Category Archives: retailing

The future of ‘authenticity’

I recently watched an interesting documentary on the evolution of the British coffee shop market. I then had an idea for a new chain that is so sharp it would scratch your display if I wrote it here, so I’ll keep that secret. The documentary left me with another thought: what’s so special about authentic?

I’ll blog as I think and see where I get to, if anywhere.

Starbucks and Costa sell coffee (for my American readers, Costa is a British version of Starbucks that sells better coffee but seems to agree they should pay tax just like the rest of us – yes I know Starbucks has since reformed a bit, but Costa didn’t have to). Cafe Nero (or is it just Nero?) sells coffee with the ‘Authentic Italian’ experience. I never knew that until I watched the documentary. Such things fly way over my head. If Nero is closest when I want a coffee, I’ll go in, and I know the coffee is nice, just like Costa is nice, but authentic Italian? Why the hell would I care about my coffee being authentic Italian? I don’t go anywhere to get an authentic Danish pastry or an authentic Australian beer, or an authentic Swiss cheese, or an authentic Coke. What has coffee got to do with Italy anyway? It’s a drink. I don’t care how they treat it in any particular country, even if they used to make it nicer there. The basic recipes and techniques for making a decent coffee were spread worldwide decades ago, and it’s the coffee I want. Anyway, we use a Swiss coffee machine with Swiss coffee at home, not Italian, because the Swiss learned from their Italian sub-population and then added their usual high precision materials and engineering and science, they didn’t just take it as gospel that Mama somehow knew best. And because my wife is Swiss. My razor sharp idea isn’t a Swiss coffee chain by the way.

I therefore wonder how many other people who go into Cafe Nero care tuppence whether they are getting an authentic Italian experience, or whether like me they just want a decent coffee and it seems a nice enough place. I can understand the need to get the best atmosphere, ambiance, feel, whatever you want to call it. I can certainly understand that people might want a cake or snack to go with their coffee. I just don’t understand the desire to associate with another country. Italy is fine for a visit; I have nothing against Italians, but neither do I aspire in any way to be or behave Italian.

Let’s think it through a bit. An overall experience is made up of a large number of components: quality and taste of the coffee and snacks, natural or synthetic, healthy or naughty, the staff and the nature of the service, exterior and interior decor and color scheme, mixture of aromas, range of foods, size of cake portion, ages groups and tribal ranges of other customers, comfort of furnishings, lighting levels, wireless LAN access….. There are hundreds of factors. The potential range of combinations  is massive. People can’t handle all that information when they want a coffee, so they need an easy way to decide quickly. ‘Italian’ is really just a brand, reducing the choice stress and Cafe Nero is just adopting a set of typical brand values evolved by an entire nation over centuries. I guess that makes some sense.

But not all that much sense. The Italian bit is a nice shortcut, but once it’s taken out of Italy, whatever it might be, it isn’t in Italy any more. The customers are not expected to order in Italian apart beyond a few silly words to describe the size of the coffee. The customers mostly aren’t Italian, don’t look Italian, don’t chat in Italian and don’t behave Italian. The weather isn’t Italian. The views outside aren’t Italian. The architecture isn’t Italian. So only a few bits of the overall experience can be Italian, the overall experience just isn’t. If only a few bits are authentic, why bother? Why not just extract some insights of what things about ‘Italian’ customers find desirable and then adapt them to the local market? Perhaps what they have done, so if they just drop the pretense, everything would be fine. They can’t honestly say they offer an authentic Italian experience, just a few components of such. I never noticed their supposed Italianness anyway but I hate pretentiousness so now that I understand their offering, it adds up to a slight negative for me. Now that I know they are pretending to be Italian, I will think twice before using them again, but still will if it’s more than a few metres further to another coffee shop. Really, I just want a coffee and possibly a slice of cake, in a reasonably warm and welcoming coffee shop.

Given that it is impossible to provide an ‘authentic Italian experience’ outside of Italy without also simulating every aspect of being in Italy, how authentic could they be in the future? What is the future of authenticity? Could Cafe Nero offer a genuinely Italian experience if that’s what they really wanted? Bring on VR, AR, direct brain links, sensory recording and replay. Total Recall.  Yes they could, sort of. With a full sensory full immersion system, you could deliver an experience that is real and authentic in every sense except that it isn’t real. In 2050, you could sell a seemingly genuinely authentic Italian coffee and cake in a genuinely Italian atmosphere, anywhere. But when they do that, I’ll download that onto my home coffee machine or my digital jewelry. Come to think about it, I could just drink water and eat bread and do all the rest virtually. Full authenticity, zero cost.

