The Future of Consumption

The Future of Consumption and how COVID impacts the way we will shop and travel in the future. Here are some key takeaways from our discussion:

How to Create Sustainable Tourism? Are You Willing to Pay for It?

• Our desire for far-flung travel is stronger than ever. How can we make travel not only safer but more sustainable?

• Pre COVID, the sharing economy, budget airlines, and Instagram culture fueled the growth of mass tourism. The “tourist dollar” is easy money for any government but the consequences often weren’t pretty. Foreign business interests usually drained money from the local economy instead of bolstering it. Hotels, vacation rentals, and souvenir shops would hike rents and drive out locally owned businesses and artisan workshops along with the history and culture that made them charming destinations to begin with. For example, Venice is swamped by 120,000 day-trippers who far outnumber the 55,000 local residents. Once known for attracting writers and artists hungry for its culture, Venice is now sinking.

• Mass tourism leaves a big carbon footprint and damages our environment. On the island of Bali, 70% of the population depends on tourism. Each year 70 hectares of land are converted to hotels and luxury residences for rich foreigners. Each 4-star hotel room requires 300 liters of water. Each day 13,000 cubic meters of trash is thrown into public dumps and only 50% of this is recycled[1]. Every month 30 million plastic water bottles are discarded.

• Tourism brings along many financial benefits. However, unless tourist money is kept in the local community, the benefits do not materialize. COVID hit tourism-reliant destinations hard. The progress to spread tourism away from the tourist hotspots through authentic, high touch culture experiences enabled by the local communities were wiped out when the visitors vanished. While they tried to pivot to attract local tourists, the volume was inadequate. These farmers-turned-tour-guides had to go back to farming because their skills were not transferrable. Cutting jobs was inevitable. When employers restructured with compassion, they actually received thank you notes from the affected employees!

• There is an opportunity to change things that do not work. To rebuild more responsible, more sustainable tourism, governments play a crucial role. Should there be taxing schemes to control the expansion of tourism and to spread the benefit more evenly? How can they regulate hikers tromping through habitats? Some examples demonstrate a paradigm shift: Phuket will be closing their beaches for a few months every year. At Luang Prabang in Laos, you won’t be able to find plastic bottle waters because every hotel and restaurant has huge water filters for free water refills. And of course, there is Bhutan, where they decided they do not want tourist dollars at any cost. Cities across Europe have passed laws to stop Airbnb in major cities so that locals are not priced out of affordable housing.

• Travelers also play a role. How can we change the preference from the 3-hour photo-opp or a “manufactured” experience into a multiple day's authentic tourism that will build livelihoods that spread beyond the five-star resorts, surf party infested beaches, and yoga retreats? How can we redefine a new 5-star experience that includes community & planet? Will awareness of the negative impact of mass tourism translate to travelers’ willingness to pay more to spread the financial benefit and create a more sustainable travel model? By planning ahead and stop letting convenience overtake common sense, travelers can do their bit to reduce their carbon footprint by using water refillable bottles and eco-bags.

Will You Continue to Support Local Businesses or Will You Jump Back to Destination Shopping?

• We were not surprised by the New York Times’ Sweatpants Forever article explaining the unraveling of the fashion industry. We certainly don’t want our style to be defined by one Uniqlo style in multiple colors or Lululemon athleisure. We are unlikely going to support fast fashion until their message of sustainability and circular economy are implemented in all, and not just a small part, of their portfolio. We will look for the pieces that last in style and quality.

• The industry needs to move away from the discount culture. The pandemic will put the nail in the coffin for Black Friday. Singles Day had led to so many new promotions online that we are frankly confused.

• At the start of the pandemic, the lack of readiness in e-commerce was apparent. Receiving poorly drafted What’s Apps was poor customer experience. Companies had to learn fast how to use data and technology to inform face to face interactions such as understand their customers, track engagement, and curate personalized interactions with customers.

• Without the tourists shopping in Singapore, brands had to grow their local clientele and fast. How can brands, international or local, retain their clientele once travel begins? “If you view the customer as a $ sign, you’ve lost them.” The narrative of the brand’s story is the start but hard work is required to “build one customer relationship at a time.” Customers want to learn and experience the brand culture. Apple could easily sell its products online but selling its culture through its stores has made all the difference in selling it at a high margin.

• What we value as a customer is authentic relationships. We know which stores we will never come back to and which we will end up buying something unintended purely because of the positive relationship. The “bricks & mortar” business is having to return to its humanistic core model – that of being in the authentic business of people which we dubbed as “Bricks & People.” If brands can leverage data and technology to build authentic relationships, we won’t need destination shopping.

How will you keep your shopping dollar locally once you start to travel? How will you travel differently in the future?

Hot Tip : Staycations are shared with your family. What if you just need a personal break away from your family? Consider a Bizcation! Check in to a hotel and pretend you are on a business trip. You can order room service, have business lunch & dinners, and get some “me” time away from your loving family.

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Inner Circle Conversations is a by-invitation group discussion on topics curated by Elaine Cheung. The goal is to develop foresight by understanding the impact of accelerated changes around us. If you are interested in joining a future conversation, please subscribe at www.elainejcheung.com