FutureProof double issue May 2013
Upcoming SlideShare
Loading in...5
×
 

FutureProof double issue May 2013

on

  • 251 views

FutureProof, the newsletter from The Futures Company is back, with a double issue packed with articles on the evolving consumer landscape—shopper attitudes in physical and digital spaces, ...

FutureProof, the newsletter from The Futures Company is back, with a double issue packed with articles on the evolving consumer landscape—shopper attitudes in physical and digital spaces, sustainability engagement, the role of women—and how businesses can stay ahead in the current economic climate.

Plus, following the recent integration of TRU, global leader in youth research and insights, with The Futures Company, we share early insights into the post-Millennial cohort, EN.Gens

Statistics

Views

Total Views
251
Views on SlideShare
251
Embed Views
0

Actions

Likes
1
Downloads
5
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

CC Attribution-NoDerivs LicenseCC Attribution-NoDerivs License

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

FutureProof double issue May 2013 FutureProof double issue May 2013 Presentation Transcript

  • FutureProof Welcome to FutureProof, The Futures Company’s regular briefing about current global strategic and consumer issues. In this double issue we have an introduction to the post-Millennial generation and a themed section that captures our recent thinking on the new consumer landscape. Issue 10/11 | May 2013 In this double issue: Meet the EN.Gens Following TRU’s recent integration with The Futures Company, we share early insights into the post-Millennial cohort. The future shopper Changing consumer attitudes are as important as technological advances in shaping the retail landscape. The power of passion Retailers who understand the internet can turn the niche into the mainstream. Top ten principles of sustainability How brands can approach sustainability to unlock growth and build loyalty and brand equity. Succeeding in low-growth markets The boom years could have been a blip. This is how to help your business prosper in low growth markets. Datawatch: social change for women As women become more economically engaged they become catalysts for change. Our global framework shows where. Digital edition contains embedded links
  • Issue 10/11 | May 2013 Page 2 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top Earlier this year TRU, the global leader in youth research and insights, joined The Futures Company. TRU was founded in 1982 and became part of the WPP group in 2007. TRU helps the world’s leading brands better connect with and serve youth. The company’s most recent syndicated publication was an early study on the attitudes of EN.Gens, our new name for the generation that’s following in the footsteps of the Millennials. FutureProof talked to TRU’s Rob Callender. FutureProof: Rob, you’ve identified in your report a new cohort, EN.Gens, whose members have been born since the turn of the century. What are the main characteristics that you’re seeing in this group which is still quite young? Rob Callender: One of the things that sets this generation apart from even the very high tech, very savvy Millennial generation is that they were born in an era with a decreased emphasis on physical media and personal computers. They can use their tablet or smartphone to get anything from the cloud now—they don’t need to go to a computer lab at school anymore. I was listening to a story yesterday from one of my colleagues who has a very young son, and one of his son’s friends was watching TV and a commercial came on. This kid was so used to not having to sit through commercials that she ran up to the TV and pressed the upper right hand corner of the screen. She was trying to fast forward because she was accustomed to being able to do that on a tablet. She was puzzled as to why this wouldn’t work. So there are two things at play here: they’re not accustomed to non- interactive interfaces, and they’re not accustomed to having to sit through marketing pitches to find the entertainment they’re looking for. FP: This group is about 14 years old or younger. Do we know enough about them to be able to talk about them in any distinctive way yet? RC: We have broad strokes; we have educated guesses based on our 30-odd years of work with youth. We’ve been studying 12-19 year olds for more than three decades, and we expanded into the 20-29 year old range as those teens aged up into a new life stage. We’ve been able to see what the commonalities and differences are, and we’ve been able to compare life stage versus cohort. It’s both an art and a science, but our supposition is that we can track these kids and predict what they’re going to turn into in the future. Life after Millennials in conversation with Rob Callender
  • Issue 10/11 | May 2013 Page 3 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top FP: So what kind of hypotheses are emerging from those broad strokes at the moment? RC: Well, for instance, if you look at what the internet did to traditional media like TV, radio and newspapers, it essentially broke them. It fragmented them into so many pieces that they’re trying to figure out how to survive. What’s happening now as the internet matures is that the internet is now fragmenting itself. Facebook has been the be-all and end-all for a few years, and it replaced MySpace, which was the be-all and end-all before that. You’ve now got Twitter and Instagram, you’ve got Reddit and Tumblr, you’ve got any number of smaller fragmented places where young people who are getting tired of Facebook are going. For some, the luster of Facebook has worn off, and they’re going off to find a niche that feels comfortable to them. You’ve also got some pretty pronounced social shifts; this isn’t necessarily dramatically different from what we’re seeing among Millennials, but at the same time it’s going to be deeper and more powerful, and it’s going to happen faster than it used to. FP: What differences are there between the US perspective and perspectives elsewhere? RC: The US perspective is looking at a majority minority