Fran Walton writes:

Earlier this week, we presented our latest research on the post-recessiom UK consumer, Feeling The Pinch 6, to clients in London. The overall message is one of gloom: 43% of consumers think the UK economy will get worse in 2012, and 46% plan to spend less. But that doesn’t mean that there’s nothing that brands can do.

So here are our new 5Ps for marketers:

1. Protection. How can you reduce the risks of purchase, or  help consumers manage risk in other parts of their lives? 63% of consumers now agree, ‘ I find myself thinking twice before making even the smallest purchase’. An interesting example is the German peer-to-peer insurance company, Friendsurance, which reduces insurance costs (and fraudulent claims) by letting people create groups of 15 people to help cover an insurance claim.
2. Practical. How can you empower people and help them to be self-reliant? 58% of UK consumers agree that ‘Since the recession I feel a greater need to be as self-sufficient as possible’. One response, from the Spanish food company Gallina Blanca: if you send them a a list of the ingredients you happen to have at home, they’ll suggest a recipe.
3. Purpose. How can you help consumers make new connections or make living with less a positive experience? 53% of UK consumers now agree that ‘since the recession I have learnt how many things I can do without and still be happy’. Sainsbury’s ‘living well for less’ campaign captures this well. It’s not just about the food. It also means making the most of the good things in life, sharing moments or maybe cooking memorable meals together. And without paying the earth.
4. Permission. How can you help consumers feel like they are achieving something worthwhile? Perhaps depressingly, 53% agree that ‘some of the goals I had before the recession are now probably out of reach’. Say it ain’t so! The French business Onefeat has a model where you set some goals, or ‘missions’, and get support from your friends to help you achieve them.
5. Pride. How can you help people take pride in small things or help people to be proud to be part of their community? In our qual research for Feeling The Pinch 6, one of our respondents observed that ‘the value of working with your hands seems to have been forgotten about’, also a theme of Matthew Crawford’s surprise best-seller. Transform Your Patch, launched in January. in which Pepsico and Britvic have teamed up with the charity Groundwork, is an ambitious scheme to create new parks and playgrounds and football pitches from waste land across the UK.

Of course, a lot of these are small things, but one of the lessons of the recession is that small things matter. The other lesson is that it’s more important than ever to be able to stand in the shoes of your customers and see the world through their eyes.

The picture at the top of this post is from the Swedish co-operative Lantmannen, which has a scheme which pairs singles to share leftover food. It is used with thanks. To find out more about Feeling The Pinch, and our research on consumer attitudes to the economy in Britain and Ireland, please contact Fran Walton. 

Andrew Curry writes:

Watching the SOPA/PIPA saga unfold from the other side of the Atlantic, it was difficult not to see it as a ‘wave war’, in which companies which grew up in different technology waves compete to set the frame of economic and policy discussion. On the one side, the media companies, creatures of the mass production era that dominated much of the 20th century; on the other, the technology companies that have grown up in the digital wave that followed it. (We wrote about these waves in our Futures Perspective report, Technology 2020).

The technology companies seem to be on the right side of the generational wave. As we noted last week in Futures Five, our fortnightly US newsletter for MONITOR clients,

most [Millennials] see far more nuance in pirated content-sharing than other generations: According to the 2011 Yankelovich MONITOR, 70% of Millennials indicate it’s “sometimes forgivable” if a person “views or downloads pirated content online (such as movies, television shows, music or shows),” almost double the 34% of Baby Boomers who feel the same way.

Of course, this is not a uniquely American issue. The proposed international treaty ACTA has the same intent as SOPA, as do sections of the UK’s Digital Economy Act. My view on this was shaped by James Boyle, the Duke University scholar who wrote The Public Domain, and his view was shaped by Thomas Jefferson, the first policy-maker to think seriously about copyright (yes, that Thomas Jefferson).

In a nutshell, we need copyright to reward creators, but in creating this legal privilege, we need to balance it so we don’t kill off the social, cultural, and economic gains from the free flow of knowledge, which let creators and innovators stand on the shoulders of others. The hugely extended copyright periods we now have in the USA and the UK are a grotesque tribute to the lobbying powers of media owners and old rock stars.

There’s another point here, too, about the way in which the mental landscapes of politicians shift only slowly. It’s been said that American politicians were surprised by the strength of opposition to the SOPA and PIPA bills, and more surprised to discover that their media industries were small fry, in economic terms, when compared to the tech industries.

