Topic “Social Trends”

So, digital natives talk about technology?

Submitted by Steve Smith on Mon, 18/06/2012 - 14:44

Over the last week, I have been looking at some of the data from our Community Igniter research.

Some of this data is about what conversations distinguish 'digital natives' from other age groups. By facilitating these conversations, brand owners are able to make their brands more meaningful and valuable to this age group.

Topics of conversations that mark digital natives from other age groups include movies, music, gaming and work. Absent from these conversations are topics related to technologies themselves. A lesson for technology brands is that they need to talk about what digital natives can do through technologies that will improve their lives and interactions with other people, rather than talk about the technologies themselves.

Conversation topics

%=proportion of age group that regularly has this conversation

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What can brands learn about community from the Apple App Store?

Submitted by Steve Smith on Mon, 23/04/2012 - 09:51

Research from University College London reported in this month’s New Scientist provides further insight into some of the characteristics and patterns of behaviour within communities, and some interesting implications for brand owners.

The researchers wanted to understand how the Apple App store operates. They started with the premise that in theory, it should be easy for app developers to get rich on the Store. How? By creating apps that copy best-selling apps. So, why doesn’t every app developer do this?

To answer this question, the researchers built a simulation of the store to look at the behaviour of app developers. Given the name AppEco, the simulation employs bits of software that obey unique behavioural rules to imitate apps, developers and customers.

The simulation mimics four types of developer the team identified: (i) innovators, (ii) optimisers, (iii) milkers, and (iv) and copycats.

Copycats build copies of top-selling apps, whereas innovators design groundbreaking apps. Optimisers take a successful app, such as the Angry Birds franchise, and modify and improve it, whereas milkers have one design, and replicate it. For example, milkers might create apps for underground metro lines, rather than build one app that can call up many underground lines.

Having designed the simulation, the authors ran a series of tests, each time starting with all four types of developer creating the same number of apps.

When they forced the proportion of apps from each group to be constant, the copycats quickly made the most money. But their advantage soon quickly vanished as unhappy users abandoned the store, because the ecosystem suffered from a lack of novel products. All the apps became similar.

In a second simulation, consumers' choices dictated which apps thrived and which failed, which is what happens in the real Apple App Store. Under this scenario, optimisers sold most apps, with innovators next, followed by milkers - leaving copycats making hardly any money. It became a self-regulating ecosystem that doesn't abide copycats.

It is salient that in this second simulation, the results arose without the App Store having to impose any rules. As a marketplace, customers decided who failed and who succeeded.

For me, the research highlights some of the ways communities work. Communities tend to have different types of membership, with groups developing over time that have different roles within them. If left unimpeded, these communities emerge as self-regulating eco-systems that do not tolerate behaviour that impedes the lives and interactions of its inhabitants.

Messages that brands can take from this study are twofold. Firstly, if brands want to be involved in communities, they need to understand the needs of the people that inhabit them, what is important to them, and their interactions and norms of behaviour. They need to fit themselves seamlessly within communities without impeding them, and facilitate them. If they do not conform to the norms, desires and needs of community members, and do not give in ways that are meaningful to communities, they will either damage those communities(as in the first simulation), or members will marginalised them (as in the second).

Secondly, the research suggests that if a brand attempts to create its own community, such as online, then imposing rules and regulations that constrain interactions between members can make that community unsuccessful for the brand. Rather, members need to shape the community according to what they want, with the brand facilitating that community. If brands do not allow this, then the research indicates that satisfaction of members is likely to decline, and they will leave the community.

Ref: Marks, P., (2012) Secrets of App Store revealed by artificial life forms. In New Scientist, 11 April 2012, 2860.

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On the emergence of 'Bring Your Own Device'

Submitted by Steve Smith on Tue, 17/04/2012 - 13:39

What are some of the consequences and opportunities of people using their own devices at work?

Growth in people using their own devices for work (often referred to as ‘Bring Your Own Device’, or BYOD) is another example of how using the term ‘consumers’ is unhelpful when wanting to understand people’s behaviour. In this case, when people use their own devices for work, they bring together their roles as consumers and employees. Just looking around at some of my co-workers, I can see one person using his MacBook Pro for work; another using his iPad; and others using their smartphones for accessing resources for work, tweeting about work, and making and taking work related calls.

