Supply chains and the hospitality market are decoupling, signalling a resurgence of mindful consumption in a high street near you. New demand will bring back variety to the domestic landscape.
Twelve weeks ago you:
- probably had to explain what a Zoom meeting was;
- couldn’t have imagined having your kids at home for two terms;
- would have struggled to describe a future where online learning was not only possible, but could be transformative.
Twelve weeks ago, fashion houses were expecting their summer collections. Twelve weeks later, their garments are sitting on workshop floors unfinished. Fashion isn’t selling, but bandanas are. Face coverings are a new market.…and pizza is winning in the takeaway stakes. It doesn’t spill and can be reheated.
Music has gone off-piste
Restaurants used to play music that didn’t offend. While restaurants aren’t a thing, music has been rediscovered and new consumers are exploring genres their peer group would have sniffed at before. I’m listening to K.Flay and my teenager has discovered The Cars. Good news for artists and consumers.
Old is good
Old has been embraced. Clothes are being repurposed. Furniture is being renovated and upcycled. Houses aren’t selling, so remodelling is booming, and builders and tradespeople are booked out for years.
Going to work will return to being normal for many people. For others, it won’t be the daily necessity it once was. Both employers and employees are finding new ways.
But here’s the really interesting bit: there is a decoupling in the supply chain and hospitality market that signals a resurgence of mindful consumption in a high street near you.
When COVID-19 hit, supply chains failed. Shipments from overseas dried up and stocks of many consumer products vanished. The effect wasn’t long-lasting, but it has brought into focus the true value of having a long supply chain. Manufacturing scrambled to ‘on-shore’ supply and, now those sources are turned on, there’s a pragmatism about whether they can remain part of the mix. Local supply sources have been winning during lockdown and it’s likely that a meaningful amount of business will remain with domestic suppliers now.
This new demand will not only invigorate production skills wherever you live, but it will also bring back variety to the domestic shopping landscape.
While good news stories about pivots to home delivery and take-away services abound, there are two sides to this story. Voted the ‘best’ restaurant in the world, Noma in Copenhagen re-opened as a burger takeaway. This is a trend you can see up and down the high street – but generally not from the homogenous chains. The indies are fighting back and grabbing market share while the competition is furloughed.
There are many outlets in the hospitality sector, though, that simply won’t re-open. Some say one in three won’t. It’s our prediction that properties will be available at great rents for new tenants on a shorter-term basis. At room44 we’ve predicted the resurgence of the high street several times, albeit not anticipating something so radical as a pandemic. Now it has happened, the trend seems set.
The issue of variety comes up here too. With less ‘sameness’ we will see more local bias in the ingredients used to deliver cuisine from every region – and we can’t wait.
This could be good news for food distributors too. Some restaurants have sold over 28,000 meals in a four-week period, where they previously wouldn’t have seen that many covers in a year. Because diners are buying take-aways and not sitting in the room, the cash value of the transactions is down by 85%, but the volume has boomed.
If entrepreneurs want to enter the market without the fat overheads that corporate operations build over time, now is the perfect time to start looking for premises.
Future thinking. Future proofing. Future opportunity. It’s what we do.
Inevitably, the events of the last three months have disrupted business and personal planning. Unprecedented circumstances have that effect.
Just before the world went into COVID-19-enforced lockdown, the UK was fixated on Brexit and guess what? It hasn’t gone away.
Other major global challenges (climate change, deforestation, plastic waste, air pollution (it’s returning)) are still out there too, but let’s, just for the sake of planning our short-term futures, have another look at Brexit.
Debt, grants and furlough
Since March, the UK has generated vast amounts of debt. Businesses are drawing on government support in the form of grants, loans and/or furlough funding, and also delaying paying rent and VAT. Hold that thought.
In June, the UK enters a critical period of negotiation over its future relationship with the EU.
If, by the end of June, we don’t reach an accord over matters such as fishing and an agreement over trade borders with Ireland, there may not be an agricultural policy deal, or any deal. Despite the UK government talking up its prospects of success, EU member states aren’t likely to agree a set of terms for the UK that are better than they can get themselves. This is part of the problem.
With no outline deal in place, we are heading for a no-deal exit that will come into effect on 1st January 2021: about the time when personal tax bills will be imminent; three months before business rents could be a full year overdue; and a couple of months before delayed VAT payments must be settled. That’s a lot of cash due to flow from businesses into the Government’s coffers within the space of a few weeks.
