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Trends in the first place

Carl Rohde

We are talking with Professor Carl Rohde, a worldwide reputed trend watcher how to be "cool" and how to use market trends in business.

Professor, during your speech on the conference Retail Horizons organized by Polish Council of Shopping Centers you said that Poland is one of the most interesting countries in the world. Why do you think so? What is interesting in Poland?

First of all, I think that it is a very dynamic economy right now. If you go to the west of Europe, it is a bit depressing there. A lot of young people say: “We are not going to live better than our parents”. That creates a little bit depressed mood. It is not the case in Asia, South America (Brazil), India, China and also in Poland. There is more “Hello, we are getting better” here.
If we compare Poland and UK, times are happier for Poland. At the same time, Poland is not the richest country but it is getting richer pretty quick. There is festive mood, kind of new ambitiousness and energy. I would say that there is also lots of conservatism but I will come to that later. For me it is really one of the reasons I want to go back to Poland again. To get a lot of new contacts; also with universities to work with them, to get a lot of good responses to my story. It gives me the hope that I will come back. This is one reason. The other reason is very simple. I, as a trendwatcher, want to know the upcoming economies of the world. Primarily Brazil, Russia, India, China - the BRIC countries, but apart from BRIC there are eleven EU economies upcoming. And I want to go there - BRIC countries of course; China is my favourite country in the world as well as Vietnam, Thailand, Egypt, Seoul, Nigeria, Turkey and Poland. These are the ‘bubbling under’ economies.

How would you estimate the amount of time Poland needs to achieve the level of Germany, UK or USA.

It depends on too many factors to say a precise amount: the world economy, the currency tariff, the 'war’ between China and America as well internal factors in Poland, such as good decisions of the government, the quality of youth, educational system: Western Europe is great in teaching their students to be innovative and creative. In China, students are more disciplined, aspiring and ambitious but they are not creative. Whether the Polish education system develops more in the ‘old way’ or more in the 'creative way’ is also a factor. Besides, at the same time, Germany or UK will be going down. There are so many aged people there that they drive the society. However, while at the age 50+ one can try to be cool or be a trendwatcher, it is not the most creative generation any more. In Poland, there is lot of young people. If you educate them well, they will become an engine.

Poland is a part of the global economy. It is influenced by the situation in USA, India, China, UK or Germany. The crisis in other countries may cause crisis in Poland as we.

What I have said until now, was in praise of Poland. You are one of the upcoming economies, you have lot of young people, there is a new kind of ambitiousness. What might be dangerous for Poland is the fact that it is in a 'flat world' as we call it. Previously, there were kinds of pyramids: USA, Western Europe, Eastern Europe, poor countries. We were the boss - we had all information. Now the pyramid became flat. Everyone has all information thanks to the internet. When I am in India, I ask my students if they want to migrate to Europe or America, they say: “No, I want to study there for a year but I want to go back to India because that is where everything is happening”. Now, we can compete on the internet. The ‘playing field' has been levelled. And that might be a problem for Poland - on the levelled ‘playing field’, some countries might say: “We are cheaper than Poland”. Consider Vietnam, China, India – Poles cannot work at their prices. At the same time, there are countries – USA, Netherlands and France or Germany – that might say: “Ok, we are not cheap, but we are the most innovative and the best among the most innovative”. There is a market for them, there is also the market for the poor - if Poland is in between it has a problem. If Poland manages to be sometimes equally innovative to the most innovative countries, sometimes at a better price, there is a chance.

You said “the more I learn, the more innovative economy is". Can you imagine any limit of innovation?