One reason for this behaviour is our move toward near ubiquitous and permanent connectivity via Wi-Fi and mobile internet. A quarter of UK mobile internet users never or only infrequently access the internet via other devices (On Device Research), and 57 percent of 15-24s use their mobile phones for accessing the internet (Ofcom).

One set of implications for this behaviour is that technology brand owners and software designers need to continue to develop capabilities that enable people to bring work and non-work together in the one device. Smartphones are obvious examples. As more powerful smartphones enter the market such as the Samsung Galaxy Note and HTC One X, then people will be able to undertake more demanding tasks on them for work. Telefonica – owner of O2 - plans to launch a cloud-based service during the second quarter of this year which will enable people to switch a smartphone between home and work modes. Starting with the Samsung Galaxy S II, the operator will then extend the service to other smartphone models.

Tablet wise, one of the benefits people are likely to find from buying Windows 8 tablets will be that are conducive for both home and work activities, for example through Office software and cloud based apps. Microsoft is likely to use this to create an edge over Android and compete more aggressively with Apple. In fact, Microsoft’s Chief Operating Officer Kevin Turner recently stated in a speech that Microsoft believes that Windows 8 will encourage companies to embrace the fact that employees use their own devices for work.

For the organisation, this behaviour means that the formalised approach, in which organisations either issue devices according to what they think is best, or have strict policies about what devices they allow on their networks, is becoming quickly outmoded. In the face of already existing employee behaviour and emerging demand, enterprises have little choice but to embrace this change. Indeed, research shows that allowing employees more responsibility and choice for which devices they use can lead to greater employee productivity and satisfaction.

These changes mean that organisations will need to create wireless networks that employees can access across devices wherever they are. Fixed line access will increasingly constrain how employees want to work. Organisations also need to formally recognise BYOD and create flexible BYOD policies with criteria for behaviour. These need to cover commercially sensitive and confidential data and who owns what data on a smartphone. Of course, wireless networks need to be secure, but also sufficiently adaptable to enable employees to connect to them using the devices they choose.

Some organisations will find these requisites more challenging than others, depending on what they do, their structure, and the number of employees they have among other things. Nevertheless, with expectations of employees changing, especially as people fresh from university for whom ubiquitous and permanent connectivity is a norm, organisations need to either adapt or bear the consequences.

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Talking of the weather...

Submitted by Paul Selby on Fri, 30/03/2012 - 14:39

It’s sunny outside and we’re in the final working day of the third hottest March since 1659 … oops there I go again: talking about the weather. It’s a national obsession and Community Igniter reveals the extent of our fixation with the British climate.

Of the 161 conversation topics we quantify on the research study, only our families, things going on in our friends’ lives and arranging to meet up with our friends are discussed by more people, more often.

So who talks about the weather? It gets more important as we get older: 55+s are twice as likely than twenty something’s to include it as one of their top conversations. If you’re female, life in Wales or East Anglia or are divorced or separated, you’re more likely to talk about the weather. However, social class does not divide people with ABs just as likely as DEs to talk about it regularly. Indeed high levels of education are no barrier to weather conversations as those with a doctorate are 30% more likely than the average to discuss the weather.

Community Igniter reveals the network profile of different conversations – how we are connected with the people we talk to. Compared to the average conversation we’re more likely to be sharing comments about the weather with our neighbours and far less likely to bond over a weather chat with people we’re connected with via an interest in a brand or product.

What specifically do these conversations include? After general comments – surely the lifeblood of any social connection between us Brits – it’s extreme or surprising weather (if we ever have such a thing…) and then the seemingly complex mathematical task of comparing this season’s weather to the average that dominate conversations.

Community Igniter is our new proprietary research programme and desktop application designed to inspire Human Experience planning. It does this by revealing who talks about what, to whom, and what media spaces inform these conversations.

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It's time to stop talking about consumers

Submitted by Steve Smith on Wed, 01/02/2012 - 09:56

At Starcom MediaVest Group, we create experiences for people - we are the Human Experience Company. One thing I love about using the word ‘experience’ is that it recognises we are talking about people - their passions, interests, relationships, behaviour and attitudes.

So when we talk about ‘creating experiences’, we make what we do personal - we want to add to people’s lives, make a difference, give them something to talk about. When we experience something, it involves our emotions, senses and thinking. We may feel happy, sad, thoughtful, curious, calm or passionate. We may hear one thing and laugh; we may hear something else and feel moved. It may stir us to action, to find out more, or to talk about it. I remember watching this ad by Coca-Cola recently, and I just had to tell the guy sitting next to me about it.

