HOW WE PLAY

Maysoon El-Ahmad, April 2020

WHAT’S GOING ON

They say it takes 21 days to create a new habit.

With many of us hunkering down in our homes over the last 4-6 weeks, our reliance on digital services and products has taken on a whole new level in meeting and delivering to our ‘recreational’ needs, often what has been described as the ‘non-essential’ services

From online shopping, streaming entertainment, meal delivery, virtual tours to fitness apps, both businesses and consumers have adapted in ways that may prove to reshape consumer behaviour for years to come.

One of the biggest changes has been in online shopping. According to Dr Andrew Charlton, Director of advisory services AlphaBeta, ‘Australia has been a bit of a laggard in online shopping’.

The COVID-19 crisis has however forced thousands to jump online for the first time, which may see many never go back as new habits start to form under lockdown measures.   

Below is a snapshot of how our behaviours have changed, with some likely to endure as lockdown measures start to ease:

• Some businesses are seeing 300% to 400% growth for some categories in their online sales channels
• Spending on food delivery services up 192% jump last week vs. pre-pandemic weeks
• Spending on subscription TV up 11% last week vs. pre-pandemic weeks
• Spending on streamed music, video games and apps up 53% vs. pre-pandemic weeks

With gyms and fitness studios closed, the crisis has only served to accelerate the digital fitness industry

• Chris Hemsworth’s fitness and meal planning app Centr saw subscriptions surge over 300% in the last few weeks and is now the second-most-downloaded health and fitness app behind the Australian government’s official coronavirus app (offering six free weeks has helped drive this growth)
• MIRROR, an interactive at-home fitness system has seen sales more than double since the start of the pandemic
• Obé, an American fitness streaming service that offers live workouts and more than 4,000 classes saw its membership grow 10 times in the first few weeks of the crisis. It recently rolled out workouts for kids that parents can stream from their accounts to keep children active during school closures
• Other yoga and fitness studios such as F45 have taken their business online using Zoom to keep their clientele engaged, while others have jumped onto Instagram Live to run classes

GROWTH MANTRA’S PREDICTION

As we move into the “opening up” phase of the pandemic, parts of our lives will return to a ‘semi-normal’, while others will see new norms and trends emerge.

The pandemic has clearly shown us that having a digital presence has never been so important. Whether it be apps, websites or partnerships with other digital and tech companies, consumers will now expect it more than ever before.  

We entered the pandemic with the ‘experience economy’ most affected by lockdown measures, we expect the customer experience agenda to become even more important as we come out on the other side

HOW WE LIVE

Jo Adams and Maysoon El-Ahmad, April 2020

WHAT’S GOING ON

Many of us have become intimate with our living spaces in ways we never dreamt of or experienced before. This has highlighted what we, as humans, need of our living spaces as we embrace new ways of living in a new era of lockdowns measures.

The Blurred Home

• Working from home has highlighted deficiencies and changing needs in the home environment, in particular:
  • How space is utilised – the need for at least a functional desk and monitor, ideally not ‘the dining room table’, became evident as some Officeworks employees described ‘Computer monitors’ as their ‘toilet paper’ while online retailer Harris Technology saw home office setups more than double compared to the same time last year.
  • The need for multiple and separate spaces – for families or situations with more than one WFH adult, a desire for a workspace that is cordoned off from others, that is designated and private and quiet, the reverse of open plan living.
  • Study nooks don’t cut it, architects are predicting a rise in ‘the spare room being re-purposed’ or multi-story dwellings/lofts which will allow for this
  • Mandatory high-speed Internet, an obvious one but expectations for ‘always fast, always-on’ to rise. In Japan, slow home Internet speeds have been a major impediment to employees’ ability to work from home. There has also been significant press coverage devoted to ‘Australia’s poor Internet speeds relative to the rest of the world’.