Well, we do a lot in the field of professional trendwatching and innovation. I do a lot of innovation processes for the companies. The way for the European countries is to become more innovative than the rest because we cannot compete in prices. We cannot pay less to our workers than they do in China. Therefore we have to play on innovation, to make the best innovative concepts. It is a big opportunity for whole Europe, including Poland. You cannot be innovative enough. It is always good, unless you forget that all your innovations have to be bought or appreciated by big groups of people. So learning your students to become innovative is the key competence for the next thirty years. Which will not be the most happy period in Europe because China, Brazil and India are more troublesome.
Another chance for Poland is the fact that Europe is the richest continent and that there are a lot of 50+ people who have lots of money, especially in western Europe. They are aware that being 50 now, they will still live for 20-25 years. Therefore they want to travel and have leisure. Poland is a great place to travel to. It is not so far away: as a 50+ German you can go to Vietnam (which they certainly do) or you can also go to Poland which is close-by and is cheaper than Germany. At the same time, a lot of people think of Poland as country with bad infrastructure, polluted cities. Stereotypical and wrong image of Poland has to be changed. One of the best examples in the last 20 years, which I often compare to Poland as it had similar bad stereotype of: “it might be beautiful there but it is industrial, polluted and dangerous” is the Bask country in Spain. Nobody had gone to the holidays there. Everyone went to Barcelona, Madrid, Andalucía. Never to the Basque country. Because it was dirty with lots of heavy industry. It might boast nice nature but it was dangerous due to the ETA terrorist group. And then, fifty years ago, the Basque government said they wanted to change and to show that they were not industrial but rather post-industrial, great, nature-rich, fresh and exciting country to go on holidays. They invited Guggenheim to build his museum there. It was build in Bilbao and shifted the whole idea about the Basque country. Now, the rich 50+ love to go there. Now, apart from Guggenheim's museum, top designers in the world work in Bilbao. It is an example how one part of the country with a lot of bad stereotypes changed to become very cool tourist destination. Not industrialisation anymore but post-industrialisation. They still have very healthy industry – not polluting one but they focus far more on tourism - artistic, elite-designer tourism for the rich. And I think that this is what Poland, which does not have a great image in western n Europe yet, can change.

Companies such as Adidas, Canon, Rodamco or Redevco are among your clients. Could you give us an example of a company that used your research and experience?

Well, Galeries Lafayette department store is a good example. They had a problem in Paris – they wanted to become more attractive to young customers once more. We helped them a lot. For example, whole ground storey was occupied by one seller and they wanted to make it for the young people. The question was, whether to make an individual entrance for them or let them go through the whole store to reach their floor. We advised them to give them their own entrance since it is want they want – to have their own Galeries Lafayette in crowd feeling. I understand that it is more attractive for Galeries Lafayette to let them go through the whole store and then go to their own place but then it is not he public space; it is marketing. And even if they did not like it, they were happy with this advice. Another lovely example is Eastpak - they do backpacks for school kids. They have almost thirty percent of the market in Europe. One out of three backpacks for kids is from Eastpak. How do they do it? They are so massive, but still very cool. Basically, they use all the material and trends we have to see how to make their brands a little bit more cool. For example personalisation: you can make you backpack personal in very many ways. Personalising your T-shirt, your back, your shoes, your bike as well, your whatever… that is a big trend.

I would like to ask you about behavioural economies. According to behavioural economies people behave irrationally.

I think that is true. I am always amazed when in all economic models the paradigm is that all people behave rationally. It so obviously is not true. One of the biggest culture-sociologists, Pierre Bourdieu has a big theory of distinction: “how do I want to distinguish myself”. It is not logical or rational but sociological; all human beings want to distinguish themselves by gathering three forms of capital. If you have more capital, people see you differently. One form of the capital is financial capital - if I am here and turn out to be a billionaire you perceive me a little bit differently. By saying “I have one million on my bank account” I make a distinction (I don't have actually). [laughs] That's one.
No, there is no rationality at all. The other distinction is social: “Whom do I know?” and the last distinction is cultural: “How much do I know from fashion, gardening, cuisine, clothing etc.”. People sort out these fields of distinction and there is nothing logical about it. So I do not see the logic. There is lot of irrationality in this world - just look at the banking system and the big crisis we had. I am not for logical or rational; I am for sociological and socio-rational.

