Economy

The Vibe Shift: How a Return to Family Values and Meritocracy is Reshaping Society and Consumer Behavior

The Vibe Shift, a term coined by historian Niall Ferguson, refers to a cultural and ideological pivot in societal values, often marked by a departure from previously dominant narratives and the emergence of new paradigms. The 2025 Vibe Shift is a cultural and societal transformation that marks a return to traditional family values and a renewed emphasis on merit over identity-based narratives. This shift is a realignment of societal priorities that is already influencing politics, culture, and consumer behavior in the United States—and is poised to ripple across the globe.

Understanding the Vibe Shift

The Vibe Shift represents a reaction to the hyper-individualism and identity politics that have dominated Western societies in the recent decade. Ferguson argues that the pendulum is swinging back toward a more grounded, reality-based worldview. This includes:

Family Values: A renewed appreciation for the family as the foundational unit of society, emphasizing stability, intergenerational support, and community cohesion.
Meritocracy: A shift away from race- and gender-based quotas or preferences in favor of systems that reward individual achievement, skill, and effort.
Biological Realities: A growing acknowledgment of the scientific fact that there are only two biological sexes, male and female.

These principles are not merely abstract ideas; they are shaping the way people live, work, and consume.

The Vibe Shift in Society and Politics

United States

In the U.S., the Vibe Shift is evident in the growing backlash against progressive policies that prioritize identity over merit. For example, the Supreme Court’s decision to overturn affirmative action in college admissions reflects a broader cultural shift toward merit-based systems. Similarly, the push for parental rights in education—such as the movement against gender ideology in schools—highlights the resurgence of family values as a political force.

The Vibe Shift is also reflected in the growing popularity of commentators like Jordan Peterson, who emphasize personal responsibility, traditional values, and biological realities.

Europe

In Europe, the Vibe Shift is for now visible in the rise of conservative and populist movements that prioritize national identity, family, and meritocracy. In Italy, Prime Minister Giorgia Meloni has championed family values and pushed back against progressive gender ideology. These movements reflect a broader European trend toward cultural conservatism and a rejection of the negative effects of identity politics.

Asia

In Asia, the Vibe Shift aligns with longstanding cultural values that emphasize family, education, and merit. Countries like Japan and South Korea have long prioritized family cohesion and academic achievement, and these values are now being reinforced in the face of declining birthrates and economic challenges. In China, the government’s emphasis on traditional Confucian values and its crackdown on what it sees as “Western decadence” (such as gender ideology) reflect a similar cultural realignment.

How the Vibe Shift is Changing Consumer Behavior

The Vibe Shift is not just a political or cultural phenomenon; it is also reshaping consumer behavior in profound ways. Here are some key trends to watch:

1. Family-Oriented Products and Services

As family values regain prominence, there will be increased demand for products and services that cater to family life. This includes everything from larger homes and family-friendly vehicles to educational tools and family-oriented entertainment. Companies that can tap into this trend—such as those offering homeschooling resources or multi-generational travel packages—will thrive.

2. Value instead of Virtue

The Vibe Shift’s emphasis on reality and merit will lead to a preference for authentic, high-quality products over those marketed primarily on the basis of identity or virtue signaling. Consumers will increasingly value quality, durability, and functionality. Brands that focus on these attributes will gain market share.

3. Health and Wellness

The recognition of biological realities will drive demand for health and wellness products that align with natural human physiology. This includes fitness programs, nutritional supplements, and medical services that respect biological sex differences. The growing popularity of biohacking and personalized medicine reflects this trend.

4. Education and Skill Development

As meritocracy gains traction, there will be a surge in demand for education and training programs that help individuals develop marketable skills. Online learning platforms, vocational training, and certification programs will see increased enrollment as people seek to improve their prospects in a competitive, merit-based economy.

5. Cultural Production

Entertainment and media that reflect traditional values and biological realities will resonate with audiences. Films, books, and music that celebrate family, heroism, and individual achievement will gain popularity, while content that promotes identity politics or undermines traditional values will be less in demand.

Future Impact

The rejection of gender and identity politics in large parts of the world with a rapidly growing global economic impact, including China, SE Asia, and India, suggests that the Vibe Shift is part of a broader global trend.

While the Vibe Shift has the potential to address grave challenges—such as declining birthrates, social fragmentation, and economic stagnation— it is not clear what will happen to ecological preservation and minority groups.