population in the not-too-distant future. That will mean that a lot of current preconceived notions won’t make a lot of sense to the newest generation. You’ve got the election of the first African-American President, you’ve got what started out twenty years ago as “Don’t ask, don’t tell” turning into the freedom for gays to serve in the military, you’ve got overwhelming support among the younger generation for marriage equality. Things that people fought over in previous generations, the next generation isn’t going to understand what all the fuss was about. As far as what that means for the rest of the world, we’re now a completely interconnected global society where people can obtain any kind of information from pretty much anywhere they want. So you’re going to see cultural norms being breached in more conservative societies as the internet becomes more pervasive. This hasn’t worked so well in China or Iran yet, but it will. In the future we believe that there will be greater social commonality among countries that previously had very little in common. At the same time, these kinds of radical shifts aren’t going to be smooth sailing: People whose worldviews are being displaced feel threatened, and they’re going to issue their protests very loudly. FP: One feature that The Futures Company talks about quite a lot is ‘considered consumption.’ That’s become very clear since the financial crisis, but you can see a lot of the aspects of that in consumer data going back into the mid-2000s, so one of the things that strikes me about this group is that pretty much as long as they’ve been able to read and write, they’ve been in a world where they’ve been on the edge of a crash or post- crash, which is quite a different experience to the Millennial cohort who were brought up in a gangbusters global boom. RC: That’s exactly right, and that’s a perfect lead-in to a theme that we believe applies to Millennials and that we think is going to be even more powerful for the next generation: Debt Doubt. As you said, Millennials have grown more cautious of debt in the past five years, ever since the crash, When they were growing up, it was a very heady time. We described them as optimistic and carefree and positive. To some extent that’s still the case; it’s just that it registers in a completely different way now than it did ten years ago. They’re spending more money than they have been over the past several years, but they’re not going crazy and charging thousands of dollars to credit cards the way they used to. We believe that although Millennials are very socially liberal, there’s a streak of fiscal circumspection, and I believe that this will carry through to the next generation even more. FP: Is it too early for brands or marketers to start thinking about EN.Gens or do they have time to watch, wait, and do a bit of learning? RC: I think they have some time, but maybe not as much as they think. This younger generation is more media- and brand-savvy than the ones who came before, and they’ll be evolving strategies to interact with brands earlier than you might expect. We’re going to be doing some watching and learning ourselves. This is something that will bear an enormous amount of scrutiny, but it shouldn’t be rushed into. Rob Callender is Insights Director in Chicago. To find out more, please visit http://www.tru-insight.com/ “EN.Gens aren’t accustomed to non- interactive interfaces, and they’re not accustomed to sitting through marketing pitches to find their entertainment.”
  • Issue 10/11 | May 2013 Page 4 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top When people talk about future shopper behaviour, they usually look to the way that technology and digital media are changing shopper behaviour. In this extract from our recent Future Shopper thought leadership report, co-written with Kantar Retail, Lloyd Burdett argues that while technology is significant, changing attitudes are just as important — and offer important opportunities for innovation. The average size of shopping baskets is getting smaller and the average number of weekly shopping trips is falling. Globally, households are increasing in number but decreasing in size. More people are living alone. More children are being brought up in single-parent households. This is a worldwide phenomenon. The number of single-person households in Brazil is approximately nine million—a threefold increase since 1995. In Japan, single-parent households are expected to grow in number by 22 percent between 2000 and 2030. European households, meanwhile, now have an average of 2.4 people, compared with 3.9 in 1980. The aftermath of the financial crisis in rich markets, and the decline of trust in business almost everywhere, are reshaping consumers’ expectations of shopping. In search of value In richer markets, the financial crisis gave people permission to look for value, although the trend predates the crisis. In emerging markets this has long been the case. Shoppers are better informed—partly as a result of digital and social media—about deals and about whether they represent good value. Discount retailing is booming. In Germany, home to Aldi and Lidl, discounters now control nearly 46 percent of the grocery sector. This is not just a reflection of The Future Shopper by Lloyd Burdett In the aftermath of the financial crisis, we have moved decisively into a new consumer landscape. Economics, consumer values, sustainability and digital media are reshaping the way markets and business models work. In the rest of this edition of FutureProof, we present some of our current thinking on some of these questions.
