Archive for June, 2011

Customers of the future

Alex Oliver writes: At the Marketforce conference I spoke at last week, I may have unwittingly cast a further cloud over my audience on a gloomy Wimbledon June day.  The conference was on Operational Efficiency in Financial Services, and my topic was Customers of the Future. I chose to focus on the behaviours and attitudes of two distinct generation cohorts – the 45-54 younger boomers and their 16-24 year old children. Both groups are facing significant challenges in terms of personal finance and long term financial security. But their responses are very different.

The older cohort is savvy and technologically competent, easily able to navigate their way through a range of online tools to find the best products and deals. But they face an uncertain future with huge financial pressures resulting from changing family structures as well as the economic context. The prospect of higher tuition fees and levels of youth unemployment at 20% mean that their children will struggle to repay debts and start to buy housing, often enforcing a longer term dependency which neither they nor their children want.  And with the spending cuts only just starting to bite, they are well aware that they cannot rely on the state to support their own future pension, health and social care needs – nor those of their aging parents.

So, what of the kids? Interestingly, our research shows that the 16-24 cohort is one of the last still to be financially optimistic, even insouciant, which may be more driven by ignorance and naivety than realism. Despite some anxiety about finding a job (half of them say they are worried), a staggering 62% of them believe things are going well or fairly well with their financial situation. And unlike other groups across the population who are actively seeking out ways to save money, this group still wants to spend, with almost half of them saying they like to ‘splash out’. But when it comes to financial management, their interest is very low indeed. They prefer to delegate decision making and reveal a worrying confidence in their friends and family to provide answers.

The conversations I later had with the conference delegates revealed the extent to which these findings rang true from personal experience. Could it be that we are raising a generation of young people which assumes that we can ‘bail them out’? If so, with their parents under financial pressure, we could be staring at an inter-generational flashpoint.

27 June 2011 at 12:47 pm 1 comment

Walk this way

Lindsay Kunkle writes: According to Google, it takes more than 6 days, non-stop, to walk 500 miles, which is also the distance from our Chapel Hill office to the office in New York. We’re not doing it non-stop, and we’re not going to end up in new York, but as a group The Chapel Hill office is planning to walk the equivalent of 500 miles over the course of eight weeks. If everyone participates, we’ll each be walking between 1.5 and 2 miles each week.

The obvious benefit of incorporating these walks into our weekly routine is physical—burning calories and becoming more fit. There is also the benefit of that post-walk re-energized feeling which exercise should give, getting some blood flowing, giving your eyes a break from the computer screen, mentally changing pace, and according to a growing amount of research, improving mental cognition and memory.

But the benefit of our walking initiative I have been most passionate about is the building and strengthening of connections across the office. For instance, our talented group of summer interns who just weeks ago were complete strangers now excitingly gather for the daily walk, indulging one another with stories—some work-related, some not. Maybe their closeness is not a direct result of walking, but it is at least a factor. For those who’ve been here longer, I’ve seen an incredible business benefit from these walks. We might all know one another, but learning more about your co-workers personally leads to greater understanding of one another and compassion in the workplace.  And ideally, these conversations can lead to creative collaboration and new ideas or even just lending a hand when needed.

So, while walking may not be the single secret of business success, spending 30 minutes to get some fresh air and engage in conversation with co-workers outside the office has been advantageous for us. So now I challenge you: go and walk— get fit, re-focus, grow your brain, and learn something new about a co-worker!

23 June 2011 at 10:40 am 1 comment

The programmable store

Andy Stubbings writes: We were recently asked to present at a retail conference,  (“Digital Retailing 4.0”) organized by The Store and WPP, on how mobile devices will change shopping.

On the surface, this already seems to be quite a familiar future, with a familiar set of litanies (“shopping will be freed from the confines of physical space”; “all shopping becomes social”; “mobile will be the ultimate disintermediation device” etc). That’s not to say they’re not true, but there are plenty of other blogs where you can find this sort of thing.

