Our Evolving Consumer

We’ve previously discussed how the future of the internet may develop. Thinking about how brand engagement has changed with the internet already we’ve put a few thoughts together about how this next evolution of the internet is already changing consumer engagement with brands.

The biggest shift has been in the way that brands communicate with consumers. 25 years ago brands were talking at consumers; in fact they were shouting at consumers. We all had easy, cost-effective access to big audiences. An ad in Coronation Street in 1985 would have got our message in front of over 19 million consumers. Today we could only reach about 11 and a half million people. Consumers have more distractions; their attention is divided. As a result winning that attention has become much, much harder.

Whereas previously brands had a one-way conversation with consumers, consumers are now responding to brands and engagement on their own terms. Whilst UK consumers are happy to be entertained by their TV for 95 thousand million hours each year, they’re equally happy to give 100 million hours of their time for free to build and maintain Wikipedia.

Whilst consumers in the past would simply be entertained by content created by others, today’s consumers are creating their own content. In fact the consumer is now the largest producer of content. Sometimes they generate their own content. But they’re also happy to take content from brands and re-create it. Take the wealth of “remixes” produced by consumers of the “I’m a Mac, I’m a PC”. There are over 4,000 consumer-produced versions of this ad on Youtube. Brands have to be aware that if they genuinely touch consumers, this is the kind of anarchistic response they are likely to get.

The original ‘I’m a Mac ads.

A selection of customer created ‘I’m a Mac’ remixes: 1,2, 3, 4.

Meanwhile, consumers are motivating themselves to become much becoming intimately involved with products and services. For example, new research by the government has just discovered that British consumers spend £2.3 billion of their time and money creating their own products and services or improving existing ones. That’s more than twice as much as British industry spends on NPD in THREE YEARS! Millions of British consumers are innovating all the time, ranging from the basic to the complex:

– one woman coloured two halves of a clock dial different shades to teach her children how to tell the time;

– a man concocted a device made from a fishing rod and a large hook to trim his treetops;

– another reprogrammed his GPS unit to make it easier to use and tailored to his needs;

– while one man made a book scanner which cost him £150, which is considerably less than the £5, 000 a commercial book scanner would cost.

So consumers are engaging with brands on their own terms, and brands that cannot harness that will wither and die. The first wave of the internet’s impact on brands was much like TV – lots of opportunities for brands to shout at consumers from a new screen. Web 2.0, the social web, was a chance for consumers to start talking about brands – good and bad. Web 3.0 will probably see a genuinely reciprocal relationship between brands and consumers as data on consumer behaviour flows freely between the two. If consumers trust brands they will give that behavioural information freely. If brands trust consumers they will allow consumers access to all that data. And if consumers want to, they will find ways to repurpose that data, enhancing the existing brand experience, and most importantly creating new experiences.

This is partially happening because all products and devices are becoming smart, gathering and transmitting data on how they’re used. Must gas boilers are now smart. They will soon be transmitting information on their usage to help consumers become more energy efficient, and automatically call for service when they’re not functioning properly. All Sony products will soon be communicating with each other, allowing the seamless movement of content from one platform to another, from video recorder to laptop to TV, easily. And they’ll be telling Sony what kind of content is being saved and moved. And Ford have just announced that they are going to open up the technology behind their in-car mobile technology, sort of like an App Store for Ford in-car systems. Consumers will be able to access the technology and the data to come up with their own apps.

Car Buying Coming Out of The Recession?

Our friends at Mintel have released some interesting reports forecasting the future of the car industry in the last couple of months. There are some particularly interesting inputs as we are seemingly coming out of the recession. Yet the evidence seems to suggest that those brands who innovate reliably will benefit the most during the next decade.