  • Issue 10/11 | May 2013 Page 5 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top continuing income disparities in high- growth markets. In China, where the “tuanguo” practice of group-buying originated, there’s a strong tradition of the “best deal.” Discounters are expanding in these markets too: In China, Mexico and Brazil, they’re predicted to grow more than 60 percent between 2010 and 2015. For increasing numbers of consumers, price and value are more important than brand. One outcome will be the continuing strength of private label. In search of assurance Shoppers are adopting shrewder and savvier approaches to their purchase decisions. There are a number of important attitudes and behaviors behind this. Consumers, in general, are skeptical of the promises and claims made by businesses, and in the shopper environment this translates into a need for other sources of information that are more trustworthy. In China, as we reported in our Future Perspective China’s Challenges, anger about food quality has forced the government to tighten regulations and impose tougher penalties, including death, for offenders. In Europe, scandals such as the continuing horsemeat affair underline a general and widespread view that if businesses think they can get away with something, they will try to do so. Shoppers, certainly in richer markets, are also more risk- averse than they used to be; with less time and money, they have a smaller margin for error. And at the same time, they are more able to express their opinions and to share their views outside of mainstream channels. The consequence for retailers and manufacturers is having to design products and services with better guarantees and warranties that encourage people to feel confident in using them, and also to engage better with shoppers’ sources of trusted information and advice. In search of mental space Across the world, in richer markets as well as poorer ones, shoppers are responding to economic and social pressure by reducing the emotional and mental clutter in their lives so they can make space for the important things. They are looking to simplify, so they can create more time and space and can take more control. In richer markets this can be because they are having to work longer hours or have increased responsibilities as caregivers as levels of social protection are cut back by governments. What this means in practice is that shoppers avoid, or remove from their repertoires, products that create additional complexity in their lives or generate more emotional clutter. It also means that their time is more important—and that retailers cannot afford to waste their shoppers’ time on transactions that ought to be straightforward. Convenience formats are growing in richer and emerging markets alike. In the US, Wal-Mart has unveiled its ‘express’ format. In the UK, upmarket grocery chain Waitrose is opening convenience stores called Little Waitroses, often close to train stations. In South Africa and Mexico, Pick n Pay and Oxxo stores are luring cash-rich, time-poor shoppers willing to pay premium prices. The increased demand for convenience is closely linked to increased urbanization and changing employment patterns. In Indonesia, for example, the number of convenience stores increased more than fivefold to 11,500 between 2000 and 2010. The winners are the retailers and manufacturers who design formats, products or services to be more streamlined at point of decision or purchase. This can mean revisiting the category to decode language, packaging, or messaging. “Shoppers avoid products that create additional complexity in their lives or generate more emotional clutter”
  • Issue 10/11 | May 2013 Page 6 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top In search of quality Nevertheless, even shoppers who are squeezed for money and short of time still desire quality. Some have used e-commerce to reduce the cost and time involved in buying basics so they can spend more of both on quality. As awareness of food and manufacturing processes rises, so shoppers are looking out for specialist providers that can ensure the quality of food. One of the flip sides of the rise of discount clothing and apparel companies has been greater interest in manufacturing quality and durability. The number of butchers, bakers, farm shops and fishmongers in the UK has increased by 11 percent since 2008. US speciality chains such as Trader Joe’s and Whole Foods continue to expand. In developing markets, meanwhile, specialists fit with the tradition of independent retail. At the same time, perceptions of quality extend to the production chain. Shoppers increasingly understand that cheaper goods are more likely to involve compromises, whether this is to do with the quality or type of labor, the impact on the environment or the returns to suppliers. Some of this overlaps with the desire for assurance: Sales of organic products in China quadrupled between 2007 and 2012 and in Brazil are growing at a rate of 40 percent per year. Demand for ethical business and CSR remains high globally—holding steady at 71 percent of consumers in 2011 despite economic turmoil. Taken altogether, these shopper perspectives represent a challenge to big retailers. Some drive down margins; some reduce sales. Some reduce the overall value of baskets at the supermarket checkout while reducing the premium element at the same time. Finding new and imaginative ways to match shoppers’ desires for value, assurance, mental space and quality will become priorities. It is still possible to make money, but you have to understand your shoppers better than ever before. Simply put, retailers will have to be more clever. Lloyd Burdett is Head of Global Clients and Strategy and a member of The Futures Company’s Global Board. He is based in London. The full report on The Future Shopper can be downloaded from http:// thefuturescompany.com/free- thinking/the-future-shopper/ It is part of our Future Perspective series of thought-pieces with concise, focused insights into important issues for marketing and business strategists. The Futures Company will share more on The Future Shopper at the IIR 13th Annual Shopper Insights in Action Conference in Chicago, 15–17 July 2013 in a keynote presentation by J. Walker Smith: The Future Shopper: How Digital Changes Everything, But Not in the Way You May Think. To receive a 20% discount, register using this link. Your discount will be applied automatically: https://www. iirusa.com/insights/register.xml? registration=SIA13WS&step=start