Connection to ‘the outside’

• Being confined has reminded people that access to fresh air, outside space and green space is necessary to not only physical health, but mental wellbeing
  • Prior to the pandemic balconies were seen as nice to have while the Australian backyard was put to its deathbed.
  • The pandemic is already bringing these back to the conversation as many of us have been confined to small spaces, particularly with the recent growth in apartment living.
  • Gardening and our appreciation for suburban parks and greenery have already started to have an impact as we look to escape from cabin fever. This is already starting to spark conversations about the future of urban planning particularly if our central business districts (CBDs) start to take on a new meaning as remote work becomes a fixed feature of our lives.

Longing for the ‘third space’

• There has been a lot of commentary that as a society we are becoming more individualistic and less community-minded
  • Whilst this trend might prevail, counter-intuitively the pandemic has reaffirmed we all have a universal need for connection with others however that is expressed i.e. our need to socialise, with others, in public spaces is not non-essential or discretionary – it is true and real
  • Post-lockdown the so-called ‘third space’ of cafes, restaurants and bars will see a resurgence, even if the experience will be different, dictated by the need to ‘social distance’
    • In a recent study, 44% of Australians indicated they would go to restaurants and cafes as their first discretionary spend.

GROWTH MANTRA’S PREDICTION

We believe that while some things will revert t, there is no doubt the pandemic will see changes in habits, values, beliefs and behaviours that will endure.

Just as the 9/11 terrorist attacks saw profound impacts on security and heightened our sense of vulnerability, we expect COVID-19 to create its own set of footprints.

One of the biggest will be a reverse trend from the global to the local as we look to support our local economy. We are already starting to have conversations about the need for self-sufficiency and the risks of global dependence. We believe the mantra for this new world will be building ‘self-sufficiency and resilience across the personal (growing our own herbs), community (e.g. community hubs, parks, and green space) and the nation (trade and production). This will likely be the catalyst to spark the next round of large-scale change.

Elements of the ‘Blurred Home’ will endure, which is likely to see the rise in innovations in new products and services as well as new ways to engage with customers.

With borders likely to be closed in the short-medium term, international and business travel will take a backseat only to be taken over by a renewed interest in local tourism. Once borders open up, the ‘Sustainable tourism’ trend we discussed in our July edition will have accelerated as social distancing measures force governments around the world to limit the number of visitors that enter their countries. With recent images of clear skies, wild animals taking over empty cities (i.e. peacocks roaming the streets of Dubai and herds of mountain goats taking the streets of Wales), this may turn many of us into more ‘responsible’ tourists causing us to rethink how and where we travel.

Some changes to the way we live will be immediate, others, such as re-imagining building design and community living, will unfold in the medium-longer term.

Whatever the change is, we expect to see the next round of start-ups beyond the Uber’s and Airbnb’s emerge as they look to capitalize on these trends through new business model innovations.

HOW WE WORK

Maysoon El-Ahmad, April 2020

WHAT’S GOING ON

With social distancing measures now in place, the way we work has undergone a massive transformation in just over a month. The most notable has impacted workers who have shifted from working in an office environment to working from home.

While we don’t know the long-term impact of COVID-19, we are already starting to see glimpses of what a post lockdown world of work looks like while the pandemic continues to linger on.

Not the death of the office, but remote work is becoming a permanent feature

• Remote work on a mass scale has been imposed on us by Covid-19. The fears many have had of working away from the office have been disproven. We now have a case that remote working can and does work.
• This is supported by some of our most senior business leaders such as CBA’s CEO Matt Comyn who recently stated on ABCs Q&A panel, “we’ve got 23,000 people, at the Commonwealth Bank, working from home at the moment.. we wouldn’t have believed that we could scale to that level, it has been amazing”.
• Optus have also just announced that work-at-home measures will become a permanent feature of Australia-based call centre workers

Welcome to the socially distant workplace

As governments look to the road ahead, businesses are getting ready to come out of lockdown

WeWork have proposed changes to its shared workspaces ahead of lockdown measures being lifted

