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Ogilvy 2022 Trends

BUSINESS & GROWTH TRENDS 2022 GROWTH & INNOVATION

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INTRODUCTION s we entered 2021, the most wreak economic havoc, and as Clare Brody optimistic among us believed - Global Consulting Director - observes, that Covid would be squarely lofty brand promises won’t count for much A in the rear-view mirror by now. if customers can’t get their hands on your Not only is it clear that we’re not in the products. “post-Covid era,” it seems increasingly that we’re not even in the “pre-post-Covid era.” Speaking of walking the talk, the days of broad pronouncements on sustainability Now, as we enter 2022, the impact of commitments are coming to a close, note Covid, and all it brought with it, still looms Consultants Gemma Bardsley and Jamie large – a global health crisis, crippled supply Hamill of our Sustainability Practice, as more chains, entire industries suffering. Covid companies respond to public and regulatory continues to be an accelerator of trends pressure to implement strategies on the that would have taken longer to evolve local level – where they actually can make a otherwise. measurable difference. Perhaps the most troubling of these trends Will the lasting impact of Covid turn us all is the polarization of societies. Many virtual once and for all? The companies and countries report higher levels of division investors pouring billions into the Metaverse today than ever before and indeed some think so. Is it the realization of “Ready Player of these divisions have been lethal. As a One”, or just another Second Life for brands result, brand platitudes about us “all being in ruins on the horizon? Either way, Marina in it together” are falling flat as people take Lindsay-Brown of our Growth Insights, sides on critical issues like vaccinations. Trends & Futuring Practice suggests, says We dive a bit deeper into this with Heather the next phase of the online world will have Watson who leads our Behavioral Science irreversible impact on every aspect of life as Practice in North America. we know it and brands will dismiss it at their peril. Meanwhile, the supply chain disruptions, which have forced many brands to Laurie Close, a Consulting Director in consider new product positioning and DTC the UK & Cesar Holguin, Chief Strategy strategies for the first time, continue to Officer, Mexico challenge whether the 2 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

great resignation will turn out to be fact or fiction. But what’s undeniable is more and Contents more millennials, and soon Gen Z’ers, will be changing the workforce at all levels, Don't underestimate the Metaverse 4 and we observe that most companies are not well equipped to attract or retain Consumers will need to touch it them. While more organizations will look to believe it 8 outside themselves to better understand employee drivers, we will see more Audience bias continues to intensify 12 taking an Adaptive Business approach to reshaping their organizations and The war for talent will be business operations. This will be especially won "Outside-i n" 16 pronounced in the B2B space, as Global Consulting Partner Michael Lombardi B2B: Disrupted but not defeated 20 observes while sharing some of the key business growth opportunities that can be Default sustainability 24 surfaced through adaption. We predict a lot of change to come in 2022, but we hope to illustrate key actions brands can take to move forward successfully in these uncertain times. We hope to provide some clarity on how to navigate these new realities. We’re here to help and would love to hear from you. Happy 2022 – Stay safe and be well. The Ogilvy Growth & Innovation Team

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Trend THE FUTURE IS (ALMOST) NOW: GET READY TO MEET YOUR DIGITAL TWIN 1

