What We Can Learn by Looking at Past Predictions

We were cleaning up our office last year, sorting through paper files if you can believe it, when we saw a document entitled "Social Media Predictions 2009" -- a simpler age, or so it seems from a near-post-pandemic period.

So we thought it would be fun to see what some of those predictions were, from the perspective of being able to determine if that future ever arrived.

• They were talking about Web 2.0 back then. The prediction was that social media would bring about a "culture of rapid response." That certainly seems like that occurred. Social media spreads news -- accurate or not -- much more rapidly, often scooping traditional news sources. We do now expect quick response when we post a complaint about a service or product. That was from David Armano, then with Logic + Emotion.
• One prediction said that in 2009, marketers would move from assigning "responsibility for social media strategy to the most logical person in the communication team" to allowing the most passionate individual from any division to lead social media efforts." Even now, that sounds like a smart move. But the reality is that social media marketing is often handed off to the youngest team member, based on the hope that they understand this social media thing better than Boomer bosses.
• That same prediction also said marketers would go from reaching "out to the biggest bloggers you could find" in 2008 to targeting "the most relevant bloggers for your campaign, (offering) them something of value and build relationships." Again, interesting idea. But we've seen clients who want to reach the biggest bloggers and podcasters (something that wasn't a thing back then) and shy away from those who are passionate but don't have broad reach. Influence can't always be measured by reach, and podcasters often don't have (or prefer not to share) metrics, the way traditional media does. We think it makes sense to target relevant bloggers and podcasters even if they don't have huge numbers but it's important to justify the executive's time or else walk away from the opportunity.
• Another prediction was that "2009 will also be the year we rediscover the appeal of 'live intimacy,'" live conversations with online consumers and also that we will "see more companies doling out good old fashioned hand-written notes and letters" based on the premise that "intimacy touches emotion." We think that was a swing and a miss. Not that hand-written notes and letters might not break through the clutter -- we think they would. But it takes time, special talent and more time, to be able to hand-write notes to customers.
• One pundit said "TV will be a big focus, because viewership in aggregate is actually going up." Perhaps it did. But more than a decade later, TV viewership even of once-major events like the Oscars and the Super Bowl, are in decline.
• Chris Brogan had two interesting predictions. He said there would be a rise in Velvet Rope Social Networks -- sites that "aren't 'come one, come all.'" We don't think that's entirely true but Clubhouse certainly fits that. He also said there would be "Lots of Consolidation and Shuttering." He was right about that, too. For a client interested in reaching regional business-oriented podcasters as well as national innovation-based podcasts, we found that many ideal podcasters stopped production as recently as 2020 but there were tons of reasonable podcasts that ceased production in the three years prior. 
• One prediction was that while clients "are eager to explore the benefits of social media engagement, (many) are absolutely terrified of the potential downsides...The tipping point has not only not been reached could still tilt away from social media if negatives outweigh positive examples." We think it would be interesting to return to a world before social media mattered, where companies could walk away from social media. But that's not the world we live in. So most companies, even complex B2Bs, do need to find a way to engage via social media.
• Ann Handley of MarkteingProfs said that companies will increasingly craft content. That's certainly true. With traditional media shrinking (as it has for much of the past decade), companies must generate their own content.
• Scott Monty, then at Ford, had a couple of accurate predictions, including: "Twitter will continue to achieve legitimacy." It certainly has. He also said, "Online video will come into its own." That also became true and I don't think it was so obvious back in 2008.  
• Other predictions:
• Google would buy Twitter.
• "Blogger outreach from PR pros will get better, but not much." We think this one from Jason Falls, is accurate.
• Better metrics. That may have come true but we still need better, more accurate and faster metrics.
• eCommerce will go social by allowing "consumers to use the critiques from people they don't know." 
• "People will rally to support companies they love when hard times hits." We think this prediction from Andy Sernovitz came true.
• "We finally settle the debate over whether PR or Marketing 'owns' social media." Sorry, we did not. Although we've seen PR functions integrated into Marketing, which means Marketing probably does 'own' social media after all.
• One pundit said that "After much election season talk about Obama's social media presidency,'" many will "realize that his win had less to do with his innovative use of social media than we'd thought." Well, that may have been true. But we did see how Trump's use of social media was vital to his visibility and reach.  

