Pi-Consulting

That old fear about a worldwide population explosion? Now it’s the opposite that makes us nervous, the onset of population decline. More and more countries find themselves the victims of population shrinkage. Russia’s head-count projects to fall by 22% in the next 45 years, while Ukraine’s is set to shrink by an astonishing 43% in the same timeframe. Japan has already started to contract as mortality overtakes replacement levels, and Germany and Italy are soon to follow. Corporations worry about market shrinkage, but what really matters is GDP (gross domestic product) per head of population. The good news is longer life expectancy, the social and economic benefits of increased control over family size, and the chance that productivity gains will offset the decline of a country’s head-count. Population down? No cause for alarm. (Source: The Economist)

Ah, retirement. Our sunset years are supposed to be like going to heaven a couple of decades before we actually get around to dying.

You’ve seen the ads, of course. We all swan around in blue blazers with gold buttons, white duck trousers and deckshoes, only pausing between cruises and bridge weeks for long enough to survey the financial pages with quiet satisfaction. Our wives can be identified by their candy-pink suits and gold shoes, and their tendency to fret about not having enough fingers to put all of their rings on. And of course we’re all so busy living a perfect, carefree existence that we don’t really have time to actually do anything.

Sounds like just another fantasy from adland, right? The peculiar thing is that this silly picture, or something rather like it, actually seems to be coming true for a significant number of older people. The difference is that the Zsa Zsa Gabor fashion-sense from the ads has given way to snappier modern styles. The significant thing is that the “after work experience” from now on has less and less to do with cats and carpet slippers. A whole generation of prospective ‘retirees’, far from slowing down, is set to take on a new lease of life. (more…)

If it’s to do with South Korea, say young Chinese consumers, it’s cool, a ‘must-have’. Music, DVDs, fashions and cosmetics with a Korean association are selling like hot cakes in China — despite the fact that many of the products concerned were manufactured in China anyway. Why have values from Seoul penetrated the souls of Chinese and other Asian consumers? Analysts conjecture that a latent Asian appetite for Western values and artifacts seems more “acceptable” if filtered through a Korean prism. Perceived as neither entirely Western nor entirely Oriental, Korea is seen as a gateway between the cultures. (Source: International Herald Tribune, Pi Market Research).

Picture 150,000 right-hand index fingers pushing buttons on gizmos for four continuous days, eight hours a day, and you’ll have some idea of what the planet’s biggest Consumer Electronics Show (CES 2006) has been like. In the last week, well over a hundred thousand CES delegates have been swarming between three huge convention venues in Las Vegas (the organizers of CES — the Consumer Electronics Association, or CEA — can no longer fit the show into just one complex). And those 150,000 delegates’ flying index fingers have not been still for a minute.

They have been pushing buttons on the latest digicams, flat-screen TV remotes, multi-purpose cellphones, hand-held electronic game consoles, MP3 players, internet access points ….and even each other! We noticed several heated conversations going on between CES attendees, with each participant tapping the other on the lapel button as they pushed home a point about where the consumer electronics market is headed, and what the other guy should be doing about it.

The scale of the show has become so vast that you need a special internet-based computer program to find your way around it. It’s called MyCES, and it’s as much of an innovation as any of the gizmos on offer. MyCES pinpoints who you need to talk to, from what hi-tech and service companies, in which corner of the giant Vegas convention labyrinth. It even makes your appointments for you. (Then it’s down to you to navigate the flotilla of shuttle buses to get yourself to the meeting on time).

So what have they all been talking about since last Thursday? The simplistic answer would be: “Technology”. But that would woefully fail to reflect the changing preoccupations of the vast and fast-mutating CE industry. The focus is migrating from the design lab to …the consumer.

Three preoccupations were uppermost at CES, and none of them (perhaps surprisingly) was exclusively technology-related. The consumer electronics market is no longer just about megabytes, megapixels, memory chips and tech-speak specifications. It’s about consumer wants, needs, attitudes and mindsets. As technologies advance, the miracles they perform are increasingly seen as commonplace by the people spending their money in Best Buy, CompUSA, Office Max ….or online. They don’t quite know exactly what they want, but they say they want it now. And heaven help the poor manufacturer who isn’t listening. They will find that the consumer changes his (and increasingly HER) mind on a whim…. and that today’s CE consumer has a whim of iron.

Here are the big theme lines to emerge from CES 2006 (but you had to be listening!):

* Producing the universal integrated gizmo and service platform, then convincing the consumer to buy your version of it — and keeping them committed to your platform rather than the other guy’s.
* Getting CE retailers to get it right. Even with increasing online sales and direct manufacturer-consumer contact, it’s still the box-movers that move the most boxes. The trouble is, manufacturers are increasingly saying, the retail trade’s “one-size-fits-all” sales patter is failing to cater to splintering niche groups of consumers. (See Pi-Consulting blog entry of Nov 15th 2005, titled “Service with a Smirk?”)
* Tapping into consumer attitudes, really understanding WHAT PEOPLE WANT, not just what the SAY they want. (How will they know it until they see it?). The overriding message of CES 2006 was this: which CE products people buy in future will be driven not just by ‘must-have’ technology, expressed in ‘geek-speak’, but by WHAT they want to receive or send, (whether entertainment, messages or information), and HOW they want to receive or send it.

The summary sound-bite? People have become more important than technology.

Keynote speakers at CES 2006 included Microsoft’s Bill Gates, Intel’s Paul Otelini, Yahoo’s Terry Semel and Google’s Larry Page. Delegates listened to their every word with rapt attention.

Pi Consulting can reveal, however, that there is one person that everyone should be listening to even more attentively.

Who’s that, you may ask? The consumer, dummy.

The typical American household already owns approximately 25 consumer electronics (CE) products, whether for entertainment, education or communication. The CE industry would love to double that number, but reluctantly realizes it probably can’t. The fall-back position? Race to sell each household “Gizmo Number 26”. And what’s that? The one that makes the other 25 communicate seamlessly with each other. (Source: New York Times, Pi Market Research).