Teeming with cryptocurrency, NFTs, avatars, and entire Trend immersive worlds, the metaverse is both misunderstood and overhyped. Here’s what you need to know. By MARINA Don’t feel bashful if you don’t yet have a narrower targeting opportunities. (It’s not LINDSAY- solid working definition of the metaverse. without its dangers, though, as internet BROWN subcultures like incels show.) In November, Wired magazine needed more than 2,000 words to explain the borderless 2. An unregulated metaverse poses privacy new digital realm for its tech-savvy readers. concerns. If personal data is the exhaust The takeaway? The metaverse is no one fume of life, your metaversal twin will single thing, but rather an array of virtual significantly increase the volume and experiences, environments and assets, from richness of those emissions. Brands must non-fungible tokens to cryptocurrency, enter with thoughtful ethical positions, digital avatars to immersive AR/VR worlds. and be ready to work with “owners” of Also: virtual worlds (e.g. Decentraland) to make experiences safe. Roblox is leading It’s coming at us. Fast. the way with age verification for spatial voice features. New technologies will continue to redefine 3. Remember hearing decades ago that the metaverse in the years ahead, but it’s the Web would be an open system? Big already emerging as a digital layer atop Tech may have walled off their gardens, everyday life—a digital twin of the physical controlling operations and consumers in world. To help quantify its impact—and closed ecosystems, but the metaverse highlight the myriad ways it might bolster presents fresh opportunities to create brand and business growth—we’ve distilled interoperable virtual worlds where this trend into three fresh insights. avatars move seamlessly between 1 1. New virtual worlds create fertile dimensions. This could create a space for subcultures and niche significantly more distributed power communities. If the physical world has base, unsettling FAANG/BAT and eroded subcultures—thanks to globally impacting brands’ technology and media homogenized trends across music, partnerships. fashion, interiors and food—then the metaverse nurtures diverse interests and behaviors. This in turn provides brands with richer segments and 5 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

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by the numbers $800 billion Estimated total market size of the metaverse by 2024 (Bloomberg) $4,115 Amount a Gucci bag sold for in Roblox’s Gucci Garden. The same bag IRL cost $3,400 (Hypebeast) 45,000,000 Number of people (as their avatars) who attended Travis Scott’s virtual concert in Fortnite (Guardian) 6 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

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WhatTO DO NEXT LEARN FROM THE PAST 1 The metaverse will soon present a limitless, multi-sensory interface for new products, services and experiences. This will require new segmentations, go-to-market models and innovation—but brands must learn from early metaversal experiments and ensure that forays into the metaverse are linked to customer need states and brand promises. OPEN YOUR DIGITAL WALLET 2Crypto will become a common form of payment for goods and services, and that behavior will bleed into the physical world. Brands will need to pivot to accept new forms of payment, working closely with crypto experts to create checks and balances. DON’T GO IT ALONE 3The metaverse is a complicated place. You’ll want a range of expert guides—think technologists, content creators, media experts, and experience strategists—to navigate this new world. They’ll also help you stay abreast of emerging hardware (headsets, glasses, implants) that enables metaversal experiences. 7 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

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Trend CONSUMERS WILL NEED TO TOUCH IT TO BELIEVE IT 2

Trend In 2022, reliability has never been sexier. By CLARE If you’re running a business, it’s hardly front- company selling bidet attachments for BRODY page news that the global supply chain is a toilets, reported a ten-fold increase in sales. hot mess. Covid toppled the first in a line of dominoes stretching around the planet, the No replacements for normal stock? Get last one landing with a thunk on an empty crafty. Baking equipment experienced a shelf somewhere in Milwaukee. Outbreaks, boom at the beginning of the pandemic, labor issues, and uneven demand have trumpeting the start of a larger DIY effectively tied the supply chain into a knot. revolution. Sales for baking cookbooks rose by 42% from October 2020 to And now, after nearly two years of October 2021. And when consumers aren’t being told to wait and keep waiting, learning to do new things themselves, consumers are fed up. Companies have they’re leaning into the craftiness of tried to maintain their loyalty by offering others, shopping small in peer-to-peer transparency, with website banners marketplaces like Etsy. Investors seem announcing longer delivery times. But to believe it will last, if Etsy’s strong stock just when things began to improve—and performance is any indication. products started reappearing on shelves— they started breaking bad again. Since the end of 2020, the index of global supply chain disruptions has been on a steady rise for the Eurozone and US. 2Companies and brands looking to grow Nimble businesses can even during times of adversity need to generate the same buzz abandon the normal course of business and and impact on their go over, under, and around. In other words, bottom lines—by meeting follow the lead of creative consumers. crafty customers Faced with toilet-paper shortages in March halfway and positioning 2020, Americans turned to an unlikely (at themselves at the least for Americans) solution: the bidet. intersection of need and At the peak of the shortage, TUSHY, a supply. 9 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

by the numbers $9.6 billion 659 10.5 to Daily cost to global trade Increase in cost, by 13.5: for the 6 days the cargo percentage, of shipping Estimated growth ship Ever Given was containers from in retail sales, trapped blocking the Shanghai to Rotterdam by percentage, Suez Canal from August 2020 in 2021 (BBC) to August 2021—the (NRF) biggest jump ever on Drewry Shipping’s World Container Index (CNN) 10 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

