xrematon

December 14, 2019

Polishing up my perspective on Poland

Over the past year, I have had the privilege to be involved in a deeply fascinating pan-European project with the objective of thinking about the future of the postal sector in 2030. I was working as a part of the team from a German foresight agency and participated by attending three workshops in Paris, Bonn and Warsaw.

The project was so interesting across a whole variety of dimensions: experiencing cultural differences in discussion and social dialogue between countries and generations; different attitudes towards worker rights and protection; the manifold challenges of working with translators; understanding the importance of universal service obligations (all you folk living out in the sticks be thankful for this).

And though I work on what are ostensibly ‘international projects’ as I need to investigate, explore and explain the difference between attitudes and behaviours across different markets, such projects are vicarious. I do not live the differences. Here I did – to a certain extent.

It was only to a certain extent as a number of the aspects of my experience at the workshops did not vary hugely across markets. We stayed in large hotels catering to business travellers and which therefore tended to offer identikit services and products. Take, for example, the buffets of breakfast food from everywhere: some eggs things, some sausage meat things, some cold meats, some bakery and other bread bits, fruit and cereals. Likewise for the lunches, though there were some intriguing local stand-outs of varying appeal. We were in Bonn at the start of October and every single meal (bar breakfast) included the seasonal offering of pumpkin in some form or other (soup, in ravioli, in stew etc), whilst in France, there were macaroons (better) and in Poland, well, it was lots of beetroot (fine but not in excess).

But perhaps the most interesting learning was a realisation that Poland, beyond the beetroot and the rather extraordinary socio-realist architecture, is really going places. I am so used to thinking about Europe as a mature market with very slow growth and that all the whizzy GDP growth rates belong to BRICS, CIVETS and their ilk. Well, it seems that Poland is not hitting double digit growth but certainly compared to other large EU markets, it is operating in a different gear.

The trigger moment was moment was during a presentation midst workshop, when as has been customary for each of the host countries, there is a chance to show off about how brilliant their postal business is. To be honest, it’s most often about how they are managing the commonly felt challenge of mail volumes falling off a cliff whilst trying to snatch up as much as they can of the growing but much more competitive parcels business. However, in Poland, there were pronouncements about doubling revenues and huge growth in activity. To make clear how extraordinary this is, a recent annual report from Royal Mail can only talk about small incremental gains of revenue rarely in double digits.

Yes, it seems that, now I have opened my eyes to it, that Poland is the tiger of Europe. Output growth reached 4.6 percent last year, compared with 2.5 percent for the European Union as a whole, unemployment has dropped to a record low of 4.4 percent. Many other EU states would envy this performance. Poland has reaped the fruits of opening up and liberalising its economy, as well as benefiting from its particular attributes of a large educated population (admittedly somewhat depleted by all those who disappeared off to the UK – probably on their way back now) and its location as being the first EU country Asia encounters as it moves West, and more.

However, some have concerns that this has come at a hidden cost and does not represent sustainable growth or wealth creation. In an interview in October last year, Prime Minister Mateusz Morawiecki commented, ‘We have sold pretty much all of our economy. Money is being sucked out of the country, “transferred every year in the form of dividends or interest on capital, interest on loans, deposits and current accounts.”

From now on, I shall make sure that I stay up to date with the next stage in Poland’s development.

PS Did I forget to mention the dumplings?!

Image result for polish dumplings

November 21, 2019

E=mc2

What am I playing at here? Well, I just wanted to make the point that opting for more experiential consumption (e) actually often ends up equalling material consumption magnified (mc2).

The event which brought this home was when I was on holiday in Ecuador and we were visiting a reserve which had set up a (very popular) bird feeder.

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We had arrived early and got our fill of taking pictures. Then came a battalion of Japanese tourists who were clearly photographers in a different league. It is appropriate to use military vocabulary as these individuals were in full camouflage gear and burdened with bulky backpacks. It turns out these contained a quite extraordinary complement of photographic equipment: endless very very long telescopic lenses, stands, digital display units and other items I cannot name.

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These were clearly individuals who had achieved a comfortable level of affluence. They were now ‘doing experiences’ but doing so had clearly triggered a whole new set of purchasing – material consumption magnified.

