How We Now Shop

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The future of retail is seemingly not what it used to be. A few years ago we were talking about trendy new terms such as premiumisation, masstigue, transumerism, pop-up retail and third spaces. We were also witnessing the emergence of Shopping 2.0 (a cross between Web 2.0 and online retail). Globalisation was also making a huge impact on everything from product sourcing to outsourcing.

And, of course, everything was about either convenience or experience, which was turning almost everything into either a big-box out-of-town mega-store or a niche, sensory-laden, high street, destination store.

So what’s changed? Quite a bit.

1. Cheap is now cool

The impact of the global financial crisis has slowed things down. It has also re-localised and re-simplified consumer attitudes and behaviour. People still shop online and source things globally but the focus has shifted to what’s in our own backyards. Frugality is back in style and so too is utility, thrift and no-frills. We are no longer ashamed to buy things second-hand and it is now cool to be buying cheap. People are even bragging about how little certain items have cost rather than how much. Quite a turnaround.

2. People are trading down

Shoppers are trading down between segments. For example, if you once bought premium-priced products in a supermarket you are now more inclined to buy everyday brands, whereas people that were previously buying everyday brands are now buying value brands. The same is true with our choice of supermarkets. Aldi is now more in tune with the tight-fisted times than Marks & Spencer. Dollar stores, pound shops and discount retailers are also doing well in the new budget conscious environment.

3. We are buying second-hand

Garage sales, boot sales, second hand shops and online auction sites are now more popular than ever but even when we are buying new we are adopting a second-hand mindset and we are inclined to haggle over price. We are generally not splashing out on big-ticket items but don’t think that this means that spending has stopped. Value rather than price is now the important factor. Equally, we are now more likely to look after things rather than throw them away at the first sign of trouble. This trend also means that vintage items and events such as clothing swaps are doing well.

4. People are creating and consuming at home

A recession is nature’s way of getting people to grow their own vegetables. It is also a good way to get the family back around the kitchen table. Sales of home baking products are on the rise and so too are home-brewing kits. People are even making their own fun with family scrapbooks and presumably it won’t be too long before we see the return of other nostalgic pursuits ranging from dress making to bread baking.

5. Consumers want to be in control

Purchases are more considered and less impulsive these days. The new attitude is  “what do I really need?” and “what can I do without?” rather than “what do I want?” and “what can I have right now?” Convenience is obviously still a major trend but so too is the desire to be in control. From a store design point of view this anxiety led desire for control will probably manifest itself in shops that put us at ease and allow people to try before they buy. The aesthetic of the home in-store in other words.

6. It’s OK to rent

In many cases renting now makes more sense than buying so retailers and other businesses that rent out expensive goods or allow for the partial or fractional ownership of luxury items are doing well. For example, style4hire rents out high-end handbags while P1 International gives what remains of the investment banking and hedge fund communities access to high-end automobiles for a fraction of what it would cost to buy one outright.

7. Bin the bling

The death of luxury retail is over-stated but it is certainly true that if you’ve got it (or you’ve just bought it) you will probably want to hide it rather than flaunt it. Stealth-wealth is where’s it’s at in terms of hiding your haul.Blending into the background is also a good idea these days unless you want to make yourself an obvious target for the media or opportunistic street criminals (the same thing in some instances).

8. Green is starting to fade.

Whatever happened to organics? In the UK sales of organic food have plummeted by 20-25%. Equally global warming has been put on ice while people focus on more immediate priorities. This is not to say that either of these things has gone away. Indeed, environmental concerns have now started to merge with economic worries, with the result that saving the planet now saves people money too.

9. Simplicity in back

Complexity is out. People are fed up with things that they can’t understand and both transparency and simplicity are back. To some extent this is a shift back to basics but there is possibly a shift to old-fashioned values going on here too. Look out for counter-trends involving analogue, stripped down or unplugged products.

10.Local not global

We still shop around the world but globalisation appears to be slowing down. Economic protectionism (Buy British, Buy USA, Bye Bye Chinese goods etc) is back and provenance seems to be more important than ever.

So what’s next?

Some commentators have hailed some or all of the above as a permanent change to the consumer culture. My comment is not so fast buddy.

In my view the answer depends on what happens to the economy. If things pick up sooner than expected I’d expect many of these new attitudes and behaviours to be ditched. They will prove to be little more than short-term reactions to a short-term situation. In other words, we all have ridiculously short memories and we will return to our selfish, debt-ridden, materialistic ways before you can say Prada bags or organic water.

