Business trends in 2012

How can your company keep ahead of the crowd? Industry experts reveal next year’s most valuable opportunities

Co-creation will drive strategy

Jeremy Brown, founder & CEO Sense Worldwide

Co-creation is all about collaborative problem solving and harnessing the latent expertise and creativity that is waiting to be tapped outside of the business. That means using the expertise and creativity of your most loyal customers, suppliers or people from completely unrelated worlds like hackers, or rejecters of your product - then taking their perspectives and ideas to inspire the business strategy, drive new product development, marketing ideas and thought leadership initiatives.

In my experience many of the world’s biggest and smartest companies, like Nike, Johnson & Johnson and Vodafone, have already turned to co-creation to transform the way that they do business.

In the age of social networks, co-creation has become easier than ever before. I have no doubt in my mind that co-creation is what every business will be doing to stay one step ahead in the future. And why will people want to get involved with businesses in this way? Because it draws on a very human need: to make things better and to make better things.

Location-based mobile tech will help retailers win new customers

Dr James Ohene-Djan, Managing Director,

The combining of video, GPS and mobile technologies will create exciting new location-based service for customers. The way businesses engage with customers will be transformed by the ability for a customer to search for a product on a mobile device, watch a video of that product, locate suppliers in their immediate area, and then be guided to those suppliers via GPS.

No longer will it be a case of searching for a business that can supply a product; instead, through the power of GPS, the business can find you. Online video will allow businesses to present themselves via mobile devices, in ways that can truly give customers an intimate, emotional view on the services they provide. Location-based services will allow customers to easily find their way to products they can see “in the flesh”, while also supporting local retailers - something currently missing in the online shopping experience.

New opportunities from real-time data and sharing

Steve O’Hear, CEO and co-founder of Beepl, former contributing editor at Tech Crunch Europe

In 2012 we will see a continuation of opportunities around social, real-time data, mobile and location, particluarly real-time data and sharing. Specifically, I mean users handing over data in return for some sort of value proposition. Data may be handed over explicitly or implicitly (via various sensors such as a mobile phone’s GPS radio or through the use of apps leveraging data from Facebook and Twitter etc).

We’ve already seen, for example, people receiving special offers at the point of intent based on present location, better product recommendations, social match-making (online dating is ripe for disruption), and so on. In 2012 there is much, much more to come.

The most consumer-friendly companies will prosper

Allyson Stewart-Allen, director, International Marketing Partners

As consumers stay stressed throughout 2012 – thanks to public sector cuts, unemployment rates continuing, inflation and more corporate misbehaviours uncovered – they’ll love the companies who make things easy. Think micropayments by mobile phone, more Amazon drop boxes in shopping centres, more free parking at urban megamalls, in-home services for those still employed (and working longer hours now there are fewer people to do the work), yet more computer and mobile-based interaction with the world, trade-in to trade up. These are just a few of the many opportunities awaiting eager entrepreneurs who can create business models tapping this trend.

Companies will teach employees to code

Steve Henry, founder of and columnist

You can’t turn on the radio these days without hearing about the debate raging around coding for schools. When you realise that schoolchildren in India are taught coding in class, but British kids aren’t - well, who’s going to be winning in five years’ time?

That’s why my prediction for next year is that companies will start teaching their employees the basics of writing code. The future is based on learning code, and smart companies will get into it quicker than others!

Innovative private funding will fuel start-ups

Ibrahim Aziz, MD of accountancy practice Numerion Associates

Unemployment will remain high with more redundancies predicted in both the public sector and the financial service industry. As a result, more and more people will create businesses to secure their long term future.

As the number of start-ups grow, access to capital from financial institutions will continue to be limited, despite the statement by the chancellor in the autumn. Access to private funding will see enormous growth in 2012 as more people consider alternatives to placing their funds in bank deposit accounts where inflation is eroding the capital value. Look, for example, at Funding Circle [which facilitates peer-to-peer lending to businesses].

A new wave of female entrepreneurship

Mary Cummings, director of online community magazine Work Your Way

There will be a boom of businesses who specialise in training and mentoring new female-owned start-ups. We’ve seen a steady rise of “mumpreneur” businesses and this will continue as women opt for more flexible working. These businesses aren’t merely “kitchen-table” industries, but smart savvy business women who are finding a niche in the market and starting up. Groups like our own, embracing social media and the internet to help mentor and support these fledgling businesses, will likely go from strength to strength.