  • Issue 10/11 | May 2013 Page 7 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top The Futures Company has re-launched its UK MONITOR package of data and insight to help clients understand how the UK market is changing. It includes UK data and analysis from our annual Global MONITOR survey and also the Consumer Outlook study that we have been conducting since this financial crisis started in 2008. Sarah King, Managing Director of The Futures Company’s EMEA office, explains why. FutureProof: What sorts of questions does UK MONITOR help businesses to answer? Sarah King: It’s an excellent overview of the values, attitudes and mood of the nation, and has particular insights into how business is viewed and the actions businesses need to take in the short and long term to satisfy customers and meet consumer needs. Themes of connection and localness are emerging very strongly, for example. These are are explored in detail, with inspiring examples. There are data across a range of important areas for business, such as health & wellbeing, technology, finance and the environment. The consumer trends and exercises within the package are essential for brand, communications and innovation planning.  FP: What’s included in the UK MONITOR package? SK: It contains the overall UK story from the 2012/13 Global MONITOR in the form of a report, and the full UK dataset. It comes with the ‘Big Picture’ trends report which identifies 10 Global Consumer trends (all highly relevant in the UK), along with identified opportunity spaces and exercise templates. There are also four quarterly macroeconomic forecasts over the course of the year, with related think pieces. And—as if that wasn’t enough—we’ve also included the Consumer Outlook report and dataset, hot off the press. The UK MONITOR package offers extraordinary good value, especially for readers of this edition of FutureProof who can get it at a bargain price! In the value-seeking spirit of contemporary UK consumers, you can buy it for £9,999 instead of the usual £12,500 by quoting FutureProof. FP: It’s been a while since The Futures Company had a syndicated UK offer. Why have you come back to it? SK: While much of our reporting and consultancy is now international or global, we continue to have a robust research base here in the UK. Local clients may not be aware that behind the Global MONITOR brand lies a wealth of useful insight into the UK market, which we can also contextualise with our global view. The UK continues to be an important —if difficult—market and making meaningful connections with cash- strapped consumers has never been more important to businesses and brands if they are to succeed here. For clients with a European remit, an equivalent exists for Western Europe. UK MONITOR for market planning You can find out more about UK MONITOR at http://marketing.thefuturescompany.com/acton/attachment/4161/f-01a1/1/-/-/-/-/file.pdf. To take advantage of the special offer, please contact karen.kidson@thefuturescompany.com
  • Issue 10/11 | May 2013 Page 8 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top It is often said that the internet has changed the balance of power between consumers and retailers, and of course this is largely true. But the effects are a lot more subtle than that. As Andrew Curry argues, retailers who understand the underlying dynamics of the internet are able to make niche into a mainstream proposition. It used to be the case that businesses that followed people’s passions were niche businesses. Some were not businesses at all, in the conventional sense, but groups of fans and hobby- ists doing some trading on the side. The internet has changed all this. In the past, businesses used to have to choose between reach (mass market, tending towards commoditisation) and richness (niche market, with depth and sometimes knowledge rolled into the service). The internet allows businesses to break out of this trade-off. Passion has mass market potential. That’s the argument, anyway, of Philip Evans and Thomas Wurster, who developed it in their book Blown to Bits, now something of an internet classic. They created a useful model for understanding this dilemma. Passion is about experience, knowledge, and connoisseurship, and there are strong consumer trends which suggest these are all on the rise. One thinks of the professionalisation of the consumer world. It is no longer enough to be an expert cook; one needs to have the same knives a professional chef expects to find Passion’s new business models by Andrew Curry Commoditisation/ comparability Traditional trade-off Richness Reach Rich product and consumer specific information Figure 1: Richness versus reach: how the internet squares the circle Source: Evans and Wurster, Blown to Bits
  • Issue 10/11 | May 2013 Page 9 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top in the restaurant kitchen. The keen cyclist follows a professional training programme, recording training sessions via a heart monitor and uploading the data for analysis when they get home. And in many areas – music production, design, video editing – the cost of the technology needed for a professional looking job has plummeted. The knowledge and tailoring that richness required used to limit the reach. No more. It is an obvious point, but the internet has raised the game when it comes to passion – and made new markets for it. 30 years ago the music fan who knew about the career of, say, Van Dyke Parks or Professor Longhair would have built up their knowledge painstakingly, from specialist magazines and record covers and books. Now, anyone can get that far in a moment on Wikipedia. The base is a lot higher. But it also means that the opportunity is bigger. The knowledgeable fan or enthusiast is the curator of a far larger museum, with a far larger and far more engaged audience. Similarly, the internet builds opportunities for businesses that are able to speak the same language as fans and enthusiasts to reach them far more easily; they are ‘pulled’ by the people in those communities of interest rather than having to ‘push’ themselves through conventional marketing. Geography becomes decreasingly important. The new curators So how do we understand this in terms of