The Futures Company

Walker Smith, in Chapel Hill,  writes:

I’ve been thinking about  the nature of the recession, and consumer responses to it, for The Darwinian Gale. a large report we’ve just published.  The prevailing view of the Great Recession of 2008/2009 is that the recessionary experience of frugality has ushered in a new era of thrift.  Another says that  consumers will pick up spending right where they left off the minute they can. Our research suggests that both views are wrong.

Instead, we concluded that the defining dynamic of the recovery consumer marketplace will be an overhang of uncertainty about economic risk.

The Great Recession blew away the keen consumption and liberal globalization that drove the global economy for three decades.  But consumers still have aspirations for a better life; although they will re-channel these ambitions, and perhaps redefine what they mean by ‘better’.

As a result, the most important question facing marketers is what sort of value will animate the connection between consumers and brands in a recovery consumer marketplace coming to terms with uncertainty. But it’s not about frugality. Where it happened (and not all markets contracted), it is best understood as a coping mechanism. The risk for marketers is that if they focus on the frugal, they will miss the bigger issue of the changing value equation.

Indulging in economic risk, as consumers did in the run-up to the recession, meant not worrying about consequences.  Now, after the recession, every aspect of every decision is up for review, along with the the full range of consequences from those decisions. A considerable part of redefining value will involve focusing on the possible consequences.

This focus on consequences will be the hallmark of value in the recovery consumer marketplace to come.  Our research suggests it will be guided by a potent ambition of responsibility that will entail a greater emphasis on vigilance and resourcefulness.  Spending will be shaped by the necessity to prioritize as consumers orient their shopping in coordination with networks of interests that include but also go beyond their own selfish concerns.

The Futures Company has developed a white paper called A Darwinian Gale (available here) that explores the story of the overhang of uncertainty and examines the implications.  The Futures Company’s “unlocking methodologies” enable clients to identify the new value equations in their markets.

Compiled by Tom Ding

Discussed around the London office lately were:

• A powerful, and contemporary, example of graphic design from an unexpected source (you may care to compare the production quality of this and this recent Party Political Broadcast from the BNP in the UK)
• The new Radical Nature exhibition at the Barbican Centre – an exploration of the different ways in which artists have tackled the natural environment over the last forty years
• Tongue-in-cheek corporate poetry and (less?) tongue-in-cheek corporate music
• A great post on the reasons why economics models often underestimate social activism and its effect on innovation
• A lively-looking digital instrument created by an Italian interaction design student
• A thought-provoking glance at what might change and what might be lost when everything is connected in an ‘internet of things’.

The picture at the top is borrowed, with thanks, from the Chelsea Art Museum

Andrew Curry writes:

‘Comfort brands’ seem to be one of the phenomena of the current recession, according to the current issue of Marketing, which talked to  our UK managing director, Will Galgey, as part of its research.

As Will told the magazine,

‘It’s definitely the case that people are retrenching to what they know and trust, and takes them back to times past. We’ve identified 10 key global energies; one of these is embracing the authentic, which means people want brands that feel grounded and real. We feel that is accelerating through the recession.’

And reassurance seems to be important; one of the few categories where trust hasn’t fallen is for independent high street retailers.

But there are some nuances here. Heritage isn’t the same as old-fashioned, suggest other interviewees in the article, and authenticity isn’t the same thing as nostalgia. Nor does ‘Britishness’ seem to be a winning strategy, at least on its own: the article qu0tes research from HPI which found that 24% of consumers agreed that during the recession they were trying to buy British, whereas 31% disagreed and 44% were indifferent.

But some sense of ‘localness’ does seem to have value in consumer’s minds, a point underlined by Nathan King of Dairy Crest, whose Country Life brand has done well from their advertisements showing Johnny Rotten doing irony about Britain. King sees this as a long term trend, not a recession blip:

‘The ’80s were very selfish, the 90s were a bit more holistic, and the noughties and beyond will be more community-based and back-to-basics… there’s still a lot of uncertainty. The economy will start picking up, but the mindset of the people will stay like this for quite a while.’

Our most recent research suggests that even in recession price is still only one part of the value proposition, and not necessarily the most important one. Companies need to draw on other qualities as well. Virgin’s anniversary ‘heritage’ ad was more about service, with a hint of innovation and a sniff of old fashioned glamour (or sexism). Country Life affirms its ‘local’ credentials by rebuking them, then reminds us that it’s a premium product (‘better butter’). You know what you want – and you know how to get it.

The picture, of Gold Hill in Shaftesbury, made famous by Hovis’ advertisements, is from The Latest on Advertising, and used with thanks.

Andrew Curry writes:

Our Executive Chairman Crawford Hollingworth popped up in the pages of the Sunday Express – in an article about the Japanese trend for renting out pets (journalists, eh?). It’s not online, it seems, but the trend is big in Japan but not so big in the UK, where a company that tried to launch a dog-leasing service has been criticised by animal organisations and MPs; and has been put on hold.

Crawford’s not known as an expert on pet trends, but he saw the phenomenon as part of a wider trend moving away from full ownership to part- or “fractional ownership”, in which we can get access to something when we need it.

“We grew up with the belief that we needed to own and accumulate, and maybe the concepts of ownership and accumulation will fundamentally change. We will perhaps be happier renting something instead.”

