Trend Watch: Part I

This story appears in the December 1996 issue of Business Start-Ups magazine. Subscribe »

Got a clue? We do, and we're willing to share. Culled from hours of research, observation and talks with experts in a variety of industries, the following pages contain our picks for the 14 hottest trends for 1997 and beyond-not to mention dozens of products, styles and services we predict will spark sizzling sales.

What trends look particularly hot? Perhaps the biggest force shaping the future is the approaching millennium. Giving rise to a whole raft of businesses related to personal growth and New Age thinking, the millennium is so important, we've devoted an entire article to the topic (see "2001: A Business Odyssey").

And while it doesn't take a genius to peg technology as a hot trend, our look at virtual corporations and home tech will help you pinpoint where the greatest opportunities lie in this fast-changing field.

As for the rest of the trends we've selected-well, if our picks are any indication, Americans seem to be going to extremes. On the one hand, they're rocketing down mountains or up skateboard ramps as participants in "extreme" sports; eagerly pursuing the latest fitness regimes, vitamins and herbal supplements in an endless quest for eternal youth; or stuffing themselves with gourmet food and designer water. On the other hand, Americans are also seeking to streamline their lives and are turning inward to spiritual pursuits. (Is it any wonder we named "confusion" as one of the hot attitudes for '97?)

Figuring out these seemingly contradictory states of mind-and how your business can best benefit from them-takes a bit of effort on your part. That effort will, however, be amply rewarded. So without further ado, start reading . . . and get a clue.

Extreme Sports

Imagine climbing up a manmade frozen waterfall or racing down snowy slopes on a mountain bike. Scary? We'd say so. Thrilling? Without a doubt. And both events are slated for next year's inaugural Winter X Games-the ESPN-created Olympics of extreme sports.

If gold medals were handed out for industry buzz, extreme sports would almost certainly capture the prize these days. Turned off by the tried and true, scores of young fans are cheering the daredevil antics of wakeboarding, rock climbing, skateboarding, snowboarding and the like.

"These sports are primarily individual expressions [of athleticism]," explains Ron Semiao, director of programming for ESPN2 and the creative force behind the cable sports channel's X Games. "A lot of these [athletes] are not really into playing team sports."

Intrigued by the burgeoning popularity of extreme sports, ESPN held its first X Games in June 1995. The summer version of the tournament has since become an annual event, and ESPN hopes the winter version follows suit. Of course, widespread TV coverage gives extreme sports a lift.

"When World Cup soccer was going on in the United States, it had a direct impact on soccer participation in this country," says Larry Weindruch of the National Sporting Goods Association.

But will a nation of young people eventually tire of going to extremes? Don't bet on it. "Is skateboarding ever going to become as popular as the NFL, Major League Baseball or the NBA? I don't think so," muses Semiao. "However, I think all these [extreme] sports will become accepted parts of the sports culture."

Simplicity

Don't be fooled: There's nothing simple about simplicity. The legions of Americans who are happily downsizing their lives in favor of a back-to-basics approach are doing so with the intention of ultimately adding to-rather than subtracting from-their daily existence.

"It's definitely not about deprivation," says Janet Luhrs, editor and publisher of the monthly newsletter Simple Living: The Journal of Voluntary Simplicity. "[Simplicity is] about freedom."

Freedom to do what? "It means living more authentically-and with a purpose," explains Luhrs. "When you unclutter your outer life, you are freed up to be more of who you want to be and who you are. You can't follow your dreams if you're just working around the clock to consume and spend."

"With the new global age coming about, people are looking for a deeper meaning of life than just material accumulation," agrees Gerald Celente, editor and publisher of The Trends Journal newsletter.

According to Celente, some 15 percent of baby boomers will be converts to the simplicity movement by 2000. Nonetheless, judging by the staggering success of bestselling works such as Sarah Ban Breathnach's Simple Abundance: A Daybook of Comfort and Joy (Warner Books), boomers aren't the only ones doing more with less. Books such as The Peanut Butter and Jelly Game (Good Advice Press) teach even kids that it's cool to be frugal.

Businesses are struggling to adapt to the complexity of a market that's turning its back on overt materialism. Reaching these folks, Celente warns, won't be easy. "Products that people desire-rather than need-won't be big sellers," he predicts. "Products have to fill a need and have a function and a purpose."