We wanted to understand the patterns, to identify a coherent theory to explain the effect of technology on the evolution of retail (this would also help make sense of some of the more familiar visions of the future in a more systematic way). To do this, we went back to first principles about how the system of retail works and how it might change, basing some of our thinking on the TRIZ model of the evolution of technical systems. The theory and evidence on the TRIZ model is complicated – engineers and inventors have spent whole careers understanding it and applying it – but in essence it can be used as a way to understand how systems and their components evolve over time, from rigid, to modular, to programmable through to autonomous states (you can read more here). One simple analogy might be the evolution from a single toy brick (rigid), Lego (modular – can be combined and moved around in the system, albeit not dynamically), to Lego Mindstorms (programmable – components in the system can communicate with each other dynamically), to an automated artificial intelligence Lego system (autonomous – components respond themselves to changes in the environment).

This theory of the evolution of systems works quite well for retail. Simplistically, we can identify the components in the ‘system’ of a store as four Ps:

  • People (staff, customers, suppliers and others, e.g. passers by)
  • Products (inventory, display products, customizable products)
  • Places (displays, exterior, payment points, ambient environment)
  • Prices and information (product information, advertising, service information)

When you look at it this way, shopping really hasn’t changed that much over the last 2,000 years or so. We have gone from a ‘rigid’ state (fixed stalls dispensing one type of product), to a ‘modular’ state (department stores and big box retail with movable concessions, changeable in-store environments and more control over inventory), and we are now moving to a ‘programmable’ state.

The main technology in enabling the transition from rigid to modular was electrification. For the shift to the programmable store, the key technology will be mobile devices and a whole host of information and communication technologies (ICT) that allow data to be stored, transmitted, analysed and displayed between people and things.

What will happen when a store becomes programmable? In essence it allows different elements in the system of retail (our new 4 Ps) to communicate and interact with each other in a dynamic way. So we night see:

  • data (including prices) dynamically linked to products, meaning that prices can be changed on the fly more easily (or different prices will be visible to different consumers)
  • products linked to other products (meaning that you will be able to create associative tags between products to form shopping lists or unique categories like ‘Scottish’, ‘ethically sourced’ or ‘related to the life of Robert Burns’)
  • places – the distributed store continues to ‘talk’ to its products about their maintenance status  throughout their working life
  • people (not just staff), controlling the retail environment (e.g. changing the lighting or wallpaper in store, or looking through the walls of a store from outside)

These are just some first thoughts, and I’m sure there are more. We plan to return to this subject, to develop our thinking on the idea of ‘the programmable store’, so we’d be interested to know what you think.

And the autonomus store? That might have to wait.

17 June 2011 at 9:05 am 1 comment

A future of advertising

Andrew Curry writes: I have been meaning to post this for a while, but better late than never. The Wire, which is the in-house magazine of WPP, our parent company, had a feature in its last issue on how advertising would change over the next ten years. 16 contributors, 150 words each, you know the kind of thing. The editor warned us off social media as being too obvious, and I stayed away from data analytics because others in the group know far more about that than I do.

Sadly, the whole piece is behind a firewall, unless you happen to work for a WPP company, although it would seem like a good opportunity to showcase thinking within the group. But here’s my contribution:

Advertising is being squeezed from two sides. The generation of millennials now cresting into adulthood, brought up with screens surrounding them, can de-construct an advertisement quicker than you can say “Roland Barthes“. There’s no trick you can play without them noticing it, storing it, and tagging it for the next time. Governments meanwhile, squeezed for budgets, have noticed that the public purse tends to pick up quite a lot of the costs of private consumption, and are increasingly willing to regulate advertising in an increasing range of categories, darkening markets or persuading companies to darken their markets themselves. Sao Paolo passed its ‘clean city’ legislation which banned outdoor advertising four years ago, and it has huge support from its citizens. Other places have followed suit, if on a smaller scale, an early sign that Adbusters’ Mental Environment Movement is just starting to gain traction. Advertisers will be able to say less and less about less and less. End of message.

The picture of Sao Paulo is from the blog Out of Home Media, and is used with thanks.

8 June 2011 at 10:30 am 2 comments

The Futures Company blog

The Futures Company was created through the merger of Henley Centre HeadlightVision and Yankelovich in 2008. This is the blog of the new company - but the former posts from the former Henley Centre Headlightvision blog still can be found here.

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