The politicization of these issues has not benefitted them. As the preservation of our planet’s nature has become a matter of ideology, it is now not any more common sense to care for our natural environment, but a matter of political positioning. Similarly, a developed society should accept its minority groups as valuable menbers, but politicized DEI programs have led to a pushback. DEI policies are not effecting the fairness they promise.It eliminates candidates with merit from highly sought-after opportunities while elevating and at the same time demeaning the candidates DEI is supposed to be helping by telling them, “You got this job because you’re a minority.”

A society structured according to race, gender, and political affiliation instead of individual achievement is politically skewed. A humanist society is color- and gender- blind, seeing every human, regardless of skin color and gender, as individual with dignity and unique talents. Unfortunately, we are still far away from a world where individuals can thrive and contribute to society without having to submit to overarching power systems.

The pendulum of societal trends is swinging the other way now – powers change, but only time will tell if this pendulum will ever find a center of gravity. It will not be easy to get to a balanced view. A society that repeats its past mistakes and does not understand its present will be unable to shape its own future.

January 21, 2025

Jaguar: A controversial rebrand

Is this Jaguar, the blue chip brand on par with Ferrari, Lamborghini, Aston Martin, Rolls Royce – the brand standing for sleek and elegant sports cars which won Le Mans seven times?

Jaguar is a British icon and an emotion which creates loyalty, as evidenced in over 160 million views of the rebrand on social media – with overwhelmingly negative comments. Consider this: Jaguar owners drive these cars although they are notoriously unreliable. They still drive it, simply because it’s a Jag.

Brands are valuable if they convincingly incorporate dimensions reflecting human cognition: time, place, personality, and emotion. The dimension of time is expressed in brand history and stories, place is where the product is ideated and/or made, personality can be expressed in the founding story and in the stories of brand ambassadors and prominent customers, and emotion can be expressed in tactile, olfactory, visual and auditory cues: in the case of a car, it’s the look of the car body, how the interior feels and smells, and the sound of the engine.

Many of these qualities align in historic Jaguars to create an integrated experience: the typical Jaguar roar of the engine, the sleek body suggesting a leaping Jaguar, the front badge with a roaring Jaguar, the fine leather interior. Jaguar also has an impressive heritage: a history of some 90 years, made in Great Britain and having been the car of choice of British TV legend Simon Templar, played by Roger Moore. The slogan “Copy Nothing” is a quote by Sir William Lyons, Jaguar’s founder, who said “a copy of nothing”.

Jaguar E-type, advert from the nineteen-seventies

The new campaign video is kept in dopamine colors and is made like a nineties music video. It’s retro with references to Warhol and Pop Art, the environment and fashion seems to reference a Hunger Games set.

Why would you pin your heritage brand to a campaign like that? We can gain some insight by looking at the situation of Jaguar in particular and the global car industry in general.

Jaguar is supposed to compete with some of the best in the business – Aston Martin, Ferrari, Porsche, Mecedes-Benz, BMW, all of which have lineups of cars you can buy right now. Jaguar however, having decided to become an EV-only company, has stopped making cars, and it won’t offer any until 2026. It is now a brand without a product.

At the same time, the global car industry is shifting fast. EV sales are since a while plummeting, yet EVs get better every year. China is now the world’s largest car market and at the same time the largest competitor for EVs. Chinese EV brands are innovating very fast and are deemed so dangerous for the EU car industry by the EU that it slapped tariffs up to 45% on Chinese EV imports.

Jaguar commercial, 10 years ago.

In the last years, Jaguar was sticking to the comfort zone of its heritage, yet sales were dismal. The reason was not the brand, but their recent cars falling short of their competition, in terms of design, performance, quality and reliability.

Something had to be done. The new managing director of Jaguar explains: “If we play in the same way that everybody else does, we’ll just get drowned out. So we shouldn’t turn up like an auto brand. We need to re-establish our brand and at a completely different price point so we need to act differently. We wanted to move away from traditional automotive stereotypes.”

The company says that is now targeting a different audience in the future – young luxury buyers. The assumption that in a year from now enough Gen Zs have the discretionary spending power for a car costing above 100,000 Pound Sterling plus find Jaguar more appealing than BMW, Porsche, Mecedes-Benz or Tesla seems quite optimistic.

Questioning conventions, breaking the mold and disrupting the market can be a good strategy, but you have to deliver something extraordinary for it to work. Apple is one example, with their legendary commercial of a hammer-throwing woman destroying a 1984 movie screen, followed by the first Mac computer. Another example of a product which breaks the mold is Tesla’s Cybertruck, a car which intentionally does not follow the bandwagon of common car designs with indents and curves trying to sugest dynamism. The Cybertruck design, edgy and angular, is very different from it’s competition and in the process elevated Tesla’s brand.