To an innovation agency that tells business to plan for the long-term, it’s clear that planning for even the next nine months, without the benefit of a certain trading relationship with our closest overseas markets and supply chains, will be problematic.
The signs are that 2021 also has the potential for new lockdowns, if COVID mutates into COVID-21. Restricted access to the workplace through enforced social distancing, app-led movement controls, face-recognition surveillance and zero return from banked cash will all still feature large.
We’re anticipating at least another year of disruption, uncertainty and risk of infection, and so, at room44, we’ll maintain a pragmatic approach of seeking new opportunities through the application of consumer-facing innovative practices.
Normal has moved on
If your business had a problem maintaining its supply chain when COVID first hit, or if you had to shut down your branch of a national chain, you probably understand the trust that previously brought customers to your door has now been diluted. Those small operators you didn’t worry much about before have been working away to fill the vacuum while you were away, and they’ve made gains in market share. It may only be local in your eyes, but it’s enough to keep them going.
Local is the new trusted brand equity
Lots of companies have pivoted into service models where their product can be delivered to consumers through new distribution methods. Even more, though, are waiting for the ‘new normal’ to float back into view, hoping that it looks a lot like the ‘old normal’.
As disrupted businesses cut back or close, there are people new to the jobs market and they too are trying to generate income by starting up a micro-business locally. Local is becoming the new trusted brand equity, further disrupting established business in a virtuous circle
Normal has moved on. Don’t wait for a return to business as it was – start working on a new plan. Tomorrow has always been different from today. Your tomorrow may be unrecognisable.
Future thinking. Future proofing. It’s what we do.
In the good old days, we could take a view of markets and see the probable changes that were readable from viewable trends. That was when the pace of change was fast – now things have stepped up to a whole new level.
Long-term thinking. Future thinking. Future-proofing.
When the long term is the hardest thing to focus on, that’s when it’s most important to retain that focus.
We’ve written a number of blogs recently predicting changes of fortune in various sectors: we’ve suggested the demise of the mobile phone; the accelerating rate of switch to electric vehicles; Apple losing its innovative edge; veganism really taking off; and the impulse and confectionery sectors taking a hit.
These are extrapolations from readable trends.
Wearable tech is becoming invisible and the internet of things has developed into the internet of everything, so the infrastructure is growing that will integrate the functionality of mobile phones into the fabric of your lives.
Governments have issued more aggressive net zero targets and shortened timescales for EVs to replace fossil-fuelled cars. It was 2040 last year. Now it’s 2032.
As for the impulse sector, we believe it’s heading for a major restructuring and probable value reduction to a negative trajectory that’s similar to the growth of EVs.
A whole new level.
And all this was when the pace of change was fast. Now things have stepped up to a whole new level.
- The UK is out of Europe.
- There are interesting developments in the US Presidential race.
- Country politics are not what they were, even a few weeks ago.
- Plastic pollution is off the news agenda because COVID19 is all anyone is talking about.
This week saw the Dow Jones tumble 7% in just four minutes. Italy’s market dropped by 11% and Germany and the UK both dropped 8% in a day. Why? Because the world is facing a pandemic and oil-producing countries can’t agree whether demand will drop during the lifecycle of the Coronavirus.
Mega-trends and toilet rolls.
Countries have ring-fenced cities. Mass gatherings are being restricted in some places, while mass transit systems function as normal in others. Government departments are closing and toilet rolls are running out.
Let’s not forget the major environmental disasters, such as drought and wildfires, that are still going on, while uncontrolled migration and its inherent human tragedies continue.
The effect of mega trends used to be something that was a step removed from the fortunes of individual companies, but things have changed.
Even as major events have turned some markets upside down, others have experienced an uplift. Hand sanitiser brands are literally rubbing their hands in glee while consumers hoard stock, and pollution levels drop as commuters stop travelling.
So, is change a real thing? Of course.
When the long term is the hardest thing to focus on, that’s when it’s most important to retain that focus.
Long-term thinking. Future thinking. Future-proofing. It’s what we do.
If this kind of thinking can be helpful to you, let’s talk. Long-term thinking. Future proofing. It’s what we do.
Here’s my diary. Book some time.
but it depends on how you see it.
