Don’t Panic, Just Pivot

What to do when the biggest shockwave of them all hits

Is there really such a thing as ‘FMCG’ anymore? We believe that those FMCG brands that are going to see success in the long run are those that can see beyond their sector. As the boundaries between health, tech, and FMCG become increasingly blurry, and as FMCG reduces its dependency on retailers by developing in B2C, we’re tapping into our expertise across sectors to explore how brands can innovate and change the game more rapidly, with better joined up thinking. It’s time to ask yourself if being single minded is making you narrow minded…Can FMCG really win on its own? 

We often use shockwaves in workshops, intended to push participants’ thinking by posing an unusual scenario, and challenging them to operate within it. The best shockwaves are unlikely, but believable. Sometimes, it’s fun to throw in a scenario so unreasonable, so totally beyond comprehension, you kind of think; that’s just silly.

The government imposes a nationwide ban on all your industry’s operations, preventing your business from trading as it normally does.

The above sounds like one of those unreasonable shockwaves, right? Yet, as is all becoming painfully apparent, this not only can happen, but is happening right now, with far-reaching consequence. My beloved restaurant industry is facing a particularly tough time; independents are going out of business, behemoths like McDonald’s and Nando’s are shutting up shop, and even high-end restaurants are feeling the stress.

Rather than wallowing in the doom and gloom, I wanted to shine a light on the fantastic food service businesses who are doing, frankly, inordinately incredible things at this time. With some businesses making the difficult decision to lose staff and suppliers alike, some are refusing to take this challenge lying down. They really are following the principle of “don’t panic, pivot”, shifting their business models with incredible speed to survive, and help the wider industry.

Take Leon for example, the healthy fast food chain known for their delicious wraps, meatballs and meal boxes. Not only have they pledged to offer 50% off all their meals for care workers, free coffee for retail & hospitality workers, free meals for kids and free delivery, they have also pivoted their business model. In a world where supermarkets are buckling under the demand for food, Leon has repurposed their network of kitchens into shops, not only for customers directly but also “last-mile logistics” brands like Uber Eats and Deliveroo, enabling them to get food that would otherwise be sold in their restaurants to people’s homes.

And speaking of Uber Eats, they have been benefiting massively from the closure of restaurants, reporting in the US a “10x increase in the number of self-serve signups by restaurants between March 12 and March 19 than it does during a normal week”. Yet in the UK, Uber Eats is helping to relieve the financial burden placed on small restaurants, by waiving delivery and activation fees they normally charge. This means restaurants can take advantage of their network of delivery drivers for free. What a fantastic initiative to service those businesses who are now reliant solely on delivery trade to survive! It’s great to see Just Eat and Deliveroo following suit with similar arrangements. Interestingly, restaurants that have previously never signed up for delivery platforms, such as the lauded Indian restaurant Dishoom, and most of Gordon Ramsay’s restaurants, have signed up this week.

B2B food delivery service Natoora, whose fresh produce from small producers is used to supply the hospitality sector, has recently opened up its services to the public. For the first time, those in London can order direct from their app, getting a range of fresh, seasonal produce direct to their door. What a time to launch your B2C proposition!

And lastly my old favourite M&S. Like most supermarkets, they are responding admirably to the challenge of feeding the nation at a time when there are few other options available. So it is fantastic to see them launch a partnership with Deliveroo, to get their products out to those who aren’t able to; all you have to do is order via an M&S BP Simply Food outlet. Who would have thought a few months ago that this partnership would have happened, and so rapidly!

So in sum, shockwaves (be they invented or real) can force new ways of thinking that shake up the status quo.  One shockwave we used with Coca-Cola and smartwater a few years ago “the government bans plastic bottles” led to the creation of their 100% recycled plastic range, which is now in-market and bang on-trend.

Hats off to all those at the moment working hard to feed us all in this time of crisis. Maybe some of the ideas borne out of this difficult time will stick, and revolutionise our relationship with food for the better.

 

Originally posted on The Value Engineers’ blog.

Chilly’s: saving the world one bottle at a time

The world of plastic is under threat.

Bottles, straws, even cotton buds are the devil in plain sight that we must purge from our societies (if the recent media hype is to be believed). But whilst it’s undeniably good that as a society we should reflect on how much plastic we consume…are we so apathetic to the plight of the environment that only top-down taxes and bans will provoke any kind of reaction?

