Posts filed under ‘consumers’
Build it? They might come
Tom Richardson writes:
What people need is still more important for business than what businesses happen to be able to create – even though the gap between these two sometimes seems quite large.
Without research, and the freedom to pursue ideas that might never be profitable, some of the world’s most successful companies might never have become so. But this is different to throwing money at services that people haven’t told you they want, simply because these services seem to offer something “innovative”.
Innovation is the monkey to our organ grinder. It exists to find new ways of approaching age-old needs, such as reassurance, simplicity and community.
IBM, for example, has been working on a supercomputer called ‘Watson’ that can understand a question posed in colloquial language and respond vocally with an accurate, factual answer. The company says it’s designed for trawling through piles of papers such as legal documents to find an elusive fact.
Poor old Watson; destined to infuriate. It may respond to one of our needs (more time to do things) but even 99% accuracy isn’t good enough for a lawyer. Education helps us develop the ability to evaluate competing claims and make judgments about the information we really need. Understanding the use of language is only one part of that.
Why are we so bad at identifying tools that respond to human needs? They’re our needs, after all. Take Wolfram Alpha – again, an incredible product – that will make a lot of money through an expensive premium subscription that offers complex mathematical modelling. But at its launch in May 2009, it was seized upon by sensationalists at ‘the next Google’.
What Google has done, brilliantly, is to work hard in private on their sterile algorithms, while presenting a likeable human face to its users, with a visual identity that is colourful and simple. Google, like the iPod, is a human technology.
Wolfram Alpha, meanwhile, is a technology for technologists. It arrogantly (there I go again with the irresistible urge to anthropomorphise) tells you the answer, rather than humbly fetching information for you to interpret, like Google. If it gets the answer wrong, there’s no way to click back, think and discriminate.
The same delusion applies to social media. We know that no-one wants to be friends with washing powder. The company knows that plonking its washing powder down on Facebook makes it look awkwardly like the try-hard kid at school.
And, sadly, you can imagine the conversation around the water cooler in the Marketing Department:
“But have you seen the numbers?
“We have to be a part of this. Let’s ride this wave, let’s jump on board, let’s join the conversation!”
No. Go away. Really. No-one wants you here. You’re the wasp in my garden. And by the way, I resent your digital cold call.
The image at the top of the post is from the Museum of Mid-Century Illustration, and is used with thanks. http://www.plan59.com/main.htm
5 November 2010 at 12:31 pm thenextwavefutures Leave a comment
The future’s blue – and yellow?
Tom Richardson writes:
In the London office we like to shake out the weekend with a ‘Monday Morning Meeting’. It’s a tradition that goes back some twenty years, and it’s a way of finding time to think out loud and be provocative, to explore ideas and have them contested.
These meetings are important because we spend a lot of our time on specific client problems, often dealing with one industry or even one type of product for long periods, but these clients rightly expect us to be well-versed in wider trends.
Finding a balance between these is crucial to being effective. The role of research is to help clients to be able to decide and to act, so we have to see trends in context.
This week we used a balloon debate as a way of thinking about the future. We created a list of 100 services, products, institutions or ideologies, pulled them out of a hat, and stood up to defend our selection’s importance to the world in 2050.
Everyone had ten minutes to prepare and a minute each to make their case.
Round one saw ‘dictatorship’ go up against ‘IKEA’, ‘the National Trust’, and ‘dietary supplements’.
Andy Stubbings, a Senior Consultant, made a persuasive case for IKEA with a sobering vision of a world in 2050 in which energy scarcity, resource conflicts and overcrowded cities made the servicing of needs – not wants – the prevalent retail model.
Lawrence Wykes’ defence of dictatorship focused on the inevitable inefficiency of democracy in a resource-scarce world, while Carol Storey’s case for dietary supplements focused on population growth and malnutrition.
My deeply personal defence of the National Trust as a bulwark against the insidious creep of disposable architecture was not persuasive enough to put me through to the final round alongside Pets, IKEA and Dictatorship. Alas!
In the final round, IKEA came out on top for 2050, despite concerns about deforestation and global warming, because of its consumer focus, logistical precision and sharp eye for the wider external factors influencing its business. (For example, it’s a leader in using rail for its freight distribution).
So – did the exercise serve its purpose? I think so.
It forced us to articulate our opinions. And more than that, it made us think about the future in terms of what will be necessary, rather than what will be possible. Too many predictions – and technology pundits are particularly guilty here – focus on what we are capable of doing because it makes good copy.