The Internet of Things

We recently had a debate about the next evolution of the Internet. The Internet of Things came through as a strong contender concept. It encompasses some relevant themes for agencies, including the approaching explosion of new types of data, how brand engagement will continue to shift dramatically and the increasing hysteria about privacy

Geneva Motorshow Kicks Off

The Geneva Motorshow kicks off this week, with hybrid, plug-in hybrid and fully electric vehicles seeming to be at the top of the agenda. As we look to continuously  investigate hybrid and alternative fuels technology, it is certainly beneficial to keep on top of any developments within the automotive industry.  Volvo for example have gone full steam in trying to start and participate in online conversations surrounding the announcement of their V-60 plug –in hybrid – We will be discussing the merits and methodologies of brands participating online in the coming days.

Finally,  in a previous post we have already discussed how plug-in hybrids will sit amongst in hybrids and fully electric cars – The Motorshow itself seems set to embody this debate and we will certainly be keeping a close eye on it over the next week.

Electrified or Electrifad?

The UK government has told local councils to make 2011 “the year of the electric car”. Our own work in hybrid technology places us in a significant position to discuss how this fast rising technology will impact the automotive industry.

To clarify, hybrid technology uses two distinct power sources to move the vehicle, often with a battery recharged by friction from driving to assist the petrol engine. Full electric cars are powered purely by plugging them into a socket to recharge a battery, so they produce no direct CO2 emissions. To encourage uptake of electric cars, the UK government is urging local authorities to relax planning permission quotas for building public charge points and give up to £5000 Plug-In Car Grants to those leasing cars with CO2 emissions of less than 75grams per kilometre, during 2011 only. Three cars eligible for this grant have been available since the 1^st January 2011, yet it appears that the significant majority of the automotive industry believes that electric cars won’t be affordable or accessible until the middle of the decade, while 64% of the British populace suggest that they won’t pay more than £10,000 for their next car. At the moment there are no hybrid or electric vehicles under £10,000, meaning that nearly two-thirds of the UK population will be unwilling to consider them as their next car purchase. Our Town Hall co-creation workshops have found that hybrid should be communicated as the rational and functional choice not the environmental one. This piece of communication has buy-in as the highest levels at Honda as they apply it to normalising the Jazz Hybrid, because it came from their customers. In this context, it remains up for debate as to whether electric vehicles will actually develop competitive sales in the next few years.

Despite the Nissan Leaf not being released until 2011, it has already been named 2011 European Car of the Year, the first electric car to win this title. It will retail for £28,990 without, and £23, 990 with government subsidy of £5, 000 if buying through a lease. By comparison, Honda’s Jazz Hybrid, which reduces emissions using a friction rechargeable electric battery assisting the petrol engine, is over £10,000 cheaper than the Nissan Leaf but will not qualify for a government subsidy because of its slightly higher 104g/km emissions. This lower price compared to the Leaf may prove disruptive to the full take off of electric cars. Cheaper, more efficient petrol vehicles may also be disruptive to the electric car market, as VW’s Polo BlueMotion offers CO2 emissions of 80-91g/km at a price of £14, 445. Customers will almost certainly not be paying attention to exactly how the emissions of Polo BlueMotion are kept so low, but will instead focus on price which will perhaps guide them to BlueMotion regardless of the technology used to be green.  Being reliant on the government subsidy, the Leaf at full price is more than 45%  more expensive than the Jazz Hybrid and Polo BlueMotion.

Despite Nissan’s claims of zero emissions, the Leaf offers only 30% less emissions if well-to-electric-outlet (well-to-wheel) calculations are made on how CO2 emissions are derived from charging the Leaf using electricity. Well-to-wheel calculations are quite dependent on the geography and source of energy used in the calculation, with electric car CO2 emissions possibly rising to 120g/km when CO2 emissions are calculated with a coal energy source. With this in mind, considering the other disadvantages of range anxiety, length of charge and availability of public charge points, it is clear that the infrastructure for electric cars as well as their affordability and efficiency will have to be improved before they can become the dominant type of engine in car sales and possibly have a real impact on CO2 emissions globally and nationally.