This Total Recall style virtual holiday or virtual coffee is fine as far as it goes, but a key problem is knowing that it isn’t real. If you disable that by hypnosis or drugs or surgery or implants or Zombie tech, then your Matrix style world will have some other issues to worry about that are more important. If you don’t, and I’m pretty sure we won’t, then knowing the difference between real and virtual will be all-important. If you know it isn’t real, it pushes a different set of buttons in your brain.

In parallel, as AI gets more and more powerful, a lot of things will be taken over by machines. That adds to the total work pool of man + machine so the economy expands and we’re all better off, if we do it right. We can even restore and improve the environment at the same time. In that world, some roles will still be occupied by humans. People will focus more on human skills, human interaction, crafts, experiences, care, arts and entertainment, sports, and especially offering love and attention. I call it the Care Economy. If you take two absolutely identical items, one provided by a machine and one by another person, the one offered by the person will be more valued, and therefore more valuable – apart from a tiny geek market that specifically wants machines. Don’t believe me? Think of the high price glassware you keep for special occasions and dinner parties. Cut by hand by an expert with years of training. Each glass is slightly different from every other. In one sense it is shoddy workmanship compared to the mass-produced glass, precision made, all identical, that costs 1% as much. The human involvement is absolutely critical. The key human involvement is that you know you couldn’t possibly do it, that it took a highly skilled craftsman. You aren’t buying just the glass, but the skills and attention and dedication and time of the craftsman. In just the same way, you will happily pay a bigger proportion of your bigger future income for other people’s time. Virtual is fine and cheap, but you’ll happily pay far more for the real thing. That will greatly offset the forces pushing towards a totally virtual experience.

This won’t happen overnight, and that brings us to another force that plays out over the same time. When we use a phrase like ‘authentic Italian’, we don’t normally put a date on it. Do we mean contemporary Italy, 1960 Italy, or what? If 1960, then we’d have to use a lot of virtual tech to simulate it. If we mean contemporary, then that includes all the virtual stuff that goes on in Italy too, which is likely pretty much what happens virtually elsewhere. A large proportion of our everyday will be virtual. How can you have authentic virtual? When half of what everyone sees every day isn’t real, you could no more have an authentic Italian coffee bar than an authentic hobbit hole in Middle Earth.

Authenticity is a term that can already only be applied to a subset of properties of a particular component. A food item or a drink could be authentic in terms of its recipe and taste, origin and means of production of the ingredients, perhaps even served by an Italian, but the authenticity of the surrounding context is doomed to be more and more limited. Does it matter though? I don’t think so.

The more I think about it, the less I care if it is in any way authentic. I want a pleasing product served by pleasant human staff in a pleasant atmosphere. I care about the various properties and attributes in an absolute sense, and I also care whether they are provided by human or machine, but the degree to which they mimic some particular tradition really doesn’t add any value for me. I am very happy to set culture free to explore the infinite potential of imagination and make an experience as enjoyable as possible.  Authenticity is just a labelled cage, and we’re better if it is unlocked. I want real pleasure, not pretend pleasure, but authenticity is increasingly becoming a pretense.

Oh, my razor sharp idea? As I said, it’s secret.

 

 

The internet of things will soon be history

I’ve been a full time futurologist since 1991, and an engineer working on far future R&D stuff since I left uni in 1981. It is great seeing a lot of the 1980s dreams about connecting everything together finally starting to become real, although as I’ve blogged a bit recently, some of the grander claims we’re seeing for future home automation are rather unlikely. Yes you can, but you probably won’t, though some people will certainly adopt some stuff. Now that most people are starting to get the idea that you can connect things and add intelligence to them, we’re seeing a lot of overshoot too on the importance of the internet of things, which is the generalised form of the same thing.

It’s my job as a futurologist not only to understand that trend (and I’ve been yacking about putting chips in everything for decades) but then to look past it to see what is coming next. Or if it is here to stay, then that would also be an important conclusion too, but you know what, it just isn’t. The internet of things will be about as long lived as most other generations of technology, such as the mobile phone. Do you still have one? I don’t, well I do but they are all in a box in the garage somewhere. I have a general purpose mobile computer that happens to do be a phone as well as dozens of other things. So do you probably. The only reason you might still call it a smartphone or an iPhone is because it has to be called something and nobody in the IT marketing industry has any imagination. PDA was a rubbish name and that was the choice.