Lately, another iconic British heritage brand was brought close to the brink by failed attempts to appeal to a young audience, in the process eroding it’s brand equity and alienating it’s brand loyalists: Burberry.

After the storm of negative reactions to the Jaguar rebrand on social media, the managing director of Jaguar accused his potential customers of “vile hatred and intolerance” over the rebranding campaign. Many in social media are outraged that this was a “woke” rebrand. Well, if you connect a heritage brand to a contested issue, finding yourself in a controversy in return is quite predictable.

This is a time of crisis in the Western automotive industry – if it is Ford, Volkswagen or Stellantis, established Western car companies have to battle with high production costs, organisational inefficiencies and a strong competition from China.

Jaguar now has a long time ahead in which they have nothing to sell, while their competitors continue to develop and learn from their customers. A host of new Chinese EV brands such as NIO, BYD or GWM are working hard to establish their own brands in the minds of consumers. Some EV companies – Tesla in Germany and BYD in Hungary – are now also in the process of building brand new factories, thus avoiding protective EU tariffs.

Renewing a heritage brand is not an easy undertaking. The goal is to fill the brand with new life without disconnecting it from its identity and authenticity. This is a fine line where a profound understanding of the brand’s values, it’s customers and their expectations play a big role. It is just as important to realize where the actual problem of a company is – if it is the brand, it’s products or it’s current audience. Changing a brand is no panacea if the product doesn’t measure up. What brands do and how they do it is often misunderstood. Jaguar seems to be a case of what I call Projector Metaphor – more about it in my article here.

Following its rebrand, Jaguar has presented a prototype of their new car at Miami Design Week. Here is a short design analysis.

The large bonnet of the car is, according to the designer, referencing the long bonnet of the legendary Jaguar E-type. The long E-type bonnet however was primarily a functional choice – it needed this bonnet to accomodate its humongous 5.3 litre V12 engine. E-cars have small engines and its batteries are placed on the bottom of the car, so there is no functional reason for a long bonnet. The wheels and tyres of the 00 are large, but large and wide wheels are inefficient in terms of drag and thus not well suited to EVs.

How can that be explained? It seems the overall design of the Jaguar 00 is primarily led by referencing competition products: Rolls Royce, Cadillac, Mercedes-Maybach. The design works with the same semantics as other cars in this segment: long bonnets, low lying bodies and large wheels with graphical wheelcaps.

Also the front view of the Jaguar 00, while more angular, seems to reference the competition: the central area could be Rolls Royce’s characteristic grill, but with the strips turned around 90 degrees.

The design of the Jaguar 00 is situated within the semantic language of similar cars rather than embracing new design possibilities given within the technical context of EVs. The blocky shape makes it appear static, yet not regal such as the Rolls-Royce, and the promotion keywords “exuberant” and “vivid” seem more apt for cars of the competition – the Mercedes-Maybach Vision 6 or the Alfa Romeo Stradale 33, for instance. When considering a design language more suited to EVs, designs such as the Honda 0 concept or the Lotus Theory are more convincing.

Alfa Romeo Stradale 33 (electric or fuel)

Honda 0 (electric)

Lotus Theory 1 (electric)

Bugatti Tourbillon (fuel)

Note how the place of origin and brand history is skillfully woven into these designs – there is an unmistakeable Italianità in the Alfa Romeo, Japanese tranquility in the Honda, British edginess in the Lotus, and French extravagance in the Bugatti.

The now historic Jaguar E was an exceptional car, sleek and elegant, and an instant success at its time. Brand, product and experience – seemingly effortlessly – created an integrated, convincing offering. The Jaguar 00 – both in comparison to its ancestors and its contemporary competition – is not that convincing, coming across as a preliminary design study rather than a fully developed product.

Jaguar sales fared badly in the last years, and it will not have a single product to sell for the next year. The only actual corporate value left was its heritage image and brand equity. The Jaguar brand sure was brought to the attention of the public with the new campaign. In these difficult times for the car industry, can a design study and a controversial rebrand indeed turn into a convincing product on par with its competition, plus be paid for in sufficient quantities by a completely new customer segment?

The owner of Jaguar is Jaguar Land Rover, part of Tata Motors which again is part of Tata Group, the largest Indian conglomerate with over a million employees. From an organisational standpoint, this campaign seems not to gel with the values of an Indian company as established as Tata. It could be result of an internal opinion bubble, an “echo chamber” in Jaguar’s British management team. From a strategic standpoint, this could be a breakout strategy and high stakes gamble, which could make sense when you find yourself economically as cornered as Jaguar. It could however also be a move to intentionally devalue the brand in the short term to make it easier for other car companies looking to take over a heritage brand. Genius move or brand destruction? Whatever it is, it is an interesting story, and we will know the outcome after 2026.