In his book, Shaping Things, Bruce Sterling talks about the language we have used throughout history to describe people. Once we had handmade artefacts used by ‘farmers’, ‘hunters’, ‘craftsmen’ and the like. Next came machines, which were used by ‘operators’. Now we have the service industry that has ‘customers’, electronic gadgets that have ‘users’, and the advertising and market research industries that have ‘consumers’.

Terms like these depersonalise the people with whom we want to engage, create conversations with and provide experiences for. They create distance between us and other people. They shape how we think about them, design for them and act towards them, instead of personifying them as real, living, breathing people. Look up ‘consumption’ in the dictionary and you will read definitions like ‘use up’, ‘burn up’, ‘exhaust’. This is hardly descriptive of what we want people to experience what we create. And it hardly gives justice to people’s behaviour around the brands to which we want people to be loyal - people who create content and post comments to brand owners on Facebook, Twitter and YouTube, who upload photos and share their thoughts about our brands with friends and family, who create their ideal homes, who plan their ideal holidays or enjoy the experience of driving and showing off a brand new car.

People are complex, with different goals, experiences and aspirations. Reducing them to ‘consumer’ or ‘user’ ignores our intricate and multifarious make-up. It’s time to stop talking about consumers and start talking about people. Understand people. Design for people. Talk to people.

Steve Smith is Head of Thought Leadership, at Starcom MediaVest Group, London.

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What can Tesco learn from its Fresh & Easy experience in the US?

Submitted by Steve Smith on Mon, 30/01/2012 - 15:25

When I heard about the launch of Tesco’s Fresh & Easy brand in the US, one of the reasons I felt certain of its success was the lengths to which its executive team had apparently gone to understand the Californian market. Using ethnographic type research, members of the team visited households, looked in their refrigerators, shopped and cooked with them, got their views on diet and health, and discussed their purchase and eating behaviour.

Fast forward four years. like-for-like sales over the six week holiday period grew 19.3%, overall sales during the same period grew by 40.6%, and the chain is also set to open in 25 new locations by the end of March this year.

Yet all is not well. The store has announced it will ‘temporarily’ close twelve stores across California, Nevada and Arizona, which is on top of the thirteen stores it closed in late 2010. On top of this, a recent analysis estimates accumulated losses of around £700m, on capital expenditure of more than £1bn.

Why have these closures happened, and what can Tesco UK learn from Fresh & Easy’s experience?

The answer is twofold. Firstly, there has been an insufficient understanding of the characteristics, expectations and demands of local communities and their members, that shape what they want from smaller format stores. Secondly, its commitment to price obscures its core proposition in the minds of some shoppers. This is because Fresh & Easy will always find it difficult to compete over price with much larger stores. It is caught in the middle between larger stores that can compete on price, and stores that better meet the needs of local communities.

How similar this sounds to the UK, where Tesco is caught in the middle between ASDA on the one side over price, and Sainsbury on price and a slightly more upmarket experience on the other.

The first thing that Tesco can learn from its US subsidiary is to continue to accelerate its understanding of community, and deliver accordingly. Tesco’s decision to tailor product ranges according to the socio-demographic profiles of the surrounding area of each of its stores, and its support of local communities are recognitions of the communities in which it operates. However, Tesco needs to understand how it can deliver beyond just local communities, to include all of the elements of shoppers’ personal communities (see below). SMG Research has looked at the values of shoppers across the big six supermarkets and has found that values around community top the value profiles of Tesco shoppers. However, its research also shows that Tesco is at risk from losing out to Sainsbury’s on delivering to shoppers’ community values.

Delivering on values around community beyond just local community will provide Tesco with three opportunities (i) a significant point of differentiation from its competitors, (ii) make it more attractive to shoppers of its closest competitors who share the same values, and (iii) build loyalty among its own shoppers.

Tesco is able to achieve this by creating rich experiences that are relevant to shoppers and their personal communities. In so doing, they can provide content for conversations and interactions between customers and their families, friends, colleagues, local communities and the like; facilitate relationships between them; and enhance their lives. In addition to funding and sponsoring local community initiatives (which Tesco is already doing), three areas in which Tesco can provide these are:

In store, through staff/customer interactions, design, communications, products and the overall shopping experience
In media and social-media communications
Associating itself with media products that help customers in their conversations and interactions

This article originally appeared on MediaTel's Newsline

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Supermarkets at the sharp end of changing consumer behaviour

Submitted by Steve Smith on Mon, 23/01/2012 - 12:30

Mixed retail results highlight the need for supermarkets to carefully navigate the emerging multi-channel retail world...

