Posts filed under 'consumers'
Facing off about privacy
Andrew Curry writes:
The current row over Facebook’s successive changes to its privacy settings has several strategic implications for the way that businesses – not just in the digital sector – relate to their customers. In case you’ve missed the story: Facebook has radically reduced the default privacy settings for its users since the autumn of last year, meaning that users are likely to be sharing far more details across the internet than they previously did. (I’ve written about this at length elsewhere, but a visit to ouropenbook.org gives a sense of the scale of it.)
The reason? Well, the company says that ‘radical transparency‘ is good for you, in a moral sense. Others say that it is part of a long campaign by Facebook (two steps forward, one step back, according to Nick Carr) to set itself up as the owner of its users’ online identity, which is a more lucrative proposition than being a mere social network, even one with several hundred million members.
So what are the implications of this for businesses?
#1: When the mental map which your customer has of your product or service becomes too divergent from their experience of it, the business suffers. (This is what happened when Gerald Ratner described one of his company’s products as ‘crap’). In the case of Facebook, the actual experience is no longer represented by the map. The researcher danah boyd has explained this well:
A while back, I was talking with a teenage girl about her privacy settings and noticed that she had made lots of content available to friends-of-friends. I asked her if she made her content available to her mother. She responded with, “of course not!” I had noticed that she had listed her aunt as a friend of hers and so I surfed with her to her aunt’s page and pointed out that her mother was a friend of her aunt, thus a friend-of-a-friend. She was horrified. It had never dawned on her that her mother might be included in that grouping. Over and over again, I find that people’s mental model of who can see what doesn’t match up with reality.
#2: Privacy isn’t dead, although it is fashionable for digerati to say so. People still expect organisations they do business with to maintain appropriate levels of privacy – and to be able to check these for themselves. We think that this expectation increases as the web becomes more ubiquitous and more portable, and there are more opportunities for breach. At least some users will engage reluctantly because of fear of theft, fraud, or inappropriate social exchanges. In the digital world, companies which take care of their users’ privacy will be less profitable in the short-term, but more sustainable in the long-term.
#3: Facebook is effectively polluting the “commons” represented by the internet – all of the public resources and protocols – through self-interested behaviour. It is possible that other suppliers which also depend on a trusted internet for their business will intervene; Google, its own privacy problems notwithstanding, has done a little of this recently. But usually what happens when public interest goods are polluted by commercial interests is that regulation follows. The cases brought against Facebook under trade and competition law, along with the initial responses from privacy regulators, are harbingers of this.
The cartoon at the top of the post is one of a string of acerbic strips about Facebook at the excellent Joy of Tech, and is used here with thanks. You may enjoy this one as well.
Add comment 25 May 2010
The limits to ethical business
Eloise Keightley writes:
Consumers may claim they want ethical brands – but what do they really mean? American evidence suggests that a desire to be ethical does not necessarily correlate with a propensity to buy ethical: Brandweek has reported a survey that found that even among consumers who called themselves “environmentally conscious”, more than half could not name a single green brand. A study at the University of Minnesota’s Carlson School of Management found that while people were likely to buy energy efficient light bulbs from the shops, they tended to opt for less efficient traditional bulbs when shopping online – and this attitude extends to white goods, electronics and domestic cleaning products. There is a classic disconnect here between stated attitudes and actual knowledge or behaviour.
This is partly because of the nebulous way in which “ethicalness” is measured, from the consumer’s point of view. For instance, whilst a vague sense of altruism may drive consumers to make choices they deem ethical, it’s unlikely that the majority fully understand what ethical trademarks denote. There is a recognition that Fair Trade, for example, equates with some sort of ethical standard but consumers often cannot define what that standard is. Consumers also find it hard to distinguish between ethical trademarks and can confuse their policies.
In any case, ethical innovation has historically proven to have a limited shelf life – due as much to legislative progress as shifting consumer values. Only a few years ago, cosmetic brands in particular were falling over themselves to tell consumers that their products were developed without the need for animal testing. These days, few brands bother. Lack of animal testing has become a hygiene factor (mainly due to changes in legislation) and consumers have established new, less standardised and more subjective ethical benchmarks for brands to respond to.
