| Consumer
Reports
Searching for a Future ?
Archive: Based on article published Sunday Telegraph
1/11/98
Don’t believe consumer reports
– they can’t predict the future. Consumer reports only
tells us about today. They tell us nothing about tomorrow. Customers
usually know even less about the future than the executives who
have paid to ask them. Consumer reports are always history, relating
to past products and services. Of course they are useful to read
before going out and spending a load of money, and are a way of
listening into community gossip about what is going on in the market
place, but they have limitations.
Many companies are using results of sonsumer reports
and market research. They will not survive long in the new millennium
because they are relying on late 1990s or early 2000s surveys to
plan third millennial products and services. They will land up with
the wrong products, designed for consumers who no longer exist.
Most people see the future as more of the same: faster
computers, better cars, more TV channels. They can't see the big
picture - how life itself
will change.
A classic example is aircraft design. In the mid 1990s
airlines such as British Airways asked business fliers what they
wanted and they said good food and wine, comfortable seats, more
video choices and personal screens. Hardly anyone mentioned data
sockets on satellite phones, and even fewer asked for power supplies
in arm rests so they could use PCs without clusters of spare batteries.
Now these things are regarded as number one essentials for any world
class airline - but it's too late. They won't be widely available
on BA flights until well into the next millennium.
This was a hugely expensive mistake. According to
Primex, makers of 82% of all in-seat power systems, installation
costs $1,000 a seat, but after delivery there is an additional cost
of up to $1,000 a day per seat in lost revenue while aircraft are
sitting in a hanger. Today British Airways has business seats offering
data phone sockets to frustrated and angry executives with dead
portables.
Those with longer range vision have won a competitive
advantage. Over 1,700 aircraft world-wide already have in-seat power,
not one owned by BA. Delta introduced it in 1996 and is rapidly
extending this across its fleet. Lufthansa has power in all new
first class seats and is upgrading business class. But American
Airlines is leading them all after a delayed start. Retrofitting
is complete on all its Airbus aircraft. Power will soon be available
on all business class and half their economy seats. Code-sharing
airlines are now under pressure to make sure travellers stepping
out of a powered seat with one partner airline can continue their
journey with the same facilities.
So what went wrong? Airline chiefs trusted consumer
reports and market research and lost sight of the future. Fundamental
changes were taking place in three areas. E-mail replaced fax and
people began to expect near-instant answers. Last minute interactive
presentations on PowerPoint replaced dusty overheads. Heavier flying
schedules meant that many executives were forced to give up in-flight
leisure time to catch up on work. Laptops appeared everywhere in
departure lounges and during flights.
There is nothing more annoying than being forced to
stop urgent work less than three hours into a seven hour flight.
What’s the point of a data socket when you have no power? Instant
access to e-mail is absolutely essential in a world where responding
in an hour can make all the difference between signing or losing
a multimillion pound deal. It also means you can get vital reports
out of the plane seconds after completion at 33,000 feet.
The trouble is that behaviour is changing far faster
than lead times for new products and services, and the gap is getting
worse. That means consumer reports will be even more useless for
future-casting beyond 2000 than it has been over the last decade.
Another example where consumer reports got the future
wrong is banking. In 1996 most CEOs of large
banks dismissed the Internet as an irrelevance, a plaything
of enthusiasts with no real impact on future profitability. Consumer
reports and market opinion polls strongly confirmed their scepticism.
The overwhelming majority of customers said they weren't interested
in using the Internet to run their bank accounts.
But since when have the general public been experts
in global technology and financial services trends? How could they
possibly be expected to form an opinion about web
banking when most still doubted their need to be on-line?
Time and again we see this institutional
blindness, compounded by dangerously misleading survey results.
Two years later many account holders were already buying goods and
services over the net. They changed their minds faster than consumer reports predicted, and as a direct result banks are struggling
to catch up. But it’s already far too late for some, as non-banking
competitors race ahead with a wide range of well developed digital
products and alliances.
Another example has been the London Liffe Market alliance
with Frankfurt announced in July, precipitated by the sudden loss
of the Bund contract. British soundings from the market had suggested
that London’s position would be reasonably secure, although
with strong competitive pressures. Then came Frankfurt’s new
electronic trading system and dealers rapidly changed their minds,
switching business almost overnight and leaving Liffe so vulnerable
that the only way to survive was to combine into a new
"LonFurt" exchange.
General Paul Arlman, Chairman of the Federation of
European Stock Exchanges says the new alliance is so powerful that
it "will have an impact on the entire European market",
possibly leading to one European
Exchange. This whole process has been precipitated by many factors,
but one was undoubtedly the failure by London to recognise that
polls don’t predict the future. People change their minds when
they catch a taste of tomorrow.
So what’s the answer? The next decade will see
mega-shifts as we turn our backs on a previous decade’s values,
as well as on a whole century and a millennium. Every decade has
its character, music, fashion, architecture and culture. The 60s,
70s, and 80s were unique and distinct. Each a reaction against the
past. But the 2000s is not just another decade nor the 21st
century just another century. These mega-changes in habits and attitudes
will defeat companies that have based early 2000s products on late
1990s consumer views.
Survivors will be future-thinkers:
companies that see six months to two years further than competitors.
That means early warning systems, able to distinguish a faint blip
on the horizon from background noise. It means taking a bigger,
wider view, an integrated approach. It means parallel planning,
preparing for fast response to a variety of outcomes.
Companies need visionary leadership, management skills
are not enough. What’s the point of managing people and products
superbly well but in the wrong direction? Visionaries in large organisations
are often marginalised because by definition they are constantly
challenging assumptions about the future. But a board without vision
is a dead board. Find those with vision, give them a voice. Bring
in fresh independent vision from outside to protect against corporate
blindness.
So then is there any point in consumer reports at all?
Listening to consumers will always be very important, to understand
shorter term issues that need addressing now. Changes in survey
results over time also give a valuable indication of trend. Market
research are vital to fine-tune existing services, but as we have
seen, over-reliance is deadly.
Patrick Dixon is
director of Global Change Ltd,
and author of Futurewise –
Six Faces of Global Change, published on 26th October
by Harper Collins £16-99. Web TV
site (5.5m hits in a year)
Future of
marketing and consumer trends - slides and one hour video
Recent press,
radio and TV by Dr Dixon.
The future of marketing: direct mail, network, email, strategies, ideas, relationship marketing, campaign slogans
Blogs - web / video diaries on trends / management by Dr Patrick Dixon
Future Trends - main blog
Future of Banking and Financial Services
Future of Digital Technology
Future of the Telecom Industry
Future of the Pharmaceutical Industry
Future of Management
Future of Marketing
Conference Speakers
Lectures, Slides and Videos
AIDS Care Education and Training (ACET)
Spirituality
Press
/ TV | Lectures | Dr
Patrick Dixon | Future of Banking | Digital Consumers
Genetics and Cloning | Life
& Health | Global Change
| Search our site |