proposition? One tool is a simple matrix that explores levels of engagement by provider and by customer (Figure 2). This was originally developed by The Futures Company in a report on the future of retailing, published by Coca-Cola. The matrix is largely self-explanatory. In the bottom left, there is low engagement on the part of both supplier and customer. This is a passion-free zone, occupied by retailers such as Poundland or other budget stores, the world of piling high and selling cheap. The bottom right sees low engagement by the customer but not by the provider. This is a zone of necessary but low-interest goods, provided by relatively high- engagement providers. One thinks of a supermarket such as Carrefour, whose proposition is underpinned by hugely complex logistics. The passion here is largely behind the scenes, though sometimes it surfaces in positioning statements,such as “passionate about [fill in noun of choice here]”, which seem like a good idea in the creative meeting but largely pass consumers by. The top two zones are more interesting. The top right is the expected area for the passion-filled “rich” proposition, in which high engagement providers and high engagement customers meet in a passionate embrace: The Body Shop and L’Occitane, for example, or Innocent’s fruit smoothies or Divine chocolate. Operating successfully in this space is expensive and it is easy to lose credibility (increasingly easy, in a world of social media) However, it offers premium returns while it works. Increasingly, there are also online offers runs by enthusiasts that are increasingly prominent in their communities of fans. Fans love fans In the top left-hand zone, we see a passion sleight of hand. Customers are engaged but suppliers are not. But this is the space in which online providers leverage the enthusiasm of communities of interest to break the dilemma of reach and richness, offering depth and scale. One thinks of Amazon, for example, which appears to be passionate about books, but that we know ended up in books only because it was the simplest product around which to start building an online retailer. But what Amazon has done brilliantly is to build a space that has been colonised by enthusiasts, and it has encouraged this colonisation, in the same way in which a gardener might design an area knowing that it will attract bees Curators Transactors Paddlers Friends High High Low Low Customerengagement Supplier engagement Figure 2: Understanding the retail landscape Source: The Futures Company
  • Issue 10/11 | May 2013 Page 10 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top From the Blog or butterflies. EBay has worked in the same way, making a new market where none existed before, the online equivalent of the yard sale and the flea market. But, so far, iTunes has failed signally to connect with the passions of music fans, creating a soulless transactional engagement space. In this gap is an opportunity for retailers beached by the internet. Fans love fans. And while every music shop can’t have the enthusiasm of London’s iconic Rough Trade, the high street or main street retailer needs to break out of the mindset of logistics and stock management that dominate contemporary retailing. Curators can thrive here, linking the world of knowledge and commitment to both the physical and digital worlds. A version of this article originally appeared in Blink number 5,‘The Passion Issue’ www.mediacom.com/ en/news-insights/blink/issues/ edition-5-2012.aspx Andrew Curry is a director of The Futures Company based in the company’s EMEA office in London. Silvia Rigoni on innovation and the ‘ambidextrous organization’: “One way to integrate design thinking within businesses is through the idea of the ‘ambidextrous organization’ proposed by Michael Tushman. He argues that a successful organization should exploit its existing operations while conducting parallel entrepreneurial activities to explore new directions.” Read more: http://blog. thefuturescompany.com/design/ colalife-and-ambidextrous- innovation/ Haydon Watkins on Black History Month: “Black History Month is not a month for African Americans. It is a month for all. It is a time to reflect not on travesty, but achievement. Advances created not in spite of race, but accomplished by people able to look beyond it. It should be a depiction of progress made, together. Viola Liuzzo, Vernon Dahmer, and Levi Coffin among many others knew this to be true. I think it is time that, as marketers, we did as well.” Read more at: http://blog. thefuturescompany.com/activism/ the-inequality-of-black-history- month/ Giles Powdrill on Argentina’s ‘blue dollar’: “Rampant inflation, draconian capital controls and a population that remembers clearly the dramatic collapse of the peso at the turn of the century, have resulted in a huge rise in the number of people seeking out the security of alternative currencies by whatever means are available. The rising popularity of the ‘blue dollar’ demonstrates both the level of concern consumers have about the ongoing stability of the peso, and the entrepreneurial spirit of the people.” Read more: http://blog. thefuturescompany.com/economics/ argentinas-blue-dollar/ Image source: Language Lens blog Image source: D&AD Image source: www.recordstoreday.co.uk Image source: White Faces of Black History Campaign From the Blog
