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Whitbread is continuing to open more Costa Coffee shops predicated on the continuing growth in demand. That growth has slowed, but the company believes we are entering a ‘third wave’ of coffee consumption, where we are willing to spend more per cup. Yes, that means you, with your single-estate cold brew.
While consumption patterns are interesting, I’m much more interested in what the continuing expansion of the chain says about our need for third space, a living room beyond our home, or a work space beyond the office. To the naked eye the coffee market looks saturated. And yet more and more continue to appear. Why?
The reality is that we are living in increasingly densely-packed circumstances. This is nothing to do with immigration, which is both culturally positive and economically necessary. Rather, it’s about housing.
Multi-generational homes are now increasingly common. As we stay single later and house prices grow ever more un-affordable, we’re sharing houses with our peers, later and later in life. Or renting the smaller spaces that we can afford in cities, where have little room to relax or socialise. Sometimes, we need to escape.
Developers are building what someone described to me yesterday as ‘student accommodation for grown-ups’: giant blocks of small apartments with high-quality shared spaces to make up for the lack of space to entertain or relax inside the flat itself.
The new pub
The irony is that we had a huge network of shared spaces in this country. Places that were designed to be the ‘home away from home’ for those who couldn’t afford the space, or the heat, in their own home. Places where groups could meet and socialise. Places where at one point in time, a lot of business was done. They’re called pubs, and they’ve been closing at a rate of 27 per week.
Of course we also had a very strong coffee shop culture in the past. Perhaps this is just cyclical. But nonetheless I think this trend is interesting, particularly for the way it counters this idea of us disappearing into our digital devices.
If we really were becoming an antisocial nation of nerds, lost to our laptops, then these physical meeting spaces would have much less value. Yet sat in one of my favourites yesterday (Manchester’s Chapter One bookshop/coffee shop), less than a quarter of the tables were occupied by solo workers. Most people were there to meet, talk, work and socialise. This was pretty typical of the other shops I stuck my head into. Hardly a scientific survey but enough to validate my suspicions: these are social spaces and they will continue to grow.
Human beings are collaborative by nature, fuelled by connection. We need spaces to make those connections, for business or pleasure. The pub fell out of favour for all sorts of reasons: homes well-equipped for entertainment, changing attitudes to alcohol, and a richer array of alternatives. But what’s clear from the continuing — almost baffling — growth of the coffee shop market, is that our need for connection has not gone away.
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I went in to Hotwire PR yesterday to talk about influence, sharing some of my experience as a person on the telly/radio and as a writer/blogger/podcaster. I also talked about the changing nature of influence, as has been highlighted in some of the work I’ve done.
Though I studied engineering (Mechatronics), my first job was in PR. I spent five years working on behalf of a range of tech firms, large and small. Given my understanding of the tech, a lot of my time was spent acting as a translator for the engineers, turning their words into stories we could sell. But I still spent a good chunk of time trying to sell those ideas in to the intermediaries between our client and their customers.
Initially this meant primarily journalists and analysts. But the founder of the firm I worked for became increasingly interested in other influencers, eventually founding Influencer50 and writing the book, Influencer Marketing.
I got involved in many of the early influencer marketing programmes that were joint projects between the agency (Noiseworks) and Influencer50. Now we were looking at 25 categories of influencer: user advocates, resellers, systems integrators, bloggers, conference organisers and frequent speakers. And we were wondering, how can we reach all of these influencers and make them advocates for our client?
We found ways. But it was very different from the linear model we started with. Then we would pitch a story to a journalist, the journalist would (or wouldn’t) write the story, the prospect would read the story, and we would tell the client how many prospects had read it. Our measurement used to be on the last step: really a measure of reach, rather than influence. Now we were being measured on our ability to reach people we had already shown carried influence.
This was complex. But the world of influence is getting more complex still.
The rise of the peers
Three things have happened since 2005 when I left the agency and started out on my own. Firstly, the publishing power at everyone’s finger-tips has increased dramatically, giving anyone the power to reach an enormous audience. Secondly, but not unrelated to this, the diversity of media has grown exponentially. Thirdly, trust in the media has fallen to an all-time low.
The result of this is a re-balancing of the influences that drive us, particularly when it comes to purchasing. The chart below shows the UK slice of some research we did with Salesforce Commerce Cloud for the futurereadyretail.com programme.
The exact question asked was: “Which 3 of the following have the strongest influence on which items you end up buying?” The score is a percentage of respondents giving that answer.
If you aggregate the columns for friends, family and peer reviews, what you can see is that peer connections are far and away the most powerful influence on buying decisions — way more than traditional media, television, or celebrities — some of the most commonly targeted forms of influence.
Influence is messy
The reality is that the process influence never looked like that neat, linear picture I had in my head as an engineering-minded 21-year-old. Influence is messy and complex. We absorb a huge range of influences and assign them different weights depending on the time, context and decision at hand. But what is clear is that now, more than ever, it is the people around us — physically and digitally — who are the primary arbiters of influence.
There is no better interface for a light bulb than a light switch.
This is not an absolute rule. In some contexts, for some people, a sensor response, a voice command, two claps, or hell, even an app, might be better.