• Creating ‘one way’ primary circulation paths to avoid bottlenecks in hallways
• Providing ‘buffer seating’ in private offices to allow for adequate distance
• Adjusting common area layouts and supplementing with additional large suites
• Introducing new capacity loads in lounge areas and meeting rooms
• Adding sanitization stations and wipe dispensers in common spaces

Netherlands company Cushman & Wakefield have developed a new concept called the Six Feet Office

• Using arrows on the floor, employees walk only in clockwise lanes around the office
• Beacons will be installed to track the movements of employees throughout the office via their phones. Data will be used to help assess the efficacy of its design e.g. are people getting too close? They may be used to audibly alert people when they break the invisible six-foot barrier
• Employees use paper desk placemats they throw away at the end of the day

In China,

• Many offices are running in rotational shifts to keep the number of people in an office at any one time to a minimum
• Factory workers at Ford are testing out wristbands that buzz when people come within 6 feet of each other

The digital workplace accelerates

• COVID-19 has accelerated the move towards a digital workplace, forcing some workplaces to condense their long-term digital transformation strategies down to just weeks.
• This has seen workplaces across the board from education to healthcare become web conferencing experts overnight. From students, teachers, nurses to knowledge workers, Zoom has become a household name overnight.

GROWTH MANTRA’S PREDICTION

• As we embrace and adapt to this new world, the way we work will continue to evolve and append itself.  The pandemic will prove to be a challenge to ‘placed-based’ working which we predict will result in new social norms emerging in the coming months.
  • The pendulum swings away from open-plan offices: While open-plan offices have received a share of backlash in recent years (e.g. noisy, unproductive) COVID-19 will further accelerate this resistance. With a focus on hygiene, we expect to see workplaces move towards smaller, confined ‘cubicle’ based workspaces of the previous decades.
  • The rise of smart office buildings: the use of smart sensors and data will accelerate. Smart technology will be used to help access, alert and predict when buildings become over-crowded, or social distancing measures breached
  • Move towards staged and blended workplaces: While office buildings won’t become redundant, the way we use them will change. Workers will come into buildings in waves and phases to prevent over-crowding while certain jobs will remain place-based due to the nature of the role they play.
  • The nine to five working day could be a thing of the past: With governments implementing social distancing measures to avoid rush hour crowds along with remote work becoming the new way of work, this could see the end of set working hours towards a more fragmented workday.
  • Heightened focus on employee wellbeing: hygiene and employee digital and mental health will accelerate as people over profits takes priority as we continue to live in the shadows of COVID-19
  • The need for creative thinking and collaboration: while new technology tools has brought down many barriers to working remotely, one thing it doesn’t replace is the creative energy generated when people physically collaborate on solving problems together.  We believe the office will play a key role in being a facilitator in creating the right environment to spark the best ideas.

CHEERS! DRINKING BETTER, DRINKING LESS?

Philip Otley on Dec 12, 2019

So, is your Christmas going to be dry this year?

Recent research by a UK brewery showed that 30% of customers sitting in their pubs and bars were not drinking the usual…they were drinking low or no alcohol products. They reported that this trend has increased most with millennials, who as a generation are showing themselves to be more alcohol conscious.[1]

We’re seeing Sober Bars and Low Alcohol Pubs, a rise in personal alcohol consumption tracking technology and an increase in the share of lower or non-alcohol beverages globally. We’re even seeing the launch of sparkling water with wine antioxidants – yet no alcohol!

Will these trends be echoed in Australia? Volume growth in alcohol consumption has been low or flat for a number of years. Yet the value of alcohol consumed has increased in low single digits year on year…a clear move to more ‘premium’ consumption.

Looking to other markets often gives early indicators of what to expect in Australia. For now, we believe that Australia will follow the US market in rapidly growing a lower alcohol, lower calorie segment, despite stagnation in the other parts of the market.

