In a digital world where the tangible is vanishing, some consumers are elevating the value of physical goods.

Digital lifestyles have been eroding our need for products like books and recorded entertainment whilst the burgeoning rental culture of our “Why Buy” trend has chipped away at the sense of place and permanence that comes with ownership.

It’s natural that consumers should react by fetishising objects and celebrating their tactile pleasures, their comforting presence and their tangible value.

The internet may have promoted the virtual over the tangible, but its role as an overarching democratic platform has conversely promoted niche interests (see our trend “Many Mes”) and the concept of individuality. This is neatly embodied by Pinterest, the social networking site where objects – alongside images and videos – are shared and used to define one’s personality or status.

The internet has also created a marketplace for the rise of unique, artisan foods and goods.

eBay is a case in point. It began life in 1995 as a place for computer programmer Pierre Omidyar to sell an old broken laser pointer. Its ascent to become a marketplace for 100 million users, selling $68.6 billion worth of goods, owes much to it being embraced by mainstream retailers, but its roots were in selling used goods and ‘antiques/bric-à-brac’. This was about more than thrift and it undoubtedly nurtured a mindset where consumers valued products from the past and products from outside the mainstream.

Provenance and backstory serve to elevate consumers’ perceptions of products, as borne out by a Significant Objects experiment conducted by brand analyst Joshua Glenn. As reported by The New York Times, the project involved buying thrift store items for $1.50 and then reselling them on eBay with the addition of narratives to grant the items gravitas. The results were conclusive, with newly ‘significant’ objects selling for up to 2,700% of their original value.

The internet has nurtured a cottage industry environment that enables consumers to source, make, buy and supply ‘productised’ forms of individuality. Etsy for example is more than a marketplace for handmade and vintage items, it is also a community that supports craft fairs. There’s been a huge rise in these in recent years, driven by a new young generation of customers and creators.

In extreme cases the fetishisation of objects has been defined and diagnosed as Objectum-Sexual – the term used for Eija-Riitta Berliner-Mauer, a woman who "married" the Berlin Wall. Erika La Tour Eiffel has the same relationship with the said Parisian icon and although these women are hardly typical consumers, their motivations did signpost and share the reassurance factor at the heart of this trend:

"Someone who falls in love with objects can control that relationship on their own terms…their objects will not let them down."

– Jerry Brooker, Psychotherapist, New York State to Channel 5 TV

Our trend “Never Say Die” explores how the comforting power of tangible products is at the heart of nostalgia, but the reassurance factor of physical goods isn’t just about aesthetics or the way they feel, it’s also about self-sufficiency and financial security.

Consumers are seeking to empower themselves through the artistic creation of physical goods (see “Survival Skills”) and through investing in things like antiques and works of art instead of intangible schemes and stock portfolios.

Today the founding spirit of eBay lives on in Etsy, a Brooklyn-based online marketplace for ‘10 million unique handmade and vintage items’, targeted at “people who value authorship and provenance as much as price and convenience”. With sales of $525.6 million in 2011, 17 million members and 800,000 active shops, it appears to be working. In the UK, Folksy offers a similar proposition, creating a buy and sell community for modern British craft created by UK designers.

Craft fairs have grown in popularity thanks to a new generation of young advocates.

• According to America’s Hobby Industry Association (HIA), there is one ‘crafter’ in four out of every five US households and 14% of these people sell what they make.
• In 2011, America’s Craft & Hobby Association estimated that the industry was worth $29 billion and that 56% of households participated in crafting at least once a year.
• In 2011, 175,000 Americans attended Sugarloaf craft festivals.
• The community craft fair spirit is also taking hold in Brazil, with artisan trade shows like Mega Artesanal attracting 114,000 visitors and 500 exhibitors.

Consumers are flocking to Etsy and custommade.com to buy unique home pieces that aren’t cookie-cutter (see Commissioning Furniture) and it’s clear that consumers prize the artisan approach in homewares. Mintel’s Shopping for Home Décor US April 2012 report shows that 35% of consumers prefer to buy handmade home décor items than mass-produced ones and this response rises in line with household income.