  • Issue 10/11 | May 2013 Page 11 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top Sustainability is everybody’s business these days—it costs too much to ignore it. Louise Kennedy attended the recent Sustainable Brands Conference in London (The Futures Company was a media partner) and distilled the main findings into the Top Ten Principles that brands need to address if they want to use sustainability to unlock growth. Brands and businesses are in the sustainability frame for two reasons: they are, increasingly, willing to act while politicians and institutions are dithering, and they are able to use the scale of their resources and influence to make a difference when they do act. But it can still be a difficult territory for a business to navigate. Here are ten principles—and some business exemplars—that can increase the chances of success. 1. Think beyond the environment Sustainability is a big word, and crucially, it isn’t just about the environment. There are three interconnected pillars of sustainability: social, economic and environmental. Brands need to take note of all three. Social and economic sustainability are well reflected in the Global Handwashing Day initiative (supported by Unilever’s Lifebuoy soap brand). This campaign encourages hand-washing behaviours in developing countries to reduce the spread of fatal diseases, ultimately saving lives and limiting medical and economic resource pressures. Environmental and economic sustainability dimensions are seen most readily in the growth of ‘sharing’ initiatives such as AirBNB and ZipCar, which offer consumers and businesses a way to share their resources (in this case, homes and cars) to save money and reduce the impact on the planet. Think: How can your brand can move beyond environmental considerations to build a more responsible, sustainable and profitable business? 2. Know your audience It’s important to know your target audience and what is driving them. Although sustainability concerns are steady among consumers, purchasing decisions in most categories are rarely driven mainly by sustainability. Brands that understand this are positioned to appeal to what consumers want, in a way that fits with the way they currently behave. Sustainability becomes a benefit, but as it sits within an existing attitude or behaviour, it helps to build sustainable habits. Green Deal is a good example of this in action. Consumers are motivated to participate in the UK Government- backed scheme by the prospect of saving money through energy- saving home improvements; the sustainability element is a halo. Think: How can your brand appeal to what is really driving consumers and ‘weave in’ sustainable benefits? Ten Principles of Sustainable Branding by Louise Kennedy
  • Issue 10/11 | May 2013 Page 12 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top 3. Imagine the future Thinking sustainably will rarely deliver instant gains in terms of revenues or reputation. However, this leads to the daunting task of judging the future. The important thing for brands and businesses to think about is what the future might look like, planning sustainability initiatives that are resilient against a range of potential future scenarios. This helps to future- proof their sustainability agenda and to ensure it is focused on long-term change. BMW i is BMW’s sustainability initiative which imagines the future of the car industry as a mobility services industry. It combines visionary design of purpose-built vehicles and intelligent mobility services with a wholly sustainable value chain. Think: Where might your category and consumer be in 5, 10 or even 20 years’ time and how can your business and brand needs adapt to be sustainable and profitable? 4. Reinvent your business Sustainability challenges are huge and far-reaching. Sustaining the world requires bringing systematic change to business models. According to Paul Gilding, global thought leader on the Future of Economics, to avoid a 2 degree increase in global warming, we would have to shutter the coal, oil and gas industries in the next 20 years. This level of change is difficult to comprehend. Chipotle is a unique example of a systemically sustainable business model that is written into the foundations of the brand. Think: How can you can build value and reduce inefficiency throughout your whole supply chain, and what could this mean for the stories that your brand can tell? 5. Create a path of disruption No one said sustainability challenges were easy. You need to think beyond tried and tested ideas and embrace brave, disruptive and unexpected solutions. Don’t be afraid to innovate in order to lead. It’s often the brave ones that stand out and achieve more. Barefoot College is an NGO working in developing countries to create sustainable rural communities. Its initiative Barefoot Solar Engineers aims to educate women to be Solar Engineers to supply their own communities with sustainable light sources – a unique project that combines environmental neutrality, education and female empowerment. Think: How could you ‘park’ existing ideas and generate bold and disruptive thinking that will challenge the status quo? 6. Don’t do it alone When we think about addressing sustainability challenges, two heads are better than one. With different skills and expertise, individuals working together can achieve great things. You need to communicate widely in order to share knowledge and skills within your business. Also consider how external partnerships can help to achieve significant sustainability goals. A recent example of a sustainability partnership in action in the UK is the B&Q and Cabinet Office’s Loft Insulation Service. This service, trialled in 2011, allowed consumers to insulate their lofts at a reduced cost, whilst offering additional services such as loft clearances.A national charity was a partner. Think: Given the limitations of your business’s knowledge and skills, how could you co-operate with a partner to plug the gaps, capture your audience’s attention and make your sustainability goals a reality? 7. Be true to your brand The most successful brands have a single-minded and unique brand story based on business truths that sets them apart, and these brands talk about themselves clearly and consistently. So sustainability initiatives should never be divorced from the brand. They need to be intimately woven into the brand story, reflect the brand’s purpose and speak in its voice. Axe’s Showerpooling is a fantastic example of a brand that has translated its core values into a relevant sustainability initiative that serves to “It’s important for brands and businesses to think about what the future might look like, planning resilient sustainability initiatives for a range of potential future scenarios.”