What is the possibility of making predictions and decisions taking trends into account?

Trends and trendwatching are great and inspiring but also impotent if you do not do anything with them. The question is how to innovate one’s business basing on trends; not without knowing trends - then it is innovating in the dark. To innovate, one has to know trends in the outside world. A beer company trying to sell pink beer to ladies made that mistake. Another mistake, typical to big companies is to become arrogant. Coca-Cola and Levis missed the trends. Banking industry right now may serve as yet another example. Nobody likes banks nowadays. The crisis we have now is not a bank-crisis anymore; it is a cultural crisis. The whole culture is at crisis. People do not trust each other anymore. In politics, corporal life, even in catholic institutions there is that feeling that no one is to be trusted. It became a cultural trust crisis. Such lack of trust is time-consuming. Instead of doing new innovative lucrative stuff, one is managing the proper risk he thinks he is having. When banks decide they need to become more honest, no one believes them. They believe they can afford not to change their policies since they are so big and people have to keep their money somewhere), yet their lack of personal relation with a customer may lead to customers switching for example to Chinese banks that might be coming up (for now, it is still unthinkable). This happened with Levis, with Coca-Cola and I believe it will happen with the banking industry.

Do you know any companies that went bankrupt due to missing trends?

You can go bankrupt on a lot of different issues. One of the dangerous trends is that everything should be open in the internet. The arrogant music industry of the TV-generation, when nobody liked the music industry but everyone bought their CDs, suffered when the social web came, first with Napster where people decided how much to pay and how to fill their CDs, then with Ichoose and now with Apple’s Itunes. What is interesting, Itunes are more attractive to older people because of the its simplicity, while younger prefer to get their music for free from the internet. The same applies to movies. Possibility to watch a movie for free with friends, being able to pause at any moment instead of paying for an experience in a cinema is appealing to young people. Cinemas are fighting back with spectacles in3D technology.

So, the consumption of media has changed?

Yes, very much. For me television and media meant that they send interesting stuff to me and I listen. For the young, communication means talking to each other. For example, Coca-Cola was the first one to make uploading and downloading music from their website possible. Their presence was also visible in Second Life (actually, Second Life is gone now – lots of people decided they do not have time for propping their second life into their first life, filled with work and stress etc.).

How do you perceive the future of shopping centres in this virtual life. Is it possible that they will exist there?

Of course. Take an example of post-order companies. They used to send their big catalogues. They don't do this anymore. They have moved to the internet. And they are booming. There are three different spheres of shopping: Personal shopping, which includes putting together for example suit and a causal jacket, since they have learnt that all males who buy a suit also buy a causal jacket. Additionally they suggest the best accessories to this particular suit. That is personal efficient shopping. Lifestyle emotional shopping, on the other hand, is for the ladies. It is totally different, it involves suggesting that if you liked one thing, you may also like a set of different clothes. It also creates emotional bound by showing the lady in the dress she has chosen is, say, Cannes or Paris. Lots of emotions, lots of beautiful pictures. Finally, there is social shopping: A female (more often than man) invites her best female friends to go shopping in the internet. You can walk in a virtual shop together with your friends, giving each other advices on what to choose. This is the future. It is cool; you stay at home, it is more efficient and it is social fun. Of course, the question is, whether this is really being together? But then, I want to have excellent shopping in experience-economy shops. The big disadvantage of shops right now is that they have such limited selection of clothes in the shop, compared to all the shops you have on the internet. Do you know the ‘long tail’ story? In the store there is not so many space, so you can only put the big hits there, while on the internet you have all the place you want. Everything which is not a big hit may be put in the ‘long tail’. And the 'long tail' goes from here to Tokyo. So there is more on the internet. All the T-shirts you can never see in the shop are on the internet. All the music you can never see in a music store, because they only buy once-tried big sell hits is in the internet. I used to think that it is impossible to sell clothes, underwear, shoes in the internet. I am amazed, because they are actually doing it. Personal, emotional, social. If you have never done it - you don't do it. As soon as you've done it once, you are over it.