The trend seems to be strongest right now in the transport sector, with outfits such as Streetcar and Zipcar developing pay-per-use cars, and a range of city bike-use schemes being launched. Members get access to the vehicle for a few hours, with transactions smoothed out by a combination of mobile phones and smartcards. Although it seems like a ‘recession trend’, it was moving quite quickly before that, because of concerns about consumption, resources, and a desire to ‘declutter’.

Tools seem likely to follow suit – community ownership schemes for irregularly used tools, such as drills and lawn mowers already exist. They make sense when times are tight, and digital sensors makes tracking and monitoring use far easier.

The image at the top of this post is from Timeless Tools.

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by Sarah Catlett

The beginning of any new year is inevitably marked by the disposal of things from the old one, be it the trash from holiday festivities or an often futile attempt to rid ourselves of bad habits from years past. For most of us, New Year’s 2009 was no exception. But for “Sustainable Dave” Chameides, the New Year brought an end to a year-long experiment in taking (very) personal responsibility for dealing with his daily waste: 365 Days of Trash.

The experiment was hatched following a discussion with a friend about how easy it is for all of us to throw things away, “because we are not confronted with that waste since it goes ‘away.’” The question became: What happens when we are confronted with the ugly truth of all the “stuff” that results from our living and consumption patterns? So for the 366 days of 2008 (it was a leap year), Chameides kept all his trash—including recyclables, e-waste and food waste that went to the worms for composting—in the basement of his Los Angeles home. Yes, Dave credits his wife for making the experiment possible.

On his blog, Chameides kept a running trash diary of sorts, describing his detritus in terms of how he would eventually have to deal with it and where it would end up—garbage, recycling, re-purposing. The hope was that the experiment would allow him (and perhaps others) to honestly assess what waste could be cut out simply by making better choices, what “necessary” waste could be dealt with in a sustainable fashion and what waste could not be avoided.

In the end, it turns out that he produced only 30 or so pounds of real garbage in a year—because most of his waste was recyclable or otherwise reusable. On reaching the end of his 365 Days of Trash, Chameides blogged of feeling uneasy about the odd experience of actually throwing something “away.” While he may not have achieved zero-sum consumption, the challenge of keeping his trash went a long way, to reducing it, while providing an interesting case study in conscious (rather than conspicuous) consumption.

There’s more at CNN, in the Ney York Times, and in TIME.

The photograph at the top of the post is via Treehugger

Andrew Curry writes:

In case you have been wondering, here are the answers to our Christmas quiz.

The Connections round first: the four sets of Connections go like this:

• Mosquito, Vulcan, Harrier, and Hurricane are all British fighter planes
• Snowy, Timmy, Nana, and Fang are all dogs in children’s fiction (Tintin, the Famous Five, Peter Pan, and Harry Potter, respectively)
• Carter, Gore, King, and Wiesel are all winners of the Nobel Peace Prize (Jimmy, Al, Martin Luther, and Eli); and
• London, Elysium, Strawberry, and Gracie are all types of fields (park in Hackney which is also the name of a Martin Amis novel, last resting place of Greek gods, Beatles song, and the ’30s singer and film star.)

On to the questions:

1. Alan Greenspan said: ‘I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms’, to a Congressional Committee in October – the closest he’s come to admitting he might have been wrong about the financial boom.
2. The Queen said of the credit crunch “Why did nobody notice it?”, while opening a new building at the London School of Economics, thereby discomfiting her hosts.
3. The address of the Bank of England is Threadneedle Street.
4. Norway topped the World Economic Forum’s Gender Gap Report, having the smallest gender gap. Chad came bottom.
5. The jazz pianist Esbjorn Svensson died in Stockholm Harbour, in a diving accident in July.
6. The ‘Moses’ who died this year who was a supporter of both the Civil Rights Movement and the National Rifle Association was Charlton Heston.
7. The first competitor to get a ten in this year’s Strictly Come Dancing competition was Austin Healey, with his quickstep.
8. The winner of the Man-Booker prize this year was Aravind Adiga, for White Tiger.
9. The record which won the Nationwide mercury music prize was The Seldom Seen Kid, Elbow’s 4th studio record.
10. And the two films which received the most nominations at this year’s Oscar awards were No Country for Old Men and There Will Be Blood.
11. The thing that opened in 1908 on the west London site which now hosts Westfield was The White City exhibition centre. (The Olympic Stadium was added as an afterthought when Rome pulled out of hosting the games at the last moment and London stepped in).
12. The 1958 invention of Jack Kilby of Texas Instruments and Robert Noyce of Fairchild Semiconductors was the microchip.
13. A single lap of the velodrome at this year’s summer Olympics was 250 metres.
14. Rebecca Adlington won her two golds at the Olympics in 400m and 800m freestyle.
15. The sportsman who made it to a hundred after a bit of a wait – but still saw his team relegated, was the Surrey cricketer Mark Ramprakash, who finally reached his hundredth first-class century.
16. The new British coin design makes a jigsaw out of the Royal Arms by splitting the Royal Crest across six coins – all of those with a face value of less than a pound (1p, 2p, 5p, 10p, 20p and 50p).
17. Sarah Palin’s home town is Wasilla.
18. The ‘big bang’ under the Alps in September was from the Large Hadron Collider, which simulated the moments after the beginning of the universe.
19. In 2008, it would have been dangerous to be in Tskhinvali because it is the capital of South Ossetia, the location of a war between Georgia and Russia.
20. And the reigning world chess champion is the Indian player Vishy (or Viswanathan) Anand.

Thanks!