However, if the economy takes another nasty turn downwards and we are confronted with five years of belt-tightening or even a decade of doom and gloom then I’d expect these new attitudes and behaviours to stick. We will start to fundamentally change how we live and we will also start to question how everything from business to politics operates.

What’s left of my money is on the first scenario.

The Strategic Importance of Lunch

I’m in Sydney talking to AFR about the importance of slow thinking. I ended up talking about the importance of lunch – especially in the context of fresh ideas and insights. They seemed to quite like this idea and said that they wanted to send a photographer over next Tuesday to get a picture of me eating lunch in a restaurant. But here’s the good bit. Nobody that I have spoken to is willing to have themselves photographed having lunch. Nobody that works in a senior position at a large company anyway.

Apparently lunch is frivolous. In times of economic recession it is best avoided. A sandwich at the desk is much more efficient. Ohmygod. Don’t people get it?

Where is my friend Douglas when I need him? Below is something that he wrote many years ago about why people should go to lunch…

Why people need to have their lunch and eat it too.

Lunch.  Let’s do lunch.  Let’s skip lunch.  Lunch is for wimps. It is many years since Gordon Gekko made that last infamous announcement and yet ‘lunch’ is still a dirty word.

We need to eat; but we seem also to need to justify the time spent doing it.  Sometimes we sit alone at our computer while we wolf a sandwich (extra points if purchased from an entrepreneur with a basket actually in the office).  Sometimes we snatch a bite while we rush round doing the domestic errands that will allow us to stay later that night.  Sometimes we miss lunch altogether: we jog to burn up calories (the absolute opposite); or we go to the gym to work out (work up?) aggression before plunging back into the dog eat dog marketplace.  Anything, anything but simply having lunch and enjoying it.

Why?  When, indeed, eating in the middle of the day is a natural and healthy moment to do so — sustaining energy, allowing digestion and feeding conversation.

It is an Anglo-Saxon phenomenon, broadly speaking.  Further south, societies have a stronger tradition of eating, and then resting, in the middle of the day.  The day starts earlier, is broken by some hours in the afternoon, and then goes on later into the evening.  The anthropological explanation of this is climatic: it is the heat which dictates, not the digestion.  Except that, now that Anglo-Saxon capitalism is dominant, in city after European city the habit is beginning to die, as desks must be staffed until Tokyo has gone to bed and New York has woken up.  Global capitalism has overridden variations in the global climate.

This new capitalism is lean, mean and very hungry.  Back in the bad old days, when socialist sensitivities were keen, business lunches possibly earned a bad name.  Fat cat capitalists sat late into the afternoon over brandy and cigars, while their workers toiled in satanic mills, only emerging late in the afternoon with pale, hungry faces and emaciated limbs.

But now bosses are thinner than shop-floor workers — they can afford more expensive gyms — and brandy and cigars. Business entertaining goes on, but water is the order of the ambitious lunchtime drinker, and the lunch — notoriously never free — must be justified by a concrete deal, a bottom line, a result.

Meals are significant social moments in all cultures.  Meals have always attracted rituals and meanings.  They used to be far more simply and recognisably significant in our own culture.  The directors would have lunch in their own dining room, and would invite others to join them.  Banks, shops and offices would close for lunch.  Lunch was important.  And it was important throughout the week.  Sunday lunch involved all the family sitting down.  Christmas dinner still does.  In America there is Thanksgiving.  In church there is the Eucharist, the Mass, the Holy Communion, The Lord’s Supper : meals are where we find much that is significant about how we live, what is changing, what is enduring.

Lunch is an interface.  Lunch is where work meets people (where colleagues became friends before the days of motivational workshops and team bonding courses).  Lunch is where people talk and people think. It is where the new economy meets a very ancient set of rituals and customs.  How we approach lunch says a lot about our attitude to work, and work’s attitude towards us.

Lunch has been on a long downhill trek — from luncheon to something, which we snatch, shamefaced, alone.  So what have we gained by downgrading lunch?  What have we lost?

“I’m going for lunch.”  Yes, but are you going for lunch to eat; or are you going to do the things that you do instead of lunching?  In one sense the latter could be said to be fraudulent because this hiatus in the working day is there in order that the natural human need to eat should be met.  But on the other hand we don’t want to eat.  So we have turned lunch into something else, something broader — time out during the working day.  And so employers negotiate about how long ‘lunch’ — and other breaks — should be.