Perspective comes in many shapes and sizes.
Here’s an example:
‘“…I’m overdue for a Donald.”
“Trump,” she explained.
Thank God for that, I thought she meant Duck.’*
Two people, two interpretations, one misunderstanding.
This is what happens when you’re made aware of a trend and you only see it from your perspective.
Here’s another example:
At the Consumer Electronics Show (#CES) this year, digital flexible screens were causing a buzz in many different product areas. I heard an exhibition stand manufacturer comment that these could offer some interesting visitor display experiences.
Well – yes, that’s true. But this is reducing the extent of his imagination to the work he does today, which is commercially limiting and demonstrates a very silo-based attitude. And let’s face it, armed with news of this emerging technology at an early stage, to restrict his product development thinking to a B2B market is to ignore the true potential the flexible screen has to offer.
You too have this choice. You can see an emerging trend as an opportunity to exploit, or as a reason to do nothing and wait.
Time plays a part
In 2017, I wrote that mobile phones would slide out of use within five years. The people I know who make apps for mobiles disagreed.
This year, at #CES, the trend is more obvious. Developments in haptics and screen texture sensations mean we’ll soon be sending texts without needing to look at a screen. In fact, this has been on the cards for some time, but it’s now winning awards as a product and not just as an idea.
In 2017, this information didn’t offer much of an opportunity to app developers, but what if they’d started building a consumer value proposition then?
Seeing the opportunity
To add to the demise of the smart phone, #CES also showcases smart glasses. Cloud-connectivity and heads-up displays combine with voice activation to seriously reduce our reliance on mobile phones.
Since 2014, when Google launched its first glasses, attitudes have changed. VR is now a part of everyday life for many people, and Google just released an Enterprise version of the Glass product, moving it from its R&D stream into its product portfolio. This is more than a trend – it’s a nailed-on certainty that the technology is coming. Carrying a phone will seem archaic when you can wear the functionality.
And don’t think this is limited to your phone…
The way you choose to see these concepts is entirely down to your attitude to your business. If you’re happy to manage innovation as it is and without considering a different future, you can do so.
If you see emerging trends as an opportunity to develop new products and future-proof the business, that’s your choice too. All it takes is your willingness to embrace the potential that new ideas may deliver, and then rank those ideas on a scale of probability.
We see the developments that will lead to less reliance on mobile phones as transformational. If you are in the mobile phone market, the camera business, the telematics services sector – in fact, any market where you deploy lenses and screens today, we think it’s time to take note.
Duck or Trump? It’s your choice.
Future-proofing. Future-thinking. It’s what we do.
*Taken from London Rules by Mike Herron
When a business gets to a certain size, the next step is, usually, to grow it. This is a critical point in a company’s lifecycle when the real question is ‘do we grow or do we scale?’
Founders go through this pain when they find themselves struggling to keep up with demand and paperwork.
The cycle is usually
- Start a business with a purpose – to meet a need
- Get busy
- Employ help
- Manage the help
- Realise you are managing and not doing what you started out to do yourself
Problem: scaling is not the same as growing
There is a point in every business’s lifecycle when ambition overrides purpose:
- Why did you start doing this? Because we saw a need in other people’s lives.
- How can you grow your client base? Go digital.
- Why are you going digital? To reach more people.
See the shift? Purpose has been pushed aside and scaling back to profit has become the incentive.
Take a training company, for example. Training of any sort is delivered best by someone who has experienced a process, seen the transformation for themselves, learnt how to be brilliant at delivering the method and who inspires trust, enthusiasm and purpose. And changes the way you work for the better.
A training company, however, is only able to reach as many people as they can stand in front of. So, they bring in more trainers who are also brilliant and do a great job.
Next step is that overheads grow and the training company needs more work, so they invest in a portal. They go digital.
The digital version of their training product is interactive, responsive, easy to access, can be delivered while you’re in the bath and doesn’t encroach on your life too much.
This is scaling. The only thing this grows is the training company’s top line. It certainly isn’t going to turn the brilliance the training company once delivered into ‘change’ in your daily life.
Scaling ≠ growing
The digital system may be the best there can be today but the brilliance has gone from the process. Digital may deliver a process efficiently but sometimes it genuinely gets in the way of delivering what a client needs.