You can stick chips in everything, and you can connect them all together via the net. But that capability will disappear quickly into the background and the IT zeitgeist will move on. It really won’t be very long before a lot of the things we interact with are virtual, imaginary. To all intents and purposes they will be there, and will do wonderful things, but they won’t physically exist. So they won’t have chips in them. You can’t put a chip into a figment of imagination, even though you can make it appear in front of your eyes and interact with it. A good topical example of this is the smart watch, all set to make an imminent grand entrance. Smart watches are struggling to solve battery problems, they’ll be expensive too. They don’t need batteries if they are just images and a fully interactive image of a hugely sophisticated smart watch could also be made free, as one of a million things done by a free app. The smart watch’s demise is already inevitable. The energy it takes to produce an image on the retina is a great deal less than the energy needed to power a smart watch on your wrist and the cost of a few seconds of your time to explain to an AI how you’d like your wrist to be accessorised is a few seconds of your time, rather fewer seconds than you’d have spent on choosing something that costs a lot. In fact, the energy needed for direct retinal projection and associated comms is far less than can be harvested easily from your body or the environment, so there is no battery problem to solve.

If you can do that with a smart watch, making it just an imaginary item, you can do it to any kind of IT interface. You only need to see the interface, the rest can be put anywhere, on your belt, in your bag or in the IT ether that will evolve from today’s cloud. My pad, smartphone, TV and watch can all be recycled.

I can also do loads of things with imagination that I can’t do for real. I can have an imaginary wand. I can point it at you and turn you into a frog. Then in my eyes, the images of you change to those of a frog. Sure, it’s not real, you aren’t really a frog, but you are to me. I can wave it again and make the building walls vanish, so I can see the stuff on sale inside. A few of those images could be very real and come from cameras all over the place, the chips-in-everything stuff, but actually, I don’t have much interest in most of what the shop actually has, I am not interested in most of the local physical reality of a shop; what I am far more interested in is what I can buy, and I’ll be shown those things, in ways that appeal to me, whether they’re physically there or on Amazon Virtual. So 1% is chips-in-everything, 99% is imaginary, virtual, some sort of visual manifestation of my profile, Amazon Virtual’s AI systems, how my own AI knows I like to see things, and a fair bit of other people’s imagination to design the virtual decor, the nice presentation options, the virtual fauna and flora making it more fun, and countless other intermediaries and extramediaries, or whatever you call all those others that add value and fun to an experience without actually getting in the way. All just images directly projected onto my retinas. Not so much chips-in-everything as no chips at all except a few sensors, comms and an infinitesimal timeshare of a processor and storage somewhere.

A lot of people dismiss augmented reality as irrelevant passing fad. They say video visors and active contact lenses won’t catch on because of privacy concerns (and I’d agree that is a big issue that needs to be discussed and sorted, but it will be discussed and sorted). But when you realise that what we’re going to get isn’t just an internet of things, but a total convergence of physical and virtual, a coming together of real and imaginary, an explosion of human creativity,  a new renaissance, a realisation of yours and everyone else’s wildest dreams as part of your everyday reality; when you realise that, then the internet of things suddenly starts to look more than just a little bit boring, part of the old days when we actually had to make stuff and you had to have the same as everyone else and it all cost a fortune and needed charged up all the time.

The internet of things is only starting to arrive. But it won’t stay for long before it hides in the cupboard and disappears from memory. A far, far more exciting future is coming up close behind. The world of creativity and imagination. Bring it on!

Out of town centres are the most viable future for physical shops

So the government’s ‘retail guru’ Mary Portas has said that some high streets are doomed and should be turned over to other uses. I don’t share the government’s high regard for her but I do agree that it is time to reconsider the structure and location of retailing.

As usual, I’ll highlight the problem first, then suggest the solution.

I live on the edge of Ipswich. The area is a nice place to live but I rarely go into town. To be absolutely honest, I try hard NOT to go into town. I am sure they don’t want me there anyway, since they try hard to deter me from going in.

In the last year, I’ve been to radio studio three times, the cinema once (that involved over 20 mins looking for a car parking space nearby, eventually parking much further away and walking), and shopping once, dragged kicking and screaming, having to wade through a lake in a waiting-for-brown-field-development car park on our side of town that we used to avoid the trauma of traffic congestion. The planners were presented with a once-in-a-generation opportunity to fix a lot of the congestion when they started redevelopment of the docks, but instead actually worsened the traffic routing and created even more congestion.  I don’t know why they did that, but they did. You could say that Ipswich had been a one-horse town, but the planners shot the horse. Ipswich could have been a great deal better with just a bit of thought. Having said that, there are far worse places, far worse. I’m probably just a troglodyte that owns a shaver.

Like many other towns, a lot of the shops are closing. The issues are familiar all over the country. Congestion, lack of parking and high parking fees compete with easy home delivery from online purchases. Congestion is not the same as throughput, and even though it seems busy, town centre businesses obviously aren’t getting enough business or they wouldn’t be closing. 