Is the time taken at the employee’s expense, or the employer’s?  If it is just used by the employee at will, then cannot employers reasonably argue that it should not count towards the working day?  If it is used to eat, because an eight- or ten-hour stretch without food involves significant loss of efficiency towards the end, then cannot an employee regard that as benefiting the organisation?  Lunch, in those circumstances, becomes a necessary concomitant of employing people at all — and the employer’s business.

This is lunch as a battleground.  It suggests a workplace that is a battlefield.  Investment banks are the new sweatshops, as much as the new call centres — only with bigger bonuses.  So that’s all right then?  In a free market and a free society people are able to choose what they do with the time when they could be eating.  That canteen, lunch-break culture was so paternalistic, so patronising.  Yet now market pressures seem to work only one way.  They have eaten up lunch for the keen employee.  Modern business culture has become as food-friendly as a plague of locusts.

Historically, many communities dedicated to a common end have distrusted meals.  Under the Rule of St Benedict monks eat in silence, listening to readings from improving texts.  (When do the readers eat?  But then, when do waiters have lunch?)

The trouble is, eating is so charged.  Rows over the family table.  Class war fought with serried ranks of cutlery and fish servers.  Meals are the traditional moment to betray your enemy under the guise of friendship: the invitation to break bread speaks of peace, but treachery often strikes.  Dante puts traitors to their guests into the very lowest Hell.
It is a busy place.

And yet, we should nevertheless try to reclaim lunch for the new economy.  Because, what is wrong with eating?  Can’t we simply enjoy that necessary break in the working day, make a virtue out of the necessity, feed ourselves, replenish ourselves, come back to give it back to our work?  A solitary sandwich maybe efficient but is it effective?

Everyone should think about lunch more.  Employers should value employees as people who need to eat.  Employees should value employers as people for whose sake — among others — they eat.  And maybe the ritual meal, the nourishing meal, the creative meal, food not as a weakness but as collaboration, can come back into business.  So, re-build the subsidised canteen, bring back the dinner ladies!

Perhaps, even, we could invite Dionysos back to the lunch table, to oil our ideas, give us a little courage to make that intuitive leap, speak up to the boss, help us to dare outline that off-the-wall idea.  Of course, it would be dangerous, but it’s food for thought.

Not So Fast

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Interesting to see a piece in The Times about a research study conducted by the University of California, San Diego, saying that traits such as compassion and tolerance are hard wired into the human brain. I’m not so sure about this.

There was another study reported on this week from the University of Southern California’s Brain and Creativity Institute claiming that whilst one person can instantly register another person’s fear or pain it takes much longer for responses such as compassion or empathy to develop.

But here’s the really good bit. According to these researchers, our digital age could be robbing us of such emotions. Why? Because information overload, caused by the likes of Twitter, Facebook, MySpace etc, is creating too much competition for what is ultimately a finite amount of attention.

In other words, when we are being constantly screamed at by a variety of digital devices we withdraw and stop thinking about others. It’s a bit of stretch to blame technology for a decline in civility but it might not be too far off.

The Death of Cash

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Some time ago I wrote about a Nielsen prediction that 90% of financial transactions would be cashless (digital) by the year 2020. Judging by the chart above it looks like they were on the money.

So what’s next? I’d expect coins to slowly vanish. Next will come notes. Both forms of cash will still exist in the future but they will be somewhat unusual outside of the black economy. Logically one would then expect paper bills (phone bills, bank statements and so on) to similarly verge on extinction. I’d also expect some regional digital currencies to emerge cumulating in a handful of Euro equivalents, or perhaps a single global digital currency.

Thanks to Andrew Crosthwaite for the killer chart by the way.

Anxiety at Fever Pitch

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I am not in the habit of cut and pasting whole articles but I’m getting so hot under the collar about Swine Flu that this article is perhaps worth it. The article is by Professor Peter Curzon, a Professor of population and security at the University of Sydney. He is also a Professor of medical geography at Macquarie University. The article first appeared on news-medical.net on 1 June 2009.

Is a flu pandemic looming and if so should we worry? It is now 41 years since we experienced the last pandemic of flu and many think that we are overdue for the next one. But have we over-reacted to the present outbreak of swine flu?

Like Bird Flu it would seem that we are faced by not one pandemic but two. The first is an epidemiological one comprised of cases and a few deaths from a relatively mild flu virus. The second is a rapidly emerging pandemic of human fear and anxiety, largely orchestrated by the World Health Organisation (WHO), governments and the media, and one which threatens to overwhelm the epidemiological pandemic.