But change and innovation lives in a messy space between consumer need, external constraint, and evolving business models. In other words, it needs an understanding of human behaviour, drivers of wider social change, and business opportunity.
By justifying our choices in a competitive setting, we had to anchor our arguments in these unforgiving contexts.
The picture of IKEA’s headquarters is from Wikimedia Commons and is published under a GNU Free Documentation licence.
28 October 2010 at 1:31 pm thenextwavefutures Leave a comment
Feeling the squeeze
Andrew Curry writes:
It’s hard to add to the volume of commentary that has followed Wednesday’s Comprehensive Spending Review, but there are relevant observations from some of The Futures Company’s recent research. It is somewhere between a gamble and a large-scale economic experiment, as pundits observed almost immediately, largely regressive (opens pdf), and despite the denials it will increase inequality (from the current historically high levels). If I was the government I’d be most concerned about the likely rise in unemployment, currently nudging the 2.5m mark, and with the government’s own estimates suggesting that 500,000 public sector workers could lose their jobs as a result of the public spending cuts. If the rush of private investment anticipated by some business leaders does not materialise, unemployment could quickly climb through the 3 million mark, which seems to have been the threshold of popular discontent in recent British history (if we think back to the early eighties and again to the early 90s).
Our recent wave of Feeling the Pinch research, which we blogged about earlier this week, also gives us a useful picture of public perspectives on the economy. The research was done in September, and 75% thought the economy was going ‘badly’ or ‘very badly’ – down from 85% in November last year. 39% thought they’d be worse off in 12 months time, and 10% better off – both figures almost unchanged since last year.
The groups who were more anxious about the economic prospects (“Choppy Waters” and “All hands on deck”) were similar to each other (and fairly different from the “Plain Sailing” group). They were likely to have a mortgage, or be renting; they were more likely to have dependent children; and they were likely to be working rather than retired. They are also much more likely to have been affected by debt, and have already changed their spending habits as a result of the recession. These are groups whose attitudes could change quite sharply if people they know start losing their jobs. And there are some clues here as to why the child benefits caused such a sharp public response.
The other relevant analysis was by our public sector team, which produced a short paper, “The Effectiveness Agenda” after the election on how to improve public outcomes in an environment of austerity. We believed that savings could be found in public expenditure, but not the fabled ‘efficiency savings’ which critics always talk about. Instead, there were savings to be found from ‘effectiveness’, which involves looking at the desired public outcomes in a holistic way, and probably across departments. The Total Place agenda is a good example of this at a local level. Nationally, Kenneth Clarke’s plan to reduce the number of short-term jail sentences improves social and public outcomes while reducing expenditure hugely (although cutting the budget of the National Offender Management Scheme at the same time is not particularly holistic). But such thinking needs some time for reflection – and some leadership.
There are still a few places available at our next Feeling The Pinch breakfast seminar on November 9th; if you’re interested in attending, please contact Karen Kidson. The Effectiveness Agenda paper can be downloaded as a pdf from the link below; for more on this, speak to Andrew Curry or Alex Oliver. The icons at the top of the post were designed by Gus Newsam, of the Futures Company’s design team. They are © The Futures Company, 2010.
The Futures Company Effectiveness Agenda 2010 [downloads as pdf]
22 October 2010 at 10:21 am thenextwavefutures Leave a comment
The new normal
Jo Phillips writes:
We are officially ‘out of the recession’, but uncertainty, and even fear, remains. The fourth wave of research in our UK consumer tracking study Feeling the Pinch (which Fran Walton and Eleanor Cooksey launched at a breakfast briefing in London last week) shows that consumers are in the ‘doldrums’ – a place which is both quiet and uneasy, a place where you are stuck. Two-fifths of consumers say they are worse off than last year (the same proportion as in November 2009) and just under half know someone who has been made redundant in the past twelve months.
With Wednesday’s Spending Review ensuring that job cuts are never far from a front page, and rising prices meaning that people need a bit more money to feel like they are staying still, it’s no wonder that consumers remain anxious. But we believe that this new reality is starting to stick. We’re seeing a deeper shift in consumer outlook: welcome to the New Normal.