Despite the technology of electric vehicles perhaps being more immediately understandable than hybrid, there is clearly a fair amount of anxiety about whether they can actually perform the tasks expected of them. Of the 200 senior executives of the world’s leading car companies surveyed by KPMG, 76% of them believe that vehicle design will be driven by urban planning. Will charging infrastructure be the electric car’s speed bump? A social experiment conducted by BBC journalist Brian Milligan found that it took 4 days and a total of 48 hours charging time, to drive from London to Edinburgh. With such charging demands, there is a concern about the amount of electricity that will have to be used to power full electric cars, and the natural variability of renewable sources. One suggestion is that such electric vehicles could store electricity by charging overnight and specifically off-peak to meet peak electricity grid demands.

A mid-term solution to the anxieties of full electric cars will be plug-in hybrids, which charge from electricity outlets to assist the petrol engine. The first mass produced plug-in hybrid, the Vauxhall Ampera, will be on sale in the latter half of 2011. It will offer more effective engine assistance than the current group of hybrids which recharge their batteries using friction from driving. Honda plans to show off a plug-in hybrid at the Geneva Motor Show next month. Long term solutions could be a quick stop battery replacement station and recycling batteries as Tesla are beginning to do.  Another improvement is being enacted as Toyota are investigating replacing Lithium car batteries with Magnesium batteries. This will help with range anxiety and plan against the shortage of rare earth metals that is brewing.  Mining rare earth materials is particularly environmentally destructive. Not using rare earth metals will go a long way to both improving electric car  range anxiety as well as making the process for building the vehicles cleaner.

The path to mass usage of full electric cars is certainly a while off with the market set to grow in the next few years, and there are many considerations to take into account as I have outlined above. Hybrid technology will need to be marketed as standardised, and the cost of the technology will have to be dropped in order to open accessibility to potential customers. Petrol and diesel vehicles with reduced environmental impact will perhaps be just as valuable to customers in the short term, as the materials currently used to source petrol engines aren’t as damaging to source as the rare earth metals mined in China for electric car batteries. Ultimately electric cars will be cleaner than traditional petrol cars. Yet to truly embody their slogans of ‘zero emissions’ renewable energy sources will need to be used to charge them rather than fossil fuels, which is part of a larger conversation.  Honda has this longer term view, in developing the first Hydrogen fuel-cell powered car, the FCX Clarity. It runs on electricity produced by combining hydrogen with oxygen, with zero CO2 emissions, emitting only water vapour as its waste product. While the technology is too expensive to mass produce currently, Honda clearly believes this to be the long term goal of clean driving, with plug-in hybrids and electric cars relative stops on the way.

DIY 2.0: Printing the Future of the Manufacturing Industry

We recently attended a NESTA seminar about 3D printing and the potential applications of having 3D printers in the home. Having such printers within the home, could potentially cause a huge disruption to the manufacturing industry as the internet has disrupted traditional media.

For the uninitiated, 3D printing is using a similar-sized machine to a normal paper printer to print any usable object imaginable, such as cars or flutes, direct from a computer using 3D design software. We may have a future where everyone will use DIY to print all the objects in their homes.  With Hewlett-Packard seemingly dipping into the 3D printer market it seems as though some big name brands are taking steps forward to prosper in such an environment.

In terms of research and planning, imagine online communities designing usable objects collaboratively, and the agency rapidly printing out these prototypes in time for co-creation workshops within the same week. This kind of rapid prototyping would be an even tighter-wound feedback loop, similar to the ‘launch and learn’ concept Seth Godin notes in his book Meatball Sundae.

Brands like Adidas, BMW, Timberland and Sony have been using 3D printers in-house for years, to rapidly produce prototypes. Yet the technology has not filtered through into the home environment, despite 3D printers often being the size of a normal office printer. When this happens, as Matt Mason the author of The Pirates Dilemma has noted “there will no longer be any boundaries between producer and consumer.  While 3D printing has proven to be extremely useful in the research departments of brands, what will happen to Nike when kids start printing out Air Force 1s at the rate they illegally download music?”

