GenAI marks a turning point in digital transformation – one that is fundamentally different from any technology shift we’ve seen before. As a technology that augments intelligence and creativity, its capacity to revolutionize industries is infinite. Senior leaders across Europe are eager to tap into GenAI’s potential to drive large-scale efficiencies and expand capabilities. But what does this mean for consumers? Are businesses truly considering the impact of GenAI on consumer needs and behaviors?  

Many senior leaders are excited about GenAI’s potential to drive large-scale efficiencies. Boards are focused on GenAI risks, but recognise that investments have major potential upside. Our research confirms that for businesses to win in this next wave of digital transformation, it is all about consumers.

Layla Keramat
Prophet Partner

AI Adoption Trends in Europe 

Data from our latest research report, The Rise of the AI-Powered Consumer, highlights that around a third of German (30%) and nearly 40% of UK consumers have embraced GenAI tools in the last six months. However, Europe lags behind other regions – Asian markets like China and Singapore report much higher adoption rates, with 60% and 56% respectively. The slower adoption can be attributed to growing skepticism and privacy concerns.

One notable trend in the European markets we surveyed is the younger demographic leading the charge. Millennials (ages 28-42) have shown the highest adoption rates, with 53% actively engaging with GenAI tools. In comparison, GenZ (ages 16-28) lags behind by 3 percentage points. Their lower enthusiasm stems from concerns over the relevance and accuracy of GenAI’s output. With millennials holding the most purchasing power today, businesses need to act now to meet their needs, or risk falling behind.  

Putting Consumers at the Heart of AI Innovation 

For GenAI to drive meaningful innovation, companies need to understand how European consumers are interacting with the technology. Our research shows that more than half of European consumers surveyed (and global consumers) use GenAI for both professional and personal purposes, with personal usage rates hitting 90%.  

The leading use case of GenAI is entertainment – creating memes, songs and other content to share with family and friends. This trend offers brands an opportunity to engage with consumers in playful, creative ways. Take Zalando, the German e-commerce giant, for example: they’ve introduced the Algorithmic Fashion Companion (AFC), a GenAI-powered tool that provides personalized fashion recommendations, resulting in a 40% increase in average basket size.  

European consumers also expect more from brands adopting GenAI. In the UK and Germany, over 70% of consumers want to use AI during the pre-purchase phase, showcasing the growing demand for AI-powered product and service exploration. Moreover, 73% of respondents view brands using GenAI as innovative, while 77% say GenAI sparks new product discoveries. It’s clear that consumers want AI to do more than just entertain – they want it to help them make informed choices.  

AI and Ethical Responsibility 

In Europe, there is a heightened demand for accountability and transparency when it comes to GenAI. Nearly 66% of German consumers express concerns about the ethical use of GenAI, a sentiment echoed across other European markets. Moreover, 82% of global consumers expect brands to disclose when they are using AI in their services.  

The reason for this concern is clear – privacy and data security remain top priorities for European consumers. Two-thirds of consumers cite these as primary barriers to greater GenAI adoption. This is especially pronounced in Germany, where privacy laws and concerns about data misuse are particularly strict. Consumers expect businesses to take the lead in creating ethical frameworks and transparent policies for AI usage, with 80% of global respondents agreeing that it is the responsibility of companies to develop clear guidelines for GenAI.  

As businesses in Europe look to unlock the full potential of GenAI, they must balance enthusiasm with caution. There is certainly a growing appetite for innovation, but the key to success lies in ensuring that these technologies enhance the consumer experience in ethical and responsible ways. This means taking seriously the need for transparency, privacy protection and clear ethical guidelines. 

As people continue their rapid shift to cities, some experts argue we’ve been living in the Golden Age of urban planning. Despite many challenges, new endeavors are breathtakingly bold. Ambitious projects like Saudi Arabia’s Neom, Vienna’s Seestadt Aspern and Dubai’s promise to become a “20-minute city” go beyond conceptualization, aiming to set global precedents for bringing places from inception to reality. 