WhatTO DO NEXT CHECK IN The supply chain is made up of ships and WITH YOUR containers—but it’s also a system that relies on living, breathing humans to work together. Companies PEOPLE should listen to their workforce and support it. The pandemic has evolved rather than ended, and emergency operating conditions were never meant to be permanent. DON’T MAKE If you’re experiencing supply issues, avoid enhancing THINGS consumer frustrations with delayed delivery times and out-of-stock messaging simply to WORSE remain relevant. You’ll only destroy brand loyalty. Find other ways to promote growth and engage with consumers that maintain your customer relationships. TRANSFORM Consider a more distributed and localized YOUR business model. The more diverse your commerce touchpoints, the more resilient you’ll be to future BUSINESS disruption. BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

Trend THE GREAT POLARIZATION 3

Even in a borderless Trend business world, people are increasingly building walls around their own beliefs. Your message needs to cross territories. By HEATHER The pandemic altered much of the world, messages from their group as true, while WATSON but here’s one thing it didn’t change: messages from opposing groups become anyone’s mind. Walled in for health reasons, threatening. people bunkered down in their minds as well, hardening their opinions and How does this apply to brands and preconceived views. In fact, researchers businesses looking to grow and innovate? have found that the virus has intensified For starters, they must be more calculated brewing societal conflicts, pushing many than ever in their messaging. Even folks from moderate some uplifting brand communications Sixty percent positions to more extreme have clanked amid the tumult. A few of people ones. Sixty percent of well-meaning brands widely advertised say their people say their countries variations of “we’re in it together,” which countries are are now more divided; in the fell flat for a group of people that doesn’t now more U.S., that number rises to share that worldview. For those with an divided 88%. Even certain gestures individual-hierarchical orientation, we’re (like face-mask wearing) certainly not “in it together”—because they became unexpected see policies intended to promote safety for triggers. the group as threatening individual liberty. Call it the Great Polarization. The good news is that businesses can still 3 have a powerful impact both on sales and Why is this so? The real life-or-death on society. A one-size-fits-all approach consequences of the virus heightened what has vast limitations in a such a divided behavioral scientists refer to as in-group- environment—but brands can use more out-group bias. Both online and in person, tailored approaches to influence choices humans sort ourselves into categories—by that carry social and moral implications: hometown, by race, even by eye color—and electric-vehicle purchases, food options strongly prefer their own group. When (meat vs. plants), sustainability choices, and we feel threatened, as in pandemics, this vaccine compliance. It’s all about knowing bias kicks into overdrive. People accept your audience. 13 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

by the numbers Percentage of Americans who say 59people can’t agree on basic facts, second only to France (61%). 9 in U.S. adults who report conflicts between people who support different political parties. In other countries, this 10 perception hovers around 50% (overall median of 17 nations). Percentage of Americans who say they 58have at least some trust in the media (the smallest share over the past five years the question was asked). (Pew Research) 14 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

WhatTO DO NEXT NUANCE IS EVERYTHING 1 As product choices become powerful social statements for or against certain values and beliefs, brands face a heightened imperative to create nuanced messaging that will “speak the language” of their deeply divided audiences. 2TAKE A LOOK AT WORLDVIEW Our framework for worldview comes from the research of anthropologist Mary Douglas and the Yale Cultural Cognition Project, where individuals’ beliefs can be plotted between two moral orientations: hierarchy-egalitarian and individual-communitarian. Your message will have more impact the more you frame it to each group’s ideals. POP YOUR BUBBLE 3It’s both easy and expedient to assume you are like your customer (false consensus effect)—but the reality is you are (more than likely) not. Do primary research and get to know your customer groups. They’re different today than they were even a year ago. Put forth extra effort, and they will reward you with deeper engagement. 15 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