It would seem at first glance, yes. Shifting consumer behaviour is tough. Taxation seems to work better than just asking nicely, if such examples as the 5p plastic bag tax dropping consumption of single use plastic bags by 85% is anything to go by.

But what if there was another way? What if you flipped the challenge and made recycling cool, even desirable?

Enter Chilly’s; the fashionable water bottle brand that has seemingly landed on office desks across the country overnight.

Founded by two entrepreneurs, James Butterfield and Tim Bouscarle, who tired of the Shoreditch digital marketing rat race, Chilly’s offer a range of slick-looking metallic water bottles that use “double wall vacuum insulation” technology to keep water cool for up to 24 hours and hot drinks warm for 12. They see design as key to their success: “our goal is to make products people love so much they don’t want to use single use stuff anymore” said Mr Butterfield.

Chilly’s have made water bottles desirable, not just functional. They look great, and they work well. You’re more likely to have your Chilly’s bottle with you and want to fill it up, rather than the manky old plastic one you accidently warped out of shape during a dishwasher hot wash.

Pret A Manger, the premium sandwich chain not known to miss a trick when it comes to sustainability, have spotted an opportunity to reinforce their environmental credentials and collaborate with the start-up. In an effort to reduce the amount of single-use plastic they use in stores, Pret have launched with Chilly’s its own range of water bottles, designed in keeping with Pret’s iconic food imagery, for £25 a pop.

All this leads me to a sustainability question for brands: if you want to get consumers to change their behaviour for the better, sometimes the carrot is better than the stick. Who would have thought a thermos flask might well become the darling of the sustainability world?

Original blog posted on The Value Engineers’ blog here.

Zero Star Rating from TFL: What’s Next for Uber?

At The Value Engineers we like to think about Shockwaves; imaginary, yet plausible future scenarios that would have dramatic implications for businesses. This challenges brands to think critically about their current strategy and direction. The most destructive Shockwaves tend to be the ones that prevent a brand from doing business at all. But of course that rarely happens in real life.
It seems though, that sometimes life can throw up shockwaves of its own…

A few weeks ago Uber’s application for a new licence to operate in London has been rejected on the basis that the company is not “a fit and proper” operator. This means that, after a 21 day period, Uber could in theory not be allowed to operate in London at all. Specific details on this are currently unclear, although it seems their supposedly relaxed approach to passenger safety and driver vetting may be driving the decision by TFL.

It will be interesting to see how this story will evolve:

Will consumers revolt, and urge Uber to challenge the ruling as they shudder at the prospect of travelling only via the Night Tube, buses and regular black cabs?
Will new competitors sense the opportunity to move in and disrupt the world’s biggest disruptor with a better (and regulatory sound) product? Could Lyft seize this opportunity to enter the UK market with a more ethical approach?

What impact will this have on the Uber brand, already on the ropes following several internal crises?

Regardless, with Uber integrated into the lives of so many Londoners, the question on everyone’s mind must surely be this: what on earth are we all going to do that first Saturday night without Uber?

Answer: probably get the bus.

Originally posted on The Value Engineers’ blog.

Imagining the Restaurant of the Future

A day spent musing on leading edge thinking at the Food and Drink Trends & Innovations Conference 2017 sparked many a thought about the future direction of this exciting and dynamic industry. One topic in particular (aside from of course the great presentation on innovation shared by Paul Gaskell and Steve Reeves) really got me thinking.

Listening to a discussion on restaurant trends, led by Anna Fenten from Levy Restaurants UK, I reflected on the following:

How different would a restaurant started in five years’ time look compared to now?

A focus on reducing food waste: Young Danish upstart Too Good To Go have recently launched in the UK. Their app connects restaurants who have surplus food at the end of service with customers wanting great food at a discount. It’s an excellent example of a business delivering a triple win; it gives restaurants a boost to their bottom line, it reduces food wastage, and is good for the end consumer who get a cheaper meal.

Further embracing of the takeaway customer: Deliveroo, Ubereats and JustEat have redefined the takeaway and enable consumers to enjoy restaurant quality food at home. Innovation in this industry is just getting started. Deliveroo have recently launched Deliveroo Editions last month, a series of “dark” kitchens for casual dining brands to rent and use solely for their takeaway customers. This allows restaurants to optimising their food for takeaway and take pressure off their own kitchens.

