When it comes to market research trends and what to expect each year, I tend to adopt a more realistic approach. Much of the new technology, theories, and buzzwords are important to follow, but the process of implementing major changes year over year isn’t always realistic. At the end of the day, trends resonate higher only if they specifically address pain points you are looking to solve.
However, there is one thing that does affect you and should be watched closely in 2019 – that’s the economy. If you lived through the 2008 recession, any mention of a looming slowdown in 2019 can bring back memories of hardships faced by your organization and network of colleagues. During that time, I was at a market research agency and in order to survive, all salaried employees had to take a 20% pay cut and work 4 days a week for 8 months. To say things were tough was an understatement.
Here are a few things to keep an eye on in 2019:
- The global economy – if we grow at 3 to 4% in 2019, we should be ok, but anything less, then things may get worse for the market research industry
- Stock market values – share price fall in 2018 was the worse since 2008
- Retail industry – Retailers continue to struggle to keep up with changing demands from customers, higher credit card debt, and less disposable income
- Trade wars between major countries – US vs. Mexico vs. China, etc.
- Brexit, Yellow Vests, teacher strikes around the US, etc. – the economy may be reporting to be doing fine, but some people continue to feel economically left behind.
- The US government shut down – Analysts suspect that it will take months to recover and the ripple effect is only starting to happen.
To get more insights on how these key factors may affect our industry, I spoke with Ray Poynter from The Future Place to ask him his thoughts on what to look out for in 2019 and what we may be able to do if there’s a potential downturn on the way. My hope is that we can fully be aware and find opportunities to evolve and prepare ourselves to continue to make a living doing what we love.
Question: In what way do you think the MR industry will be hit hard if our global economy doesn’t grow at 3-4% this year? You wrote a little bit about mergers and acquisitions but wanted to know if there are additional details you can expand on.
Answer: Market research is usually at the sharp end of any decline. If a company finds it undershoots it targets by 1% it will often try to trim its expenditure by 1%. But it can’t cut its fixed costs (e.g. rent, interest payments etc), it often cannot cut its ‘costs of goods sold’ (e.g. the materials it uses to build things and services), so it is left cutting the rest by much more than 1%. This includes market research, training, re-branding, marketing, etc.
The mergers and acquisitions are mostly a byproduct of the problems that many research companies are already facing – in particular, the downward trend in prices that the ESOMAR Pricing Study has been reporting for the last two to four years.
Question: Are the economic signs seen in 2018 and 2019 the same or different from 2008? What the biggest signs the MR industry should be watching this time around?
Answer: Recessions and slow-downs tend to be different, and 2008 was a monster, so we would not expect a 2019 event to be as bad. Bad signs would be:
- If share prices fall as much in 2019 as they did in 2018,
- If short-term interest rates for bonds keep going up (especially if they become the same or higher than long-term rates),
- If production and GDP numbers fall.
A large part of research is bought by retail and CPG – if we see more companies in those sectors going bust then it will be bad for market research.
Question: What kind of market research organization will be able to weather downturns? Or, what can organizations or departments do to survive a downward economic trend?
Answer: In terms of agencies, there are several routes that aid survival. The first is to try to be as indispensable to the people making the research buying process as possible – step up your customer success manager functions. Being able to offer cheaper alternatives that meet the clients’ needs – this means focusing on what is needed, not what is usually done. Focus on speed – cost is important, quality is important, but it is speed in everything from proposals, to execution, to insights, do matter most.
If you are a client-side team, boost the ROI of your research, add value to the organization and then sell the value of that research to stakeholders. One simple way to boost the recorded ROI of research is to record its value properly. If MR is used in a decision that brings in new revenue, make sure you take an apportioned share of the revenue. Cut programmes that are not valued by the key stakeholders and try to use the money for things that make your stakeholders’ jobs easier/more profitable.
Many thanks to Ray Poynter for sharing his valuable thoughts with our customers. I do believe these are things we all can follow and implement for the rest of 2019. To read other 2019 predictions from Ray Poynter, please check out his article on the #NewMR site.