The UK had a similar problem, in a very different sector, a decade ago. In response to an outbreak of foot and mouth disease, the government closed off large swathes of the countryside, only to discover that rural tourism and leisure were worth far more to the economy than farming. The policy-makers understood this. The politicians didn’t, because they’d got used to the farmers’ lobby. But, as with SOPA, the noise of the lobbyists had drowned out the quiet shifts of long-term change.

The image at the top is from the Bangstyle blog, where you will also find a perspective from the independent music sector. It is used with thanks.

Last week, we and 150,000 of our closest gearhead friends attended CES, the consumer electronics industry’s largest trade event – and with a few days’ distance from the Las Vegas hype and glitter, we’ve been able to identify some of the show’s most interesting trends.

1. The Center of the CE World Is Shifting

While the big Japan brands – Sony, Panasonic, Toshiba – still dominate the show floor, it’s never been more obvious that Korea’s tech titans, Samsung and LG, now represent the front line of consumer electronics innovation. Or at least the innovation on display at CES. The biggest U.S. gadget players – HP, Google and especially Apple – are conspicuous by their absence; Microsoft has announced that next year, it too will exit the show, selling the rights to its coveted exhibit space to Dish Networks and China’s Hisense electronics. The latter is also a sign of the times: While Chinese brands are still quietly building market share rather than trying to technologically leapfrog, it’s only a matter of time before the biggest China players – Lenovo, Haier and TCL in particular – make a move for mindshare as well.

2. Say Hello to the Internet of Things

As of 2010, there was an average of one net-connected device per human being on Earth; by 2015, there will be an average of two. This reflects the reality that more and more information is being exchanged between intelligent devices, independent of human agency. In fact, networking giant Cisco recently estimated that the single fastest-growing category for Internet traffic is “machine-to-machine,” with the amount of data flowing between M2M modules now soaring at a rate of 258% per year.

Several brands at CES pushed the curve on the thing-based Internet. LG showed off the second generation of its “Thinq-enabled” home appliances line – e.g. a smart refrigerator that’s capable of tracking grocery purchases and ordering favorites when they run low, as well as transferring recipe suggestions to a connected smart stove.

Not to be outdone, Samsung unveiled its own plans for a household ecosystem of connected intelligent devices, with the Smart TV at its center. Will the television go from digital hearth to digital hub? Samsung – the world’s number-one seller of TVs – is banking on it.

3. Rise of the Intuitive, Immersive Interface

For obvious reasons, traditional devices are awkward input and control tools for an Internet of Things. (A microwave with a keyboard? No thanks.) This year’s CES showed dozens of ways that manufacturers are attempting to solve for this problem: Wall-sized multitouch surfaces (including a massive 82-inch capacitive display from Perceptive Pixel, whose technology powers the “smart walls” used on CNN), face recognition, and, of course, natural-language voice control.

Behind closed doors, Nuance – the developers of the speech recognition technology used in the iPhone 4S’s Siri intelligent agent – showed off their new DragonTV voice-based television interface, and it was impressive; Nuance says the software will power the smart TV offerings of “all the major manufacturers” (including, perhaps, Apple’s hypothetical new iTV?).

Meanwhile, startup Tobii unveiled an eye-tracking system that senses what you want to select next based on the position of your pupils. And PrimeSense, developers of the technology used in Microsoft’s Xbox Kinect peripheral, demonstrated the next-generation version of their motion recognition system, which uses a 3D camera to allow users to control devices with typical touchscreen gestures (swipe, pinch to zoom, and so on) – in thin air, from up to ten feet away.

4. What’s Next
Though some have questioned CES’s continued relevance in an era of instant communications and social networks, the show remains one of the few opportunities to watch the dynamics of the technology marketplace up close – allowing active observers to spot new technologies, track the uptake of trends, and identify emerging standards in real time. We’ll be following up on the phenomena we saw this year, so watch this space.

Andy Stubbings writes:

Have you ever asked yourself what the travel guidebook of the future might look like, or why when it is arguably easier than ever to visit anywhere you like, it’s also more hassle to actually get there?

Andrew Curry and myself spent Wednesday this week with the global travel distribution company Amadeus, talking to journalists about the report, “From chaos to collaboration” we’d written for the company on the future of travel, and specifically how technology will change travel in the years to 2020.

