October 25, 2011

For richer, for poorer – which consumers are the best bet?

Filed under: Demographics,Innovation — by xrematon @ 11:11 pm
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I have been doing some research into the changing dynamics of consumer culture and got side-tracked looking into the growing impact of emerging markets. One facet that is particularly intriguing is ‘reverse innovation’, or as it was dramatically first known, ‘innovation blowback’.

It’s something everyone gets excited about – it allows us to talk about new ideas from new sources; rethinking the obvious; challenges to status quo; design paradigm shifts etc. It can take different forms. There are the ’emerging giants’ who make life difficult for established multinationals, as is the case with Brazil’s Embraer making regional jets to challenge Canada’s Bombardier, whilst Cemex from Mexio is proving to be a worthy competitor for the French Lafarge. The established global corporations are also learning new tricks. A leader in this area is GE, which has its very own Professor-in-Residence, Vijay Govindarajan, who acts as Chief Innovation Consultant. One of example of GE’s successes is with ultra-sound machines. In the US, the ultrasound machine is huge and bulky, costing anywhere from $100,000 to $350,000. GE created a portable low-cost ultrasound machine, somewhere in the neighbourhood of $15,000 that has opened up a huge market in China and India.

But what is there beyond the hype of this bubble? It is certainly true that the principles and approach behind creating these products are inspirational, but their application often has limited relevance. Here, in the UK, I don’t need a water filter that uses rice husks, nor am I interested in a little fridge (as in Godrej’s Chotukool). So what if it can run on batteries – I want something that is 50% bigger, not one that offers me a quarter of my usual storage space.  Amanda Jones, the co-founder of social enterprise Red Button, makes some interesting observations about why frivolous Western consumers like me will struggle.

‘Frugal innovation is about getting people to buy into reality, but [Westerners] don’t want to do that. Why? Because perceived benefit sells. Customers want those 25 apps that they’ll never use because they like to think they are the kind of person who will. For frugal to spread to developed nations, consumers will have to “give up that alternate reality version” of themselves in which they really are “efficient enough to work out what all the bells and whistles do.’

As a twist in the tale, if we look beyond products and devices to the FMCG sector, this is where frugality is perhaps starting to look more relevant. Consumers in Europe are facing continued economic uncertainty – in this environment, value offerings in day to day purchases appeal. One company that has noticed this is Nestle, which develops Popularly Positioned Products (PPPs) for emerging markets. It has recently brought some of these innovations back to developed markets, for example in Spain, where it has altered packaging and quantities to reduce prices.

The final twist: a recent article in The Economist talks of the limits to frugality and finds evidence of the challenge to be profitable serving low income consumers.

‘In the 2010 auctions for 3G telecoms licences, operators bid ten times more for a slice of the airwaves in affluent Delhi, with 18m people, than in east Uttar Pradesh, with 120m people…. That is not to say that selling to the poor masses, and inventing ways to cut prices in order to appeal to them, is not vital. It is, both from a moral standpoint and because India’s stability depends on it. But the big profits lie elsewhere.’

October 18, 2011

Learning to write in a digital age

Filed under: Consumer Trends,Technology — by xrematon @ 10:33 am
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As I struggle to encourage my son to learn to write, I am very tempted to give up with the excuse that today’s society privileges digital as oppose to analogue capture, and that I would be better off spending my time teaching him to type. It is undeniable that laptops and tablets are increasingly found in the classroom, not only at secondary schools, but also when teaching younger children like my son.

However, as I ponder this more, I am struck by the fact that often the core skills and intent remain similar, even though the methods may have changed. We still write, but use electronic touch-sensitive touchscreens, which now seem so commonplace. We can even digitise our inconsequential doodles using a special pen, the Inkling, which works on any old paper.

The Inkling reminds me of another object I have recently seen which allows us to continue our ‘traditional’ behaviours. A design company have made a two piece plastic cover to fit over an iPhone with a faux lens that forces you to angle the phone to landscape mode when taking a picture. The case even comes with a nice strap so that you can have that authentic camera-fanatic look with your treasured object hanging around your neck.