Chilean home centre and hardware chain Sodimac has started a partnership with artisans from the Lafkenches Native Indian community to sell handmade clothing, accessories and home decoration products in its stores (see A Native Home Center). This taps into a national affinity for artisan goods, with the National Council of Arts and Culture claiming that 54% of households have artisan goods.

Bespoke, special edition or unique designs also appeal to consumers because they grant them an opportunity to express their individuality and taste, something that has become more difficult in an era of ‘faceless’ Kindles, iPods and ubiquitous clothing labels. One such example is fashion brand LittleShilpa which turns throwaway junk into high-art headgear (see Trash Fashion).

Consumers aren’t just prizing artisan or artistic objects – we’re seeing a revival in products and accessories that had been written off in the digital age.

• In Mintel’s Books and e-books UK September 2012 report, 34% of e book buyers say they still like to collect books and 36% of consumers think that “part of the magic of reading is holding a book and turning the pages”.
• It seems that the phone is not the wristwatch after all. The Federation of the Swiss Watch Industry reported its highest sales for 20 years in 2011, with growth concentrated amongst ‘statement watches’. Sales of watches valued up to $300 grew 22% in 2011; those priced between $300 and $1,000 grew 25%.
• According to Mintel’s Watches and Jewellery UK September 2012 report, 36% of women like to buy jewellery with unusual or unique design.

When it comes to sensory appeal, it’s not just the object itself that matters – so too does the packaging. The jury is out as to whether touchscreen technology has reacquainted us with our fingertips or dulled our sense of touch, but we’re seeing a rise in tactile packaging nonetheless.

Perhaps the leading exponent of pleasing packaging inspiration is Material Connexion, which claims to be the world’s largest library of ‘advanced, innovative and sustainable materials’. Its materials encompass everything from leaves to processed salmon skin.

The appeal of packaging aesthetics is playing out in the mainstream market as well:

• In Mintel's White Spirits and RTDs US November 2012 report, 33% of drinkers agree that an interesting looking bottle is an important attribute, rising to 53% of 21-24s.
• In Mintel's Premium Alcoholic Drinks UK November 2012 report, 33% say they “would expect a premium product to come with luxurious packaging (eg handcrafted bottle)", rising to 53% of 18-24s.
• Patron Tequila meanwhile has enjoyed great success from assuring customers that each of its bottles is ‘individually crafted by a glass artisan from recycled glass and is hand numbered’. In the same sector, José Cuervo has created pop-up stores that curate nationally crafted jewellery in Mexico (see Making a Comeback).

Beyond marketing, another area where tangible products appeal is in the world of investments. The same reassurance factors that have compelled some consumers to embrace objects apply to governments as well. Global uncertainty created a record 6% quarterly increase in gold demand in Q4 2011 according to the World Gold Council.

At a consumer level, whilst property and pension investments have an air of uncertainty, tangible alternatives are growing in appeal. Mintel’s Share Dealing UK October 2011 report showed that 34% of investors were planning to increase their holdings in ‘alternative investments’ like wine, art and antiques.

Individuality is an increasingly precious commodity and quality in our era of globalisation and social networking, where we project our personalities to the outside world. Consumers crave opportunities to be different and look different and unique, handmade or special edition products present an opportunity to buy into this concept.

Prized objects will present an opportunity to put some permanence back to our transient, fast-paced lives and as we spend less on life’s ‘big ticket’ fixtures like houses and cars, we may have more room – financially if not always literally in the home – for investing in smaller products that bring us pleasure, through their tangibility, tactility or aesthetic appeal.