In my own household I have noticed a similar trend. After careful deliberation, we have made a conscious choice to funnel our spending into good holidays and less on ‘stuff’ (accepting we have to drive old bangers and cope with unglamorous bathrooms as a result). However, we still seem to have been keeping Amazon in business, ordering at least six binoculars (upgrades, replacements), telescopes, boots, performance clothing etc. But it has produced good memories, which is the key thing behind experiences.

September 22, 2019

Making it big

How do you view the world and which criteria do you use to determine who is ‘top dog’? If you focus on landmass, then Russia does pretty well; if you look at GDP, it’s the US that comes out as number one; taking population brings China to the fore; and so on.

And then if we think about how these countries got there, it changes the picture yet again. I like thinking in terms of systems and stories, but having just read Prisoners of Geography by Tim Marshall, I have understood there is another way to frame country narratives. And thinking about things in this way has made some current dynamics clearer/easier to comprehend.

This is best exemplified by focussing on Africa. Over the years, this continent is subject to great paeans about its future potential (as yet unrealised) but which are now ‘almost there’. Why is this?

Well, it’s worth remembering that Africa actually has a head start – it’s where Home Sapiens originated 200,000 years ago. Though Africa is a great place overall and in terms of the specific regions within it (which contain a huge amount of diversity across many different dimensions), what they have in common is isolation: isolation from each other as well as from the outside world. This is significant as this stops the all-important flow of ideas that drive progress.

Let’s come in a little closer. There is the Sahel which cuts across the top third of the country, and whilst the north, in particular those places with access to the Mediterranean and technologies, agriculture innovation and trade from Europe, managed to develop and change , below the Sahel, it’s quite different. Here, there are few plants willing to be domesticated, and animals even less so. Much of the land is jungle, swamp, desert or steep-sided plateau, none of which is good for growing crops or grazing for easy livestock, such as sheep. There is a good quote from Jared Diamond which reinforces this point: “History might have turned out differently if African armies, fed by barnyard-giraffe meat and backed by waves of cavalry mounted on huge rhinos, had swept into Europe to overrun its mutton-fed soldiers mounted on puny horses.”

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And then there is challenge of getting goods in and out. Africa has lots of rivers, but they aren’t much use in this regard as they begin in high land and descent in abrupt drops which thwarts navigation. Going to the sea doesn’t improve the situation much: there are few natural harbours – the coast line across much of Africa is too smooth (where can ships aggregate safely together if that is the case?) and around the beaches the water is too shallow.

However, perhaps some of the ‘challenges’ can now come into their own as the means by which we rely on sharing ideas and goods have changed. For example, those same rivers that hampered trade are now being harnessed for hydro-electric power. That’s one bright spot in the prison of geography. Let’s see how long it takes for more to make a real difference.

 

July 27, 2019

Older and none the wiser

If I mentioned ‘pensions’, it’s likely that your mind will go blank, or you might start thinking about what you will have for lunch/dinner/snack on instead. But even if you try to think about pensions, it’s not clear that you will be able to make much progress. Pensions, over the past decade or so, have really become much more complicated and this means it is hard to keep track of what the situation is. There is complexity across many different dimensions and the overall result is that there are many choices to make and lots of uncertainty implicit within those choices.

Crudely, pensions were about paying money in and then getting a regular set sum back again once you had retired at some point in your early sixties. But this is no longer the case. For a start, you won’t be able to get your State Pension until you are 67 (well, I won’t!). And, as we have all been told many times, you really shouldn’t think that you can rely on the State Pension to survive in old age, unless you are very keen on leading a minimalist lifestyle.

So you need to set something up additional. This is where the questions and uncertainty kick in. You go for some private pension provision and most this is probably done through work – but how do you know what is best? And what if you have changed jobs and have an existing pension with another employer in another scheme? Can you remember who that is with? And should you consolidate them? How do you work out which offers best value? Do you know the charges? What about returns? What about other costs that are hidden away?

And, thinking about this additional pension provision, you won’t get a set amount (a proportion of your final salary) at the end. The times of Defined Benefit pensions are over. I am not going to go into all the background of why (perhaps for another time), but now the majority of schemes set up are Defined Contribution (where you put a set amount in but what you get at the end is far less certain).