The conclusions included: "We understand the technologies but need to employ them with a human empathy" and that measurement and relevance are key to success. That still seems to be the case. We guess this is a case of the more things change, the more they stay the same.

More Doom & Gloom from the Retailpocalypse

We've been focused on the "Retailpocalypse" for about a year now because we feel so many sectors are affected, including real estate (when stores close and locations may or may not find new tenants), hiring (when tens or hundreds of employees lose their jobs), and local media (who had been relying on ads from those local retailers). 

We came to this topic by way of the impact on local media, which is directly relevant to our business.

Unfortunately, while there are new stores launching each year, and other retailers may be expanding, there seem to be more retailers shutting down locations or declaring bankruptcy. The latest is Sears, the 125-year-old retail pioneer, which on Monday filed for bankruptcy and said it will close 142 more stores. That's on top of the 46 locations it announced it was closing back in August.

The company, which also owns Kmart, will have 687 Sears and Kmart locations remaining. The company owed $134 million of debt that it could not pay.

At its height, Sears was the known as the "the everything store" and was the largest retailer in the U.S. In 2006, it had 355,000 employees; today, it has fewer than 140,000 employees.

One reason Sears is failing is because of Amazon. It's ironic that Sears, which started as a catalog business, has lost out to Amazon. Amazon is now "the everything store."

For more on Sears' legacy, check out this NPR story.

The retailpocalypse is not ending anytime soon, and will continue to have a significant trickle-down impact on a range of sectors in the U.S. economy. We don't know if there's a solution exactly, and certainly don't see how government could step in (other than to break up Amazon, which isn't necessarily a good idea). But the health of the retail sector is one that needs to attention paid to it. As we prepare our predictions for trends in 2019, the retailpocalypse will continue to be on our list.

More Problems for Retail

The retail sector is vital to the health of the U.S. economy, and we felt the myriad of problems plaguing the sector would generate more attention in 2018, and unfortunately, we've been see more of those problems in the media.

One of the key issues not getting attention in prior years, we felt, was the impact that store closing would have on the real estate sector. Back in April, Bloomberg Business validated our prediction with an article titled, "The Retail Real Estate Glut Is Getting Worse:  Stores have announced the closing of 77 million square feet of shopping space so far this year."

The article included a chart of the combined square footage lost from store closings going back to 2008, and the trend is bad. In just four months (when the article was published), 2018 has eclipsed full-year results for every year except 2017 and 2008. Keep in mind: 2008 saw a financial collapse of Lehman Brothers and other big finance -- so a significant year. 

And yet. the difference between a full year in 2008 and four months in 2018 us less than 11 million square feet. We're certainly on track to surpass 2008's total and could eclipse 2017, which is only 2.8 million higher than April's losses.

The idea that all stores are going to go away, due to Amazonification, is not likely to happen in the near term. After all, even Amazon, Warby Parker and others have been opening brick-and-mortar store locations. 

That said, the premise that the underlying value of real estate holdings may be more valuable than the retail chain itself may no longer be true -- or no longer true to the same extent, in an era of so-called zombie malls.

The reason: lease values, which are dropping to keep current clients or to entice new ones, are having a downward pressure on the valuation of retail's real estate portfolios. That serves as a disincentive for investors to put less pressure on retail stores to shut shutter more stores.

Another problem, according to the Wall St. Journal: "Retail’s Other Problem: Too Few Clerks in the Store: Macy’s, J.C. Penney and others have cut jobs even more than they have closed stores" Even while operating the same number of stores, Macy's has, according to the Journal, "shed 52,000 workers since 2008."

What that means is if you thought service at retail locations has dropped over the past 10 years, you're actually right! While some of that may reflect new ways consumers shop as well as new store concepts, which are typically smaller or operate with more layers of tech, lower headcount will make it difficult for customers to find a level of service they expect.

“If brick-and-mortar retailers can’t compete on price in an online environment, the only thing that allows them to survive is to provide a positive in-store experience,” said Stuart Appelbaum, president of a retail union.

And that may cause more people to abandon other bricks-and-mortar locations, furthering the downward spiral of one of the largest U.S. industries. 

We certainly hope that this doesn't come to pass.  Let us know what you think.