Fountain Of Youth

For better or worse, no country places a higher value on youth than the United States. So as the eldest baby boomers hit the half-century mark this year, it was only to be expected that alleged age remedies such as melatonin would fly off store shelves.

"Big products [among baby boomer consumers] are going to be cosmetics, health, fitness and nutrition products," says Gerald Celente of The Trends Journal newsletter. "Anything having to do with health and longevity [is going to sell]."

Of course, boomers aren't the only ones seeking the fountain of youth-they're just the most prominent. With no less an authority than the Surgeon General urging physical activity, even heretofore rooted couch potatoes are beginning to work up a sweat. Indeed, it's estimated the number of Americans age 55 and older sporting health-club memberships more than doubled between 1988 and 1995. In the same time period, as reported by the Fitness Products Council, membership among 45- to 54-year-olds grew 61 percent. Not surprisingly, health clubs say members are showing much greater interest in senior programs.

What's ahead? Expect more exercise routines that place greater emphasis on energy, stamina and wellness-as opposed to those that merely build muscles. Expect, too, increased demand for home exercise equipment that reduces impact and enhances comfort. Above all, expect Americans in general-and baby boomers in particular-to continue following in the footsteps of Ponce de León. Eternal youth . . . here we come.

Aliens

We interrupt this special section to deliver the following news bulletin: Aliens have landed! Don't panic. In the event this becomes an actual emergency, you will be notified where to turn for updates on this frightening situation.

OK, so Orson Welles did it better with his legendary broadcast of "The War of the Worlds." Even Welles, however, might be taken aback by the alien-crazy nation of today's America. With "The X Files" and imitators landing all over the TV airwaves-not to mention the otherworldly success of films like "Independence Day," "Stargate" and the "Aliens" series-it's clear there's never been a better time to be from another planet. Just don't expect a cuddly alien (à la E.T.) to grab audiences fascinated by unkinder and ungentler forms of extraterrestrial life.

"Popular culture appears to be focusing in on bad aliens," acknowledges Terry O'Neill of Fate magazine, a monthly publication devoted to the world of the paranormal. "Aliens are storybook monsters-scary in one sense but not real in another sense."

Well . . . maybe. Recent scientific findings indicating possible life on Mars are enough to convince all but the least starry-eyed among us that we may indeed not be alone. Real or not, however, aliens have unquestionably touched upon our pre-millennium jitters.

"I think it's safe to say large portions of the American public-and people around the world-have been conditioned to accept the idea that there are other life forms out there," says Don Ecker of UFOMagazine. "Look at all the science fiction we've been bombarded with."

And will continue to be bombarded with, no doubt. For even as we scoff at rumors that sound like pure fiction to us-no, we don't believe that a certain town in Colorado is populated entirely by aliens-we can't resist the urge to cast our eyes skyward. The truth is out there.

Home Meal Replacement

Busy professionals may be able to stand the heat, but that doesn't mean they have any desire to get into the kitchen after the workday is through. To the contrary, there's often precious little energy or time left over to expend on preparing the evening meal. Rather than microwaving bland TV dinners or heading out to restaurants, however, these professionals are increasingly opting for pre-prepared meals to be enjoyed at home.

Pioneered by home-style fast-food chain Boston Market, the home-meal replacement industry is cooking up a storm. In addition to the grocery stores and restaurants offering packaged foods to go, some 1,000 personal chef businesses throughout North America are tasting success. Perhaps even more impressive, David MacKay at the U.S. Personal Chef Association projects the number of personal chef businesses will increase fivefold in the next five years.

"It's still in its infancy," says MacKay of his industry's prospects. "It's just begun to grow."

As have grocery store/restaurant hybrids like Eatzi's in Texas. Considering the majority of consumer food dollars are spent on meals prepared away from home, it's clear that the modern-day definition of home-cooked meals are meals meant for eating at home-but prepared by someone else. Hey, we're not complaining.

Women's Sports

This year's Summer Olympics telecast was reportedly designed by NBC programmers to appeal to women, and for good reason: The number of women interested in-and participating in-sporting activities seems to be at an all-time high. Consider this sampling of statistics provided by Boston-based marketing firm About Women Inc.:

Forty percent more women athletes participated in the 1996 Summer Olympic Games in Atlanta than in previous Games.