Whilst this trend is in part a reaction to the rise of virtual products, it’s the internet that will nurture it moving forward. The key issue will be how the concepts of originality and individuality can survive as artisan crafts get adopted by the mainstream. We can expect new niche platforms and concepts to emerge to maintain alternative appeal, but we’ll also see increasingly major brands integrate independent concessions into their stores (see Pop-Up Flowers) and locally or independently created products into their offerings.

Another opportunity for mainstream brands is to invest some permanence into packaging so that things like disposable vessels or holders are designed to live on as objects in their own right.

• Traditional or unique crafts present an opportunity for consumers to celebrate individuality in an increasingly virtual, homogenised world.

• Tangible products have permanence and reassurance value – whether as tactile, attractive objects or ‘concrete’ financial investments.

• The clamour for individual, aesthetic and artistic products is creating new retail and employment opportunities for designers and distributors.

36% ofonline grocery shoppers would like the option of a nutritional summary of their basket when checking out, coupled with suggestions for healthier product replacements.

In Finland, K-Supermarket launched its Ravintokoodi nutrition tracking tool in late 2010, and we feel competitive advantage could be gained by a UK online grocer offering such services – and in utilising them to upsell and cross-sell.

With a number of retailers adopting the traffic light nutrition summaries on product packaging, a similar colour-coded system could classify users’ overall diets based on their online baskets. Nutrition tracking could offer the consumer a summary after each purchase – but the data could also be aggregated into monthly or annual totals, to suggest whether a consumer has a sufficient or excessive intake of key nutrients.

In addition to providing a real point of difference, such a service would provide the potential to upsell to premium, healthy products. And for those retailers with non-food interests – particularly diet plans (such as Tesco Diets) and health insurance – nutritional analysis provides opportunities for retailers to cross-sell and for users of these services to self-assess or measure progress towards goals.

Millennials are driving less and purchasing fewer cars. But Millennial parents are the hidden opportunity within this demographic.

Those born between 1977 and 1994 are more tech-savvy and culturally diverse than previous generations, and they’re penning down lessons from the recession into their parenting book. This blog season of “Gen Y Parents” will highlight category-specific insights about this new generation of parents and how brands and marketers can connect with them.

Young adults born in 1980 and after now make up 40% of the potential car-buying public, which otherwise should make automakers content that the good times will roll on for many years to come.

But they’re not. According to the Federal Highway Administration (FHA), in 1998, some 64.4% of potential drivers aged 19 and younger had their driver’s license; by 2008, that percentage was only 46.3%. For those slightly older, the data are just as bad: 87% of those aged 20-24 had their driver’s license in 1994; in 2008, that number was 82%.

Millennials who are driving are driving less: data from the National Household Travel Survey show that drivers aged 16-34 drove 23% fewer miles in 2009 than they did in 2001.

They’re also purchasing fewer cars: The peak year for new car purchases by those aged 21-34 was 1985 at 38%; by 2010, that figure is down to 27%, according to CNW Research, which specializes in the automotive industry.

Automakers are starting to wake up to the fact that selling cars to this emerging generation won’t be as simple as once thought. In remarks given at the 2011 Automotive News World Congress in Detroit, Toyota USA President Jim Lentz summarized the problem succinctly:

“We have to face the growing reality that today young people don't seem to be as interested in cars as previous generations. Many young people care more about buying the latest smartphone or gaming console than getting their driver's license.”

He neglected to mention Millennial parents, who present a more complex buying group than their childless peers. According to custom Mintel survey data, Millennial parents—those aged 18-35 with children aged 17 and under—were only slightly more interested than total Millennial buyers in purchasing a small car—the economic and eco-friendly choice that has become so popular in the recession. Over a third of Millennial parents (37%) said they were interested in purchasing a small car in the next six months while about the same (38%) said they had no interest.

So what are Millennial parents interested in? Two words: Size and power.

Mintel data show that Millennial parents with children under 17 living in the household are more likely than total Millennial buyers to harbor plans to buy a CUV (14% to 7%) and an SUV (29% to 19%) in the next two years.