The government’s recent announcement by Theresa May, to provide resources for 5,000 mentors to be trained to help female entrepreneurs set up their own businesses, is very welcome. 

Energy solutions that save money

Jon Bentley, energy and environment partner, global business services, IBM UK & Ireland

Costs will remain in the spotlight next year. Saving energy across an organisation results in saving costs which is as important to smaller businesses as it is to large corporations and government.

Our economy remains energy dependent, and there is no choice but to replace much of the existing generation capacity as it reaches the end of its life. Yet the UK is committed to its carbon targets. The government is pressing ahead with the nationwide smart meter programme and is bringing in the Green Deal to foster energy efficiency.

With the amount of change and investment in the energy sector, this means there are opportunities for businesses large and small. The winners will be those that can combine innovation and collaboration with practical, efficient execution. Results will count more than vision in the years to come.

The rise of mCommerce

James Booth, investor, and founder of Rockabox Media

The advent of smart mobile devices such as the iPhone and more recently the iPad, has further empowered consumers with on-demand content: music, video, magazine-style, gaming, etc. With this, new commercial models have evolved. And it’s this move of media consumption to smart mobile devices that has opened up no end of opportunities for mobile commerce (mCommerce). These device types will start to affect the high street in a number of ways: customers will be able to browse items before potentially finding the same for a better price via their mobiles; equally users will soon be able to pay for goods using their mobile handsets via payment chips built into the device.

SEIS will encourage investment in riskier start-ups

Jon Sutcliffe, technology partner at Kingston Smith LLP

 The Enterprise Investment Scheme (EIS) has for many years been crucial in encouraging business angels and others to invest in early stage businesses with high growth potential, as the valuable tax breaks available under EIS help to offset the risk involved in investing. EIS has played an essential role in getting many technology companies up and running.

The chancellor’s Autumn Statement last month confirmed an enhanced version of EIS, known as Seed EIS (SEIS). It will be similar to EIS, and aimed at smaller, riskier, early stage UK companies. It will give investors income tax relief worth 50 per cent of the amount invested, compared to the EIS’ 30 per cent. Good news, you would think, but the law of unintended consequences means that some investments heading for small companies may now get postponed until 6 April 2012, as investors seek the new tax relief.

Regardless, we expect to see investment into early stage businesses, especially those that plug into clusters like Tech City, to bounce back strongly in the New Year. There are clearly individuals with an appetite for investment, and it is possible that the current closing of their chequebooks will translate into increased activity in 2012 to get the best out of SEIS. This will be on top of overseas investment, which we have seen increase during 2011, and which we expect to continue in 2012, especially from the US and the Far East.

Retailers will become more localised and provide more sophisticated promotions

Sue Butler, director, global management consulting firm Kurt Salmon

Despite the boom in online business, stores will still deliver the largest volume of sales. As such retailers are going to have to drive more profit from their existing estate. To achieve this they will need to develop a more “localised” product offer; the one-size-fits-all theory holds no water. They will also have to invest in training and developing store staff to improve customer service.

Those retailers that best manage cross-channel sales, such as order on line and collect in store, will have a real advantage.

Promotions will continue to be part of every day life, but alongside the ubiquitous 2-for-1 deals, there will be more sophisticated and personalised tactics, such as coupons and vouchers offered via a mobile or at the till point.

Prime retail rents will soar

Peter Mace, head of central London retail, Cushman & Wakefield

The race for space in London’s desirable retail locations among international retailers is set to intensify in 2012. Availability in both prime and secondary shopping areas in the capital remains at its lowest level for the past two decades. Competition for space on Oxford Street, Regent Street and Bond Street is particularly fierce.

We expect zone A rents for prime retail property on Bond Street, supported by very strong luxury retailing, to reach £1,500 per sq ft by 2013. With limited units available, lease premiums have been pushed as high as £7m.

With the Olympic Games in 2012, many retailers from overseas seeking to gain representation in London  are prepared to pay very aggressive rents or key money (money paid to an existing tenant as an incentive to move) to open before summer 2012. However, having worked hard to gain representation in the capital, most retailers are very reluctant to give up stores as they consider the next 12 months to be an important period, not only in respect of sales, but also as profile for their company.

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