More on the Death of Retail

On July 17, we asked if Americans were seeing the death of traditional retail. In its July 31st issue, Time Magazine asked the same question. In its "The Death and Life of the Shopping Mall," Time not only shared some scary statistics -- like, "This year alone, an estimated 8,600 stores could close, according to industry estimates, many of them brand-name anchor outlets" -- but raised a point we didn't think of.

While we touched on the disruption to the commercial real estate market, we didn't discuss (except among ourselves) the impact of Amazonification on small towns. When local retailers can't keep up with Amazon (even as Amazon opens brick-and-mortar bookstores and supermarkets, now Whole Foods), they will close up, resulting in a problem for local towns from a tax revenue and employment perspective.

But it gets worse. As Time points out, many stores, including local malls, are not just places where people work or shop. As Time notes, "The shopping mall has been where a hug swath of middle-class America went for far more than shopping. It was the home of first jobs and blind dates, the place for family photos and ear piercing, where goths and grandmothers could somehow walk through the same doors and find something they all liked."

Retail can be a gathering place. They can act as town centers, giving people a reason to gather, not just to spend, and to work. Even if current retail staff switch from sales to warehouse, even if some don't lose their jobs, their communities will lose something important.

Without local stores and malls, where do people gather on bad weather days? Sure, restaurants, pubs, etc. will likely remain but other stores will have a tougher time. And that will have further implications on small communities.

Perhaps we're giving up something in exchange for efficiency and cheaper prices.

Anyway, check out the Time article. This will continue to be a trend we monitor because its implications are significant.

Wall St. Journal Validates Another of Our Predictions: Getting Away Means Disconnecting

Back in 2012, we said:

• The desire to be connected 24/7 may change in 2012. You almost never have downtime anymore, and people are beginning to notice that’s not all good. Sure, if you are waiting in line at the post office or bank (something today’s kindergartners won’t do by the time they hit college), you’ll be able to check email, play an app, text your friend, or make a call. But this lack of downtime may negatively impact our ability to concentrate and avoid distractions at work and at home. The recognition that we actually need to disconnect, that we need downtime, is likely to generate coverage this year. Already a handful of companies have limited email, both during the day and after hours – and we think more will join those ranks. We also think the concept of going on vacation without access to email or cell will become more of a status symbol because it now takes a lot of money to disconnect yourself from your regular workday.

In our list of ongoing trends that we update annually, we've mentioned the ongoing need to disconnect. That need may be more pronounced than ever as younger-and-younger kids own their own devices -- and as more-and-more parents can't get their kids off their screens.

Screen use and children, including how they socialize, how they interact with peers and grownups, how they experience their environments, will be a growing area of tension for parents -- at least when they look up from their own devices. (And we're all guilty of that.)

We even once said that where it was once only the wealthy who could stay connected wherever they traveled, that soon, it would be a luxury to travel and not be connected. That's borne out but an article in today's Wall St. Journal: "Resorts Promise Families the Perfect Getaway—From Electronics: Looking for a technology detox, more parents book vacations at family resorts touting limited Wi-Fi."  Check it out.

Track Record of Our 2014 Predictions, Part V: Ongoing Consumer Trends

Here's a look at how we called Ongoing Consumer Trends affecting us in 2014:

• The Battle for the Living Room.  Grade: B

• Cord-cutting will continue to be a top story. Grade: A

• Consumers still expect Apple to unveil a new way to watch TV, but Apple will offer, instead, the iWatch.  We nailed this one except we got the name of the Apple Watch wrong. Grade: A

• Premature deathwatch of things that are very much alive. People love to predict the death of various, usually popular items, devices or technology. Here are candidates for 2014:

o        PCs: We said PCs are not dead yet and corporate sales kept the category from seeing overall declines. Grade: A

o        Cable TV: We said, “We don’t think cable companies will disappear anytime soon because they’ve made bundling – phone/cable and Internet – so indispensable.” Grade: A 

o        Press releases: Despite social media, there’s still a place and a value to press releases. Grade: A

o        Media relations: We said it would continue to be important, and we feel it still is, despite inroads from social media. Grade: B+

·     Actual deathwatch: Things we feel are actually dying.

o  The phrase “at press time”: Grade: A

o  Paper-based holiday cards: Grade: B

o  The words “authentic” and “artisanal”: As much as we’d like these words to die, they remained strong in 2014. Grade: C-.

Tomorrow, we'll wrap things up with the last set of trends we identified for this year.