But right now, for the vast majority of people, in the vast majority of contexts, a light switch is unbeatable. It is simple and familiar and most of all, it works. It doesn’t fail when AWS goes down. It doesn’t take five seconds to respond.
If a connected device can’t take those characteristics as a base line, conform to them within a reasonable margin, and improve on them with new features, then you have to ask yourself: does this object have a place in my home?
An increasingly analogue, digital world
It is spectacularly easy to make digital objects these days. Physical devices with internet connections are now a primary school project, with costs measured in the low pounds. Entirely virtual objects can now also be created with a primary school skills and at a cost measured in the pence.
Beyond the primary school, the state of the art is digital objects with analogue interfaces. How else to describe virtual, augmented or mixed reality? These are all interfaces to our digital systems designed to mimic physical interfaces. Physical interfaces that are intuitive to us thanks to millions of years of evolution.
Given this trend, to wrap the digital in the physical, why do we persist in wrapping connected physical devices with digital interfaces?
Analogue outside, digital inside
I’m rebuilding my home automation system at the moment, though since this seems to be a constant state of affairs, it might be more accurate to say it is undergoing continuous development. One of the design principles for this iteration is that every digital action must be clothed in an analogue interface that conforms as far as possible to the standards of the physical item it replaces.
This starts with the light switches.
If I get it right, they will look, and function just as they did before. But with the added benefit that they can — if desired — be remotely controlled and that the system will know their state.
But unless you know this, it will just be a plain old light switch. Because right now, there’s no better way to turn a light bulb on or off.
People often ask me how I keep up with everything. There’s two answers to that.
When you do research on such a broad range of topics, you gather a lot of context along the way. That helps you to get your head around other stuff, or at least makes you sound passably knowledgeable about a lot of things.
Shelagh Fogarty once described me as ‘a man who knows a lot about a lot’. ‘A lot about a little, and a little about a lot’, might be more accurate.
The second answer is that, as a rule, I listen when I walk and write when I sit. To my shame this largely excludes books from my intake. Instead, I consume a huge amount of material through podcasts. This lets me get the sense of the arguments in the big books of the day — frequently from talks give by the authors themselves.
I always intend to buy the books as well, or listen all the way through on Audible, but often it doesn’t quite happen.
Walking through London to a meeting this week, I was listening to a podcast from the RSA, a talk given by one of the partners at IDEO, Sue Siddall. It was on the subject of ‘design thinking’, a subject of great interest to me right now as I am redesigning some of the Applied Futurist’s Toolkit in advance of the next Futurism for Business course at the University of Salford.
At the end of the talk, as usual with the RSA’s excellent events series, the host invited questions. The first voice was very familiar to me. Even though he didn’t give his name I knew straight away it was my friend, the designer Johnny Grey. He asked what Sue had meant when she talked about ‘human-centred design’ — not because he was unfamiliar with the term, he explained, but because of a sense of caution about its use.
The answer revolved around addressing not just the needs and challenges facing the end customer but the needs of those people delivering the service as well.
This got me thinking.
When I first designed the Intersections foresight tool, it was to fulfil a need that I had. I wanted to structure my investigations into the near future of the different markets I was being asked to address.
The Five Vectors of Change had already emerged from the projects I was working on: five consistent trends that seemed to be affecting every sector, whether public or private, local, national or international. What I needed was a way to connect these trends to the realities of a specific sector I was addressing.
I realised looking back at the projects I’d worked on that the places where the incoming five trends caused the most dramatic change, were where there was already pressure:
If there is stress on your margins then greater diversity in the supply chain can dramatically improve the situation.
If your customer service is poor, then rising consumer expectations of performance are going to be more problematic for you than others.
If you are a deeply vertically-integrated business, then you might struggle to adapt to an increasingly networked economy.
These are Intersections, the points at which incoming trends collide with existing Pressure Points.
The view from your window
Back when I was in marketing, our new business pitches always used to include a section called ‘The View from Your Window’. It was a few paragraphs that told the client that we understood their business and their market. When it was a big pitch we used to interview members of staff in the business to get this insight.
I realised I needed a similar process.
Over time, I’ve refined a set of questions that can be re-used across industries to understand the Pressure Points that companies are facing. It’s amazing how often issues that are widely recognised in the lower ranks can shock management. Organisations are often a lot more opaque than we think.
Pressure Points are human
I’ve always talked about my toolkit as being about structure, not people. I’ve left the more human elements of strategy and change to specialists in that area. I’m an engineer by training and I have a strong belief that there are structural design solutions to a lot of the problems that my clients — whether companies or industries — are facing.
What I realised from Johnny’s question and Sue’s answer is that actually I have been addressing a human component all along.
The questions that I ask people to find the Pressure Points, are about their feelings: what frustrates them, how they rate their own performance and that of the people around them. This has proven to be a very effective way to find problems in the core of a business, but it also speaks to their more human needs. To the changes that will improve their experience.
Now when people ask where the human element comes into my views on the future, I can give a much clearer answer.