It’s unfortunate that the value of ethical trademarks deflate the more ubiquitous they become. If McDonalds can win awards for its free range eggs, consumers may well wonder about the rigour of free range certification and imagine that ‘free range’ is a tiered or varied notion. Bad press also dilutes the currency of ethical initiatives: the BBC has accused Live Aid of misappropriating the money it raised and there has been a rise in well-publicised literature that calls into question the very nature of humanitarian aid. We have no commonly understood, credible metric for ethics.
Some pioneers of ethical retail have argued that it is not enough to use ethical standards as a USP. American Apparel CEO Dov Charney, whose business is synonymous with the anti-sweatshop movement, has remarked: “If you want to sell something, ethical or otherwise, appeal to people’s self-interest.” In other words, brands need to marry sound ethical values with products that are inherently desirable if they are to last.
The picture at the top of the post is from Green Mountain Coffee, and is used with thanks.
1 comment 12 May 2010
Trying it on
Denise Hicks writes:
Next time you’re in a changing room or at home wondering if those shoes really go with that dress, don’t fear. Help is at hand online. Sign up to ‘Go try it on‘, post a pic of your questionable outfit, and receive instant feedback.
It’s an interesting idea in theory, and a great example of how the web is enabling users to solicit instant advice from online networks. However, it seems to fall into a similar trap as most online ‘forums’, which is that you don’t have any idea about the validity of the opinions offered.
Putting aside the fact that most people probably use it to confirm what they’re already thinking (be it positive or negative), why should you listen to what Jennifer C, or Alexa F, or any of the other 200 participants think? If there’s a debate going on, who do you trust? (Especially when there’s a penchant to say ‘change it’ rather than ‘keep it on’, for the sake of it).
There must be a way for these comments (and similar binary opinions on other forums) to be filtered via an attitudinal profile at the outset, so that you can prioritise the feedback of those who share your attitudes.
Certainly retail sites, and some restaurant reviews, are aggregating and cross-referencing previous feedback and purchasing data to help filter and edit your shopping choices. And sure, it may not be relevant for sites like YouTube that are geared towards capturing mass opinion. But still, if my mates aren’t there, or can’t be relied upon to give an honest opinion on my fashion sense, I want to know what ‘people like me’ think. Not the opinions of people who bought similar stuff, or the ones that most people agree with, but the ones who share my outlook on life, fashion and the universe – a group I can consider my ‘advisory panel’.
So when I’m told that ‘the puff sleeve with the high boat neck makes for too much bulk’ around my face, I can think ‘y’know what, Fawn G, you might just be right’.
The picture at the top is from Go Try It On, and is used with thanks. In case you’re wondering: Julia N needs an opinion on a super-casual look at her work.
1 comment 26 April 2010
Keeping Track
Eloise Keightley writes:
The industry for personal informatics is certainly one to watch. There’s even been talk of a ‘movement’ and unsurprisingly, the iPhone has spawned a host of personal informatics applications. These applications are tantamount to an omphaloskeptics’s dream: pretty much any variable of life can be tracked to the most granular degree. Users of personal informatics sites can log everything from vegetables consumed and number of migraines suffered to variations in mood and their feelings about particular places.
Perhaps evidence that consumers are seeking certainty in these uncertain times, the sheer number and variety of personal informatics applications suggests not only a rising interest in self-analysis (or an increasingly narcissistic society) but a desire for more control over one’s personal life. For starters, these tools help you to learn from the past and plan for the future – if you ate too many calories this week, you know exactly how many to remove from your diet next week. However, much of the allure of personal informatics lies in the visualisations these sites can produce with the raw data. Sites such as your.flowingdata.com allow users to create custom visualisation pages for what they’re most interested in and encourage you to ‘play’ with the data.
In theory, brands could have an enormous pool of data at their disposal should these tools become mainstream enough to attract sufficient users. While many personal data tracking accounts monitor health and leisure habits, many others track brand usage, product usage and attitudes towards brands. Personal informatics could help brands spot emerging competitors faster and track whims and fads with more agility than conventional methods. However, criticism of social networking sites that have deployed their members’ data for commercial gain mean that brands need to tread carefully: an assumption that you own the data simply because it is publicly available is imprudent.
On the other hand, brands are beginning to wake up to the potential of incorporating personal informatics into their business propositions – most notably Nike, through its joint venture with Apple and a handful of health clubs to produce the Nike + iPod package. It’ll be interesting to see how others follow suit.