And now for more decisions and choices. When you retire, you don’t simply get some money, you need to work out what you will do with the big lump of money you have carefully saved up. Before most people would buy an annuity, which gives someone a guaranteed sum paid out each month. Now you can take a substantial cash sum out in one go, but then again, you need to be careful as you might start paying a lot of tax on that if you take out too much as this is taxable income.

But if you took some out, you don’t want to put it in a bank as it will effectively lose money with interest rates so low. So instead you might decide to do something more sophisticated, such as keep some money invested so that it carries on making better returns, but will your current provider let you do this? And then perhaps you could take a regular small sum from that for current expenses. But do you know how to split up the amount saved – how much to invest and how much to take out?

And then another element to consider is how to get financial security for your final years, for example some kind of annuity. But the challenge here is to second guess when would be the right moment for this, and then what sort of amount would you need to live on? Most people tend to overestimate how much they will need at this stage and die with unspent funds.

I’m just hope that by the time it comes for me to grapple with all this, that the perfect product has been launched and I can live happily after thanks to it.

June 22, 2019

Totemic objects

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Things are never just ‘things’, are they?

There are some objects that manage to transform daily life into something very different to what was happening before they appeared on the scene. Now it would be very tempting to call out the internet here but not only is that not really ‘a thing’ (it’s too big and messy to be that), I am not actually sure it has radically changed my everyday life experience. As someone who grew up with a childhood that was internet-free and only encountered email, web browsers and more in early adulthood, I have to point out that I still seem to be living in a house built with bricks with tiles on the roof, with a car in the drive, a fridge in the kitchen full of the same kind of foods etc. Perhaps I might feel differently in a couple of decades.

No, I was thinking more of the objects found in Tim Harford’s book Fifty Things That Made the Modern Economy. The book starts with the plough, which is a particularly striking example of a catalyst for change: as the author claims, it was the plough that kick started civilisation in the first place. The plough made farming much more efficient, thereby freeing up a large proportion of the population to do other activities and specialise in these, whether baking bread, building houses, constructing bridges and roads – in other creating civilisation. In addition, the agricultural abundance that existed as a result (people were no longer foragers living at subsistence levels), meant powerful people could confiscate food and thus reinforce their power. This enabled the rise of kings and soldiers, bureaucrats and priests etc to live off the work of others.

The plough also changed domestic arrangements. Ploughing was awkward and required men’s strength, whilst the wheat and rice grown required more preparation than nuts and berries, which became women’s work at home. And as these women were no longer out and about foraging all day, they were more able to look after little children and thus had more frequent pregnancies. This was supported by the guaranteed good supply of food, helping to increase population size significantly.

And that’s not all – there are other impacts set in play which are perhaps less positive: switching from foraging to eating grain was actually less nutritious and average height dropped, whilst living more closely with many other people increased the chance of disease, parasites and other challenges to good health.

That’s a lot from just a plough.

There are other types of objects which are notable not for what they trigger but for what they represent. This came through very clearly in an interesting piece from Vox on the rise of granny panties and why this happened. It’s about a number of different things: the rejection of hypersexualisation, the rise of female empowerment (you can wear what you want and feel good), the advent of new garment technology permitting seamless underwear, reinvented granny panties can be also folded into the athleisure movement as women now look for comfortable clothes suitable for everything from working in an office to working. It’s about more than ‘just underwear’.

What totemic object would you want to put on a pedestal?

January 15, 2019

Home from home

img_20181228_100504Where do you think the above snap was taken? Don’t look too hard as otherwise you will spoil the fun!

I’m hoping that you zoned in on the all-too recognisable Heinz tomato ketchup and thought the photo was perhaps taken in my local supermarket. Well, not quite. I took this picture in my Xmas holidays spent in the coastal area close to Malaga on the Costa del Sol. It is the heartland for ex-pat Brits and it was all too easy to find those little creature comforts of familiar foods readily available in the Mercadona next to the villa we were renting.

With all the chaos created by Brexit (at the time of writing, it is all very much up in the air), the number of Brits living in Spain has actually dropped. According to Spain’s National Statistics Institute (INE), in the last five years, the number of British residents in Spain has dropped from 397,892 to 240,785 – a fall of 157,107. However, for someone who has no point of comparison, it felt like British presence was still a feature of the landscape in Cala de Mijas where we stayed.

I had a lot of fun ambling around the supermarkets, trying to spot the items catering to the Brits. Here are some of the treasures I found.

