As we reflect on the year that passed by, we can note that 2021 was a year replete with personal challenges.
As we close the calendar year of 2021, we realize that we have come a long, long way from January 2020 (when the covid story began in India). As we reflect on the year that passed by, we can note that 2021 was a year replete with personal challenges (some of these include individuals ability or rather audacity to normalize hospital visits), mini-wars against the multiple variants of the covid-19 virus, opportunities to identify multiple white spaces to develop and build solutions for a changing India (something which Indian entrepreneurs tapped into and the investor community supported with the generous influx of capital) and lessons for brands, organizations, and individuals (to understand that emotional capital is a multibagger asset and like a multibagger stock very few investors have the tenacity to envision how this asset will help in achieving multifold returns in one’s personal and professional goals).
With this recap, I am back with my annual tradition for trends for 2022. Without further ado, presenting 5 trends that I feel will play a crucial role in how 2022 unfolds.
We will live in an age of hyper-personalization:
As brands compete in the attention economy for consumers’ time, marketers will need to be cognizant of the fact that consumers would no longer be comfortable with “just an experience”. In my opinion, consumers in 2022, due to replacement cost nearing zero, will crave for personalized brand experiences. Hence, hyper-personalization and continuously altering curated experiences will be the norm. Social commerce as a sales channel and using the creator economy to leverage its community and thereby reducing CAC are mechanisms (in addition to the traditional channels) through which brands can build this hyper-personalization. The inability to address this need will create customer experience gaps. These gaps will be crucial to bridge, especially at a time when the fluidity between sales channels (offline, online and virtual real estate) would be a key ingredient to ensure there is increased sales conversion, higher engagement, increased repeat rate and eventually a higher LTV (Lifetime Value). Furthermore, I feel the ability of brands to curate payment options based on the customer profile along with dynamic pricing for its offerings will assist early stage brands to achieve unit profitability relatively early on in their lifecycle. A combination of this will help in increasing the Net promoter Score (NPS) for insurgent brands.
Lack of financial literacy & the expected attention recession are a deadly combination for young investors:
Retail investors who have entered the market in the last 18 months seem to be enjoying a bull run. While they should pat themselves on their back, I feel they should be far more cautious in 2022. A significant percentage of these new investors are millennials and Gen-Z’s whose neurons have not been wired with the fundamentals of financial literacy. Consequently, this set of investors has relied on social media platforms to influence their investment decisions and to educate themselves about investing. Given that these are the same set consumers who will be facing an attention recession (this is when negative marginal utility kicks-in) in the next 6-9 months, this is a deadly combination. I would say this investing approach for retail investors, driven by recommendations of finance influencers from social media platforms, clubbed with an impending attention recession is something young Indians should be cognizant of and plan accordingly.
Consumers will inadvertently pick pop colours infused with stability to express their “lost feelings”:
As mentioned in my recap above, the last two years have been replete with challenges, opportunities and lessons for our community. While individuals are still learning the ropes to excel in this time of uncertainty, I feel individuals will subconsciously choose in 2022 (both professionally and on their personal front) activities, projects and associations that will be a union of comfort (that will allow individuals to be comforted by the idea of familiar energy) and boldness (this factors into account the individuals desire to reinvent the wheel, their ability to take high risks and thereby be rewarded for the same, and a set of charged neurons tasked to take on the unthinkable). This will be human’s mechanism to convert pent up emotions into productive and positive energy; thereby, achieving the moonshots they have been working towards.
The funding party will continue, while startups will become cognizant of business fundamentals over their burn rate:
While India has seen the rise of numerous unicorns (taking India’s tally to 54) in 2021 – companies with healthy fundamentals, unit profitability or a very strong moat, in my opinion, will continue to attract capital in 2022. While one must be optimistically cautious of the impact of the tightening of the monetary policy globally next year – early product-market fit, scalable business models and strong fundamentals will allow investors to make aggressive bets in the Indian market even in 2022. Furthermore, the rise in angel investors (access to early-stage capital and mentorship), India Inc. opening up their balance sheet to invest in startups (either directly or by becoming an LP in VC/PE Funds) and the fact that 62 Funds (across categories) were raised in 2021 – are all signs that highlight the funding euphoria will continue into 2022.
In addition to the four trends, I feel there is a common theme that runs across all of them and that makes for my fifth trend, which is: 2022 onwards individuals will want to be in control or rather not in uncertainty. Ergo, you will find consumers see through influencers — thereby moving away from online perfection to embracing the rawness of virtual life (filter-less social media), will expect timely brand communication driven by AI so that as a user they can navigate their experience and smoothly shift to virtual real estate (if brands and regulations permit) and will remind businesses that consumers are humans and not cyborgs (at least, not yet!).
As we look forward to a stellar 2022, these five trends will be crucial for brands to analyze their evolving consumers, for founders to understand the funding environment, for strategists to gauge the intangible factors that will drive consumption in the new year and for young retail investors to understand cyclical nature of the stock market.
https://www.financialexpress.com/industry/leapfrogging-into-2022-here-are-the-trends-that-will-drive-growth-for-india/2393005/