In a nutshell: the report argues that over the next decade, thanks to a range of technologies as well as changes in social and economic contexts, there is great potential for travel to be enhanced at every stage of the journey by greater and more fluid interaction with other travellers and travel providers. The main benefits for travellers will be making the experience of getting to and from their destination less chaotic and stressful, and once they get somewhere else, they will be able to have a deeper experience of the place  by accessing other people’s collective experience. Most of the data that’s needed to do this already exists; the challenge is putting it together.

Sounds intriguing? The full report can be downloaded for free from here (opens pdf), and our friends at Kwittken, Amadeus’s international PR agency who worked with us on the report, have put together this infographic with some stats taken from the quantitative research done for the report.

A shareable version can be found here.

The picture is published here by The Futures Company under a Creative Commons licence: some rights reserved.

Andrew Curry writes:

Just before Christmas, The Futures Company re-published a report which it wrote (as The Henley Centre) a decade ago, for the British government’s Cabinet Office, on understanding best practice in strategic futures work. It’s stood up well over the last ten years, because it focusses on organisational context and culture and on principles, rather than on methods. We were able to republish the work, which has been in the public domain, because of the generous copyright provisions of the UK’s Open Government Licence, which makes most Creative Commons licences look positively restrictive.

The report was based on an extensive benchmarking study, together with a literature review and a range of expert interviews. Without trying to summarise the whole thing here, one section has a set of methodological guidelines which are worth capturing:

• Ensure there is clarity about the resource requirements of the work
• Ensure that the process is inclusive
• Ensure that people understand and trust the processes being used
• Understand the limitations as well as the opportunities afforded by strategic futures thinking (there is no magic bullet)
• Understand that the process will take time to deliver benefits to the organisation

The full report, published as part of our Future Perspectives thought leadership series, can be downloaded from the website (free, but registration required).

This October, I spent 24 hours with Walter de Maria’s Lightning Field artwork. It’s miles from anywhere, in the high desert of New Mexico about 3 hours outside of Albuquerque: a one mile by one kilometre grid of 400 stainless steel rods, averaging 20ft in height, which attract lightning. You have to stay the night (a little cabin sleeps six) which is just as well because when you first get there, there’s not a lot going on. In the early afternoon when the sun is high, the rods are almost invisible and so spread out it seems there’s little to see or do. And then, gradually, as the light changes, you realise you’re in the grip of an experience which needs time as well as space. I highly recommend it.

Andre Furstenberg, on untranslatable words

The Oxford English Dictionary claims there are at least a quarter of a million distinct English words in use. It estimates that English probably has more words than any other comparable world language. So, it struck me that when it comes to the most personal, our closest interactions with others, English still sometimes fail us.

How many times have we experienced Mamihlapinatapei, but failed to verbalise it? Nor have we one word for that hesitating look when you both know you want to initiate something but are reluctant to take the first step. Or cafune; tenderly running our fingers through someone’s hair?

It’s good to be reminded that in our media swamped world, our languages still sometimes come up short.

Andrew Curry, Don Paterson’s Rain

Sometimes consultancy has its privileges. So it was for me this year, when, delivering a keynote to the UK Independent Publishers’ Guild, the IPG, I was also able to hear their after-dinner speaker, the Scottish poet Don Paterson. Most of it was a light affair, as custom dictates, and he started with the conceit that he had forgotten which organisation he was speaking to, reminiscing about the chequered history of the fictitious International Paintballing Group. But Paterson is one of Britain’s finest poets, and this was an audience of publishers, so we were also treated to a reading of ‘Rain‘, the title poem of his best collection. It is dark and cinematographic, as this extract conveys:

I love all films that start with rain:

rain, braiding a windowpane

or darkening a hung-out dress

or streaming down her upturned face;

His reading sent me back to the collection. As it should.

I’ve been thinking a lot about technology this year, with the writing of our Technology 2020 report amongst other things, and more specifically about the amount of technology embedded in everyday objects. So I was delighted when I heard about The Toaster Project, a short description of an attempt (originally an MA project) to construct a toaster, from scratch, without recourse to industrial technologies. There seems to be a tradition of using toasters as the archetypical everyday object that appears simple but is in fact tremendously complex when unpacked and deconstructed: from Harvey Moloch’s tremendous study of the design of everyday objects Where Stuff Comes From, to the story this year of toaster patent trolling in an episode of This American Life, to the character of Arthur Dent in Douglas Adams’ Mostly Harmless, who, when stranded on a prehistoric alien planet “left to his own devices..couldn’t build a toaster” (he can make sandwiches though). The Toaster Project doesn’t disappoint, and is cutely pieced together as a kind of cento of email exchanges with professors and oil company executives, with travelogue and photos. It’s more of a study of materials by way of metallurgy than electronics or computing technology per se, but no less entertaining for that. I guarantee that you won’t look the same way at a toaster again after reading it.