The popularity of women's soccer got a boost when it made its debut as a medal sport at the Atlanta Games.

By 2000, an estimated 10 million women will play golf-double the
5 million now taking to the links.

An increasing number of women are pitching in to swell the ranks of female college-level softball players to more than 29,000.

Women make up one-fifth of the nation's snowboarders.

A whopping number of professional boxing fans-nearly 40 percent-are estimated to be women.

Women are estimated to account for almost half the adults purchasing NBA products.

"More and more attention is being given to women's sports," says Larry Weindruch of the National Sporting Goods Association. "There used to be a lot of unisex workout gear-not anymore."

By way of example, Weindruch points to athletic shoes designed for women, golf clubs engineered with women in mind-even women's-sized basketballs. Sporting goods manufacturers who don't give their women customers a sporting chance aren't going to score as well as their competitors.

Feeding Frenzy

Perhaps "have food, will travel" would be a fitting theme for the '90s. People are out and about, eating at malls, airports, gas station convenience stores, bookstores, car washes, car dealerships . . . you name it, they're there. It seems every service provider or retailer is adding some sort of food to its agenda, in a massive attempt to satisfy the bottomless American appetite. "People are much more accustomed to eating away from home," says Ron Paul, president of restaurant consulting firm Technomic Inc. in Chicago. "Now anywhere you see people, you'll see food."

Consumers may hunger for food; business owners, meanwhile, are hungry for consumers. "Food makes consumers want to spend more time [in stores]," says Paul. "Food keeps them close to the merchandise."

All industry segments are partaking in the feast. In retailing, you'll find cafes not only in large stores such as Nordstrom or Target but also in more selective outlets like the Emporio Armani clothing store in Costa Mesa, California, which has an adjoining Armani Cafe. And Ken Berg, owner of Koo Koo Roo California Kitchen, recently acquired Color Me Mine, a Los Angeles-based paint-your-own-pottery shop, with the intention of combining the pottery and food concepts. "It's a synergy," says Berg, who experienced a 13 percent increase in Koo Koo Roo sales the day after he opened Color Me Mine next door. "People spend two or three hours doing ceramics and want something to eat or drink before, during or after. Eating as part of entertainment is convenient."

It's also somewhat instinctual. "If food is accessible," says Berg, "people reach for it."

"There's a definite pattern toward almost continuous eating," Paul agrees. "It's a form of relaxation, a you-deserve-a-break-today kind of thing. Or it's just something to do while you're waiting. You grab something as it's available, and then you grab something again a little while later. It's impulsive eating, where you eat maybe eight times a day instead of three square meals."

The urge to eat isn't the only thing that seems constant. "Once trends like these start," says Paul, "they're only likely to accelerate."

Hot Tips

Samurai Pizza Cats

Yes, Virginia, cats deliver pizza-and they save the world, too. At least they do in Los Angeles-based Saban Entertainment's weekday animated show "Saban's Samurai Pizza Cats," in which three good Samaritan felines run a pizza parlor in Little Tokyo when they're not performing superheroic acts such as foiling evil villains. The crime-fighting kitties-brainy Speedy Cerviche, suave Guido Anchovi and sultry Polly Esther-are reminiscent of those do-gooder Teenage Mutant Ninja Turtles of yesteryear, who, you'll remember, also happened to have an insatiable yen for pizza.

Bluegrass Music

Nothing makes the toes tap quite like a well-played banjo-which might help explain the growing popularity of bluegrass music. According to the International Bluegrass Music Association, an estimated 4.5 million adults are consumers of this quintessentially American folk-style music.

That number might not seem like much to sing about, but consider this: Bluegrass buyers typically purchase more than nine recordings per year. What's more, a U.S. Census study cited the bluegrass audience as the fastest-growing segment of the music industry. There must be a whole lot of toe-tapping going on!

The Big Comfy Couch

Step aside, Bozo-there's a new clown on the tube, and she isn't wasting any time taking the cartoon world by storm. Her name is Loonette, and her PBS show is called "The Big Comfy Couch." The set is-you guessed it-a big, comfy couch, from which young Loonette and her doll, Molly, teach kids lessons about values, manners, feelings and more.