Those Millennial respondents who say they have NO plans to purchase an SUV or CUV over the next two years? About 45% of Millennial parents with young children say they are staying out of dealerships, compared to a much higher rate (63%) of total Millennials.

Clearly, Millennial buyers who are parents of young children realize they can no longer avoid buying a vehicle. Unlike their childless peers, these consumers are in major transition in their lives. Adulthood beckons in the form of their children. Unlike their parents and grandparents, they held off on buying a car—the one they are considering purchasing as parents may be their first. So for them to buy now is a major life event and one they want to make sure does not compromise their values or wallet.

What will appeal to Millennial parents? Vehicles that do not stigmatize their age. These buyers will respond to vehicles that are edgy enough in design and technology but have the roominess and utility that will accommodate young children.

High-tech will matter. Millennial buyers represent the generation that is no longer interested in speed and power. Instead, these are the buyers of the online era. They see power in handheld technology and rapid network connections.

Automakers need to accommodate this drive for seamless technology by first providing it in CUV/SUVs, particularly those with the lowest price points. But more importantly, automakers need to move away from upselling premium tech packages to making them standard. Automakers need to find a sweet spot where premium tech upgrades are part of the standard package; upselling can happen through premium satellite radio subscriptions, additional power outlets, USB ports, etc.

Millennial parents will respond if the messaging shows how the technology understands their needs: a DVD player and earbud jacks for the children, a satellite service that emphasizes radio fare kids will enjoy like the Disney Channel, etc. The design and comfort amenities (leather seats, bicycle racks, Bluetooth, premium stereo speakers) will give Millennial parents the sense that they haven’t compromised a thing.

Eco (and wallet) friendly. Millennial buyers are spinning their wheels in a debt crisis: A 2010 report by Fidelity Investments found that members of this generation have more than three credit cards and 20% carry a balance of more than $10,000. Student college debt is also at its highest level ever. A November 2011 study by the Project on Student Debt, a non-profit thinktank in Oakland, Ca., found that the average student exits college with $25,250 in debt, a 29% increase from six years prior. Pew’s research worsens those numbers: 37% of adults aged 18-29 are underemployed, the highest finding of that age group in over three decades.

Millennial parents with children? The debt crunch is likely tighter. For that reason alone, SUV/CUVs marketed to Millennial parents need to emphasize value. While it may not be possible in the sticker price, the messaging will work if the vehicle has a low mpg rating and/or hybrid technology.

Millennial parents are more likely to be green—they grew up in the era of curbside recycling and green messaging in every storefront. They will not be transitioning to green culture; they’re there already. So for them to make this big leap into buying a car—and especially a larger vehicle like an SUV/CUV—they need to be sold on the fuel-saving benefits (and eco benefits for the planet) related to their purchasing. This should be the banner message for these vehicles.

Community. Because they came of age during prosperous times, Millennial parents tend to feel more positive about the world and closer to family and friends than their older Generation X peers, who commercialized alienation in the grunge era. Millennial parents also matured during the online boom where connectivity became king and racking up “friends” via Facebook became a badge of identity.

Messaging to these parents needs to invoke community. Young parents will feel more empowered if they understand they are joining a movement rather than striking out on their own.

Automakers can create meet-ups among Millennial parents just like they do single car buyers. They can market their vehicles at hotspots where parents hang out—festivals, Legoland, Chuck E. Cheese, water parks, etc. Millennial parents can meet each other and use each event as a social opportunity to meet like-minded young parents, but also confirm that they’re not alone.

Unlike older generation parents, Millennial parents will see this opportunity as a badge of self-worth, not mockery. Other ways to get them involved: special Facebook groups, weekend road rallies designed for parents and kids, driving tours of interesting destination sites like a local craft brewery or art fair.

Any way the dealership or automaker emphasizes how their vehicle makes Millennial parents feel they are part of a group will resonate more, especially since they’re still in that transitory period of leaving one foot firmly in their youth but taking the next leap forward to what’s next.