Eleanor Cooksey,  Turner Contemporary, Margate

I was brought up in Kent, not the wealthy commuter-belt part, but the more depressed heel of  Canterbury and the Isle of Thanet. The arrival of the Turner Contemporary this year in Margate had the opportunity to be very exciting. We now expect architecture to be spectacular – new buildings should be strange, wonderful, otherworldly, possibly distracting us far too much from thinking about what they are meant to house. Turner Contemporary isn’t one of those; it is a modest affair, probably linked to its pretty modest budget. Having visited it, I was ready to head back to London singing its praises, but for a small hitch. It is a habit of mine to get a postcard wbever I visit a gallery – and the Turner Contemporary failed the ‘postcard test’. The building doesn’t lend itself to the iconic view by which it can impress itself upon our memories. Instead, we have a view of what looks like some big warehouses on the seafront. Other angles were no better. David Chipperfield (he’s the architect) – don’t forget the postcard shot!

The image of Turner Contemporary comes from ArtRabbit, the picture of the toaster from The Toaster Project. Both are used with thanks.

Anita Beveridge, Message from an Unknown Chinese Mother

The most touching book I have read this year was Message from an Unknown Chinese Mother by the journalist and author Xinran. In it she extends her exploration into the implications of the one child policy first touched upon in her seminal work The Good Women of China (also a ‘must-read’). The tales Xinran recounts are heart wrenching and enchanting in equal measure, and remind us of the emotional implications of the Chinese social policies which are too often only viewed through an economic lens. It is a wonderful read, but have a box of tissues to hand.

Tom Morley and Ann Clurman on layaway angels

‘Layaway’ is a way in which Americans can purchase an item without paying the entire cost at once. But the item stays in the store until it’s completely paid off. We’ve noticed several articles about strangers paying off layaway bills anonymously on behalf of people who can’t afford to do this themselves. It’s a tangible example of the growing economic divide in the United States, this country; the story speaks to the fact that people recognize the divide (it’s not just the economists, demographers and market researchers) and want to help. And it’s not about approbation and  applause. One of our MONITOR themes this year, “Small Is Getting Bigger” is about avoiding grand, sweeping gestures, to stay clear of the grandiose. These good samaritans already know that.

The image above comes from the First Preston HT blog, and is used with thanks.

Walker Smith writes: For the past three years, since the economic crisis ballooned, I’ve been writing a regular column called Looking Up, on the ways for businesses to manage through recession and tough markets; I wrote the last one in the series earlier this month.

I wrote the first Looking Up in October, 2008, just over a month after the global financial system went to the edge of collapse.  (I’m not being melodramatic here; if you need a stark reminder of just how close we came to financial meltdown during the eight days from September 12 to September 19, 2008, James Stewart’s New Yorker essay “Eight Days” is still chilling).

The column had three purposes.  It translated financial concepts, to help people navigate the macro-economic news. It provided evidence and examples, to show that there were still opportunities in the market. And the third, and most important, purpose of Looking Up was to offer insights and guidance about how to reach consumers effectively during the Great Recession and subsequent stagnant recovery.  Over three years, Looking Up focused on delivering insight and inspiration to our clients.

And looking back on something like a hundred issues, I see that three themes repeated themselves over and over again. They’re worth repeating here.

Innovation.  The single most effective way to thrive in a downturn is to innovate. Reams of academic research have demonstrated this across past downturns and across geographies.  There are hundreds of examples of successful innovations introduced during the depths of past recessions, along with hundreds of examples of defunct companies that went bust waiting out a recession while competitors innovated. The logic is simple: innovation sparks new demand, creates new jobs and advances the overall productivity of the economy, which is the key to prosperity.

No other theme has been mentioned in Looking Up as often as innovation, one of the core practice areas of The Futures Company. If you had to take just one thing away from Looking Up, it would be: innovate!

Sourcing growth.  The biggest challenge facing companies at the moment is sourcing growth.  Unemployment, stock market volatility, cuts in government benefits, deleveraging and housing price declines all mean that household budgets remain tight. But there are pockets of strength in the consumer marketplace; more can be found through close scrutiny and shrewd analysis.  A number of MONITOR methods, such as Dynamax, have been developed to identify this enduring spending potential.