There were three speakers at the seminar we went to, Adrian Bowyer of Reprap, Hadyn Insley of FabLab Manchester and Alice Taylor of Makieworld. Bowyer and his colleagues at the University of Bath have created low cost open source rapid prototyping system that is capable of producing its own parts and can therefore be replicated easily. A 3D printer that prints itself! It takes 2 days to copy itself. Replication means potential for exponential growth as the machines create other 3D printers. All the parts can be purchased for around £300. It uses Polylactic Acid, a polymer plastic, which can be synthesized using fermentation of corn starch, potentially meaning the materials for manufacturing could be grown in your back garden, adding an incredibly vibrant green to the manufacturing process of everyday objects. Bowyer finished by asking why if the CD pressing plant, the photographic dark room, and the printing press are sitting in everyone’s living rooms, then why not the factory?

Personal Manufacturing – Adrian Bowyer from NESTA UK on Vimeo.

Hadyn Insley then took his turn in addressing the audience. FabLab is a fully functional fabrication workshop which gives everyone in the local community of Manchester, from children to entrepreneurs and businesses, the capability to experiment with 3D printers and turn their ideas and concepts into real, usable objects.  They are focused on making the tools for rapid digital prototyping available to the masses. The 5 steps towards this end are:

1)      Equipment – providing 3D printers, they have a few that the local community can use for rapid prototyping.

2)      Software – digital fabrication requires 3D design software, which is currently quite expensive.

3)      People – providing training in using both the equipment and the software.

4)      Facility – providing a physical community network.

5)      Accessible – on Fridays and Saturdays, FabLab is open for the public to attend to create their own concepts.

Insley hoped that FabLab of Manchester would make 3D printing more accessible and affordable by creating a UK network of FabLabs.

The final speaker of the morning Alice Taylor , started her company intending to conceptually go from people making online avatars to 3D printing doll type toys, so that children could literally create themselves in toy form. Taylor didn’t stop there asking “rather than printing a dolls house why not print a dolls science lab?”  At the moment a prototype that Taylor prints costs about £600 but this will certainly come down in relation to Moore’s law, as 3D printing gets cheaper. The finishes aren’t smooth at the moment, but the benefits include being eco, localism, less in shipping costs and being made by the user. She hopes to increase the green element to a degree where biodegradable objects are made and re-used by 3D printers. When asked “Won’t Mattel and the big toy companies just copy this?” Taylor replied of course they will as the internet has shown, but the point of differentiation is being different, doing it better and at a lower cost.

Personal Manufacturing – Alice Taylor from NESTA UK on Vimeo.

The Q&A began with a question about when HP will create their own home usable 3D printer. The panel answered that probably have already. The news that HP have bought a 3D Printing company called Startasys shows that yet the industry has been scared of open source for years considering it could potentially take away from their own manufacturing of products. It has been guessed that the home use of technology has been already delayed by about 4-5 years already.

Speaking about the distribution of this technology, the floodgates will open in good and bad ways, as an abundance of new objects are created, like the internet’s distribution of music, but the potential to reuse materials will prove useful. This prompted my question about the current materials used. The current high end 3D printers work with cartridge like technology but all the materials are solid and are then layered by the printer. All involved would like more eco-friendly material so that waste can be reused. With home 3D printing, the area of supply materials is still very open to debate.

Finally a point was made about the internet distribution of 3D printing designs could lead to professionally created digital models which could then be personalised at home, via tweaking the design with software. There is most certainly an opportunity here for big brands who specialise in manufacturing to become leaders in the electronic blueprints for 3D printers. All in all it was very interesting seminar, the result of which will certainly have a revolutionary impact on all types of manufacturing and industry. If you’d like to know more about The Emerging Economy of Factory at Home have a read of this fantastic paper.

…Go!