So, the future of the shopping centres lies in the experience economy?

The offline experience economy – integrating the online and the offline world. The example of Onitsuka Tiger – the sport shoe in Amsterdam is an excellent one. Not so big space, lots of computers. A total experience.

Does it mean that shops do not need big spaces?

No, they must have flexible spaces. And sometimes less. 7-Eleven being an example. On the other hand, there are shops like Adidas store on Champs Elysees in Paris, where you can actually run through the whole shop. So sometimes you need big space for experiences but it is definitely changing. And the least department stores can do, however conservative they are, is know that here comes a new generation who will shop over a greater kaleidoscope of channels than the old TV-generation.

This is not a good news for investors, is it?

Basically I agree, but the good and at the same time bad news for the investors is that they don’t live in the 20th century anymore. There have been many successful products and concepts, be it a car, be it the music industry, be it a shopping mall. Though people still love mobility, music, meeting people, buying things, the ways around which they organise it are changing. If you are better adapted to this change, you will win. So think harder, be more innovative. If you simply continue doing what you do because ‘this is a good time’, especially in Poland, other people, other developers or investors who are more clever will continue better and will have bigger piece of a market in the future.

So we might say that companies that can adapt will survive on the market?

Of course. Everyone has to innovate. If you say this is bad news that you have to innovate, you are a little bit pathetic and you deserve to be buried in the 20th century. Obviously, you must innovate properly and it means you have to know the trends. Of course you might say: "I don’t want to know because I have still a good business”, but that is what the banking industry did, what Coca-Cola did. But if you know you have to innovate, do it as solid as possible, on the foundation of empirical knowledge how logical and illogical people behave.

What can an entrepreneur or an enterprise do to use trends, be innovative and how use this knowledge in real life?

As I always say that if you are in any branch, you will know far more about your business then I will ever know. But I know the trends and they are highly documented. I am a scientific trendwatcher. If you have your expertise and you come to me and at this part we must work together. With almost all our clients we do three different types of cooperation. Either I come and give them newest trends and they do anything they please with it, or I tell the trends, the client says something an in the middle we meet for a short period of time or a client says that we need longer cooperation in a certain area on a longer basis; let’s do brainstorms or let’s give his employees training in trendwathing. So there can be different types of cooperation but it always starts with understanding that trends and innovation are important.

Thank you, professor.

Biography:

Dr. Carl C.Rohde is a worldwide reputed trend watcher who distinguishes himself by his academic depth and by the broad scope of his empirical research projects.
For two decades Rohde has conducted research at the University of Utrecht concerning the mentality trends within the social-cultural climate of this world.

Currently dr. Carl C.Rohde is leading the lectorate Trendwatching at the Fontys Universities of Applied Sciences.
The centre of his work is http://www.scienceofthetime.com. Rohde leads a virtual network of market and trend researchers, first in Europe, since a decade worldwide.
In this Cool Mentality Research Program Rohde works with academic, business and brand experts worldwide and with a team of about 500 cool hunters in several age groups.

Rohde conducts research on the movements in the social-cultural climate of this world:

- What ‘moves’ consumer groups, clients and citizens?
- What are the ‘soft spots’ of a generation?
- What really makes the Computer Game Kids tick?
- What appeals to the Baby Boom Generation?
- What are the collective desires and ambitions, worries and preoccupations of Generation X (born 1960-1980) and the Millenniums (born 1980 and later)?

At the university Rohde approaches these themes with methodological academic depth. In Science of the time he researches the strategic relevance of these themes for marketing, marketing communication, for product development and quality service concepts. Now and in the (near) future.

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