Greater use of technology to attract customers: Smart Home services like Google’s Echo and Amazon’s Alexa may soon be able to respond sensitively to the question “where shall we go for dinner?” by overlaying customer cuisine preferences, propensity to travel for food, and cross-reference with table availability (or takeaway delivery wait times). Surely this is more intuitive than panic Googling? The development of Facebook Messenger bot apps also enable restaurants to engage customers through new channels at just the right moment to entice them in.

A slicker in-restaurant experience: Eating out will mostly likely always need a human element, but soon many elements of service could become automated. Apps like CAKE and Qkr make paying the bill less of a pain, and brands like McDonald’s and Applebee’s are embracing self-service kiosks and iPads for great efficiency when ordering. Who knows, maybe your food will be delivered to your table by drone?

More flexible restaurant spaces: The rise of the pop-up restaurant allows for restaurateurs to trial new concepts more flexibly and at lower upfront cost. In fact, why shell out for a restaurant at all when you could host your restaurant in an inspiring space for a few months at a time before packing up and moving on? It helps make the high street more vibrant, allows for chefs to test more experimental ideas, as well as give established restaurant brands the opportunity to test their vision in new areas without investing too much first.

One thing is for sure. Disruption in the restaurant business is just getting started.

Originally published on The Value Engineers’ blog.

Cadillac: the new transport industry disruptor

True innovation should be bold, not incremental.

True innovation should disrupt and drive an industry forward by better servicing customer needs more cheaply, quicker and more efficiently than before.

Sadly, this too often means that true innovation is reserved only for the start-up world, those ambitious guys and gals who don’t carry with them the baggage and risk aversion so typical of corporate environments. Some big brands do aspire to adopt the nimbleness of a start-up; innovation borne out of bootstrapping, a “move fast, break things” mentality, and no company politics. Some brands do achieve this too, but it is rare. It is even rarer to hear of brands that anticipate the future direction of a market and beat the start-ups to the punch.

Cadillac is such a brand.

In a move that sounds more likely to be dreamed up in a college dorm room than a boardroom, Cadillac have drawn into question the whole purpose of buying a car by launching a subscription model service for their suite of vehicles, called Book by Cadillac. $1500 a month gives you access to a range of Cadillacs which you can chop and change throughout the year at a moment’s notice, without having to pay extra for registration, insurance or maintenance.

What a great example of a brand recognizing that the status quo is ripe for change, and they should be the ones that change it. Just think of the possibilities. Got a weekend trip in the country lined up and want something sporty? Swap your sedan for a coupe. Planning a road trip and need some extra room in the boot? Swap the coupe for an Escalade. Just need something straightforward for the commute? Swap back to the sedan.

Sure it means you actually don’t own a Cadillac.

But do you really need to?

Uber: the business traveller’s safety blanket

Travelling through an unfamiliar country on business is a tiring and bewildering affair.

One of the first, and arguably most frustrating, situations happens immediately after you land. Stumbling out of the arrivals hall, with little idea what time of day or night it is, not least where on earth your hotel is, it is tempting to collapse into the nearest cab.

And I did exactly that a few days ago, stepping out into Cairo where I was greeted with a scrum of taxi drivers. The most persistent ended up charging me about £20 for what turned out to be a relatively short journey. I was, however, grateful and was duly whisked away to my hotel. It was only when I met a colleague in Egypt did I realise that Uber was flourishing and I should use it instead. No cash, no haggling on price, and a reliably efficient route. Exactly the same journey in reverse? The equivalent of £2.

So I left Egypt with a bruised ego and a renewed love for Uber.

The system works. Excellent.

 

Customer experience and the peer-to-peer economy: What traditional retailers can learn from the new kids on the block

Wouldn’t life be easier if, instead of selling stuff, you just let other people do it and then take a cut?

The rise of the peer-to-peer economy in recent years has flipped traditional business wisdom on its head. No longer need you worry about stock levels, store rental prices and fixed term labour contracts- instead create a platform where incentivised parties come together to exchange goods and services, and leave the rest up to the market you’ve created.  Let the eBay buyer and seller, the Uber passenger and driver, the Airbnb guest and host do the hard work and enjoy the spoils of your self-sustaining network.

