I was recently on the receiving end of a classic ‘grumpy old man’ style tirade from a marketing consultant I deal with on a regular basis.
He’s a keen sailor and had been to Rock in Cornwall for a weekend of racing. Rock is a small village perched on the shores of the Camel estuary in north Cornwall. A short ferry ride away is Padstow – better know as ‘Padstein’ – the home of celebrity chef, Rick Stein.
The reason for the moaning and groaning was simple enough. The village pub had changed out of all recognition since his last visit. Gone were the nicotine stained walls, Cornish pasties and real ale, all replaced by a yuppy makeover featuring plasma screen TV, chrome pillars and designer cocktails.
I had to agree it was sad that the traditional character of Cornwall was being eroded in this way, but I had to point out that it was happening for a reason – because customers wanted it that way. Like it or not, if trendy bars are what customers are after, that is precisely what the breweries will provide. If they do, they can profit from a growing, younger, more affluent customer base; if they don’t, they get left behind as other pubs steal their business.
The changes taking place to the pubs of Cornwall are simply a reflection of the changes taking place throughout society. More people are buying second homes in what used to be quiet, backwater, seaside towns. Fishermen’s cottages are now highly desirable bolt-holes for busy city executives who, when they decamp to the coast for the weekend, want access to the same sort of bars and restaurants they can find in the towns and cities in which they work.
The challenge for businesses is to spot these changing trends and try to capitalise on the commercial opportunities they create. Nothing ever stands still in business and the companies which succeed are those which are able to adapt quickly to the changing environment.
Spotting the trend
Trend spotting is one of those marketing disciplines which is part art, part science. The science is the easy bit – there are plenty of statistics available which paint a picture of changing trends in just about every aspect of the housing market. If you have a spare 10 minutes one day as you eat your sandwich at lunchtime, have a surf on the Council of Mortgage Lender’s (CML) website, at www.cml.org.uk, or the Department for Communities and Local Government (DCLG) website, at www.communities.gov.uk, and you’ll find a rich vein of information about changing social, economic and housing market trends in the UK.
However, as helpful as facts and figures are, you don’t need to be a statistician to be able to spot emerging trends – which is where the art comes in. Indeed, statistics can often be useful ways to confirm that a trend you have spotted is actually happening. Statistics mean you don’t need to rely on hunches.
For example, at the time of writing this article, a press release was published on the internet confirming that the buy-to-let (BTL) boom in Wales is being fuelled by a growth in the number of migrant workers the principality is attracting. Apparently, the Home Office estimates that nearly 600,000 people from eight new EU countries have come to work in the UK. The enlargement of the EU in 2004 has given workers from new member states the right to work in other EU countries – hence the influx of migrants.
From a housing – and therefore a mortgage market perspective – this trend has huge significance. More than half a million people need housing, initially in rented accommodation, but in due course in homes of their own. If you live in an area where there is a large or growing migrant population this is a trend of which you can take advantage.
A HIP environment
On a completely different tack, the government Housing Minister, Yvette Cooper, has also announced that Energy Performance Certificates (EPCs) should be linked to incentives such as green mortgages and energy saving schemes being run by energy companies. The announcement was made as part of a general announcement about the next phase of Home Information Packs (HIPs) testing, which the government is committing £4 million towards.
So, another couple of important trends here. Firstly, the potential for environmental issues to have a direct impact on mortgage product design and sales for the first time and secondly, the onward march of HIPs. Both of these trends will have a big impact on brokers in the future. Whether you agree with them or not, every house seller must have a HIP from next June, so this is a trend you must be part of. Likewise, environmental issues are going to play a far more central role in future – they will impact on the way in which we are taxed and, by the sounds of it, even the types of mortgages we choose.
The problem with trend spotting, of course, is that trends aren’t obvious in their early days. For example, did Kodak realise mobile phones which incorporate cameras would be an even greater threat than the emergence of digital photography? And who, just a few years ago, would have thought that the internet could eventually kill off CD music sales?
Riding the wave
The trick with trends is to try to spot them early and then ride the wave for as long as you can. National trends may not be relevant in your specific location (I somehow doubt that immigration from EU countries is a huge issue in Cornish seaside towns), but there may well be other trends that will have a far more profound effect on your business.
Companies which refuse to adapt and change rarely survive. You cannot expect to be running your business in the same way for the next 10 years. The challenge is to seek out new markets and new opportunities – just as the pub owners of North Cornwall have done.