  • Issue 10/11 | May 2013 Page 13 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top support its masculine and irreverent brand values and reflects its purpose of “making men more attractive” Think: What are your core equities as a brand (purpose, values, tonality). How can you stretch these towards new sustainability innovations and initiatives? 8. Lose the design stereotypes According to Dragon Rouge, in 2030 sustainability will be implicit in everything we do—from small businesses, to global organisations, to the guy next door. Dated stereotypical images and references will be history. Brown paper packaging may seem like a good indicator today, but how will this resonate in 2030 when sustainability has moved up a notch? Method is a great example of a brand that has turned sustainable hygiene products into status symbols rather than leaning on worthy references, laid-back sentiments or packaging clichés. Think: Who is your brand targeting and what do they want from you in order to ensure your sustainable design is relevant and current? 9. Keep it simple The world of sustainability isn’t always easy to engage with. Consumers sometimes assume that being sustainable involves radical (and expensive) change in their lives. When this change manifests itself in language such as ‘Collaborative Consumption’,‘Repurposing’ and ‘Eco’, it’s difficult for people to grasp what that means for what they need to do and what the cost might be. So, make sustainability initiatives easy to understand and easy to action. As Julian Borra from Team Saatchi put it,“Martin Luther King didn’t say ‘I have a Mission Statement’.” By changing the language of sustainability, you can open up to new audiences and make it easier for people to engage. The Rainforest Alliance’s Follow the Frog campaign is a fantastic example of paring down sustainability to one key action – purchasing products that feature the ‘frog’ certification— all couched in easy-to-understand language through the medium of a tongue-in-cheek YouTube video. Think: What do you want people to do, and what’s the best language you can use to describe it and make it easy to achieve and understand? 10. It’s all right to be wrong There’s no exact science to developing successful sustainability initiatives, so brands don’t always get it right first time. But brands can get it wrong and bounce back again. After all, you only really learn from your mistakes. Don’t try to cover them up. In 1993, H&M launched an unsuccessful range called ‘Nature Calling’ made from unbleached cotton and specific dyes. The problem was that it was never considered fashionable. In 2010, H&M launched a more successful organic cotton range with the principles of fashion and added value at the heart of the collection. H&M has made no secret of its early mistake, which shows great strength of organisational character, helping to build consumer trust through transparency. Think: Have you made mistakes in past sustainability initiatives, and what can you learn from them? Louise Kennedy blogs on branding at Brand Republic http://brandnew. brandrepublic. com/. Her e-book, The A-Z of Branding, can be downloaded from iTunes. Image source: methodhome.com
  • Issue 10/11 | May 2013 Page 14 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top Last year the economic historian Robert Gordon caused controversy online with a paper suggesting that a range of long-run ‘headwinds’ could mean US growth rates stay low for the long term. But what if he was right? In our recent Future Perspective report Succeeding in low-growth markets we examined the evidence of low growth across the world’s richer markets—and the innovation opportunities it creates for businesses. In this article J. Walker Smith summarizes the argument. It is now more than four years since the financial crisis struck, and the mood has changed. Some economists now suggest that the growth years before the crisis were a blip and that rich economies must learn to live in a world of low growth. This would mean a fundamental shift in the way companies do business. The idea that we might be facing lower underlying growth was around even before the financial crisis. The OECD has a website devoted to the authoritative database of economic statistics back to 1 AD compiled by the British economist Angus Maddison. The homepage makes this stark declaration: “World economic growth has slowed substantially since 1973, and the Asian advance [of the past half century] has been offset by stagnation or retrogression elsewhere.” The Futures Company’s recent Future Perspective, Succeeding in low-growth markets, examines the long-term decline in productivity gains from innovation. It identifies seven headwinds that make slow growth likely to be a backdrop for years to come, a situation that is utterly unfamiliar to today’s business leaders. This article tackles how to grow a business in a low-growth world. Headwind #1: Demographics The post-WW2 era saw a surge in output from a boom of young people, especially women. But it is long gone. It is a familiar refrain but, for the foreseeable future, older consumers control most of the wealth. Yet few companies have adjusted. Headwind #2: Inequality Inequality matters because the rich spend their money differently. Middle- income consumers spend a greater proportion of their income and do so closer to home. It is essential to make markets with more shared value. Headwind #3: Service sector growth As economies get richer, consumers spend more on services. While there is less scope for increasing the productivity of services, there are opportunities, such as co-created services where users do some of the work or digital technologies that customize care. Headwind #4: Debt overhang The spectre behind this is a Japanese-style “lost decade” in which deleveraging leads to low investment Succeeding in low-growth markets by J. Walker Smith
