Market Trends August 2017
3D Printer Creates Building
A drone research building in Dubai is being built entirely by 3D printers in Singapore, and 3D printers are also being used to lay brick. According to Bob Wilson, Executive Director of AGC in Mississippi, with a 3D printer, you can build a wall in about a third of the time, and it is more accurate than a wall built by the best mason.
Drones in Construction
Drones can now perform dangerous operations that people used to have to do, such as hanging off the side of a building to do an inspection. The use of drones can eliminate a lot of safety concerns. They can also be used to check for leaks and cracks in walls, sewers and tunnels. Using drones instead of humans also cuts insurance costs. In addition, high-powered cameras can look behind walls to locate sewers, electrical lines and cabling without having to drill into buildings.
Pop Up Building
Ten Fold Engineering, a housing startup based in the UK, has created self-deploying buildings that can pop up in just eight minutes at the push of a button. The rooms fold out like an accordion, using a counterbalance system. Once the home folds out, the parts just need to be secured with an electric drill. The company says each building measures approximately 689-square-feet, and could have a variety of uses, from medical clinics to offices to camping shelters.
Boomers Still Rule
Baby Boomers are still making up an oversized share of consumer spending, despite all the marketing focus on understanding millennials. In the first quarter, Americans 55 and older accounted for 41.6% of consumer spending, up from 41.2% in the fourth quarter of last year and 33.5% in early 2007, according to the Commerce Department and Moody’s data. Add in spending by 53-and 54-year-olds and you have about half of all consumption. Boomers also have a higher level of discretionary spending. NPD Group says that big brands assume advertising targeted at millennials will also attract boomers trying to turn back the hands of time, but that fails to take into account the fact that older adults have different needs and distinctive spending patterns. Boomers buy fewer cars, less clothing and fewer electronics, but spend much more on services, including health care, travel and entertainment. The 90.7 million Americans 55 and older make up 28% of the population today. In 2000, the 59.3 million people in that age group comprised just 21% of U.S. residents. In addition, 38.7% of all 55-and-older Americans are employed, a share that has risen steadily from 30% in 1997. The median income of households headed by 65-to 74-year-olds rose from $31,670 in 2005 to $47,432 in 2015. Median net worth excluding home equity rose from $51,026 in 2005 to $66,047 in 2013.
Economic Recovery Uneven
Arizona, Connecticut, Mississippi, Nevada and Wyoming still have not regained their levels of GDP from before the financial crisis, more than five years after the country as a whole hit that milestone. Eight states remain below prerecession levels of employment. And in 15 states home prices have not fully recovered. In Nevada, 12.4% of homes with mortgages are still underwater. Other states with significant percentages of homes with negative equity include Florida, Illinois, New Jersey and Connecticut, according to CoreLogic. Analysts say the recession was longer and deeper in these states, and it will take longer for them to recover.
Worldwide Ecommerce Sales Grow by double digits
Ecommerce sales will increase 23.2% in 2017 and, for the first time, account for one-tenth of total retail sales, according to the most recent estimates from eMarketer, despite the fact that estimates for worldwide retail sales for 2016 through 2021 were slightly reduced due to foreign currencies’ weak exchange rates relative to the US dollar. The retail ecommerce market, which includes products and services ordered via the internet over any device, will total $2.290 trillion in 2017.
Total retail sales will reach $22.737 trillion by the end of this year, up 5.8% from 2016, according to eMarketer, which includes sales across all retail channels in its estimates for overall retail. This includes sales from ecommerce retailers and transactions that occur over C2C platforms such as eBay and other auction sites, and sales by motor vehicle and parts dealers and by gas stations. Travel, event ticket and restaurant sales are excluded from eMarketer’s forecast of retail and retail ecommerce.
Over 1.66 billion internet users ages 14 and older will purchase at least one item via any digital channel this year, up 9.4% from 2016. It's the first time growth will slip below 10%, but represents 60.2% of internet users and 26.8% of the global population.
Roughly one-quarter of digital buyers worldwide reside in North America and Western Europe. More than half of the world’s digital buyers reside in the Asia-Pacific region this year. Approximately 61.7% of Asia-Pacific’s internet users and 28.5% of its population will make a purchase digitally this year. With room for growth, Asia-Pacific’s digital buyer audience will increase 13.2% in 2017 and continue to expand by double-digit percentages annually through 2019, accounting for the fastest rate of growth by region worldwide.
Millennial Spending Habits
A recent study of millennials by GenForward found that more than one in four of those ages 18 to 34 say that they spend more than they earn. Black and Asian respondents were slightly more likely to spend more than they made, at 29% and 26% of respondents, respectively. Comparatively, 24% of Hispanics and whites each reported falling into this category. However, 45% of whites and 42% of Asians spend less than they make, as do about a third of both black and Hispanic millennials. In a Q1 2017 survey by IRI, 89% of millennials said they buy private-label brands in order to save; nearly as many respondents also tried lower-priced brands and nearly half downloaded coupons from digital deal sites.
Insights about Artificial Intelligence
An artificial intelligence (AI) researcher at Michigan State University, Dr. Arend Hintze, recently published a paper about the future of AI, and what researchers respect and also fear about this rapidly developing technology. Dr. Hintze says that as AI designs get more and more complex and computer processors get even faster, the skills of AI devices will improve, which will lead humans to give them even more responsibility. Right now we are still in the beginning states of evolving machines that can do simple navigation tasks, make simple decisions or recall a finite amount of data. But soon there will be machines that can execute more complex tasks and have much better general intelligence. The ultimate goal is to create human-level intelligence. Which says begs the question—how do we insure that we don’t create a super-intelligent generation of AI devices that no longer need humans at all? He suggests that one way is to use evolution to influence the ethics of the AI systems we create, setting up virtual environments that give evolutionary advantages to machines that demonstrate kindness, honesty and empathy, ensuring that we don’t create a generation of ruthless, single-minded machines intent on wiping us out.
Retailers to Increase Use of AI
Retailers will rely more on technologies such as live chat, Facebook Messenger and Amazon’s Alexa for customer service, according to a new research study from Linc and Brand Garage. According to the study, 87% of the 100 senior level marketing and ecommerce executives surveyed plan to increase their use of AI to serve customers going forward, even though only 7.7% have already incorporated AI as a regular part of customer service. According to the Internet Trends 2017 Report, 82% of customers stopped doing business with a company after a bad experience. At the same time, 55% of retailers report that customer service costs are rising. Rapidly rising customer expectations are causing retailers to examine how best to answer a wide range of questions quickly and correctly. To that end, 68% of retailers plan to use AI to route customer service requests, 68% will use it to help track packages, 43.5% will use AI for product suggestions and 42% want AI to handle returns and exchanges. AI will also be used to answer pre-purchase questions (39%) and for marketing (38%).
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