocal, holding influence over their peer group.”
The fourth and final – and newest – step in GfK’s forecasting process is its A.I. named Betty. Launched just six months ago, Betty is already making a difference to the way GfK operates by keeping a close look on the social airways. Programmed to analyse social media Betty allows GfK to see what products consumers are talking about on social media. But Betty is not just about quantity, as Choudhary explains: “The great thing about Betty is that she can tell us if people are talking positively or negatively about a product. When Apple launched the iPhone 8 and the iPhone X for the first time we were able to make predictions on their success in under 24 hours. This would not have been possible without Betty. For example we were able to see that the feature everyone was talking about was the new face ID technology. However, as the demonstration didn’t work we were able to see that more than 50 per cent of chatter online was negative. We were able to take this data to make future predictions about consumer concerns which we then relayed to clients all within 24 hours of the product launch.”
In terms of the future, GfK expects Betty to grow and be more influential in the way they conduct their forecasts. Major growth is expected in the smart home and VR markets in 2018, with wearables also set to be boosted by the likes of Apple’s latest watch. Mid-market mobiles are also set to be a hit, with the likes of Apple and Samsung alienating the mid-price market with their sky-high costs, paving the way for Huawei and Nokia to come to the fore. GDPR, data concerns and security scares are likely to be the major challenges to the Channel over the next 12 months but looking further forward GfK expects 5G to ‘revolutionise the way we do everything’. Here’s to the future gazers!