With revivals and reinventions, where the legacy of a place demands deeper consideration, exemplified by Sydney’s Barangaroo and London’s King’s Cross, the transition requires developers and planners to co-create with the communities who inhabit and frequent these already established locales, shaping spaces that align with their evolving needs and desires.   

The master developers and planners meticulously craft construction blueprints that account for both short-term and long-term evolutions, incorporating considerations for population growth and the well-being of early inhabitants who may prefer not to reside near noisy, dusty construction sites. Although the investments in the rapidly evolving future wonders are well-defined, addressing the unforeseen consequences and sustainable management of how to best protect the planet necessitates a commitment to closing the loop and taking responsibility to reuse, reduce, and recycle across every experience, in every location and for every purpose. 

And while the design and architecture will always grab headlines, the next step is just as important: telling the brand story of these ambitious new places to the many people who’ll live in them. As the project unfolds, it’s essential to define the cognitive relationship that will exist between these spaces and the individuals who use them. These projects aren’t just about refurbishing a train station or building the transit system of the future. They are about transforming everyday experiences into journeys of discovery.  

If the governments and development companies behind the building are to succeed, people must understand that the places they are creating will be sustainable and enjoyable, fusing physical space with meaningful experiences. Developers must be convincing that the project drives positive outcomes: Genuine placemaking creates well-being, placing both people and the planet at its core. 

The Human Side of Placemaking 

When designing the experience strategies that will bring these ambitious projects to life, it’s important to remember that standing out from the crowd is getting more complicated. Urbanization continues to increase. Today, about 56% of the world’s population, roughly 4.4 billion people, live in cities. By 2050, the urban population will double, and almost seven out of 10 people will live in cities.   

That’s because increasingly, cities are places of optimism, hope and reinvention. They are “not just mere containers for innovative activities,” writes Richard Florida, the urban theorist, “but are actively involved in the generation of new ideas, new organizational forms and new enterprise.”  

Building these new relationships requires blueprints as detailed as the project’s physical architecture. While there are many steps to take along the way, Prophet starts by reimagining the project not just as a place but as a human being. Like real people, it is defined by DNA. This is the intent of the place, its vision – and it should shine through every expression. The project also has a mind, which – with the right skills and capabilities – will enable it to effectively engage people and investors. It has a body, too, allowing it to direct its efforts, helping the destination deliver value to people. And finally, the new place has a soul. It motivates and inspires everyone who encounters it.  

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How Do We Deploy This Philosophy Into Placemaking Projects?  

Start With a Strategy and Positioning That Tells the Story 

Seeing every place in this holistic way makes it clear the project is much more than a physical location. It’s a story waiting to unfold, connecting the space to the people who use it. This relationship is a cognitive bond animated by the project’s DNA. 

To carry this DNA through to stories that are relevant, authentic and engaging, brand strategists need to look at many elements. And they need to focus on the desired result, which is the well-being of the people living and working in the developing location.  

Show how the project’s purpose will be manifested through active living. And share the complexity of the environmental impact and sustainability goals, too. People everywhere are deeply concerned about the planet. They want to know you are thinking about every detail, from energy use to recycling to wildlife. In projects destined to last for generations, they need to believe you have the world’s best interest at heart. 

Create an Experience Master Plan to Engage the Community 

Placemaking requires an experience master plan, anticipating the many ways people will encounter the place, both physically and digitally. Each engagement and experience deepens the relationship between place and people, illuminating different aspects of the project.  

Often, projects are bridging structures from the past – perhaps even centuries old – with those of the future. Which experiences help most to connect people with the spirit of the place? How can they tap into the cultural currents of their environment? How can these new experiences help shape the story? Think about their mobility and interaction with the place’s entire ecosystem. 

These experiences aren’t a one-way street. It’s critical to get residents involved as problem solvers and co-creators. For example, Munich is a pilot city, along with eleven others in Europe, designing, implementing and scaling up circular systematic solutions for a more robust circular economy. The key to this transformation process lies in the collective collaborative power of all city stakeholders and having the tools to empower its citizens to cast a vote in favor of circularity. To that end, the Future Map was designed to provide the accessibility and convenience needed for the adoption of circular products and services by offering residents and tourists the opportunity to discover a more circular Munich on foot.