Holding its own against such children's programming staples as "Sesame Street" and "Mister Rogers' Neighborhood," could the Canadian-made Big Comfy Couch be the next "Barney and Friends"? It's anybody's guess, but one thing's for sure: When Hollywood Ventures sank $5.2 million into making the first 52 episodes, they weren't clowning around.

C-Bear And Jamal

Hip-hop is hot-and may get hotter if the new animated series "C-Bear and Jamal" on Fox Children's Network's Saturday morning lineup takes off as expected. Voiced by rapper Tone Loc, C-Bear is an ultrahip teddy bear sporting baggy pants and a baseball cap. He leads his human teen friend Jamal in and out of adventures . . . and, of course, plenty of lessons are learned along the way.

Rocky And Bullwinkle

They're cute. They're funny. They're sarcastic. And, most significantly, they appeal to cartoon lovers of all ages. For these reasons, look for Universal's "Rocky and Bullwinkle & Friends" to be a hot property in the coming year.

" 'Rocky and Bullwinkle' is a classic," enthuses Cynthia Cleveland, president of merchandising and licensing for Universal Studios Consumer Products Group. "They first went on the air in 1959-and have been on continuously ever since. So what you've got is a [show] that appeals to baby boomers through Generation Xers through little kids."

Rocky and Bullwinkle apparel, bedding, gift cards and cookie jars are among the licensed products either already in stores or in the works. There's even a Rocky and Bullwinkle coffee-table book. How much more respectable can a moose get?

What's Up With . . .

Bagels

With some 6,000 retail bagel operations in existence and a host of major chains continuing to expand, is there still a hole to be found in the bagel market?

The answer is a resounding yes. "The larger [bagel] shops are going into major metropolitan areas," says Thomas Lehmann of the American Institute of Baking, "leaving plenty of niche markets to be developed."

Yet while bagels continue to boom-the American Bagel Association estimates retail bagel sales rose from $1.6 billion in 1995 to $2.3 billion in 1996-entrepreneurs would be wise to consider this: According to the Tortilla Industry Association, Americans consumed some 60 billion tortillas in 1995, making tortillas the fastest-growing segment of the U.S. baked goods industry. Quesadilla, anyone?

Internet Service Providers

With the entrance of AT&T and MCI into the Internet access business earlier this year, pundits have predicted the demise of the nearly 3,000 independent Internet service providers (ISPs). True, costly equipment upgrades are more difficult for small ISPs to swallow. Yet technical outages and service irregularities aren't limited to independent ISPs.

"Nobody is immune [to system failures]," says Ted Julian of International Data Corp., a technology research firm in Framingham, Massachusetts. "Look at how America Online went down for a day. Certainly, the big companies have better resistance and their response time is faster, but it's naive to think they don't face similar issues."

Despite technical problems, industry watchers say ISPs have an edge over their larger competitors when it comes to customer service. Says Julian, "ISPs have proved they're more than capable of delivering superior customer service."

Internet Commerce

Thanks to a growing population of users discovering the convenience of shopping online, Internet commerce has finally arrived. What electronic storefronts are busy taking orders? Companies that serve narrow markets such as hard-to-find books, wine and music.

"Niche companies that go where the large companies won't are really taking off," says Rosalind Resnick, author of The Internet Business Guide: Riding the Information Superhighway to Profit (Sams Publishing).

Internet retailers are becoming more savvy in reaching their customers. Some use new software that lets them send e-mail to select groups. Others deliver real-time customer support-clients with the right software can "talk" with support staff.

Need more proof of the Net's drawing power? Technology research firm International Data Corp. expects Internet commerce revenues to reach $1.9 billion by the year 2000.

Coffeehouses

Aiming to become a societal staple rather than a mere drop in the bucket, coffeehouses are changing more than just the flavor of the day to keep customers alert. "It's not the nature of people who start these businesses to sit still," says Ted Lingle of the Specialty Coffee Association of America. "They're always looking for bigger and more dynamic things."

While everyone's abuzz about trendy cybercafes, many coffeehouses are simply adding meals, and an imaginative few are experimenting with odd lures such as laundromats. Whatever the venue, we can be sure of one thing: More caffeine will be coming soon to a location near you. Lingle expects the number of coffeehouses, which grew from 200 in 1989 to 5,600 this year, to reach 10,000 by the end of the decade.