With the New Normal comes our new acronym, SCANT, to help organisations and brands understand current consumer attitudes and thereby navigate this sea change. Here’s a brief introduction:
- Scepticism: many brands have been so focussed on price through the recession that they have stopped talking to people, leaving a trust void. 77% of consumers agree that the banks serve their own interests, not the interests of their consumers, and 58% now have less faith in the government to tackle the big issues of the day. Brands urgently need to rebuild trust.
- Control: 65% of consumers agree ‘it is important for me to get a greater sense of control in every aspect of my life’ (up a very sharp 13% since November 2009), and 60% feel a greater need to be as self-sufficient as possible since the recession (up 9% from November). We’re seeing people’s relationship with time change fundamentally. Pre-recession, people would do almost anything to save time, including spending money. Now they are willing to use their time to gain greater control. Brands need to help consumers feel in control of their lives again.
- Acceptance: 53% agree that this recession will change consumer culture for ever (up 11% on November), and 45% that ‘some of the dreams I had before the recession are now out of my reach’. Categories that may have been seen as essentials may now be considered to be luxuries. Brands which are affected by this change may need to reposition themselves. Waitrose is a great example of a brand that has found a way to tell a different story.
- New aspirations: 53% agree that ‘Since the recession I have learnt how many things I can do without’ (up 5%). Expectations have been re-calibrated. People are focusing on smaller, everyday treats. One example of a business that has responded: as flying becomes an increasingly unpleasant experience, with security and health concerns, Virgin has positioned its “Upper Class” offer as taking these frustrations out of flying.
- Treading carefully: 60% agree that they have ‘become more likely to consider the potential risks of a decision they make’. People think twice before buying. And so the warranty has become the new battleground for the car industry. Kia opened this up with a 7-year (or 100,000 mile) warranty earlier this year, and Toyota later introduced a 5-year warranty. Since then Vauxhall has announced a ‘lifetime’ warranty (which also turns out to be 100,000 miles). We expect this sort of security to become part of a new relationship between organisations and their customers.
There are limited places available for a repeat of this breakfast briefing on 9 November. To find out more please contact Karen Kidson.
18 October 2010 at 5:40 pm thenextwavefutures Leave a comment
Looking beyond price
Walker Smith writes:
A ‘new normal’ is emerging among consumers in the wake of the financial crisis and the recession: ‘considered consumption’. This trend, which we noted last year, has now been reaffirmed by our latest Global MONITOR survey, which has just been released. One of the consequences is that the focus on price which was so strong immediately following the financial crisis has started to weaken.
Two data points stand out. The first is that 53% of consumers – taking a global average across all 20 countries – agree that ‘price is more important to me than brand names’ (down from 59% in 2009). The second is that 39% agree that ‘it’s best to buy famous brand names because you can rely on their quality’ (up from 34% in 2009).
Although these changes are small, they are notable. It can be easy to lose sight of the fact that consumers who are still tightening their belts also want the reassurance of name-brand quality.
And while there’s been a lot of talk about consumer frugality, what’s actually happening is that they’re practising prioritization. Consumers will stand up for the things that matter to them. But brands need to play their part as well. One of the other trends tracked by Global MONITOR is about interest in brands that practice social responsibility or deliver innovative wellness benefits. That’s been climbing, albeit slowly, over the past three years.
Global MONITOR is The Futures Company’s syndicated insights service. It encompasses an annual quantitative global survey of more than 27,000 consumers in 20 countries; the Global Energies, our consumer trends framework; and Global Streetscapes, our interactive database, continually refreshed, of consumer and brand behaviour. For more information, please contact Jennifer Childs in London or Simon Kaplan in the United States.
The green consumer
Josh Hunt writes:
The Futures Company’s recently-launched multimedia report, Greenprint, looks at the UK public’s engagement and behaviour in sustainability. The research, based on both quantitative and qualitative data, shows that while people report relatively high levels of engagement, this does not necessarily translate into changes in everyday behaviour.
Consumers, it appears, have a ‘costs and benefits’ view of sustainable behaviour, in which they assess trade-offs involved. Direct benefits to home and family have most influence, perhaps unsurprisingly, followed by benefits for neighbourhood and social networks. More general benefits, for example to the planet, have the least sway.
Consumers also find it difficult to conceptualise complex issues such as ‘embedded carbon’. There’s little understanding of why eating less meat improves sustainability outcomes, for example. Finally, consumers generally underestimate the benefits of more sustainable behaviour. But when they do change one aspect of their behaviour they tend to find that it leads to other benefits elsewhere in their lives.