By staying close and engaging often, citizens are more likely to develop a sense of forgiveness during transition or construction delays and hiccups. We can take lessons from the most loved cities and brands that have endured through times of upward and downward trajectories, all while maintaining authentic relationships. Even if things don’t work, and that happens in our reality, the equity built in these relationships provides a balance of goodwill.  

Using Technology and Innovation, Integrate Smart City Tech and Sustainability Goals to Promote the Brand and Attract Investment

To survive decades, generations and shifting human behaviors, places need vibrancy. Technological capabilities, powered by AI, predictability and simulation, are instruments that build that vibrancy. They allow for co-creating ideas and experiences with citizens and stakeholders, continually enhancing these destinations. 

Vibrancy matters. Attraction to cities comes in waves. On upward trajectories, yesterday’s problematic and rough neighborhoods have historically revealed patterns evolving into cultural hotspots, rising as magnetic attractions to entrepreneurial talent, commerce and family centers.  

In downward spirals, people leave, changing the needs and purposes of real estate. These downtimes demand strategies to remain desirable, establish a competitive advantage and adapt to unique factors that speak directly to social, multicultural and unexpected human needs.  

Sustainability helps places maintain vibrancy. Today’s master planners’ deep commitment to sustainability and the environment is often hard for outsiders to fathom, computing climate factors decades in the distance. Every decision balances questions about energy, water and waste. Walkability, mass transit, green spaces and solar panels are as essential as shops and schools.  

But it’s vital to translate this complexity to benefit every citizen. In our technological age, connectivity is considered as essential as water and electricity for people of all ages, abilities and incomes.  

Technology should help deliver on the promise of every place initiative: Driving positive outcomes by placing people and the planet at its core.  

Given the turbulent global economy and widespread cutbacks, Prophet’s innovation team had some burning questions. What makes a business resilient–not just able to survive tough times but thrive?  

We intuitively believed there was a connection between innovation and resilience. But we wanted to know if others thought that, too. So, we talked to 300 senior global business leaders across 30+ industries. We learned that innovation and resilience are connected, and organizations that are both innovative and resilient are 2X more likely to exceed their financial targets and 3X more likely to create more shareholder value than their competitors.  

Download our latest research, Building Business Resilience Through Innovation, to learn how the most financially successful organizations innovate their way to business resilience.  

As we continue to unpack our findings, we’ve got plenty of new questions, which is why we recently invited a few innovation experts to join us for an on-demand webinar. Professor Jan-Erik Baars, who teaches industrial design at the Lucerne School of Business in Switzerland, and Chris Reinke, vice president of design and product development at Masonite, an industrial manufacturer. 

Below are a few key highlights from that discussion.  

Defining Innovation 

Innovation is “about solving the problems people care about,” says Reinke, who formerly directed design at Bose. “Innovation needs to be uniquely relevant, hard to copy and something your customers want to pay for.”  

But in his experience, many companies rely too much on their history and current knowledge. They’re reluctant to look far enough into the future to understand what might happen next. As a result, these companies tend to be slow to pivot and capture the next growth opportunity.  

“The viewpoint of the organization has a huge influence on its ability to be innovative and resilient,” says Baars. He spent nearly two decades in design at Philips. During his time there, he noticed that future casting was specifically assigned to the inventors of the organization, while business managers were limited to a much shorter horizon. 

“If you don’t allow an organization to open for larger and longer horizons, you will not have enough time and stamina to understand customer needs and respond accordingly to develop something truly meaningful,” Baars says. “You can’t sketch something out on a napkin and expect to have it ready next quarter.” 