Trend FORGET “TOP- DOWN” AND “BOTTOM-UP” – THE WAR FOR TALENT WILL BE WON “OUTSIDE-IN” 4

Trend Companies that will win the talent war will look outside their organizations to grasp what talent wants and needs. By LAURIE In 2021, the world celebrated the 40th The full impact of the Great Resignation is CLOSE, PAUL anniversary of the release of the film yet to be understood—but what’s certain ENGLISH & CESAR HOLGUIN “Take This Job and Shove It.” The movie is that workers have voted with their feet, is a cathartic and lighthearted look at an and let companies know they’re expecting employment situation gone deeply wrong, something quite different from their but for businesses facing a stunning exodus employers. of workers, the iconic title is likely to inspire nothing more than a cringe. As the world In most cases, that means changes in enters the pre-post-Covid era, one of the company culture. In the past, such change most significant and impactful changes has has been driven from top down—that is, been the workforce talent drain—aka the from the C-suite—or was the result of a Great Resignation. bottom-up, grassroots push. The answer for today’s brands seeking growth? Neither. This once-in-a-generation surge of Today, cultural change must be driven from self-administered pink slips has made the outside in. employers desperate to hire—and retain the workers they have. But some of the crisis To succeed in the talent war, companies is a function of selectivity: Employment must reduce their navel-gazing and look figures show that the talent pool has outside their organizations for a more 4actually increased, and that companies complete and nuanced understanding of with attractive employer brands are hiring what today’s emerging talent wants and more than ever. The resignation movement needs. And then they will prioritize steps to seems to be strongest within the US and meet those needs in ways they might not UK, but it’s unclear whether it's being driven have considered even a year ago. Arrive at by millennials, or by Boomers leaving to live the intersection of desirable culture and their best life. high self-awareness, and your brand will be loaded for success. 17 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

by the numbers Percent of workers across the 41 globe considering leaving their jobs. (WeForum.org) Percent of millennials looking to 77change roles within the next year. (Metro.co.uk) 51 Percent of workers who place work-life balance at the top of their list of priorities. Career advancement opportunities were second, at 43%. (IBM Business Value Report) 18 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

WhatTO DO NEXT FORGET WHAT YOU THINK YOU KNOW ABOUT EMPLOYEE CULTURE 1 Sure, workers want their employers to express gratitude, praise their work, and enable healthy work cultures. They also want more flexibility than ever—but every organization is unique and must be treated as such. It is important to set out on your own path to discover your talent’s needs and wants. 2FOSTER THE RIGHT CULTURE With a deep understanding of your talent in hand, seek to nurture a greater sense of trust by enabling your top talent to fulfill their professional responsibilities in a manner that closely aligns with their personal values and embedded life interests. Once that trust is in place, an unbreakable culture will follow. And when the organizational culture is right, employee performance and loyalty will soar. BUILD YOUR BRAND—AS AN EMPLOYER 3Companies will continue to grapple with the talent war for years to come, so your brand needs to remain attractive. The best way to do this is to display your organizational culture across every touchpoint. A strong and appealing culture and employer brand is a critical differentiator in recruiting, retaining, engaging, and competing for top talent. 19 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