I’ve written on the future of high street retailing before:

http://timeguide.wordpress.com/2013/01/16/the-future-of-high-street-survival-the-6s-guide/

http://timeguide.wordpress.com/2011/03/03/future-high-street-retailing/

Online shopping offers formidable competition, and in those previous blogs I looked at what can be done to compete . This time, I want to concentrate on the location of shops.

Sometimes I just want to get out of the house and go shopping. If I don’t have anything particularly in mind, I go to Woodbridge and Felixstowe, mainly because they are just as fast to get to as Ipswich, but prettier, it is far easier to park there, and parking doesn’t cost a fortune. If the trip is purely functional, I will often end up at a retail park. They are easy to get to, I can park close to the shop I want, and it is free.

There has been huge resistance to out of town shopping centres over the last decade or two because they obviously take customers away from town centres, and involve driving so were considered environmentally unfriendly. Let’s look at both of those in the light of the new reality.

Big retail parks are mostly full of enormous warehouse stores that offer a purely functional destination. Some are selling stuff that is best suited to online purchasing and the less competitive ones are likely to die or shrink. As they free up the big warehouses, these could be attractively redesigned to house many shops that once lived in town centres. So when someone goes to their local retail park to look at furniture or DIY kit, they might well spend an extra while wandering through some interesting small shops.  The big stores would act as a functional magnet, and the small shops would add interest and serendipity, making a boring functional trip into an enjoyable experience that could fund a flourishing retail community. Provided the rents and rates are OK, and that parking is free and abundant, this could work well as a model for high street condensation and relocation. It could even rejuvenate physical retailing, especially small businesses.

As for environmental impact, being stuck in a traffic jam is far more polluting than driving along unimpeded. Out of town centres can be placed to work well with the local human geography and roads so that traffic can flow smoothly and make less pollution. Parking must be adequate to cope with latent demand or that will drive potential customers onto the net, or force them to drive round and round car parks looking for places, polluting as they go. People who live in town centres generally have ready access to public transport and it is just as easy to aim routes at out of town centres as it is to town centres. If the old high streets are re-purposed, then retail business would just be moved to more viable locations where they could flourish.

If we move shopping out of town, almost everyone benefits. People living out of town would not have to go into town to shop, and congestion there would probably fall so that it would be less traumatic when they do have to go in for other reasons. People living in towns would still have public transport access to shops, just in different locations. The few who live within easy walking distance of town shopping centres would suffer having to go further to shops, but they will suffer their loss anyway if they don’t move.

For people out of town, well designed out-of-town shopping centres offer the potential of reinvention and to rekindle the joy of shopping. For townies, the alternative to shops that are a bit further away might be to have no shops at all. That’s probably the new reality and we either embrace it or suffer it. Government and planners should recognise that and make policy accordingly.

 

Sainsbury’s marketing have lost the plot

This one is more of a rant against poor marketing, and isn’t about the future.

I won’t mention names, but I know a few marketing chiefs who think their staff are largely a waste of space. I don’t have any experience of working with Sainsbury’s marketing though so only have experience as a customer as evidence one way or another.

I am sure someone thinks their new campaign is fantastic. Lets run a TV campaign telling everyone that if they could have got stuff cheaper elsewhere, we will give them a voucher for the difference. It worked well for John Lewis didn’t it?

Well, yes it did, but John Lewis did it right. You did it the opposite of right.

P3

So, if we’d shopped in one of their competitors, we would have paid less.  But they are kindly ‘making it this easy to claim the difference back’. So, if we are still dumb enough to go back to Sainsbury’s soon, knowing we had been overcharged, and remember to take this voucher with us, we can ask for a refund of the overcharge, but only as a discount of our next purchases, which presumably, being a similar basket, will also be overcharged, so we’ll get another voucher and be locked in forever into a cycle of being overcharged and having to juggle vouchers and keep shopping there to get a fair deal. But it is only £1.31, (it was only a small top-up shop of around £20) so we’ll cut our losses and shop in Tesco’s again, where according to Sainsbury’s, we’ll presumably save even more than that every time, since we normally pay rather more than £20.

Not quite John Lewis is it? They are ‘never knowingly undersold’. If they find a competitor would have charged less, they will charge you that or less, at least that’s what I have always assumed. Not give you a voucher that you have to take back and get a discount of another overcharged shopping trip.

Sainsbury’s, you are not being clever, locking people happily into forever shopping there. First, you are telling them you overcharged and then secondly, instead of just deducting it at the checkout at the time which would be easy and fair, you are making people additionally jump through hoops before you’ll give them a fair deal, while telling them where they can get one right away. Not clever. Not at all clever.