The quantitative analysis led to the development of our Greenprint segmentation. The segments are differentiated by the extent to which people feel able to live an environmentally-friendly lifestyle, or are constrained, and the extent to which they are motivated by the idea of an environmentally friendly lifestyle. There are six segments, shown below: two engaged groups (Pioneers and Adopters), two interested but uninvolved groups (Strugglers and Confused) and two unmotivated groups (Sceptics and Passives). It’s also worth noting that – to a significant degree – consumers find sustainability messages confusing, and not sufficiently relevant. But there is considerable scope to change behaviours with the right messages.
The right messages are those that tap into genuine consumer motivations for change, and those that work across segments, rather than assuming that people will be moved by a desire to live more sustainable lives. Thus, encouraging people to pump up their tyres is more likely to be motivating if people are made aware of the potential cost savings as well as the environmental benefits (rather than reducing their carbon footprint). Equally, people are suspicious of the motives of marketers and wary of greenwash, so communications which explain how sustainability can benefit multiple parties can cut through this. Finally, we don’t want to be preached to: messages which provoke thought and encourage re-evaluation are more likely to be seen as relevant rather than those which take a position and assert it, loudly.
The Futures Company’s Greenprint Insight Package (opens pdf) is a paid-for resource which explores UK consumer attitudes to sustainability. It comes on on a USB pen drive. It includes includes multimedia presentation and video resources to help you bring the opportunities and challenges of sustainability to life within your business.
Young people and their money
Eleanor Cooksey writes:
How do young people learn about managing money? Earlier this month, we ran a workshop session at an event organised by the Consumer Financial Education Body (CFEB) which was designed to spark debate around how better to engage with young people. The event involved marketing and compliance representatives from across the financial services industry, and included a short presentation of our recent research for CFEB into how young people make decisions about financial products, and the role of promotions in this process.
Rightly or wrongly, it seems young people turn to their own version of the ‘wisdom of crowds’, which might come from talking to family and peers, as well as referring to online comparison sites and ratings. Echoing findings from our in-house research into the Millennials generation, we also found that young people often identify themselves as confident consumers, perceiving their knowledge of personal finance to be as high as expected to be given the category. This is in spite of a lack of detailed understanding of the terminology required to make properly informed choices. However, when it came to making a decision about which provider to go for or solving problems, the traditional method of talking to someone face to face at a local branch remained very important.
The workshop session triggered useful discussion about how best to address these challenges and balance the risks of under- or misinforming young people by facilitating more peer to peer / youth-focused communication (e.g. the use of part trained online panels of young people), as opposed to failing to engage at all through badly targeted communications which may be disregarded as irrelevant. As one of our respondents noted, ‘facebook is about fun – it’s not for talking about bank accounts’.
The image is from Flickr user Alan Cleaver and is used under a Creative Commons licence with thanks.
17 September 2010 at 3:15 pm thenextwavefutures Leave a comment
Energy levels
Andrew Curry writes:
Sometimes you stumble on good news by accident. So it was recently when one of our analysts – while researching something else – found some excellent coverage in the trade press (which we’d missed completely) of a project we’d done late last year for Red Bull. The project was about how consumer manage their energy levels, a subject we’ve been interested in for about a decade, when we first started to thinking about the idea of ‘consumer currencies’ which went beyond money and time. The Red Bull project enabled us to take a far closer look at how consumers think about energy levels and manage them, day-to-day and even hour-to-hour. In particular, we found that consumers were very aware of energy levels at different times of the day, and the idea of ‘transformational energy’ emerged from the research – making sure that you have the right energy levels to be set up for the next part of your day.
Red Bull used this insight as part of a new creative platform, “Want to Squeeze The Day Dry?”, which launched in May. The campaign was developed both to bring former Red Bull customers back to the brand, and also to inform retailers about the value of the whole energy category. Yannis Kavounis, the Futures Company Director who led the research, observes:
The energy category has only been around since the late 90s, so it’s really amazing to see how savvy and sophisticated consumers have become with their energy needs, and how to satisfy them, in such a short period of time. Gone are the days where people talked about time management and physical kick. Today, it’s about holistic energy management with a wide range of desired energy modes; transformational energy fits really well in this, as people’s efforts focus on managing energy levels throughout the day and making the most of it.
The photograph at the top of the post is by Andrew Curry. It is published here under a Creative Commons licence.
9 September 2010 at 8:01 am thenextwavefutures Leave a comment
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.