The above image comes from Mapmaker, a user of the Mycrocosm personal informatics website, and is reproduced here with thanks.
Add comment 14 April 2010
Trust plus
Will Galgey writes:
Trust in organisations and brands has been declining steadily as consumers have more information and are more sceptical. There’s also striking evidence that attitudes have shifted, certainly in Europe and North America, as a result of the global financial crisis. But if trust isn’t enough, how should companies respond? We’ve been collaborating with Millward Brown, the WPP company which runs the WPP brand equity research programme BrandZ, to try to answer this question.
Our joint research produced new insights into consumer behaviour and attitudes which should help shape the behaviour of companies and their brands, and new metrics to help gauge the effectiveness of these actions. In summary:
- trust is still essential
- but it needs to be combined with customer recommendation to be effective
- which generates the ‘equation’, Trust + Recommendation = Success.
And since both levels of trust and willingness to recommend can be measured in research, the quantitative wizards at Millward Brown have produced an index, the TrustR score, based on global consumer research, which indicates how effective different companies and different brands are in different markets.
There are some surprises in the data – Pampers tops the chart globally (and is also number 1 in the UK, France and Germany), while China Mobile is in the top 10. And Nokia, which tends to get written off by American commentators dazzled by Apple and Google, is top in 8 of the 22 countries covered by the study. The research shows a strong correlation between TrustR scores and brand financial performance.
The good news is that the TrustR report is free to our clients, and comes tailored for specific markets and specific categories. If you are a client, the consultants you usually work with can arrange for a copy to be sent to you. If you’re not a client, and are interested, please email us at betterfutures[AT]hchlv.com, and we’ll see what we can do.
1 comment 12 March 2010
Cautious consumers, building buffers
Andrew Curry writes:
We’ve just published our latest report on the post-recession consumer, and the headlines are that although people are still concerned about the state of the economy, and are behaving cautiously as a result, there is less panic about the economic outlook than was shown in our previous research. But this is partly because people have changed their behaviour – the UK savings rate is now 8% (it was close to zero for most of the last decade, and even negative in 2008). As Futures Company Director Fran Walton said at the client launch, “People are building a buffer for what might lay ahead for them.”
A couple of insights from particular sectors are striking. The first is that people seem to have changed their grocery shopping behaviour – the proportion agreeing that ‘I am shopping at several shops to get the best prices, rather than doing one big shop at the supermarket’ increased from 22% to 36% between January 2009 and November, when the field research was done for the latest report. And there’s evidence that people are looking to spend less when they go out. There’s a more detailed summary of the data in WARC (subscription required).
News of the client launch event turned up in an unlikely place – Claire Myerscough’s Media Week in Brand Republic. She works for News International, and this was her take on the research:
Learn that consumers are still less trusting, with 53% worried about the price of petrol and 43% planning to spend less over the next 12 months. The mood of uncertainty is in line with our research: things have improved since this time last year but we are not out of the woods yet.
The Reconstructed Consumer is available as a paid-for report. For more information please contact Jennifer Childs on 020 7966 1824.
Add comment 19 February 2010
A history through objects in a post-material world
Eleanor Cooksey writes:
I have been enjoying the current BBC Radio 4 series ‘A History of the World in a 100 objects’ in which Neil McGregor, the Director of the British Museum, tells a history of humanity using objects from the museum’s collection. As I listened to his intricate description of the pestle, it made me realise that objects, things, ‘stuff’ – or however we like to call them – still have a very important role to play in our lives.
It is often easy to assume we live in a ‘post material’ world, but in a post credit crunch recovery marketplace, should we re-evaluate how we think about ‘stuff’? Looking at data from our 2009 Global Monitor Survey suggests that it is perhaps worth reviewing our hypotheses. Consumers are less likely to agree that they have all the material things they need: in the UK, this dropped from 60% in 2008 to 56% in 2009. In fact, the only market surveyed where feelings of material satisfaction have increased is Australia. Moreover, though we may not have everything we need, we are also less likely to buy more as spending without consequences is no longer in favour. Again, all markets – bar China – are showing a greater reluctance to take on debt. This suggests we are more likely to value what we have now.
Our research also suggests that people are still as interested in spending on experiences as accumulating possessions, but this is less about extreme experiences, and more about the enjoyment of simpler pleasures. Such pleasures, in fact, could consist of listening to something interesting on the radio, or going to a museum.