 

The future of music and video media

With the death of HMV and Blockbuster this week, I’ve done some radio interviews on the future of the high street and one on the future of media. I wrote about retailing yesterday so today I’ll pick up on media. I wrote a while back that Spotify isn’t the future of music, not in its current form anyway, though I will admit that streaming is part of the future. Spotify will probably up its game and survive. If it doesn’t, it won’t. (I didn’t properly answer the question then of what the future would actually be. I will now.)

CDs aren’t the future of music either. DVDs or Blu-rays aren’t the future of video. Think about it. If you were starting from scratch today, would you base media distribution on plastic discs that have to be spun quickly in a mechanical device, and need to be read by lasers, are easily damaged, and take up lots of storage space? Of course you wouldn’t. You’d almost certainly go for either solid state or web storage. I’d go for solid state. Here’s why.

Web storage is fine as long as you have a good connection all the time and don’t have to pay for data downloads. I think we will still have streaming services in the far future and they might even remain a large market, but streaming isn’t a perfect solution. Transmitting data requires energy, and transmitting lots of data streams to lots of customers requires big server farms. It also clogs up bandwidth and that is limited too.

Downloading to local storage is also fine to a point. It is a large market now, and will remain so for some time. But there are also big problems with it. Licenses are not the same for downloaded music. You have a much more restricted ownership of music you buy online. The companies’ desire to protect their revenue is a higher priority for them that giving their customers full rights, just as it is with streaming (another reason streaming is not what it could be). With physical media, even though you may have ripped (and hence stolen) the content of the disc before you transferred it, the disc itself stops being yours if you pass it on to someone else. The concept of ownership and theft is very clear with physical media. With an MP3, less so. It is clear that the extra actual cost to the music provider is zero if you give a copy of an MP3 away, and you won’t buy a replacement anyway, and they probably wouldn’t either, so there is no clear revenue loss, so you can easily reason away any guilt in keeping a copy. So the music companies put in stuff like copy protection and non-transferable licenses that make it harder to keep your music organised, use it on multiple devices, recover it after disk crashes or sell it on when you’re bored with it. And with an MP3, you don’t have a nice box to look at and know that you own it. The music companies are more conspicuously stingy with MP3s too. If you are downloading the music, why don’t you get the music videos thrown in too? It’s obvious with the CD, there isn’t space on the disc, so you don’t mind, and the tradition has never been there anyway. A DVD could contain the video, but would cost more. With online music, you can usually watch it on YouTube so why don’t you get a proper decent resolution copy when you actually pay for it?

Anyway, solid state storage. I don’t want to be stuck with CDs or DVDs, and would much prefer to get a USB memory stick with the media on. I could plug it straight into my home cinema systems and watch a full Dolby Digital 7.1 Hi-def music video, preferably in 3D. I could easily play or transfer the files to any device I want. But that’s just today. Already, flexible displays and flexible batteries are appearing in electronics shows. It won’t be long at all before they are extremely common.

yoummain_2447820b

This is a demo flexible battery/display from Samsung. This is far more suited to carrying around and everyday abuse than glass. This could be a general purpose display but is also perfectly suited to be an all-round CD/DVD replacement, eventually. It will cost too much initially to directly replace CDs or DVDs or downloads, but the price of such devices is governed by Moore’s Law and will tumble. It could show you the music video or movie, it could hold the music or video, it could communicate with any of your display and audio devices as well as being one itself. It is collectable, and could hold a permanent album cover image or slideshow of video clips or stills. It could be of any shape and size and still do the job. It ticks all the boxes for ownership, portability, robustness, media future-proofing. The battery could be built in or it could be powered inductively, or using solar.

It could support a range of business models too. You could buy albums, one per device, just like CDs, proudly keeping them on a nice rack or display shelf. Resell them at car boot sales or give them to friends. Or you could subscribe to a band or a music producer, and it could hold all of their stuff, and be immediately updated with any of their new releases. It could be locked to just their stuff and just you if that’s what you bought.  The device could support lots of different kinds of license. Or you could buy stuff online and it would download to one you have as a replacement for today’s MP3 player. So it could hold one track, an album, a group, an entire collection, or be the front end device of a streaming service. Devices like this could support many business models. It meets the requirements of the music industry and the customer, doesn’t need lots of energy for cloud based storage, improves the potential quality of offering for everyone. This is the future of music media and probably video.

Of course you can do some of this with an app on a pad too. But having a dedicated device solves a lot of the problems we are used to that are associated with doing that.

