A significant number of (lucky) people have got all the ‘stuff’ they need, so they are now, increasingly, looking for experiences not products. Research suggests that this is especially true for women. Examples include WHSmith (a UK stationer) selling cooking courses, hot air balloon lessons and Ferrari drive days. In theory this trend should benefit flagship retail, but the jury is still out on whether these temples of brand experience are really anything more than expensive poster sites.
Brand experience
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As life speeds up and becomes more complicated (and in some cases more dangerous) people of a certain age are yearning for the simplicity, warmth and certainty of bygone eras. Hence the growth in comfort food eating and retro recipes. A good example is the food hall in Marks & Spencer (UK) where you can re-live the nineteen seventies with dishes like prawn cocktail, mousaka, chicken Kiev and Black Forest Gateau. Over in the US meat loaf sales are booming and Black Jack gum has been re-introduced.
Dr Atkins is now dead and so, increasingly, is his low carb idea. In the US one of the very latest trends is starvation (seriously). That’s right, you pay $1,000 to go and live in the desert for a couple of days and eat NOTHING. But don’t worry there will be another health fad along in a minute.
Britain is the largest consumer of so-called ‘functional foods’ in Europe (GBP £110 per person each year on average). Also known as ‘nutraceuticals’ or ‘phood’ — a combination of good old-fashioned food with a pinch of the very latest pharmaceutical know-how and technology. Current examples include breakfast cereal that reduces heart attacks and bread that fights depression. Future examples will include chocolate that fights cancer and possibly even Coca-Cola that reduces Alzheimer’s disease.
Fed up with work/your boyfriend (lack of)/children/email/ life/the universe? Then get your revenge in early by eating something ‘naughty but nice’. You could save up your angel points by eating salad all week and then polishing off an entire tub of Ben and Jerry’s ice cream, or you could combine good and bad in a single meal (Jeykl and Hyde eating). Better still have lots of small bites so it doesn’t feel so naughty. Best of all treat yourself to some healthy indulgence (fabulously expensive mini-treats like Nudie fruit smoothies or Innocent drinks).
In the US two-thirds of adults are overweight which is driving everything from health club membership (up 8.5% between 2002 and 2003) to growth in kids ‘plus-sized’ clothing. Over in Europe a recent survey said that nearly 75% of Europeans are more concerned about their health than 12 months ago – which is not surprising when you consider the fact that women’s alcohol consumption has jumped by almost a third between 1998 and 2003 in the UK. McDonald’s are getting into the act selling salads and high fibre snacks whilst beans, grains and white tea sales are booming. Future winners will include products that successfully merge the health trend with other trends like portability e.g. healthy food on the go (it’s called fruit!).
In the IPO prospectus for Google, the company stated that it would invest in projects that had a 10% chance of success if the return could be a billion dollars plus. The company also said it would ‘place smaller bets in areas that seem speculative or even strange’. In other words, Google will invest in strategies and products that are more likely to fail than succeed.Failing often, failing fast and failing cheap (otherwise known as experimentation) will be a core competence in the future, but how do you create a culture that not only accepts and learns from its mistakes but does things that it knows will fail? The difference is important. Unlike scientists, managers do not deliberately try to prove themselves wrong. Instead, they use historical evidence to prove that something will work in the future. Scientists, work on a different basis – that you can never prove something is right, only that it is wrong. In other words, only through making mistakes can you disprove a hypothesis and the more mistakes you make the faster you will disprove it. So how can you harness the power of deliberate mistakes to improve your strategy or innovation process? Or to put it another way, how can you tell the difference between a smart mistake and a dumb one? To some extent the answer is not about how but when. Mistakes made on purpose are best used when the potential gain of being right far outweighs the cost of being wrong. Another reason to make deliberate errors and study the outcome is when rigid assumptions drive large numbers of small decisions. For example, it was once a core assumption that giving credit cards to students was a bad idea. However, Citibank decided to test that assumption and found that that the ‘worst possible risks’ were in fact nothing of the sort. Other instances when making deliberate mistakes can pay off include situations where the industry landscape is changing fast, where problems are complex and solutions are numerous or where experience with a situation is limited. In each of these cases deliberately making a mistake and learning from it can be a powerful strategy but it is rarely something that large organisations feel comfortable with. Programs like Six-Sigma have created measurement systems and cultures that aim to eliminate failure, not promote it. Employees feel insecure because of short-term employment contracts and evaluations so while they buy into ‘mistakes done right’ in theory, in practice they are loathe to put their own careers on the line. One solution to this dilemma is to evaluate employees on longer timeframes.This is something that IBM Research is trying. Bonus payments are linked to one-year performance, but salary and rank are linked to three-year timeframes. Maybe they’ve been listening to Thomas Watson, the founder of IBM, who once said ‘ If you want to succeed, double your failure rate’.