Our research confirms that the most innovative companies are explicitly organized to innovate on multiple time horizons, simultaneously. They work hard to advance organizational capabilities. “They’re like successful musicians,” Baar says. “They’re dedicated, disciplined and committed. They stick to the plan, grow, learn and improve. “Layla Keramet, partner and EMEA head of Prophet’s Experience and Innovation practice, believes there are three tiers to innovation opportunity:  

1. We are not using the existing technology, product or solution in a way that can improve our human condition, and there is an opportunity to optimize and make it better. 
2. People are making a significant shift to a new type of product and service, therefore driving the demand for innovation. 
3. The technology, product or solution doesn’t have use cases for today, but we think it will in a plausible future. 

Financially Thriving Companies Invest in a Diverse Range of Innovation Techniques

No matter which path companies are on, they can benefit from increasing the number of innovation tactics they use. Our research asked business leaders to identify which best-practice innovation techniques their organizations consistently rely on. Those that describe themselves as innovative and resilient use between five and six of these innovation techniques, on average. Companies that were neither innovative nor resilient used only 3.5. 

That surprised us, especially since these tactics are widely known in the innovation community and general business world. Baars, on the other hand, wasn’t shocked at all. 

“Most companies are dominated by management thinking,” he says. “They are very focused on output and time to market, even though that makes no difference to the consumer.” Yet that type of thinking tends to limit the variety and scope of innovation techniques. 

Becoming more innovative requires “a change in the culture so that these techniques can be introduced, accepted and deployed.”  

Innovation must be more than just a function. Building an innovation lab and detaching that group isn’t useful. “It’s like having a satellite with nothing to satellite around,” Baars says. “Innovation has to be a part of the core business.” 

Companies that aren’t sure where to begin should start small and build from there, advises Reinke. Look at products that have proven successful and ask, “How can we make them better? What does the future look like?” 

Masonite recently completed an activity with Prophet that looked to 2030. “We created a vision that enables us to walk back to the current day and understand where we are going with our product line,” says Reinke. “Now, we have a roadmap.” 

The C-Suite Must Have Skin in the Game

Through our research, we discovered that only 11% of senior leaders set and are accountable for their organization’s innovation agenda. That didn’t surprise Baars, “Most companies are dominated by people with MBAs. They’re not trained in the company’s primary activity, which is creating impact for customers. Very few have degrees such as a Master of Business Design, which trains people to understand the inherent uncertainties of design thinking and set innovation agendas.” 

“In many organizations, there is an over-representation of traditional business managers and an under-representation of designers and engineers,” Baars says. “So, they focus on driving operational excellence and efficiency, and not on creating an impact for customers.”  

Final thoughts 

Our recent research and conversations with innovation leaders demonstrate that an organization’s innovative strengths correlate with its resilience, the kind of bounce-back flexibility all companies need to prosper in changing markets. As innovation leaders make their case for corporate support, they should enlist the involvement of the C-suite to spark new cultural thinking and organizational strategies. 

Get in touch with our innovation experts. 

Faced with a world of growing volatility, uncertainty, complexity and ambiguity (VUCA), business resilience is being tested like never before. And, continuing with business as usual becomes the biggest risk.  

Innovations’ power to boost resilience is more important than ever. Yet organizations are barely scratching the surface when it comes to innovation and missing opportunities for meaningful and sustainable revenue growth.  

So, how can business leaders chart a path for their organization to join the high-performing ranks of the truly innovative and resilient? Especially when innovation and resilience are treated like conflicting priorities, with innovation seen as a cost center and resilience as cost-cutting.

We talked to 300 senior global business leaders across 30+ industries to learn how successful organizations use innovation to drive business resilience. And we learned these types of organizations are more likely to practice a wide range of innovation techniques, have C-suite buy-in and strive for sustainable change.  

Organizations that are both innovative and resilient are two times as likely to exceed their financial targets and three times as likely to create shareholder value than their competitors.  

Download our global research report to learn:  

• How the most financially successful organizations use innovation to build business resilience 
• The common barriers that slow innovation in organizations 
• The top techniques used to expand commitment to innovation through the enterprise 
• How to use Prophet’s Human-Centered Transformation Model to become more innovative and resilient 

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