The needs of the user
There’s a second constituency that Sue Siddall mentioned that I haven’t addressed, and that’s the needs of the user. The people actually applying my toolkit for themselves, as consultants or leaders in their own business.
One of the most valuable pieces of feedback from the first course at Salford was that people wanted the tools to be more usable on a day-to-day basis, not just for projects. They also wanted them to be simpler: I’m learning you can almost never make things too simple when it comes to designing tools.
For the next course I’m taking the five or six steps in each of the two tools taught on the course, and making each one into a ‘micro-tool’ in its own right. For example, one little tool can be used to prioritise the Intersections that you focus on, or it can be used as a format for a to-do list to prioritise your work. One that can be used to understand future impact, can also help you to prepare for a meeting with a new constituency — perhaps a client or a different function within your business.
Strategy and storytelling
The most human development of all to the toolkit over the last few months has been to the way that I communicate what it is. With due thanks to Phil Lewis, Applied Futurism is about strategy and storytelling.
How do you set strategy in an increasingly fast-moving world? How do you communicate your vision for the future to all the audiences that matter? How do you build an organisation that is truly future-ready?
These are the questions that Applied Futurism seeks to answer.
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Have you heard of transactional memory? It’s the outsourcing of memory to other people around us. You don’t remember your nephew’s birthday because you know your other half will. You don’t need to remember to get the car MOT’d because you know your other half will. By outsourcing this way we can store much more than we can fit in our own heads.
Human beings have always been looking for ways to be more than our own biology allows. We’re a race of toolmakers, determined to turn every material we can find to our advantage. Whether it’s a stone axe or a smartphone, we’re keen to augment ourselves to be more than we could otherwise be. Do more than we could otherwise do.
This deep and ingrained comfort with transactional memory, and our own desire to augment ourselves, is why I think we will so happily accept AI extensions of our own selves. A transactional relationship with software agents that extend our memories, our processing power, and give us the ability to do what every busy person has always wanted: to be in two places at once.
Hold that thought.
For the time being, the biggest battleground in digital marketing is still search. What this means is people spending billions of pounds and using all sorts of sneaky means to ensure that when you type the relevant words into Google or Bing, theirs is the first brand that you see.
You may not think it, but Google and Bing are your friends here. Every day its engineers go to bat to make sure that what you see when you search is not what someone else wants you to see, but objectively the most relevant answer to your question.
On the other side though, every day, every brand’s agency is working to do the opposite. To ensure that whether you’re searching for car insurance or cat food, it’s their clients who appear right at the top of those search results.
Two sides locked in a constant battle.
Hold that thought.
Tell me: do you enjoy buying toilet paper? Really? Or tinned tomatoes? Or washing powder? All those things that make up a good chunk of your weekly shop. Things you really need, but honestly, do you really want? Do you lust after them? Are you fulfilled by finding that perfect pack of triple-ply?
What if you could have a transactional relationship with an artificial intelligence who ordered those things for you. Ensured that you never had to think about them again. They would always just be there. You would never run out of washing up liquid, or dog food, or nappies again. It has access to your credit card and an online store, and limited scope for discretionary spending against a list of key items.
Outsourcing plus tools.
Now imagine the battle that is going on behind the scenes. Today that battle is between marketing agencies and search engines. But what happens when you stop searching? When you allow an AI to do the searching for you? Imagine how much effort will go into influencing your AI to buy a particular brand. This is the next big battleground and there won’t be a single human on the front lines.
Personalised marketing engines will suck in huge amounts of data about you and your peers and serve endless offers at your AI, only for it to bat them back. 99% of them will be rejected. But every now and again, based on appealing to the criteria that your AI has been given, or learned, it will change your brand of toilet paper, cat food, shower gel, or, yes, cereal.
What might that data be? Let me give you some ideas.
For a start, we will all be wearing cameras on our heads, all the time. Your AI won’t just know what brands you buy, how much you use, and when you need more, it will know what your friends and family buy and use. People like you bought things like this? Imagine Amazon’s recommendation engine turned on its head and brought into the physical world.
Your smart glasses won’t just know what you ate elsewhere, they will know how much you enjoyed it. Heart rate monitors, breathing, galvanic skin response, even an EEG reading brain activity. All this is today’s technology the output of which can already be used to reliably interpret emotion by an AI. Sampled a different cereal elsewhere and liked it? You may find a box in your next order.
But only if it’s good for you. Your personal AI will know a lot about your health. We already pump data into systems like MyFitnessPal, recording our diets and streaming data from our Fitbits and connected scales. A few years ago I made a programme called ‘In the future, toilets will be our doctors’. I wasn’t kidding. You can learn a lot about what’s going on inside you by looking at what is coming out of you.
We are already on this journey. We have outsourced our memories to digital calendars. Our sense of direction to GPS.
We are increasingly comfortable with subscription-based shopping models for everything from films to food, razors to pants.
The future of retail — at least large chunks of FMCG — is automated. Decades of marketing to humans will increasingly be turned on the AIs that assist us, trying to game them into switching our brands. This is the new brand battleground.
Mum hasn’t gone to Iceland. Nor has dad. And they haven’t sent the kids. The AI has done the shopping and it has bought you exactly what you need.
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