Yet in this happy (and admittedly severely rose-tinted) world, where your business’ brand ambassadors aren’t even employed by you at all, how do you ensure that your customers have a consistent customer experience that will keep them coming back? In practice, peer-to-peer companies do a reasonable job of this. They control key aspects of the experience, such as the app interface and the customer service department, to ensure in the first instance customers are comfortable using the platform, and in the second instance are reassured that any issues are dealt with professionally and efficiently.

They then leave the bulk of the customer experience in the hands of strangers- your Uber driver, your Airbnb host, your eBay seller. Now what peer-to-peer businesses do which is smart is that they align the incentives of these individuals with their business interest. The Uber driver is incentivised to get on the road when more people need cabs through surge pricing. The Airbnb host is incentivised to offer competitive pricing through a pricing map showing the cost of other Airbnb rooms nearby. The eBay seller is incentivised to accurately describe the products they have on offer through customer feedback ratings. These mechanisms mean it is in the interest of all these individuals to provide a good service to their customers. This is good for the customer, who feels reassured interacting with strangers, and it is all good for the business, since it encourages customers to come back to the platform again and again.

Smart stuff.

It is clear, however, that these mechanisms aren’t perfect. There have been claims that surge pricing by Uber is exploitative. Despite “clear” photos Airbnb rooms aren’t always as fantastic as they claim to be. Customer feedback systems such as eBay’s star ratings can be inaccurate, giving customers a platform to vent problems rather than offer accurate criticism. The next stage for these businesses is to understand the insights behind these pain points and work to rectify them, working to deliver an even better customer experience, either through intervening themselves or fine-tuning their incentive framework.

Regardless, this mix of incentives and direct customer engagement is a potent and arguably less resource-heavy way of ensuring a consistent customer experience. So, traditional retailers, the next time you’re thinking about your customer experience, maybe take a leaf out of the peer to peer economy’s book?

Incentives, rather than investment, could be the solution to your problems.

Throwing his toys out the pram: Were Lego right to deny Ai Weiwei?

You may have read in the news this morning that famous Chinese political artist Ai Weiwei and toy manufacturer Lego are in the midst of a brick-related bust-up. The altercation arose when Weiwei, known for his politically-charged works aimed primarily at the Chinese government, was refused a bulk order request of Lego for a new exhibition in Melbourne, Australia. The company stated that it could not endorse “the use of Lego bricks in projects or contexts of a political agenda” and refused to send him any.

In response, Weiwei has accused Lego of “censorship and discrimination”, and has sparked a social media storm with supporters around the world offering to donate their old Lego to him. He has even set up “Lego collection points” across the globe to receive these donations.

So, did Lego make the wrong decision?

On the face of it, it seems a dud move. For a brand associated with creative freedom and self-expression, it is perhaps short-sighted to annoy a celebrity artist, particularly one so widely known for standing up to, in his view, an oppressive government. Additionally, the fact that many (at least if Twitter affirmations are anything to go by) have stated they’ll never buy from Lego in the future as a result, may suggest that Lego have played this wrong. What would be the harm of sending him a couple of bricks?

Scratch the surface however, and I reckon Lego are in the right. At their core, Lego has a playful, innocent quality that is focused on encouraging children to create. It does not, nor should it, engage in political debate, because that goes away from this brand persona. Refusing to supply Weiwei doesn’t prevent the artist from using Lego in his work. The subsequent #legosforweiwei hashtag has proven he won’t have any issues finding materials, but it does clearly stop Lego from implicitly endorsing Weiwei’s work.

Is this in itself a shrewd business move, by not antagonising the political class of a key future area for growth? Or is it an equally shrewd brand-led move, which protects the child-like innocence of Lego by refusing to engage in the big bad world of political dissidence?

Regardless, I think Lego got it right, by not (for once) letting Weiwei play with its bricks.

Ode to Uber: More than just a Taxi

So, I’m a bit of an Uber fan. Although admittedly a bit late to the party, the ease, flexibility and convenience of being able to summon a taxi at a moment’s notice has turned me into a complete Uber-phile. Let’s face it, I’m always going to be a fan of a service that is faster, cheaper and more convenient than the norm (a typical Millennial trait I’m sure you’ll agree).

The controversy of their ascent, aside, Uber has transformed the way we interact with taxis. From syncing your credit card to the app so you don’t have to worry about carrying cash, to seeing in real time how far your taxi is away, to developing a two-way feedback loop so that both driver and passenger know they’re in for a smooth journey, Uber has completely re-invented the industry. The question is, which industry will Uber re-invent next?