The future of high street survival: the 6S guide

I do occasionally write a blog relevant to the news of the day rather than just what takes my fancy. The news today, apart from Tesco horse burgers, is the closure of another national retail chain, HMV. I learned on the news that HMV stands for ‘His Master’s Voice’. Never knew that, I thought it was a 90s chain. ‘His master’s voice’ is immediately recognisable as an ancient and trusted brand. HMV has a nice up to date logo  though so maybe their marketing department though that is more important to appeal to a generation that has mostly never bought a CD. HMV also didn’t bother to explain the difference to shoppers between what you get when you buy a CD v what you get when you download, i.e proper ownership and rights v part and temporary ownership and severely restricted rights. Still, too late for them to ask me my views. They’re dead.

Some high street shops make excellent use of the synergy between a physical outlet and web presence. As we progress into the age of augmented reality, that will become ever more important. People will expect to be able to buy via either route but still use the facilities offered by the shop. AR also adds huge potential to add virtual architecture, décor  themes and gaming. Reserving online for high street collection, or buying for home delivery while in the shop are well established; less so is using 3d printing to accessorise outfits, or laser scanning body shape so that you can use stores as try-on outlets. These are starting to generate presence and will grow in importance. And some shops are getting extra income by acting as drop off centres for other companies, so that people can collect things on their way home from work, a big thing for the many households where nobody is at home during the day to receive goods.

Socialising is best done face to face, and shopping is a social experience too. Coffee shops and restaurants have been familiar in shops for decades now, but shops could make far more advantage of social networking to offer meeting and hanging out facilities for people using social networks and who share something in common related to the theme of the shop. Clothes shops could offer fashion related events, gadget shops demos of up and coming products, and so on. Establishing shops as something more than just places to buy increases their relevance and brand loyalty, hence survival chances. So, synergy, socialising. I feel a ‘6S guide to high street survival’ coming on.

Next S:  service. This should be obvious, and most shops do appreciate the importance of differentiating on service quality. While it used to be a concern that people would use the shop for service and then buy online, having good web presence and competitiveness anyway makes this less problematic. There is nothing wrong with having some premium services and charging for them in addition to free basic service. Some premium services could even be provided for competitor web sites with no high street presence, making a potential income stream even when people do use competitors. Opticians doing prescriptions for online glasses sellers, or clothes shops providing paid measuring services are good examples where this already occurs. Seeing competitors as potential market opportunities rather than just as threats is key.

Suck and see. OK, a bit contrived to get the S this time, but shops are starting to do it. The Apple Store is a good example, where you try it out in the shop but the purchase is essentially an online one. Clothes shops can let you try a garment on and then order it in your size for home delivery, using rapid customisation manufacturing and delivery systems.

Surprise is another one. It is easy to shop online when you know what you want. If you don’t, shops can offer that mixture of expected and unexpected to make you want to visit. Call it serendipity if you prefer.

The 6th S is for Special. This could be customisation or personalisation of products for customers, or it could be an extended relationship with customers in terms of pampering of regular customers, after-sales services, advice, affiliate programs, belonging to social groups… People want to feel special.

There you have it. Service, surprise, suck-and-see, socialisation, synergy and special. The 6S guide to high street survival. :)

 

Are advertising and Apple expenses we can do without?

If you wage war with someone and he gets a bigger gun, you feel pressured to get one too. It’s the same in the war to take your money. If everyone else spends a fortune on advertising, you are likely to feel forced to do so too. But it costs, heavily, and those costs ultimately have to be recovered in higher prices.

When you click on an ad on a website, an advertising company somewhere typically gets about £0.50. That 50p plus has to be recovered when you buy the product, but many of the clicks are ineffective, and there are other expenses in the whole chain apart from the actual click fee (the seller’s own staff, banking costs, accountancy, management etc). Whether you even notice ads or have ever clicked on one, the money you hand over nevertheless subsidises a great many ads, and the ultimate price you pay is much greater than the price that would be needed without advertising.

Nothing new there, but advertising has become a significant and unavoidable extra cost along with taxes and banking fees (and parking charges if you buy in town). You don’t get a choice whether to pay extra to buy via an advertising route or get it cheaper by somehow buying direct. Add up all the web ads, junk email, text messages, paper junk mail, newspapers and magazines, TV and radio advertising, and the whole advertising mark-up is big.

