Omicron waves and a crypto crash: A look back at what derailed SmartCompany’s predictions for an unpredictable 2022

Forget the crystal ball for a moment; let’s reflect. SmartCompany looks back at some 2022 predictions made one year ago. What did we get right, what did we get wrong, and what things played out a little differently than we expected?

Marketing

In her 2022 marketing predictions, Mia Fileman thought ‘Apple Gate’, the disappearance of third-party cookies and increased privacy measures meant marketers would no longer be able to lean so heavily on data. Instead, they’d have to go back to the big idea — bold creative, in other words, “campaigns that transcend precise targeting and make us feel something”.

Invited to reflect, Fileman says “I was spot on about the emergence of the big idea,” and offered Woolmark’s ‘Wear Wool, Not Fossil Fuel’ campaign, “which packs an emotional punch,” as an example.

As for social media, Fileman expected a mass Facebook exodus and huge growth at Pinterest. A year later, Facebook’s still hanging in there, but things at Meta aren’t exactly peachy, with this year’s embarrassing launch of the metaverse experience, and Instagram’s abandonment of strategy in favour of “copying TikTok at every turn”.

Pinterest, on the other hand, did have a fine year. “Pinterest added 14 million users in the first three quarters of 2022, and Q4 is likely to be their biggest quarter, given Black Friday and Christmas are peak periods for the platform,” said Fileman.

“And I don’t think anybody could have predicted the dumpster fire that is Twitter,” she added, on the topic of social media.

Shopping

This January, Adrian R Camilleri laid out his expectations for post-lockdown shopping trends in 2022.

As vaccine rollouts materialised and lockdowns eased, many predicted a wave of ‘revenge shopping’ and ‘revenge tourism’. Harder to predict was the Omicron wave, which did away with heady notions of putting the virus behind us, but it’s clear revenge spending did play a part this year. 

Tourism picked up again the world over, evidenced by the rapid growth at luggage brand July, whose revenue jumped 640% to $21 million in the 2021-22 financial year. 

Economic difficulties that hit consumers and businesses took more than just a bit of shine off this shopping. High inflation and rising interest rates have turned this year into a tricky one for many at the checkout, the petrol pump and the balance sheet. Household spending did remain solid in the second half of the calendar year, though, the RBA reported, “as spending on discretionary services, such as hospitality and travel, continues to rebound”.

RBA does expect this to ease moving forward, though: “Consumption will be tempered by rising consumer prices and higher net interest expenses on household debt.”

It’s not all doom and gloom. In a recent survey of 900 small businesses by Sendle Australia, 80% expected online sales growth in the next 12 months. “The recent Black Friday and Cyber Monday sales may explain this confidence, with our parcel volumes up 50% during the November sales period,” said managing director Laura Hill.

Other predictions made by Camilleri, such as the accelerated move to contactless shopping and the rise of omnichannel shopping experiences, are progressing as expected.

Cryptocurrency

At the start of the year, Andy Meehan laid out his crypto predictions. Among them, a regulatory framework that would help institutions keep pace with the growing popularity of cryptocurrencies, a rise in the popularity of NFTs, and steps by the industry to mitigate the negative climate impacts of cryptocurrency mining.

Certainly, the Australian government has indicated its awareness of the growing popularity of cryptocurrencies and the need for regulation. In August, the government announced it would be looking at a token mapping exercise to protect individuals who own cryptocurrency, a move welcomed by Charlie Karabaga. As yet, there is still no real clarity or transparency on how the regulations will work despite increased calls for action in response to the FTX collapse in November.

The collapse of the trading platform was a hellish end to a tough period for crypto that kicked off with a crash in May.

As for NFTs, well one of the big stories of the year was a huge drop in values, largely driven by the crashes.

While it’s easy, indeed fun, to revel in big value dropoffs of things like the Bored Ape NFTs (looking at you, Jimmy Fallon and Justin Bieber), it’s not necessarily a sign of the end of the NFT. The industry prefers to call it an ‘NFT winter’. Big brands like the AFL and Nike played in the NFT space this year as a new way to court a new era of fans.

Meehan also predicted the crypto industry would increase its decarbonisation efforts. “We are already seeing most major crypto projects turn toward proof-of-stake models, which use significantly less energy,” he said at the time.

Most notably, the Ethereum blockchain platform switched from proof-of-work to this less energy-intensive proof-of-stake model, which it said would decrease its energy use for mining by 99.95%.

Across the board though, the truth remains that cryptocurrency mining is a hugely energy-intensive undertaking. Much of the energy still comes from fossil fuels and recent research published in Scientific Reports compared the impact to that of the beef or crude oil industries.

Finance

A year ago, Harley Dale commented on MYEFO’s optimistic outlook and was wary that the newly emerging Omicron variant could derail those predictions. Safe to say he was right.

“The latest MYEFO is heavily based, rightly so, on Australia’s emergence from the Delta variant. You always play what is in front of you and right now, that doesn’t include any real knowledge of the impacts Omicron may have on Australia’s economic activity,” Dale said.

The Omicron variant has, of course, had a massive impact on the nation.

There’ll be no MYEFO this time around, to check back over. For the first time in 25 years, the mid-year forecast will not be handed down, as the Albanese government said the October budget provides sufficient results on economic performance.

Last year, MYEFO predicted real (i.e. inflation-adjusted) growth in Australia’s economic activity of 3.75% in 2021-22 and 3.50% in 2022-23. GDP is expected to have increased by 3% over the year, according to the RBA. As for MYEFO’s tip of the unemployment rate reaching 4.25%, well the labour market got tighter still this year, it’s currently sitting at around 3.5% and RBA expects it to remain so until economic activity slows in 2023, when unemployment’s tipped to begin rising.

On the topic of interest rates, Dale said on reflection, “it remains quite baffling that the very last source to talk interest rate rises in 2022 was the RBA itself, but I did underestimate the magnitude of the hikes, although I steered that ship better as the year progressed!”