  • Issue 10/11 | May 2013 Page 15 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top Business environment Demographics and aging Greater inequality Services growth The debt overhang Higher energy costs Digital technologies The scale issue Follow the money— and people Making markets with more shared value Redesign services to improve productivity Rethink business models Strip out energy cost, migrate from fossil fuels Rethink approaches to innovation Use tech to customize and localize by corporations and low demand by consumers. Business models that depend on debt will come under pressure, so it is essential to reinvent how consumers own, use and enjoy products. Headwind #5: Scale As organizations become larger, it is harder to grow at the same rate, and bureaucracy becomes a dead weight. To keep scale from smothering innovation, companies must first find new approaches to innovation in order to find breakthroughs that boost productivity. Headwind #6: Energy costs Oil prices are trending upwards as demand climbs and supply plateaus, and this will keep the global economy perpetually on the edge of reces- sion. Companies must aggressively squeeze out energy costs. Headwind #7: Digital technologies Digital networks have made ‘jobless growth’ an unfortunate reality by removing large swaths of middle- income jobs. The digital wave has produced many upsides, but there are limits to the extent of this. Three things stand out for succeeding in low-growth markets: First, rescale innovation: conventional approaches focus too much on incremental improvement and not enough on the breakout ideas needed in a low-growth world. Second, make your own markets: markets need consumers. Too much of the recent past has been a race to the bottom, with middle-income wages, infrastructure and social welfare sacrificed. Finally, figure out Plan B: good times might be just around the corner. But if not, Plan B is essential. If low growth has set in for the long haul, then it is absolutely imperative to know today what your business needs to do differently tomorrow. J. Walker Smith is the Executive Chairman of The Futures Company, based in Atlanta. A version of this article has appeared in Market Leader. http://www.warc.com/ ContentandPartners/MarketLeader. info. The full report Succeeding in low- growth markets can be downloaded at http://thefuturescompany.com/free- thinking/succeeding-in-low-growth- markets/ Succeeding in low-growth markets – at a glance Source: The Futures Company
  • Issue 10/11 | May 2013 Page 16 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top Elisa Birtwistle writes: Our thought leadership piece, Women 2020, published at the end of last year, argues that women are the catalysts for deep change. The report includes a framework to map the disparity between the rate at which women make progress in terms of their economic contribution to society, and the rate of change in terms of the social and cultural prominence they are permitted. The chart is built from a number of economic and social factors: the social access runs along the horizontal while the economic axis is the vertical. Usually, the two run together, with economic contribution just ahead of social and cultural prominence. And generally countries cluster, broadly speaking, according to their overall economic performance. When one of these things isn’t true, it suggests that rapid social change could be in the air. We identified India as an outlier because it sits away from its BRIC peers. The best explanation is that India’s proportion of poor—350 million low-income consumers, the largest number in any country in the world—pulls the scores down strongly, resulting, in effect, in ‘two Indias” – the city and the countryside. This is one way of looking at the events in India since the horrific rape and murder of a woman on a bus in New Delhi last December. In a country that has tolerated entrenched and endemic violence against women, the political response has been surprising, with large-scale demonstrations followed by promises of changes to the law and to judicial processes. Indeed, some of the press commentary connected the level of anger to the victim’s socio-economic background: she was a student of physiotherapy on her way home from an early-evening screening at the cinema. As The Economist observes,“she was the friend, sister or daughter of an entire social group,” representative of India’s emerging middle class. There’s a striking contrast with Bangladesh here. Although it is a much poorer country with lower Human Development Index scores, public health and child mortality have been improving rapidly. The economic participation of women is significantly higher (witness the gender of the recent textile workers’ protests), and change is being driven by women’s activist and self-help groups. As we explore in Women 2020, changing social attitudes and conventions is a slow process, but sometimes, societies become primed for change. DataWatch: women and social change The Opportunity Tension Framework (Economic vs social participation of women in society) Economic Social Albania Algeria Argentina Australia Bangladesh Bolivia Botswana Brazil Cambodia Cameroon Canada Chile China Colombia Croatia Egypt Ethiopia Finland France Germany Greece Hong Kong, China India Indonesia Iran Italy Japan Kenya Laos Malaysia Mexico Morocco Nigeria Norway Pakistan Peru Philippines Poland Russia Saudi Arabia Singapore South Africa Spain Sri Lanka Sweden Switzerland Syria Thailand Tunisia Turkey United Arab Emirates United Kingdom United States Vietnam Yemen You can learn more about the Opportunity Tension Framework in the full Women 2020 Future Perspective which can be downloaded from http://thefuturescompany.com/ free-thinking/women-2020/.
  • Issue 10/11 | May 2013 Page 17 © The Futures Company 2013. FutureProof is published by The Futures Company at 6 More London Place, Tooley Street, London SE1 2QY. Copying, redistribution and display is permitted under a Creative Commons licence for non-commercial purposes, provided articles are properly attributed. Please notify us of any such re-use by emailing futureproof@thefuturescompany.com back to top Editor: Andrew Curry Production: Karen Kidson Design: Augustus Newsam To subscribe to FutureProof please visit http://thefuturescompany.com/futureproof-subscription/ Send comments, feedback or requests to unsubscribe to futureproof@thefuturescompany.com Published by The Futures Company under a Creative Commons Licence: some rights reserved. Page 17