Advertising doesn’t just increase costs. With the exception of some wonderfully entertaining ads, many involving meerkats, adverts waste our time too. Count up all the hours people waste fast forwarding over the add breaks or even sitting through them, and consider the significant personal stress directly resulting from the irritation they cause, that may have a small but finite impact on health. Add to that the extra demands on landfill from the paper junk mail, plus the wasted time opening and sorting the waste. The negative impact on our lives, the environment, and on  the overall economy is vast. Sure, the ad industry creates jobs, but jobs in advertising don’t generate wealth (though there are obviously cash flows between regions). Like banking and the public sector, advertising is a drain on resources. It syphons money from the productive economy and impoverishes us. 

On the other hand, advertising pays for a great deal of what we use on the web, watch on TV or read in newspapers. Some of that wouldn’t exist if the advertising went away, though some would survive via other business models. We’d still have to pay for the things we want to use somehow, so any notional extra fees and administrative inconvenience can reasonably be offset against advertising’s negative impacts.

But even with that offsetting, we really should challenge the cost:benefit ratio in advertising and see if we can find better ways of letting suppliers make potential customers aware of the merits of what they have on offer.

Advertising is only one strand of marketing of course. Marketers know that people want to learn about their new products when they are potentially interested. Context is key. If I have just eaten, I am not interested in marketing from nearby restaurants. If I haven’t, I might be. Using context makes direct marketing possible, especially knowing the location of the user and their tastes and preferences. I will gladly pull information from companies willing to sell me stuff I am interested in, when I want it. They won’t have to pay anyone. Pull marketing is potentially very low cost to both parties, providing the consumer with the info on suppliers’ offerings so they can make an informed decision on what to buy. If we moved entirely to that sort of model, we could greatly reduce the price of everything we buy while saving time and stress.

It is certainly possible to build such a system and make it work well. The technology exists and we’d all be far better off. The really huge problem is that we have bought into the smartphone model, buying iphones, pads or similar, and were taken in so well by beautiful designs and features that we didn’t look under the covers. What we didn’t consciously buy, but bought nonetheless, were devices that only give us access to things on condition that Apple or another big manufacturer gets a big slice of the price, via a variety of mechanisms. A smartphone is perfectly capable of providing exactly the platform we need to save lots of unnecessary spend, but Apple has used its power to extract its own slice of our spend not just at device purchase but throughout its lifetime. Not only has it not let us avoid the expense of advertising, it has added its own extras on top. It has made the situation even worse. Most other companies also use strategies that are designed to get into the most lucrative position in the value chain, expanding the price increase industry.

As I remember it in the beginning, the web was meant to get rid of intermediaries and save costs, making the economy more efficient. What has happened is that layer upon layer of new intermediaries have become adept at selling us products and purchasing systems that allow them to skim off extra slices of revenue for themselves. Anyone working in IT is very familiar with the many layered system architectures, and each layer is another opportunity for some company to take a slice of the revenue passing through. All add ultimately to the purchase price, and companies like Apple win several times because they control several of the architectural layers that their devices are used in. But we are suckers, and keep buying them. Because the extra costs are cleverly hidden or disguised or renamed, we don’t notice them until it’s too late.

I may sound critical of Apple, but all they are doing is to maximise profits for their shareholders, whilst giving customers products they can’t resist. There is no fault there. The same goes for Google or Facebook or any other intermediary. It is the model that we need to change, not companies, who will always do what they can to make the most money. That’s what companies are for.

I’ve written often about cloud nets and digital jewellery nets and the forces of censorship and surveillance and web-based politics and the consequential likely emergence of sponge networks. Check them out in my recent articles list. Freeing ourselves of parasitic companies and advertising is another potential pressure. It may go two ways. We could simply recreate exactly the same problems all over again, just swapping one set of intermediaries for another. Sadly, that is the most likely outcome. History teaches us best that we don’t often learn from history.

But, and this is a long shot, but one that would really help make the world better, we could make devices that people buy, and are then free. No charges for making apps for them, no push advertising, completely open, highly context aware, and high powered, yet completely free to own and use after purchase. Even the comms could be free. They would be capable of everything that you do now, and more. We could use them to talk direct to suppliers and do business with them without anyone else involved. It is even possible to design a free payments and banking system. We could avoid paying anyone except the device manufacturer, once, and the companies we want to do business with using the devices. And with all the time and money we would all save, none of us would mind paying a fair price for such a device. Many people paid via advertising would have to find alternative support models, but the economy would be better off, the rest of us individually would be better off, and the environment would be better off. It is hard to see a downside.

History tells us we will still pick the other system and pay more for a worse life.