Practice optimism.  Consumers take their cue from businesses.  Optimism is contagious (as research has shown time after time).  If you want consumers to be buoyant again, you need to help. Conversely, if your marketing echoes their worst fears, don’t expect them to be cheerful. There’s a virtuous circle here: if businesses look up, then your customers will too.

Global MONITOR is an innovative, strategic, future-focused Global Insights programme for clients and agencies. It identifies the key dynamics shaping the world and the consumer marketplace, as well as potential implications for your clients’ businesses. If you want to know more about Global MONITOR, please call Simon Kaplan in the United States, or Deniz Erdem in Europe.

The picture at the top of this post was originally published by Global Envision – well worth a visit – and is used with thanks. 

Phil Soanes writes:

I spoke earlier this week at a WPP workshop run by The Store on the future of retail , and the form was a series of short sharp presentations (for example, by Kantar Retail, Fitch, and Ecommera) with discussion. My theme was the future of consumer segmentation in the age of austerity, but what I wanted to do here was to share – unattributably, unfortunately – the ten big things I heard during the day from the different presentations.

1. Retailers are moving away from their traditional segmentation models.  The classic segmentation combines a ‘Why’ (need-state) on one axis with a ‘What’ (value or attitude) on the other. Now retailers are segmenting occasions and missions. As one speaker said, there are fewer missions than consumer types so it’s easier to segment that way. For me this feels like the easiest way to segment, and closest to point of purchase, but it doesn’t negate the need to understand what’s driving the consumer.
2. Retailing is now about data. There’s lots of it and the winners will be the ones who can collate and understand it to their advantage. Getting to a ‘single customer view’ (with integrated data sources) is the holy grail, but it’s a massive task and most retailers won’t achieve it. Retailers are reluctant to hand their data over, but may need to if they’re to make the most of it. One other implication of this: less market research. People will have less need to collect survey data.
3. The discount noise in the market is deafening. This isn’t surprising given the economic climate. But when you look at who is doing well (or less badly) it shows that the secret of good retail is still having a great proposition at the heart of the business, and this defines the ‘value for money’ test. This also means that brand really matters, probably more than before.
4. Consumer motivation to buy and shop for different categories differs widely. so working this out is important. Close up, motivation by category looks different, while there is a repertoire of behaviour within categories. It is also clear that making shopping easy is the tipping point in some categories. And the need to deliver ‘easy’ is replacing the need to optimise customer satisfaction.
5. Trust and transparency matter more than ever. It was true before austerity struck. It keeps on getting more true because in tough times consumers expect, more than ever, that brands won’t take advantage. They’re less concerned with the ‘fluffy’ idea of ‘on your side’ as with a ‘fair deal’. Getting found out has more severe consequences for brands than it used to.
6. The future will be multi-channel. But not in the way people sometimes think. The purchase path is increasingly complex, with consumers jumping between online and offline as they go. But offline retailers need to understand better why their customers are there instead of in front of a screen.
7. The value exchange on a shopping mission is critical. What do consumers need to get out of a shopping ‘trip’, actual or virtual, to make it worthwhile for them?
8. Shopping mind states fall into three groups. One contributor conceived shopping ‘mind-states’ as falling into three types: locate, explore, dream. For another this division was more operational, via stages of a shopper journey: plan, search, select, and buy. Consumers switch between offline and online within many of these stages,  so understanding the role that each plays at different time is crucial draw out. I think we’d say there’s more work to be done here, in particular in understanding the role of ‘reviewing’ and who’s involved in that, and also to map how these behaviours apply to different categories. And conventional shopper journeys also tend to neglect the shopper relationship after purchase, from service to sharing to word of mouth. One more thought on mind-states: what is the potential to offer ‘dreaming’ online?
   
9. Online retailers have to get everything right to be successful. Contrary to the received wisdom, online retail is a less forgiving environment than physical; ‘everything’ includes vision and planning as well as ‘enablers’ and delivery. Amazon are the only one to hit all the numbers and this is partly down to a relentless focus on what they can control.
10. There are some important questions where we don’t really know the answers yet. For example:

• Does impulse exist?
• How do you measure loyalty?
• What categories will and won’t work online? I know; after more than a decade you’d have thought we’d have cracked this, but it seems we haven’t.

The picture at the top of this post was taken by Peter Curry. It is published here under a Creative Commons licence: some rights reserved. If you’d like to see a copy of Phil’s slides from the conference, please contact him.