Certainly we are faced by a new flu virus that seems to be very contagious between people, particularly teenagers and young adults, and one that is spreading quickly around the globe. We are also in the southern hemisphere about to enter our winter flu season and given that this virus is still evolving and moving we do not really know what it might do. But did we really need to construct this all pervading environment of fear and panic?

Have we learnt nothing from our over-reaction to SARS and Bird Flu when the media’s reaction totally swamped the epidemiological realities of two relatively small but significant epidemics among wildlife and transformed them into the Black Death of the 21st century?

Perhaps a certain amount of fear is useful, forcing people to consider precautionary behaviour and adopt personal avoidance strategies, but the line between what is ‘reasonable’ fear and something which produces widespread fear, anxiety and panic is a very blurred one and frequently over-stepped by the media.

While it is not in the media’s brief to enquire into the impact that their stories have on people, there seems little doubt that the media plays a defining role in how we see swine flu. While some media stories aid awareness and place such issues on our agenda, the temptation to sensationalise through emotional headlines, images and language is often irresistible.

We saw it with SARS and Bird Flu and in many respects we are seeing it repeated with swine flu. But what are the epidemiological realities of this flu outbreak?

So far the disease has spread to 53 countries producing a little over 15,500 cases and approximately 100 deaths. Up to this point 91 per cent of all cases have been in Mexico, the USA and Canada, and 98 per cent of all deaths in Mexico and the US.

Elsewhere the virus has been fairly mild and responded well to antiviral treatment. In a globalised interconnected world where millions cross international borders by air everyday, many perhaps incubating respiratory viruses, why are we surprised by the rapid diffusion of swine flu?

One of my major criticisms of Australia’s reaction to any anticipated pandemic is that there appears to be little understanding of the production and communicability of fear and how fear might be understood and ‘managed’ during the pre- and actual pandemic period.

To a large extent this stems from the different ways in which experts and ordinary people see risk and exposure. To experts, risk and exposure are quantifiable dimensions simply arrived at by comparing those exposed to a particular threat with those not exposed.

But to ordinary people, risk and exposure are emotional, intuitive, socially constructed things, very much influenced by the way we construct our view of our world, as well as by the reaction and opinions expressed by people around us, and by our reaction to media influences and government pronouncements.

There seems little doubt that most people harbour deep-seated fears about contagion and infection which are a mix of rational and irrational fears, and that while government pronouncements and media stories play an important role in informing and advising us, they may often play on our fears and ignite hysteria.

When we are consistently told that we are faced by an extraordinary viral threat that may strike down 25 per cent of the population, that people will be quarantined in their homes and should consider stockpiling food and antivirals, that 10 million doses of vaccine will be produced but that it may take three months, and confronted by headlines like “Killer Flu is Running Wild”, rationality is very quickly thrown out the window and replaced by emotion.

Further, when we are told that there is no magic cure, confidence in medical science and the government rapidly evaporates. It would also seem that most people are highly sceptical about government claims that it will protect them if a pandemic crisis does emerge. In consequence they fall back on their own resources and place self and family first.

No one disputes that governments should not follow a policy of active caution and plan for a possible pandemic, but we need to be convinced that we haven’t over-reacted, that authorities understand how people see such threats, and how government policies may impact on their lives. Critically, we also need to know more about the communicability of fear and how ordinary people react to pandemic threats both real and constructed.

One of the great ironies of 21st century life is that we seem to be more moved by the tempest than the gentle rain and what might be, rather than what is.

Swine flu is important, but where is the widespread public interest in the dengue epidemic in North Queensland that has so far produced more than 1,200 cases, or the thousands of whooping cough cases in NSW?

The Next 100 Years et al

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There seems to be a trend for books about the future (who saw this coming?). I’ve just read two more. The first – and best – is The Next 100 Years by George Friedman. The first half of the book is concerned with some familiar trends. The second half is a scenario for a future war. Friedman can be a bit US-centric but overall it’s pretty fabulous. Totally recommended.

The second book is A Brief History of the Future by Jacques Attali. This book is again in two halves. The first half is very interesting but I think it goes off the rails in the second half. I suspect that this might be due to the translation from the French. Still a good read.

PS — My own book Future Files: A History of the next 50 years is coming out in an updated edition in Aus/NZ towards the end of the year.

Map of the Interior World

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I’ve been on quite a few planes recently. For some unknown reason I thought it would be a good idea and try to paint something at 35,000 feet. People didn’t quite move seats to get away from me but it came close. No idea what
this is or what to do with it. Maybe it could be the basis of a 2010+ trend map?