The image above is from the BBC’s ‘A History of the World in 100 Objects‘ website, and is used with thanks. For more information about accessing Global Monitor, please contact our UK Marketing and PR Manager, Jennifer Childs.
Add comment 26 January 2010
Struggling towards sustainability
Andrew Curry writes:
Whatever the disappointments about the Copenhagen talks, it’s clear that consumers have fairly strong attitudes to sustainability issues, and these have barely been affected by the financial crisis. That was the view of a recent report on our Henley Planning for Consumer Change [PCC] research in New Civil Engineer. Indeed, politicians seem to be lagging consumers on the question of sustainability.
The managing director of The Futures Company’s London office, Will Galgey, told NCE that “The key thing is that there hasn’t been a significant diminishing of engagement with environmental issues. In fact we see the importance of those issues continuing to rise.”
At the same time, consumers increasingly see the links between environmental behaviours and financial prudence. But not all businesses seem to have registered this.
Frank Price, sustainability director at the engineering consultancy Grontmij, argues in the article, “Some businesses may be tempted to reel in their focus on sustainability, based on a false belief that the finances needed to introduce sustainable practices could be better spent elsewhere. On the contrary, businesses that are looking to save money and reduce costs should be looking at their sustainability measures as a priority.”
The costs of not increasing the level of business sustainability are likely to be measured in business reputation. PCC data show that 79% agree that companies have a responsibility to support the communities they operate in, and businesses are identified by some distance as the group “most at fault for causing environmental damage”. At the same time, trust in businesses continues to decline. Potentially this adds up to a vicious circle in which it is difficult for businesses to increase their credibility – or a welcome opportunity to rebuild trust.
For more information about accessing Planning for Consumer Change, please contact our UK Marketing and PR Manager, Jennifer Childs. The picture at the top of the post is from Australia’s fmcg sustainability institute, and is used with thanks.
1 comment 22 December 2009
What you don’t want for Christmas
Oliver Wright writes:
One of my seasonal ‘jokes’ goes that you can tell when Christmas is approaching by the adverts on TV. Thus, like many others I suppose, I am thrust from my usual lethargy into a mild panic, making hurried calls to my siblings and parents, enquiring what they might want for Christmas, with the implicit fear that the shops might somehow run out of appropriate gifts.
In spite of our recessionary times, the high street in London has done surprisingly well for itself compared to 2008 when the onset of the recession dampened the Christmas (spending) spirit. November sales are up only 1.8% on last year nationally, but in the capital sales are up 13.3%.
Even if we are short of cash, we certainly shouldn’t be short of ideas: most of the major newspaper websites have a glut of buying guides, telling us what we could buy, and for whom. But for every article about ideal presents, one often finds a dissenting contributor in the comments sections, outlining the merits of a presentless Christmas. Capitalising on these frugal sentiments, The Green Thing has created a cunning spoof of the Amazon.co.uk website, delightfully titled Amazero.com, encouraging us to buy their single product – nothing (it’s priceless, of course). With a slightly more traditional approach, Adbusters sponsored ‘Buy Nothing Day‘ on the 26th of November this year.
Both of the above campaigns make the claim that Christmas – or more simply, buying lots of stuff – is bad for the environment, and detracts from the true spirit of the season. However, if you’re more inclined to think that Christmas is a waste of money altogether, then Joel Waldfogel’s book ‘Scroogenomics: Why you Shouldn’t Buy Presents for The Holidays’ may contain some more compelling arguments. Based on US surveys, he suggests that people would generally be willing to spend 20% less on the gifts that they received were they to buy them for themselves. This difference – in economic jargon, the deadweight loss – is worth $13bn a year in the US. He continues:
There’s every reason to believe the deadweight loss is as big elsewhere. That would get you to $25 billion a year around the world in value destroyed through gift giving.
Waldfogel isn’t against gift giving – just bad gift giving. Tim Harford has some useful recommendations based on Waldfogel’s arguments: spend modest amounts (hence reducing the likelihood of a large deadweight loss), or increase the sentimental value of your gift – invest time or creativity into making something personal. In other words, give it value to which you can’t attach a price.
In a neat twist, Waldfogel’s book is out for Christmas. But before you buy it, make sure the recipient wants to read it first.
The Image above is taken from the Amazero.com website, and is used with thanks.
Add comment 18 December 2009