Where has this left me in my struggle with writing letters? Going back to the basics I think. I must confess I have invested in painting my own blackboard onto the kitchen wall so we can try the ‘talk and chalk’ approach. Wish me luck!

October 11, 2011

Postez comme vous vivez!

Filed under: Uncategorized — by xrematon @ 10:35 am
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The above exhortation (roughly translated as ‘Post to suit you and your lifestyle’) comes from an ad that struck my eye as I was flicking through Femme Actuelle (the French equivalent of Women’s Own). I won’t digress on justifying my choice of literature, nor on the other ads I noticed – except perhaps the one for my favourite beauty product: an anti-ageing facial cream made with a magic formula containing snake venom. Father Christmas – please take note!

So what was so interestingabout this one (see below) from the French Post Office?



It seems simple enough – an announcement about new postal rates on offer. French consumers can choose from the ‘Green letter’ which is delivered in 48 hours, is cheaper and greener (through a commitment to avoid using plane transport); the ‘Priority letter’ for next day delivery; and finally the oddest one of all, the ‘Online letter’ which is printed out and delivered. Dig a little deeper and there are many interesting angles to explore.

Firstly, I pity poor French consumers who now have to negotiate the additional complexity these rates create. They already had to deal with three different possible weights for letters (20g, 50g or 100g, whereas in the UK, we only have to work out whether something weights more than 100g); and now they have to think  about delivery speed. Want to know more? There are four documents to download (each of four pages) which explain all the different options.

Secondly, what about this ‘Green letter’? I must confess I am not convinced. Offering consumers a lower standard of service (slower delivery) as more ‘economical’ (by a trivial three cents) and more ecological smacks of blatant greenwashery. Carrying out a little further research also reveals how disingenous this green claim is. Though the letters will not be transported by plane, they will go on the road (a plan to use TGVs to replace the postal air fleet sold in 2007 has so far come to nothing). In addition, as the French Post Office has gone through a period of rationalisation, a number of sorting offices have been closed meaning that the distances the lorries travel has in fact increased over recent years.

Finally, it also raises issues for workers. (How could one write about a French public service without including something from unhappy civil servants). According to the trade union for postal workers in southern France, offering a slower service means that fewer workers will be required on the night shift. Whilst they recognise night shifts are not for everybody, the union berate the government for not recognising the rights and routines of their workers.

After all that, I think I would rather stick to emails!

October 2, 2011

Being a homebody without being a nobody

Filed under: Uncategorized — by xrematon @ 7:02 pm

Please admire the above view. I don’t want to be smug but that represents the place where I work (British weather permitting!) now that I have left the world of ‘proper’ corporate employment.

There is much hype about new ways of working outside of the traditional office environment – I was involved myself in one report some five years ago – and the statistics on what actually is happening are not clear cut. One recent global survey from Iconoculture suggested that 6% of those employed in the UK work from home whilst recent TUC research has the figure closer to 13% (with admittedly a small drop due to the recession as people have been reluctant to ask for the ‘privilege’ of working from home at a time of job insecurity).

Whatever is going on, it is clear that the idea of a work space is no longer simply about a desk and a chair. One can add a nice view, use a shared space or add other perks such as free food, drinks, massage, band instruments and tarot readers (ok – I made the last one up and if you are really interested, check out the link here which goes through to photos from facebook offices from around the world). 

However, in a way, these are a distraction. Where most of the energy is is not in terms of space, but the relationships. New technologies have effectively meant we can work anywhere; now it seems increasingly to be the case that we can also use technology to stay in touch. There are many solutions that allow remote teams to work together and share files, links etc including the likes of Dropbox, and various apps. Now we are also able to find ways to capture the little things – Rypple is a social performance platform built for sharing goals and giving feedback, whilst Yammer is a kind of facebook for companies.

But I still have to make my own cups of tea!

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