Digital isn’t clever enough, yet, to listen to the room, turn the problems that get discussed into nuanced case studies and help a specific client to improve their business.
It may do this in time. It doesn’t do it now.
The answer, we believe, is to stay true to ourselves and only work with clients face-to-face or one-to-one.
The programmes room44 delivers are only available from a core team or by email with the same people.
The objective we aim at is to create a sense of purpose in you and provide you with the tools you need to change your company’s prospects.
We strive to create an environment in which change can occur and we prepare you to be the nucleator.
Our website says “Product innovation strategies for revenue and growth. It doesn’t say ’strategies to help you scale and distance yourself from your client need’.
Future thinking. Future proofing. It’s what we do.
Here’s one way we do it. Click to download the 10, 20-30 programme outline, new for 2020.
There’s a farm in the UK that grows raspberries. It has always had pickers to come in and harvest the crops at the right time, but now it’s working with an automated picker and the results are looking good.
The robot does the work of a person, and does it for 24 hours a day and for as many days as the need exists. Then it stops and waits.
The robot doesn’t eat anything or need space to move around in between jobs or heat or food. It just waits and, when there’s a crop, it’s ready to go again.
Other farms like this idea too and are watching closely.
We know of an autonomous tractor designed to do the job of conventional tractors in orchards – crowded, obstacle-strewn places – and it’s working out well. The tractor runs out to collect, tow, carry and mow, and then returns itself to a charging point to be refuelled and re-instructed.
When it’s not working, it waits.
Farmers are facing a problem with the UK workforce. People prefer, given the choice, not to work on their knees in fields. So, people with fewer choices do those jobs and, at the moment, many of those people have come to the UK because work is easier to find than in their home country. And even the migrant population prefers to work in towns where other facilities are easier to find and enjoy.
But Brexit has slowed immigration of the people who are prepared to do the jobs, for less money, that the native population doesn’t want, so farmers are looking at other solutions.
Automation has taken an autonomous step forward.
The result may be a reduction in openings for migrant workers and an increase in jobs skilled in the art of managing robots. The landscape is clearly shifting and autonomy is growing more acceptable, more competent and more efficient.
Picking up a trend
I’ve written many times that the concepts we imagine will enter our markets in about five years, most often gain market share inside eighteen months.
January 2017, I wrote a blog called Augment
yourself that opened
with the line, “We’re going to let you in on a
secret: Artificial Intelligence’s dirty little secret.
AI hasn’t got legs and it won’t march over the hill and steal your job.“
Eighteen months on, the picture shifted to make automated, commercial fruit picking possible today. AI may still be a way off, but autonomous machines, that can do the same things people can, are here. If you doubt it, take a look at the reporting of robots in distribution warehouses like Amazon and Ocado, where most of the work is already automated.
So, whether you like it or not, food picked from a tree, a bush, or in a warehouse is likely to have had some non-human intervention before it reaches you.
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Future thinking. Future-proofing. It’s what we do.
My last dog made it to fifteen. Coincidentally, this is about the lifecycle of a successful company today. Sure, there are exceptions, but fifteen years is the average brand lifecycle now according to people like PWC.
During the life of that dog, who was called Ice, I had two children, moved house four times and changed jobs five times. When Ice was a puppy, I had no plans for any of that to happen.
I’ve got a new dog. Well, actually she’s five now, and she’s called Soda. In the last five years we haven’t moved house, I have started five businesses for other people, and am five years into running my consultancy.
When Soda was a puppy, I had an idea I wanted to start companies and knew I’d be my own boss. Soda is a reminder to me that, as she gets older, so does everything else – including my brand. By the time she’s fifteen and I’m another ten years down the road, everything I know about the world will be different.
We regularly say that the ideas you expect to be in the market in five years will have taken market share in eighteen months. Things change much faster than they used to.
At the current rate of creation, all data (every byte of data ever created) is doubled every two years. By 2020, data creation will be doubled every year.
Without a regular look into emerging trends, you simply can’t plan for a future market.
I’m a great believer in ‘how you do anything is how you do everything’.
If you aren’t looking into the future and planning your place in markets as they develop, you may as well wrap it up and sell out now to give someone else a chance of doing better.
This is the reality of business today.
If this kind of thinking can be helpful to you, let’s talk. Here’s my diary.
Future thinking. Future-proofing. It’s what we do.