Product innovation continues to drive the US market. “Hard Seltzers”, which we’d call spritzers or sparkling water based alcoholic beverages, have taken off sharply, initially by tapping into middle-aged, middle socio-economic segments who were seeking an alternative to high-calorie, high-alcohol beer and white/rosé wines. This has created a half-billion US dollar market from scratch in less than 5 years.

Research suggests that Australian consumers want more than ‘low calories’ though – we’re interested in ‘clean food’, and support a more mindful consumer movement than other international cohorts…so direct translation of US trends to Australia would be misleading.

Australian drinking occasions are changing too – ‘relaxing by myself’ now being our top alcohol occasion by volume. Though this doesn’t only mean getting quietly sozzled, alone, with a cask of Australia’s finest.

Other powerful trends are also coming into play in Australia, among them:

• Value seeking will be the new norm – Australia lags in 21^st place of 30 developed countries in real wage growth terms and consumer sentiment is not strongly supporting spending increases. So we’d better get the price point right as a starter

• Health & Wellbeing is not about just diet – it is about being “wholly well”, which covers a healthy diet and lifestyle, contributing to reduction of stress, increased mindfulness and overall physical and mental health

• Premiumisation – in an increasingly experience driven economy, people are seeking novel and unique experiences, which is driving the premiumisation of categories as consumers shift towards an attitude of ‘less but better’. This trend is also creating traction for niche and localised flavours (e.g. spirits made with locally foraged botanicals)

GROWTH MANTRA’S PREDICTIONS

Who will take advantage of these trends to establish their share of the Australian alcoholic consumption market? Whoever it is, they’ll have to get a few things right:

• Tapping the Health & Wellbeing trend with an emphasis on ‘pure’ in marketing messages and lower calories and carbs (vs. beer & wine)
  
  
• Being in the right time and the right place – designing around regulatory and distribution curiosities in Australia to ensure that price and distribution targets can be achieved
  
  
• Being Unisex, and managing to convert males to a non-traditional alcoholic beverage
  
  
• Breaking Conventions to develop strong word of mouth growth. “There ain’t no laws when drinking Claws” is a well-known youth catch cry of White Claw selzer consumption in the US. Priceless.

What will Australian drinkers’ catch cry be this Christmas? You can be pretty sure if won’t be “Make mine a Claytons”

Is now the right time for you to find advantage from our rapidly changing world? If so, let’s talk.

[1] Mintel British Lifestyles Report 2019

LOCATION, LOCATION, LOCATION.

Philip Otley: Senior Adviser at Growth Mantra
Mark Wynter: Advisor at Growth Mantra and the Founder of DeepConnect
Dec 04, 2019

Three famous words from Conrad Hilton, founder of the eponymous hotel group, about ensuring you’re in the optimal place to attract customers away from other lodgings. For business today, it’s still important to be in the right place for your customers, but there’s much more to it than that.

Location strategists across sectors have traditionally followed much the same path:

1. Collect details for as many customers (or patients, or students, etc) as possible
   
2. Find addresses for customers; place customers onto a map
   
3. Map competitor location(s) on the same map
   
4. Look for areas of greatest customer density, least well-served by us or competitors
   
5. Sometimes, use a variation of ‘gravity modelling’ to anticipate the number of customers (& spend) that we expect a new location to capture
   
6. Engage real estate specialists to find a suitable property for us within this geography
   
7. Realise, too late, that customers’ behaviours are complex
   
8. Scratch heads when we don’t get the market impact we’d hoped for, and lament the long-term lease obligation we’ve now incurred for our business.

SO WHERE TO NEXT?

There’s a much better way, making full use of data… and a healthy dose of creativity.

Retail, health, education are now 24/7 activities, and the customer is now in full control. The mobile / internet does a lot of what stores traditionally did, offering customers new experiences and greater levels of convenience from the palm of their hands.

Although the way we shop and interact with technology is different to how we did things 5-10 years ago, the store is making a comeback, evolving from merely a distribution outlet to a seamless and optimized experience and service channel…a place to go to accomplish several potentially different objectives.