Christmas results from the supermarkets are in, and one of the most striking pieces of news is that Tesco was hit by a fall in its non-food sales. As a consequence, Tesco has announced it shall reduce the number of new store openings this year.

This retreat could spell trouble for the nation’s largest retailer, and others if they follow suit. CBRE data shows that food retail space under construction or with consent soared 16% to over 25 million sq ft at the end of 2011, possibly leaving supermarkets with no immediate return on their investments and empty shop floor space. (Incidentally, the downturn in non-food sales by supermarkets makes news about Morrison’s being in talks to acquire stores formerly occupied by Best Buy in order to sell its Kiddicare products surprising.)

Tesco’s plans are matched by some well known high street retailers. Together, Dixons, Argos, Game Store, Mothercare and Thorntons plan to close nearly 1,000 stores over the next two to three years, once property leases expire.

Of course, one reason for poor retail results and store closures is the economic malaise. But to blame job losses, stagnant pay and an uncertain economic future for this obscures the more fundamental underlying shift of people moving more of their non-food purchases online. According to Columino, nearly 11% of all UK retail sales will happen online this year – up nearly 300% on 2005. And Forrester forecasts that by 2014, 37 million UK online buyers will spend £56 billion online.

A major task for supermarkets and major high street retailers over the next few years is how to manage this changing consumer behaviour and the increasing share that the online market will take. Rather than treat online and physical stores as separate channels, retail owners will need to carefully strategise about how they use them together. For in the minds and in the behaviour of many consumers, there is little distinction between them. Close too few stores and revenues are likely to decline, but closing too many stores could have the unintended effect of impacting online sales. This is because physical retail spaces are important for creating and communicating brand experiences for shoppers and therefore brand equity. For shoppers, physical stores will continue to be important for browsing, trying out new products, and interacting with staff. And experiences from these will help generate trust in these brands’ online stores.

This new eco-system of retail environments is especially good news for supermarkets that respond to it. On the one hand, food sales in physical stores will continue to be profitable, even if Britain’s internet grocery market is forecast to double to £9.9bn by 2015, according to IGD. On the other, supermarkets should leverage brand trust and value generated through physical stores in order to encourage online behaviour such as browsing and purchase of both non-food and food items. This means that although Tesco is right to cease opening out of town hypermarkets (which will be glad reading for Mary Portas), supermarkets should be careful not to reduce their physical non-food retail too much, as doing so would be likely to impact trust, equity, product awareness and online purchase.

M-commerce will be a significant opportunity for supermarkets in the multi-channel world, facilitated by and declining smartphone prices and growing tablet ownership. Supermarkets are able to employ these to integrate multiple channels and indirectly boost sales by enabling shoppers to access and browse products easily (even in-store, as Tesco is already doing), research products, check prices, find special offers, user virtual supermarkets, scan products, order online and have the choice of collecting in-store or delivery at home. Further opportunities are around loyalty programs, extra rewards, NFC, virtual coupons, social media integration and group discount offers. Vital to this is that although most of the supermarkets provide mobile apps across the spectrum of operating systems, supermarkets must continually optimise their sites for mobile, partly because many first time mobile supermarket users are likely to visit the site rather than use an app, and also to give customers choice.

Steve is Head of Thought Leadership, at Starcom MediaVest Group, London.

This article originally appeared on MediaTel's Newsline.

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Tesco extends 'Big Price Drop' but needs to innovate to stay ahead

Submitted by Steve Smith on Thu, 05/01/2012 - 09:52

Tesco has announced that it is continuing its Big Price Drop campaign into 2012 with another wave of price cuts in stores across the UK.

The UK’s biggest supermarket has already cut the price of over 350 new products spread across basic items including bread, meat, fish, fruit and vegetables.

Tesco claims that a trolley shop containing a selection of 50 of these reduced staples will reduce in price from £64 to £56 – a saving of £8. This represents an overall cost to Tesco of more than £500m.

UK CEO Richard Brasher says in Tesco’s press release, “As we look ahead to 2012 people across the country are saying they need more help with the cost of living... Big Price Drop is not a one-hit wonder. It is a rolling campaign to help customers save more money every day at Tesco on the essentials they need the most.”

