Monday, February 22, 2010

Read the Fine Print of Indicators

As we emerge from the worst economic climate in generations and we enter a changed world in which, amongst other things, banks are more cautious in their approach to lending, businesses are understanding that material decisions that they make now need to be evaluated comprehensively. In this new context, it has become more critical than ever to base business decisions on a full understanding of the external environment in which a business operates. The days of crap shooting and hoping for the best are, for the moment, behind us.

However, as we enter a world in which accurate, insightful information is more critical than ever, it has also become increasingly difficult to obtain such information as hindsight is no longer a defining factor in forecasting. This is highlighted through two recent articles commenting on consumer behaviour in the US and the UK that show interesting trends that are counter intuitive to what one may expect post-recession.

Hindsight suggests that in a world in which recession-hit consumers are faced with the prospect of a jobless recovery, cheap brands should do better than luxury goods. However, while consumer spending is expected to remain sluggish, and consumers will still be making trade-offs that they did not need to make in the past, there are examples abound of luxury brands performing better than expected - many consumers still opt for premium coffee and super market brands, for example. How can the reality of a jobless recovery be reconciled with the sustainability of the luxury sector? The answer may lie in the fact that the headline unemployment figures don’t tell the full story - overall unemployment in the US, for example, is hovering at around 10%, but unemployment within high earners (luxury brand purchasers) has not changed significantly over the past 18 months, in contrast to America’s lowest earning population, which stands at around 30%, three times the national average. It is not a stretch to conclude that the vast differences in unemployment rates, depending, on income levels, directly translate into vastly different consumer habits.

Understanding the often ignored subtleties of key economic indicators can go a long way towards ensuring that business decisions are made in an informed manner. Rather than basing decisions on the headline assumptions

Wednesday, February 17, 2010

Facebook's Doppelganger craze and the Social Media phenomenon

Over the past week, Facebookers around the world have taken to the celebrity Doppelganger craze en masse - what does this say about the state of social media? and, more importantly from our point of view, what does this mean for the state of social media as a business platform?

The Doppelganger phenomenon has been widely reported as yet another example of the group think engrossing social media sites, the most popular of which is currently Facebook. Commentators were quick to conclude that the Doppelganger craze is yet another step towards the eventual decline of sites like Facebook as serious, credible online platforms. What does this mean for the countless businesses, which are currently wondering whether they should jump on the social media bandwagon by establishing a Facebook presence? Following the line of thought of the aforementioned columnists, it would be easy to conclude that you should establish a Facebook presence only if the current characteristics of the platform match the image you wish to portray about your product or service. However, would doing so not be to ignore the true potential of this new medium and to risk falling behind the curve (much like businesses that once stubbornly dismissed the internet and refused to create webpages)? Should not the mere fact that a craze, like Doppelganger, can catch on so quickly, spread virally across the world and be discussed in the mainstream media be viewed as an example of social media's ever-increasing popularity and relevance?

While the future of Facebook and online social media in general is far from certain, businesses need to think about the future of the platform rather than simply about its current brand fit.

Friday, February 5, 2010

Insight is Better than Hindsight

The first Pointers discussion will be posted on Monday, February 15th