Today it’s all about connecting with your customer. This means being in the right ‘place’ where your customers are to fulfil their needs, respecting the occasion your customer is experiencing.

A necessary occasion. A convenience occasion. An experience occasion. An impulse occasion. A panic buying occasion. We’re human…fickle, flexible, impatient…and therein lies the opportunity to get it right (or more right than our competitors).

CONSIDER A DIFFERENT WAY TO ANSWER “WHERE SHOULD I BE?”:

1. Gather data for as many of your customers as you can, and for the overall market you serve. Respect privacy laws, guidelines and perceptions in doing this
   
2. Overlay as many data sources as practicable on that market base – gender, age, socio-economic status, place of work, friend network, spend behaviour in other categories, location history, weather history, social ‘likes’, indeed anything that sharpens the picture of the complex technology and product interactions of individuals, and the contexts of their behaviours
   
3. Apply a branch of AI called Self Organizing Maps (SOM) to draw out distinctions in the data, and to allow the data to speak without distortions
   
4. Use geospatial properties of customers over time (& potentially Agent Based Modelling) to define where your best customers live, work & play, where they go, when, for what occasion…with whom…down which side of the street…using which device…in which ‘need state’…to accomplish which goals…
   
5. Use these contextual insights to design granular and more relevant experience journeys for your most valuable audiences, combining physical and digital elements around the occasions that matter to them
   
6. Track and monitor customer interactions and responses across your physical and digital properties to improve the quality, mix and timing of your engagement initiatives
   
7. Design geo-targeting and activity-based prompting into your new ‘omni-channel’ build
   
8. Finally, use emerging property datasets and AI-engines to find ‘soon to be available’ physical properties that best fulfil one or more critical roles in your customers’ priority occasions
   
9. Negotiate from a position of strength…declare victory…then move on to refine and evolve your ‘Geospatial Customer Engine’ at speed.

HOW IS IT ‘BETTER WITH DATA’?

The more you know about your customers before they walk into your store, the more you can do to attract them, do business with them and earn their loyalty.

Successful companies deliver signature experiences across occasions, in physical and digital forms, to the most valuable audiences. Getting to the customer at their moment of need, in the right place, can be more than luck. It can be design.

At Growth Mantra, we believe that many important problems can be better addressed with data, to generate genuinely better insight and action. Our “Better with Data” series provides thought-starters for senior decision makers.

Commercial Creativity…Better with Data

Travel getting smarter with new tech

Maysoon El-Ahmad on Mar 5, 2019

WHAT’S GOING ON

• Digital technology is creating a new era of travel, from how people book their trips, to where they stay, and how they experience it.
• Many innovations are coming to an airport nearest to you, here are just a few to give you a glimpse into your next holiday.
• Last week Manchester airport became the UK’s first 5G connected airport by Vodafone, with other travel locations set to follow in the coming weeks.
• Destygo, a French company has built a chatbot for airports that answers simple questions from passengers such as what gate a passenger’s flight is leaving from, and whether it’s delayed. The bot is currently being used by airports in Paris and Lyon.
• Dubai International airport has just announced it will soon introduce smart gates to detect traveller’s body temperature by scanning their thermal print. If the tests indicate an unwell passenger entering the country, the data will be shared with the Ministry of Health and Prevention so they can start taking care of the traveller immediately.
• Many airports, particularly in Asia, are deploying robots to improve passenger’s experience. Tokyo Airport uses friendly-looking robots to help with airport security, transportation, logistics and translations while international airports in Taiwan have robots that tell passengers their departure details and weather updates of their destinations by simply scanning boarding passes.
• And in our own home town, Brisbane and Melbourne’s airports are trialling new technology at security checks which will allow electronics and carry-on liquids to be kept in bags. This will help speed up and eliminate the hassle of taking electronics out of your bag and the ‘airport dread’ of forgetting that lotion you had at the bottom of your bag.
• Air France has just upgraded its app with new features. One includes a baggage tracking function which sends each passenger a notification of the whereabouts of their baggage throughout their trip and the number of the baggage carousel to collect their luggage from. It is also one of a number of airlines testing facial recognition at baggage drop-off points and boarding gates to speed up the airport journey.