Trend DISRUPTED BUT NOT DEFEATED: THE RISE OF A NEW GENERATION OF B2B LEADERS 5

Trend B2B people are used to challenges, from powering cities and economies to transporting food to tables. It’s in their DNA. Hard has never meant impossible. By MICHAEL Still, the last two orbits around the sun an outsize ability to find growth and LOMBARDI have been extraordinary in the hurdles and opportunity. the tectonic shifts the industry has seen. Customer expectations have changed; The good news is this need not be an supplier dynamics have remained in exclusive club. Adaptive Business and constant flux across a borderless supply leaders can be built. In 2022, we see four chain; traditional sales organizations have critical strategies they’ll harness to drive become immersed in a move to virtual business growth: engagement. The unexpected has become the only reasonable expectation—and with 1. They’ll challenge the traditional norms pandemic-related complications piling on, of how relationships and trust are built, the quantity of revolutionary change has mastering the complexities of hybrid jolted even the most hardened B2B leaders. customer relationships across virtual and in-person environments. What does this mean for the year ahead in 2. They’ll build networked ecosystems 2022? A whole lot of adaptation is what. designed for continuous growth, And B2B may help show the way forward from traditional routes to market to for everyone else through a concept called unconventional direct-to-consumer, “Adaptive Business.” e-commerce, or “frenemy” partnerships. Adaptive Businesses are customer- 5centric companies that succeed through 3. They’ll create more meaningful adversity—not despite it—by pivoting customer interactions with innovations quickly and confidently and innovating in created through next-gen technology. new landscapes. Having endured the last 4. They’ll champion social and two years of upheaval, B2B leaders will environmental change through active begin reshaping their organizations around and influential planet- and social-forward the qualities of the Adaptive Business. actions. These companies will demonstrate 21 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

by the numbers in Number of B2B leaders who saw the speed of decision- 1 making and access to people increase through digital selling, suggesting they must better leverage virtual 3 environments. Percentage of B2B sellers who will see traditional inside- 80sellers qualities, such as demonstrating deep knowledge of the customer’s organization, as increasingly important. Percentage of B2B leaders who believe in the value of 75strategic relationships and collaboration between parties over transactional vendor relationships. (WPP Proprietary Research) 22 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

WhatTO DO NEXT RE-THINK MARKETING 1 Marketers should play a key role in Adaptive Businesses. They can do this by shifting from static communications to more engaging virtual experiences and by serving as strategic internal partners who provide account-level insights back to sales, product, and other organizations. As buyer needs and interests change, so must content and experience. Marketing must be ready to adapt by continuously learning how buyers want to engage. 2MAKE YOUR BUSINESS HYBRID From products and services to customer interactions, every part of the Adaptive Business is re-evaluated and categorized as physical, virtual, or hybrid. Can your services be delivered virtually? Can you provide self-service online tools? Do your virtualization efforts build trust and advocacy as well or better than in-person experiences? Where should you avoid going virtual, either because of a loss of a customer connection or your ability to provide your offering? Evaluate all of these questions and act accordingly. INCUBATE INNOVATION 3Tomorrow’s advantage won’t be built by purchasing out-of-the-box technology. As with other transformations, the biggest innovations are creative and first to market. Adaptive Businesses should be able to seize these innovations through effort, not luck. Doing so requires an incubation environment centered on solving a core customer challenge while still being free to embrace risk environment. 2323 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

Trend SHOW, DON’T TELL: THE NEW REALITY OF SUSTAINABILITY 6

As supply chain standards Trend improve, sustainability claims will become the norm. Brands must be smarter on messaging—and find ways to help the public become sustainable by default. By GEMMA Back when dinosaurs roamed the earth • COP26 leaders asked nations to BARDSLEY, a decade or so ago, greenwashing was a consider, formulate, and publish JAMIE HAMILL viable business practice. Slap an earnest updated Nationally Determined sounding but ambiguously worded decal Contributions (NDCs) to the Paris on a label, and brands could plausibly claim Agreement for 2030 by the time to be keeping an eye on sustainability. COP27 begins next year. This new Fortunately for the planet, and for “ratcheting mechanism” will enable the consumers who don’t like being duped, public and other nations to call out the those days are officially over. slow movers on climate action. Investors and regulators are now • 92% of people say they want to live scrutinizing brands’ threshold of a sustainable lifestyle, but only 16% compliance to sustainability claims. are actively changing their behaviors. The palace guard is no longer asleep, which Sustainable experiences can also help means that claims must be verifiable in solve this intention/action gap while addition to sounding good. At the same helping brands grow. time, the sunk costs required to make supply chains more sustainable will be less As attention on sustainability matters easy to claim back through sustainability intensifies, conversation around business equity alone. Brands must find new ways to efforts will morph from a unique selling connect with customers on their sensitivity proposition to business as usual. That to the health of the planet, while at the means brands will need to integrate 6same time helping them become more sustainability efforts into their entire sustainable in their day-to-day lives. customer experience. Creating sustainable experiences will help brands adopt The stakes are indisputably high: solutions into the full brand lifecycle, helping customers become sustainable by • 74% of global institutional investors default. revise investments if a company does not consider environmental, social, and governance (ESG) criteria within their business model. 25 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