BHS and online retailing: delivery of faulty goods should be compensated

I haven’t had a lot of luck the last year buying stuff on-line. I have had a few deliveries of items that have been dead on arrival. In some cases they have been broken in transit, in others they were faulty at the factory. Manufacturers or retailers can obviously save money on testing if they just send any old junk out to anyone, assuming that some will come back. But customers are being used as unpaid testers. They have to unpackage the item, get it up and running, discover it doesn’t work, have to contact the retailer and/or manufacturer, fill in some forms, repackage it, take it back to a post office, check that a refund has arrived and then re-order a new one. This is a substantial amount of work.

This week I bought a lamp from BHS. It arrived in a badly damaged box, obviously having had some severe trauma somewhere, but I couldn’t immediately see the damage to the lamp shade until I had fully unwrapped it, at least 10 mins given the extreme overwrapping. Given the additional tape on the box, I deduced that it must already have been returned and had just been sent out again, with me as the unfortunate recipient. I will have to send it back. They don’t provide a phone number on the documentation that arrives, but loads of instructions about all the things I have to do, just to send it back and eventually get a refund. At the end of all that, I will be no better off then I was before I ever went near BHS but will have wasted a lot of my time and effort. I am furious with them.

I emailed them to complain but have heard nothing.

At the very least, when something is faulty, they should collect it from your home and bring you a replacement at the same time. If they expect me to work as an unpaid quality tester, then they should compensate me for my time – at my standard rates.

As it is, I paid £30. I have a broken light and some packaging to dispose of. I can either write off the £30 or waste £100 of my time to get it refunded. I suspect many people would just write it off, which obviously is of great benefit to the suppliers.

We really need a change in the law so that retailers are fully responsible to collect and make good, with no significant effort required by the customer, or fair compensation to be paid. Until then, companies like BHS will be able to send out faulty goods, with appalling customer service, not even provide proper contact details, ignore customers complaints, and get away with it. The only recourse customers have is the power to embarrass them online.

Time for the 13″ pad

800M people now have e-book readers, iPads or various other tablets. Most are around 7″ or 10″ screen size. The next obvious step upwards is magazine tablets.  There are a few very large format magazines out there, but Time magazine comes in at 13″ and I’d place my money on this being the next size for popular tablets. People can read books, papers and magazines on pads already, or even iphones for that matter, but with middle-aged eyes, I am not alone in wanting a bigger display and even the ipad feels cramped.

Smart-phones fit in your pocket, current pads are designed for taking out and about, but the 13″ pad will live mostly on the desk, coffee table or kitchen table. It is a better substitute for the laptop, and this is an important niche of course, but enabling new services in the home will be the big market for it. People who are used to reading paper magazines are more likely to buy a large format pad if the price is right. Games will look better on a bigger display, and so will videos. Even books can feel cramped on a 7″ pad, and in the home some will prefer to read them on large formats with bigger text instead of having to squint or juggle different pairs of glasses.

The 13″ format is more likely to be a shared device then the smaller formats. It is the natural home of home messaging, calendars, magazines, books, general web access and information services. Some of these are personal and will live on individually owned smaller pads, but the shared ones will move up.

I am expecting the phone to ring any minute as newspapers start producing their “what will happen next year then?” articles. Well, the 13″ pad will be top of my prediction list for 2012.

 

New book on the future of everyday life: You Tomorrow

My brand new book is called You Tomorrow, and now is available at http://t.co/yPcRwdY . It is all about the future. I started by collecting a lot of the ideas from my blogs and papers over the last few years, but found loads of gaps and filled them in, updated and rewrote a lot of stuff, sorted it, and finally was happy with a contents list for 2 books. Then I started writing them. The one that I just released is about everyday life and for ordinary people in ordinary language and is called You Tomorrow. My next one is for business and will be a full PEEST analysis – politics, economy, environment, society and technology, and is a bit like a long overdue update of Business 2010. If it gets too big, I may split off the technology and environment bits into a third book. It will be much more jargonny, if that’s an acceptable word, but still aimed at intelligent people from pretty much any discipline so will explain terms where I think they need it.

Meanwhile, buy this book about your own normal everyday life. I made it cheap enough to be a casual purchase and easy enough reading for bedtime or the beach. It is £5.74 inc tax and delivery in the UK. It is approximately 86,500 words.

It looks at how technology will change the ways we make kids, the life stages they will go through, from pre-design to electronic immortality. Then it looks at just about every aspect of everyday life, then the ways careers will change, then the sort of stuff we own, and finally the nature of our surroundings, real and virtual. Although aimed at pretty much anyone, it is I think still a useful guide for anyone in strategy or planning.

It is only available so far as an e-book, and a few comments here and there are UK-specific. But USA and German versions will come soon, and if it sells well, I will also issue it on paper, though at a higher price.

I hope you enjoy reading it, while I get on with the next one.