Brisbane and Melbourne’s airports are trialing new technology at security checks which will allow electronics and carry-on liquids to be kept in bags.

GROWTH MANTRA’S PREDICTION

• The advent of self-serve check-in kiosks, digital/mobile boarding passes have already reduced the time and hassle of checking in at the airport. We expect to see more innovations that will further enhance and streamline the passenger experience. We believe we aren’t too far off from a future that will see the check-in process being completely digitised and automated – allowing us to check in just minutes before our flight instead of hours.
• Facial recognition, smart scanners, IoT and biometric technology are already being trialled in many airports around the world – we believe the trials will rapidly evolve into full adoption across many facets of the passenger journey in the next 5 years.
• More digital technology also means new data collected about passengers. This will lead to more real-time and highly personalised experiences for travellers.
• More data, however, will also raise concerns about data privacy and ethics, unlike the current concerns we have about this issue. With travellers from different countries crossing borders with different data privacy laws, this is likely to cause big questions about data sovereignty. Which data protection laws govern and protect travellers? Can laws from your home country protect you from data privacy issues when travelling in countries that don’t have them?

Educating for tomorrow

Maysoon El-Ahmad on Nov 5, 2018

WHAT’S GOING ON

• “The things we teach our children are things from the past 200 years – its knowledge based. And we cannot teach our kids to compete with machines, they are smarter…we should be teaching kids skills that no machine can possess. Like independent thinking, teamwork and care for others.” Jack Ma, Founder Ali Baba
• There are some interesting education models that are rising to this challenge:
  • Lindfield Learning Village due to open in Sydney in 2019 is based on a “stage not age” approach – students will progress at their own pace assisted by a learning mentor. All subjects will collide to be more relevant for tomorrow – using maths, science, art and English in the development of a video game for example.
  • In rural India, a group of entrepreneurs are establishing a similar school with a greater focus on building EQ and technology skills
  • Alt School in the US is a veteran in this space. It opened in 2013 and has rejected all standardised testing in favour of developing tech skills
• Tertiary institutions while embracing the challenge with a huge focus (financially and operationally) on innovation and technology are challenged by new models of learning as a departure from the highly lucrative 3-4 year tertiary degree
• The Minerva Project in the US is leading the way offering pathways that focus on critical and creative thinking and problem solving, effective communication and teamwork

Click here to read more

GROWTH MANTRA’S PREDICTION

• The education sector is likely to be shaken up by industry visionaries who have everything to gain from a new generation of workers equipped for the fourth industrial revolution
• Education will become more personalised and online in the future creating serious issues for long standing traditional models
• “soft skills” such as EQ and creativity will overtake STEM as the focus of educators of the future

I’ve got $10 in my pocket…

Maysoon El-Ahmad on Nov 5, 2018

WHAT’S GOING ON

• “Collaborative Consumption” is not new, but the movement has gained mainstream traction as sustainability and waste has become part of the collective consciousness
• “Second hand” is now on trend in a way not seen before – driven by the merging impacts of sustainability, the GFC and new technology
• Peer to Peer second hand selling is prolific – Depop (400,000 active users / day), Thredup, Poshmark and Gailed all focus on the younger 13-24 market who are loving “vintage”
• Maria Raga, Depop’s CEO tells us that millenials are choosing this type of store because they “want to feel unique, to shop with (and from) friends and to build their own green businesses without losing a drop of street cred” – and we love the sales lingo “Hit me wiv sum offaz”

GROWTH MANTRA’S PREDICTION

• With any luck, as this trend continues, the dominance of fast fashion chains will reduce – but like fast food, fast fashion is likely to remain alongside this thrift store economy
• H&M and ASOS are already on board offering vintage H&M and collections online – and the rest will follow very soon