by the numbers Percentage of Americans who expect companies to take action against 76climate change. (Cone Communications' corporate social responsibility study) Percentage of the top 100 companies in Japan and Mexico that report on 100sustainability. (KPMG Survey of Sustainability Reporting 2020) Economic benefit that businesses $26could realize taking action on climate change in combination with trillion governments and other stakeholders. (New Climate Economy) 26 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

What TO DO NEXT LOOK WITHIN 1 Understand where your business is on its own sustainability journey. Carry out an audit to understand your current strategy, which should involve mapping all of your commitments and pain points alongside the macro landscape. BUILD A PLAN 2Use your audit findings to develop your organization’s sustainability ambition, then align this to your customer needs through cognitive profiling. BRING IT TO LIFE 3 Map your customer-experience journey online with your sustainability ambition to identify how you can create a sustainable experience from the value chain through to point of sale and beyond. 27 BUSINESS & GROWTH TRENDS 2022

About Ogilvy GROWTH & INNOVATION Ogilvy Growth & Innovation is the strategy, We also work closely with teams and innovation, and business insights arm of The businesses across Ogilvy including Ogilvy Group. An enterprise-wide offer, we Advertising, Brand and Communications, provide advisory services across Business Public Relations, Experience Growth & Innovation Strategy, Business and Health. Our global team works across Transformation, Corporate Brand & Marketing all sectors and categories including Innovation, Sustainability, Behavioral Science healthcare, technology, financial services, and Growth Insights, Trends & Futuring. manufacturing, automotive, retail, and many more. We are a global network and bring agile and diverse teams of analysts, strategists, and For more information please visit us at: consultants together at the intersection https://www.ogilvy.com/work/growth- of brand, growth, innovation, and innovation transformation. We are positioned as the Or contact us at: strategic advisors to the C-Suite on all [email protected] aspects of brand, marketing, and business growth. Sources TREND 1 https://www.bloomberg.com/professional/blog/metaverse-may-be-800-billion-market-next-tech-platform/ https://hypebeast.com/2021/5/virtual-gucci-bag-roblox-resale https://www.theguardian.com/games/2020/apr/24/travis-scott-concert-fortnite-more-than-12m-players-watch TREND 2 https://www.bbc.com/news/business-56559073 https://www.cnn.com/2021/09/08/business/shipping-containers/index.html https://nrf.com/media-center/press-releases/september-retail-sales-grew-delta-variant-favored-spending-goods-over TREND 3 https://www.pewresearch.org/fact-tank/2021/10/13/americans-see-stronger-societal-conflicts-than-people- in-other-advanced-economies/ TREND 4 https://www.weforum.org/agenda/2021/06/remote-workers-burnout-covid-microsoft-survey/ https://metro.co.uk/2021/11/16/why-are-millennials-and-gen-z-leading-the-great-resignation-by-quitting-jobs-in-droves-15609002/ https://www.ibm.com/thought-leadership/institute-business-value/report/employee-expectations-2021 TREND5 The Adaptive Business: The Future of B2B published by WPP, Ogilvy Growth & Innovation TREND 6 https://www.conecomm.com/research-blog/2017-csr-study https://home.kpmg/xx/en/home/insights/2020/11/the-time-has-come-survey-of-sustainability-reporting.html https://newclimateeconomy.report/2018 28 BUSINESS & GROWTH TRENDS 2022 OGILVY GROWTH & INNOVATION

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