Brussels sprouts – of course! Well, it was Christmas.

img_20181228_100414And fancy a curry – albeit with salmon – but I guess fish is pretty hard to avoid in coastal Spain.

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Can you spot the bacon in the centre of the bottom shelf?

img_20181228_101327Spot the wannabe After Eights on the top shelf?img_20181228_100233But there were also some delicacies clearly aimed at the local residents. The below is not my cup of tea.

img_20181228_100726And out in the streets, there other similar indicators of Brit presence.

img_20181228_110112But I want to use my final photo to highlight a new dynamic reverberating in the area. Having chatted with a local (Irish!) estate agent, it seems that Scandis are the new big kids on the block since an airline started added direct flights between Norway and Malaga. So in the Mercadona, amongst the bacon and baked beans, I also found the dark rye grainy bread so beloved of Scandinavians.

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I can’t say that I saw any pickled fish, but that’s probably coming!

December 22, 2018

Eating less meat – what could this look like?

At this time of festive overindulgence, perhaps it’s good to think about opting for the opposite – ‘underindulgence’ – in particular the growing momentum around reducing meat consumption.

This is not a new idea but the dynamics swirling around it have changed. Whilst the key motivation when I was growing up was moral and centred around the idea of not wanting to inflict cruelty or be responsible for the death of animals, the environmental rationale for opting for a more vegetarian or vegan lifestyle is now paramount. Fresh evidence appears in the headlines almost daily:

‘Avoiding meat and dairy products is the single biggest way to reduce your environmental impact on the planet, according to the scientists behind the most comprehensive analysis to date of the damage farming does to the planet.’

However, it seems that there are variety of different trajectories a meat-reducing world might go.

Let’s get insects out of the way first. Some people are very excited by the prospect of either making insects themselves palatable or grinding up them up to use as a nutritious flour of some kind. In fact, in November 2018, Sainsbury’s was proud to claim it was the first UK supermarket to stock edible insects, making packets of Eat Grub’s smoky BBQ crunchy roasted crickets available in 250 stores across the country. However, to produce insects at scale and for large swathes of the population to eat them is another matter, There is currently limited experience or knowledge about how to do this or what the impact might be. This is in terms, for example, of allergic reactions, microbial risks or even what welfare standards to apply to rearing arthropod livestock.

Others hope that cutting-edge science will have the answer and give us meat that either is not real meat or else real meat but does not involve rearing and slaughtering livestock as currently takes place.

The former, a meat-like product, is actually quite advanced in some markets, the US in particular. Companies such as Impossible Foods have created ‘foods’ which act like meat in every sense – they look, smell, taste and even bleed like meat – but are in fact newly manufactured foods. In case the case of Impossible Foods, they have created something magical reliant on their star ingredient, leghemoglobin. This ingredient is found naturally in the roots of soy plants and derived in a fermentation process similar to brewing. However, as this is effectively a genetically modified organism which has never been eaten before by humans, Impossible Foods sought approval from the FDA to confirm leghemoglobin was safe to eat and this approval was eventually given. Whatever reservations some might have about the safety of such products and in particular risks of allergic reactions, as well as the resource costs involved, the scale and ambition of Impossible Foods is impressive. Whilst it is easy to pitch non-meat options to affluent, health conscious and well educated individuals, it is a much harder sell to those who don’t have the means (neither the time nor the money) to be so selective and discerning. Impossible Foods has made a start to address this: its burgers are now being sold in the outlets of fast food chain White Castle across the US (albeit priced at one dollar more than their standard burgers).

The other way to get real meat but without all the usual associated negative impacts is to effectively ‘grow’ meat in a lab. This ‘clean meat’ is still at very early stages of development, but already significant progress has been made. Costs have dropped dramatically: from $325,000 for a burger in 2013 to $11 five years later with the potential to go lower. More importantly, clean meat is attracting the interest of investors already big in the meat world. In mid 2018, the American meat giant Tyson Foods announced a multi-million dollar investment in a cellular meat startup. This is a sure sign this kind of meat is to be taken seriously.

However, there are also challenges here, which relate to the fact that currently growing meat in this way relies on animal stem cells which are typically fed with a serum derived from the blood of calf foetuses – in other words, clean meat uses animal products and is not vegan.