Tesco isn’t alone in stressing its price competitiveness. Sainsbury has decided to continue its Price Match scheme into 2012, even though it expected to run this scheme only until the end of 2011.

Clearly, with squeezes on incomes and rising utility and sky high petrol prices, people want lower food prices, especially when food has increased in price by 35% since 2005.

One consequence of Tesco focusing on price alone in its marketing is that there will be less to distinguish the supermarket from the likes of Asda, Aldi and Lidl in the minds of many of its customers.

On the one hand, this is good for Tesco because it will help to shore up its more cash strapped customer base as well as appeal to its competitors' shoppers. However, our research using our proprietary tool spaceID shows that values around community and pleasure are particularly important to Tesco’s middle and more upmarket customers.

By neglecting or at best underplaying the importance of these values to these customers in its marketing, Tesco is vulnerable to having some of them leave the supermarket to join Sainsbury and Waitrose. Of course, a significant proportion of regular Tesco customers find that its loyalty programme is a reason to remain at the supermarket. But with Sainsbury and Waitrose promoting competitive pricing and quality, community and (especially for Waitrose) pleasurable experiences in-store and at home, their loyalty will stretch only so far.

Steve is Head of Thought Leadership at Starcom MediaVest, London.

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Mary Portas, Community and Supermarkets

Submitted by Steve Smith on Wed, 21/12/2011 - 10:35

Lots of interesting news about supermarkets over the last week have grabbed my attention.

One piece is about how customer perception of the value offered by Tesco has plummeted in the past year. This is despite its aggressive price based marketing strategy to appeal to customers feeling the effect of the economic squeeze. YouGov’s Brand Index Score, which measures how customers rate the brand in terms of impression, quality, value, reputation, satisfaction and whether they would recommend it, has suffered the biggest fall of the Big Four supermarkets in the past 12 months.

It seems clear then that even in an economic downturn, customers want more than just competitive prices. Our recently released spaceID research on the big six supermarkets demonstrates this is the case. It shows that each supermarket must deliver on shoppers desires around ‘community’ and ‘pleasure’.

This research is one reason why I was so pleased to read Mary Portas report on the roles that large retailers can play in facilitating local communities. But what I find really interesting is that some supermarkets are already doing this. Morrisons has just opened a store in St Albans that it says is one of a new breed of Morrisons stores dedicated to delivering to the specific needs of people living locally. Even over the last day or so, local papers have given examples of Sainsbury’s working with local schools and sports clubs to raise money and give away Christmas gifts.

It seems there is a discrepancy between what some supermarkets are doing to facilitate communities, and the image they actually have. If I were working at one of these supermarkets, I would be escalating working with local communities, and I would shout a little more loudly about it.

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Supermarket UK: The Changing Values of UK Consumers

Submitted by Adam Rattner on Mon, 12/12/2011 - 16:14

This Supermarket UK study, powered by SpaceID, uncovers peoples’ real motives and emotional values by measuring subconscious reactions to 210 key words. Its findings show two supermarkets - Sainsbury’s and the Co-Operative - are best suited to capitalise on this new battleground of Community (the importance of their neighbourhoods, friends and family) and Pleasure (self-gratification and enjoyment of life). These will become increasingly important in 2012 to shoppers.

Competitive prices and quality, while important are ubiquitous and increasingly less of a differentiator in an economic downturn. The Supermarket UK study suggests that the ‘big six’ supermarkets need to place greater emphasis on fulfilling shoppers’ emotional needs rather than competing squarely on price and quality.

The study reveals how the major supermarkets fare when attracting shoppers who place the greatest importance on Community and Pleasure.

The study shows that for supermarkets to poach shoppers from rivals, they need to target customers seeking Community and Pleasure from their supermarket shopping experience in 2012 from the nearest competitor. For each of the ‘big six’ supermarkets, the study reveals the competitor with the closest value profile, demonstrating potentially the easiest poaching environment for each brand.

In summary, Sainsbury’s and the Co-Op have the highest proportion of regular shoppers with trending values of community and pleasure and as such are well placed to poach additional shoppers from nearest competitors Asda and Tesco who need to up their game to halt a decline in numbers of shoppers. Of the big six supermarkets, Morrisons trails the pack in adopting and promoting values associated with society and enjoyment and will need to reinforce these values to retain its regular customer base, for whom community and pleasure are important, as shopper values begins to shift.

Supermarkets UK: the changing values of UK consumers

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