Juice Bars

Juice bars are fueling consumers' dual cravings for health and good taste with savory concoctions of fruit and vegetable juices spiked with nutritional supplements, herbs and more.

But the most fruitful ventures will only be found in select markets, experts warn. Joan Holleran, editor of Beverage Industry magazine, stresses that juice bars thrive only in regions comprised of young and affluent consumers. They also require a warm climate where produce is readily available.

Before jumping on the juice-bar bandwagon, Holleran advises, do careful market research to ensure there's a steady client base, and get the scoop on the latest supplements customers want-whether it's seaweed, wheatgrass or ginseng. After that, drink up!

Restaurants

Some of today's hippest-and hottest-restaurants are dishing up more than just good eats. Elaborately decorated restaurants that capitalize on exotic themes-the Rainforest Cafe, Dive and Planet Hollywood, to name a few-are the specials of the day . . . and quite possibly the year.

"A restaurant isn't just a place to eat anymore," says Caitlin Storhaug of the National Restaurant Association. "Having some sort of theme helps to differentiate restaurants from each other."

But while starting a Hard Rock Cafe is beyond the average entrepreneur's budget, experts say most restaurants still need a hook. Storhaug proposes opening a less-expensive sports-themed bar, or playing on a local interest, such as the beach, in the restaurant's menu items, decor and uniforms.

More ideas for boosting a restaurant's "eatertainment" value? Hire magicians, fortunetellers or cartoonists; host food festivals; hold open-mike nights; add golf-putting or pinball machines; or offer beer, wine or cigar tastings.

Hot Markets

What's hot doesn't have much to do with what excites you-it's what's hot to your market that matters. Here's a look at the most influential markets for 1997 and beyond:

• Homebased businesses: Homebased business owners-31 million strong-are evolving comfortably into cutting-edge technology users. In five years, home workers, who already drive the home PC movement and comprise 63 percent of all U.S. adult Internet users, will see "intelligence built into every device," says Tom Miller of research firm Find/SVP. "The Web TV is already out there, as is the network PC." With voice modems (making it possible to speak and send data over the same standard telephone line) and Internet-ready phones (which allow you to browse the Web from a screen on your phone) soon to follow, Miller foresees the isolated home worker of the late '80s morphing into the network-happy worker of the late '90s.

• Rural: This long-ignored market is gaining new respect. Today's rural consumer is more likely to be "sophisticated, smart and formerly urban," says Jon Bard, author of audiotape set Escape! How to Quit the Rat Race, Move to the Boonies & Make a Great Living . . . By Someone Who Has! (Two Mile High Press). "These aren't a bunch of hayseeds."

Large companies are starting to look at rural towns not as secondary markets but as sales leaders. Staples, for one, reports sales per store in small markets now exceed those in the average urban store-and it plans to make these markets a priority. How to market to rural dwellers? "These customers are straight-talking and want to know what this item will do for them," says Bard. "They're more interested in quality and convenience than in price."

• Juvenile: The Juvenile Products Manufacturers Association (JPMA) reports increased sales of juvenile products last year. "There were a record number of first births," explains William L. MacMillan, JPMA president. "And new products are being devised that we never thought of before."

Out of the crib and into the marketplace, kids have clout of their own, buying or influencing almost $150 billion in purchases annually. Another reason to drool over this market: Studies show brand loyalty is determined by age 11.

• Teens: A teen and his money are soon parted. Teen spending has increased every year since 1993, and more of the money now comes from their own pockets. U.S. teens last year had a combined income of $102 billion, reports Teenage Research Unlimited-and spent 84 cents of every dollar they earned. Thirty-seven percent of 18- and 19-year-olds have credit cards in their own names; Young Americans Bank in Denver even offers teens loans.

And they're not just spending more; there are also more of them. The 12-to- 19-year-old population hit 29.1 million in 1995 and will keep growing until at least 2010, when it is expected reach 35 million.

What are this hot market's interests? Many teens watch up to four hours of television daily (including shows just for them, such as this season's "Clueless" sitcom, pictured at left), love their cars, and love brand names. They also respond to marketers who don't stereotype them. That's why smart marketers hit the streets and schools to observe teens firsthand.

"Teens share the key motivations of many generations: belonging, acceptance and affiliation," says Peter Zollo, president of Teenage Research Unlimited. "If you can develop products or messages that give them this, they'll relate to you."