Now, for our third meat-free path, let’s go back in time to when this involved going for something that didn’t have any pretense at being meat – a veggie alternative that was clearly veggie. I’m thinking of something like a good old-fashioned nut roast or veggie burger made of beans and the like. From having spoken to colleagues, it seems there has been a shift in expectations between one generation and the next. Some Millennials expect going meat-free to mean having something else that is just like meat, whilst older generations expect meat-free to look ‘veggie’. I wonder how this will pan out and whether there are also comparable regional differences in attitudes.

The final trajectory for meat-free is to put forward to the idea of preparing dishes that are designed to be vegetarian or vegan from the outside. An example here is the cuisine from Asia which makes use of vegetable and vegetable forms of protein such as bean curd, nuts and pulses. This seems like a much simpler path – we use ingredients that have been tried and tested over many generations, with the promise of lots of spice to keep things interesting.

However, no one would try to claim that anything can match up to the smell and taste of a proper bacon sarnie! I wonder if Impossible Foods is working on that.

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September 19, 2018

Change in the financial sector – three observations

Over the past couple of years, I have had the opportunity to dabble in numerous projects for FMCG clients. Recently, however, this pattern has shifted and I have worked on several projects in the financial services sector, giving me a chance to engage with the challenges and dynamics impacting this sector.

Across all areas of commercial activity, there is increasing focus on innovation. In mature markets, growth is slow and it seems that the best opportunities to deliver against revenue targets come from not simply tweaking the existing but taking a fresh approach. When it comes to the financial sector, innovation is undeniably taking place, but a lot of this is driven by the external context, rather than established players deciding for themselves to do things differently. How money is managed is changing rapidly – thanks to changes in technology and the accompanying shifts in consumer expectations and habits. What is most interesting of all is the way that this new of ‘doing things’ is most apparent in emerging and developing markets, with mature markets lagging often behind.

Think about mobile money – this initially got going in Kenya. And now look at where the most sophisticated mobile payment ecosystems exist – there are in China. In mature markets, we are hobbled by our legacy systems which make switching to quicker and more convenient processes hard. Moving to contactless payment didn’t require waiting for the technology to be invented (that was around a long while ago); the delay came from having enough retailers who had installed the pay points that could accept this payment method. In emerging markets, it has been possible to build the infrastructure from scratch, using only the latest and best, which can work seamlessly across all types of digital processes and systems.

Mature markets are not only behind the curve in innovation. Some might argue there is a backlash as well as momentum to maintain the status quo. In an article earlier this year, Victoria Cleland, the Bank of England’s chief cashier, mentioned that she does not use contactless payment cards for personal spending – in part because she is yet to trust the technology completely. In Sweden, though the country is making rapid progress towards becoming the world’s first completely cashless society, there are growing concerns it is causing problems for the elderly and other vulnerable groups, as well as recognition that phasing out coins and notes could put the entire country at risk should Sweden encounter a serious crisis or war.

My final observation relates to how our relationship with money, and those organisations whom we talk to about money, is changing in the core fundamentals. In the UK, being able to buy a house is not a realistic aspiration for those in early adulthood. First-time buyers now wait longer – on average, they are seven years older than in 1960, and likely to be in their late thirties. In the face of this situation, some decide they will simply rent. Likewise, buying a car no longer seems such a critical entry milestone to adult life. Instead, there is great aspirational appeal in not being tied down, and instead taking the opportunity to experience life and work in a more flexible manner. I paint an extreme picture but only to bring out what challenges this presents for financial organisations.

If people are no longer buying houses or cars, gone is their opportunity to establish a long-term relationship with customers by providing them a mortgage or loan; if people are not slotting into standard regular jobs, gone is the opportunity to have salaries deposited in a nice and steady manner to build up bank capital; and with a desire to travel and focus on experiences, gone is the need for credit cards and other vehicles to facilitate spending.

It is a world for the brave, with the greatest innovation found not quite where and how you might expect it.

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April 21, 2018

Hairy business

Filed under: Business,Consumer Trends,Futures,Innovation,Marketing,Uncategorized — by xrematon @ 10:34 pm
Tags: ,

 

Over the past year or so, I have had the opportunity to work on projects in the ‘personal care’ category – think all things hair, skin and other forms of beauty care.