A recent article in Marketing Week highlighted some of our most pertinent work for Honda. Our Honda Friends panel, which spans across Honda’s business sectors of cars, motorcycles and power equipment, has had 16, 428 surveys completed over the last 11 months. Typically 1, 000 of the 5, 498 Honda Friends respond within a day. We created the panel because Honda needed a way to rapidly test new ideas, creative, propositions, communications and promotions to drive sales. The feedback from the advocates that have joined the panel is at the heart of decision making at Honda, because they are their most devoted customers. This fundamental shift from unidirectional marketing is clearly gaining a greater mainstream pulling power, as the dialogue between customers and brands is becoming ever more open and authentic.

Our growing expertise in co-creation has buy-in at Honda at the highest levels, because our Honda Town Hall workshops treat customers as equals alongside stakeholders. While uptake of hybrid technology has increased over the past 10 years, awareness remains low, with misconceptions relating to the technology’s function and benefits as well as to its environmental association. The co-creation process developed the most relevant and compelling messages at the core of hybrid, that ‘Hybrid is the smart and normal choice, not environmental choice’ because of the direct interaction between customers and senior Honda staff. Honda have stated that they “want hybrid to be normalised.” The recently launched Jazz Hybrid will stake its claim in embodying this message and communications derived from co-creation as well as enter the approaching hybrid versus electric debate (which we will be eulogising about shortly). Honda have asked us to do at least 3 more Town Hall workshops in the coming months.

 

Involving customers in answering the business questions about how to drive Honda’s car sales has been central one of our biggest research programmes, Customer Clinics. Taking the stance that, ‘good customer service equal good sales,’ we developed an approach that re-invites customer to their dealerships and reviews every single element of the customer journey for sales and servicing, with underperforming D-Band dealerships. Within a year, 40 of the 57 dealerships that entered our Customer Clinic programme, have improved their performance. Honda have asked us to develop the programme a wider part of their UK dealership network. The focus of this new programme will be broadened to cover other areas such as: dealership communications, creative and & offer testing, and knowledge gathering about the brand, models, and competitors. It’s an opportunity to share knowledge between dealerships, as well as speak to more Honda customers up and down the country. Honda is currently ranked 2^nd in the JD Power league for customer service.

Customer understanding has also played a key role in answering the business questions of Sony and AXA. Having never conducted any form of campaign evaluation, Sony didn’t know how customers and staff perceived their campaigns. Our evaluations of their recent point of sale campaigns, World Cup Trade-In and Back to School, give a holistic impression by taking in view points of customers, Sony Centre Managers and Sony Partners. We gave Sony the tools to understand what campaign messages, offers and design customers prefer and ability to measure how these campaigns affect staff engagement and any effects on sales and footfall. Sony are able to measure their success through our research. Similarly, our work with AXA has taken on the needs and desire of their customer’s journeys in regard to improving Sun Life Direct’s online services. With our guidance, AXA redesigned their services online. The changes made under the ‘redefining standards’ proposition centred on the viewpoint of the customer – it was redesigned by them.

We have helped Honda, AXA and Sony realise that these answers are only the beginning of the journey, that good research should directly link helping improve their service and products. We think that the future is no longer distant. It’s happening now, and research methodologies should reflect that, in producing actionable answers beyond insight. We’ll be exploring on this blog, in the coming months, how new types of data and disruptive technologies and trends will have significant business implications for manufacturing, household electronics, marketing and research and automotive industries. Keep walkin…

 

Ready, Set…

Hello world!

We’ve been on standing on the verge of getting it on for a short while now, but figured it was about time we really got the journey going! For the uninitiated, we are research agency based in Oxford Circus, with our own in-house viewing facility, providing strategic answers beyond mere insights. We’ll be using this blog to talk about our work and any attention-grabbing trends that have implications for how brands, marketing and research will evolve in the future. You can find out a little bit more about us in the About or Case Studies pages, via Crayon or by contacting us on Twitter or by email if you’d like to find out more.