Because I really doubt Uber will be satisfied with just being a taxi company. Let’s think for a moment about what Uber has created. In one sense, Uber had created a network of taxis, allowing for a rapid response taxi service that transports people more responsively and more cheaply than existing taxi companies can. Yet in another sense, Uber has created a rapid response logistics network that has the capability to transport anything faster, cheaper and more conveniently than existing players.

 

If you start talking about Uber as a logistics company rather than a taxi company, you can begin to uncover the opportunities Uber has created for itself. What’s to stop Uber becoming…

…a rapid response food logistics operator, coming to the aid of the disorganised chef who’s run out of fish for tonight’s busy service at his restaurant?

…a mobile corner-shop, for the busy working mum who doesn’t have time to pop to the shops on her way home but still needs a pint of milk?

…a parcel delivery service, for the avid eBay seller who needs a parcel delivered quickly but doesn’t have the time to visit the Post Office? (I may be talking from personal frustration here)

 

The scary thing is, Uber is already doing some of these things. UberEats is a fantastic example of Uber’s potential. Currently in only a small number of cities, UberEats is (in Uber’s words):

…an on-demand meal delivery service powered by Uber. We partner with the best local restaurants to bring you a meal in 10 minutes or less. It’s the same cashless payment as an Uber ride. So all you need to do is tap a button and wait for the goodness to arrive.

In a shrewd tie-up from Unilever, Uber recently ran an activation with Wall’s ice-cream, enabling users to request ice-cream on demand. Not only did it generate a great buzz for both Uber and Wall’s, but it also uncovered an interesting thought: why bother letting your customers go to the shops and see competitor products alongside your own if your product, alone, can come to them?

With this and I’m sure, other partnerships in the pipeline, it seems that setting up the logistics network was only phase one for Uber. Phase two, the utilisation of that network, is just round the corner. The question is, will your business be a future partner or competitor to Uber?

 

Disruptive times lay ahead, and not just if you’re a cabbie.

Shooting the Elephant: Do soft drinks have to be sweet?

What’s the elephant in your room? There most probably is one if you look hard enough (check behind the sofa, it’s normally where they hide).

Or, to put it another way, what assumptions or category rules exist within your industry unquestioned? Why aren’t they being confronted and, if these rules are broken, will they unlock exciting new innovations?

It would appear that, in the soft drinks industry at least, the elephant in the room is sweetness. At the Soft Drinks Industry Conference 2015, the main bulk of the day centred on sugar and the challenge of managing sugar levels in soft drinks whilst still delivering a delicious product. Yet, within every problem, an opportunity. It felt to me that this assumption, that to be tasty a soft drink must be sweet, isn’t necessarily correct. Is the pursuit by big industry players of alternatives to sugar, or reformulating drinks to contain less sugar but still taste just as sweet, really the only way to go?

Now it sounds obvious that soft drinks must be sweet, and perhaps indisputable, but in other cultures, savoury and salty drinks sit very happily alongside their sweet counterparts. Take ayran for example, the milky, salty beverage from Turkey (great with kebabs). In 2012, 508,444 tonnes of the stuff were produced to quench thirsts and it is Turkey’s unofficial national drink (despite some controversy). Lassis, often served alongside spicy Indian meals to help cool the fire, can be served sweet, spiced or salty depending on what it’s served with. So the idea of non-sweet soft drinks is perhaps not as outlandish as it first seems.

Outside the soft drinks category, beer and wines tend to have a savoury default taste profile. It is fair to say though that even this category caters to our sweet tooth, with the rise of alcohol pops, fruit ciders and the rapidly growing “Sp-eers” category. Could the soft drinks category learn from this and similarly bridge the taste gap and bring out something non-sweet?

Some soft drinks brands are testing the water and shooting the sweet elephant. UnSweet have released lightweight lemonade, made from sparkling water, lemon and lime juice with no sugar. It’s distinctively sour taste is certainly divisive. Belvoir Fruit Farms launched a spicy ginger cordial which, although sweet, has a more complex and spicy profile than your average cordial. Both may well become successful niche propositions, and who’s to say that the mainstream British consumer won’t find these tastes palatable in the future?

A lesson for all interested parties: if you’re stuck for innovation ideas, question the assumptions hidden in plain sight. You may well surprise yourself (and your consumers) with what you come up with.