Now, my first learning was actually that I had a lot to learn. Unlike food, where I not only have done many pieces of work over the years, but I am also deeply personally engaged given that I generally cook from scratch at least 10 meals a week, for personal care, I have limited exposure. I have bought the same brand of shampoo for the past 25 years and the same brand of facial cream for the past ten, and apart from other bare essentials (toothpaste and deodorant), I’m done. I have in effect opted out of some whole categories – make-up, more sophisticated hair care, treatments and styling and skin care (the latter, I realise now, is a particularly bit gap given that I am of the age when I should spending a good proportion of my disposable income on anti-ageing products. (For the record, I am currently relying on addressing wrinkles from within by eating lots of avocadoes).

But it turns out that personal care is a fascinating category which has some dynamics it shares with food and some which are quite specific to personal care. Let’s start with the similarity:

Personal care and food are both deeply influenced by the local cultural context. How and what we eat will, to a certain extent, vary depending on where we are: in the US, the UK and increasingly Europe, we shop from supermarkets and are happy to a certain amount of ready-made foods, going from dried pasta and bread all the way through to ready meals, and the food we eat will be quite diverse with many non-native items. In other countries, there are often stronger food cultures and more variety within that culture of food, for example think of all the different types of curry in Asia, but curry will still dominant, with fast food nibbling away at the edges.

In personal care too there are culturally-dependent preferences, for example beauty regimes in Asia are more complex and a lot of effort going into achieving fair skin. Interestingly one might argue, that just as with food, there is starting to be some globalisation/less variation across geographies. Think of the impact of social media on the convergence of aspirational aesthetics – everyone wants to look as lovely and beautiful as the Duchess of Cambridge or Meghan Markle etc.

However, there are important differences between the dynamics of food and personal care.

A key one is the direction of influence. In food, though we have ‘hot’ food cuisines, which become trendy for a year or two, for example it was Korean recently, but perhaps the crown has now gone to Scandi food, in general, food is becoming more ‘Westernised’. By this I mean that people are cooking less from scratch, there is greater consumption of processed and ready-prepared food, people’s food routines are changing with more snacking, whether to fill hunger gaps between meals or to replace meals entirely. And that’s not to mention the irresistible temptations of delights such as burgers, pasta and pizza.

In personal care, in particular beauty and skin care, the more interesting ‘stuff’ tends to be happening in the East first, in particular countries such as Korea and Japan, where people are willing to invest considerable time, money and effort into looking after their appearance. Fancy a 12-step skin-care regime anyone? It is from this region that the BB cream came, now a major staple in the beauty product world, as well as many other weird and wonderful products, such as syringe face-masks (not quite as dramatic as they sound!). So look East for beauty tips!

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March 21, 2018

Can graphic design save your life?

Can Graphic Design Save Your Life?

This is the arresting title of an exhibition I saw at the Wellcome Collection. It was a more interesting experience than I had expected, but I am not convinced I would answer ‘yes’ to the exhibition’s opening question.

Do you remember those iconic Silk Cut print adverts from the 1980s?

Silk cut

Well, that’s what the exhibition started with – adverts to be admired for the way in which creativity was used to circumvent restrictions on advertising. This, in effect, is graphic design that brings you closer to the end of your life.

However, after this, the exhibits were centred on communications from the world of healthcare, and not just for patients, but also for would-be medics. The latter was covered by excerpts from text books and teaching manuals which were closer to works of art than academic material, as the below images suggest.

design head

design body

What struck me most about the exhibits of medicines and other health products is the way in which they reflect the best in lowest common denominator communication approaches. The pill boxes below make it very clear what consumer need they are responding to. I have seen a similar approach used by smoothies and herbal infusions, which pitch specific products as the solution for a particular moment, whether it is the search for an invigorating uplift or a soothing experience.

design pill boxes

One area getting increasing interest as a way to increase public health is behavioural economics – for example making ‘good’ products easier to get hold of, whether this is about making them more visible or accessible on a shelf, or making the default option the ‘good’ one. Behavioural economics wasn’t mentioned in the exhibition but graphic design could be used in partnership with behavioural design to up the ‘oomph’ factor of a piece of communication or instruction.

And finally, it’s worth noting that it was a refreshing experience to think about paper and packaging which didn’t come alive. If the exhibition was repeated in 10 years’ time, it would be about how augmented and virtual reality can save your life!

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