Link to this article: https://mgstrategy.com/ideas/2024/11/24/jaguar-a-controversial-rebrand

November 24, 2024

Design support for the 21st century

Published 2021 by Dongdaemun Design Plaza/ddp Design Fair/Seoul Design Foundation.

From hand-holding to startup financing

The history of design support until today has two distinct phases: project hand-holding and startup financing. From the nineteen-eighties until around the 2000’s, the economy revolved around industrial production, and a preferred model of design support was project hand-holding. In this model, a designer was brought together with a company for a project, and a part of the costs were financed. This worked well to raise awareness for design as a means to add value to companies. However, after the initial funding was completed, there was little follow-up, and the first project often remained the last.

⁠Around the 2000’s, the overall financialization of the economy led to a new model: to directly finance start-up teams through state investment agencies or investment aggregators. After the early years of excitement, it turned out that some freshly financed startup companies were unable to deliver their envisioned project. The incentive to get high amounts of funding, coupled with demands to become profitable in a very short timeframe, led several startups to exaggerate their claims. Some projects turned out to be mainly speculative, and problems in startup teams included lack of design competence, lack of product development experience, and difficulties with production and logistics.

⁠The hand-holding model suffered from a short-term focus and a lack of follow-up analysis, and short-term design jobs often suffer from a lack of engagement by designers. Also the startup model suffers from short-termism. In the startup model, companies are expected to quickly grow out of thin air: development, production, sales and logistics, all has to be built from scratch. The hand-holding model at least has the advantage that the wheel doesn’t have to be reinvented: the company is already existing and has capabilities, and bringing designers in should add value.

⁠In search of a new concept

⁠After the industrialization of the eighties and the financialization of the 2000’s, a new, more considered concept to support companies and advance growth is needed. New laws to reduce harmful ecological impact demand better resource utilization and options for recycling, and a new generation of consumers demands new standards of corporate transparency and resource traceability.

⁠SMEs thrive in specialized niches. There, design can help with creating innovative product and service concepts or with improving existing products, including ecological considerations and consumer trends.

⁠Which SMEs are successful, and why? Italian design producers such as Artemide, Alessi, or Zanotta are driven by passion and a long-term commitment to design. They provide meaning, pride and security for family members and employees, and they cooperate with a range of designers for their collections. Similarly, excelling medium sized German companies such as Festo or Durst base their strength in their commitment to innovation and technical excellence. None of these organizations exist to reap short-term profits: Instead, they have a long-term focus, cultivate innovation and are driven by an untiring motivation to excel.

⁠Design Collaboration

⁠Already In the nineteen-sixties, car companies entered collaborations with designers, either because they lacked sufficient design capability, or the in-house team needed design inspiration. Designer Giorgetto Giugiaro created cars for Ferrari, Maserati, Alfa Romeo and others, while Giovanni Bertone designed cars for Lamborghini, Citroën, Fiat, Volvo and others. Design cooperations are also a successful model in fashion design: recent cooperations include Virgil Abloh for Off-White or Jil Sander for Uniglo.

⁠Design Collaboration can be a highly effective support model for SMEs because it instantly adds design capacity and experience which would be time-consuming and costly to establish in-house. To make it work, a range of points have to be considered.

⁠To be suitable for Design Collaboration, projects should have a shared vision and long-term development focus, keeping in mind that a new design offering can fundamentally improve the market position of a company. Design Collaboration is built on the premise that designers and companies treat each other as partners. To make sure of a good match between a designer and a company, a design audit looking at capabilities and motivation should be conducted. To maintain lasting motivation, designers should share risk and reward of product development by being remunerated through a percentage of revenues.

⁠Design Collaboration is ideally supervised by a design promotion organization which acts as catalyst, principal supporter and consulting partner of companies and designers, helping with audit, analysis, and match-making.

⁠Creative professionals are mostly educated to compete, but complex tasks can only be mastered through collaboration.

Principles of design collaboration

Design Collaboration instantly adds the power of design to the capabilities of a company – transparently, fairly, and with a long-term focus. Here are 5 principles to ensure successful cooperations:

1: The Design Audit

Finding the right fit between a designer and a company is a step where often mistakes are made. Sometimes, a designer is simply taken because somebody in the company happens to know one. Other times, a design company is chosen on the grounds of being famous, but their work style and expertise might not fit to the company and design project at hand. Sure, these approaches might work by chance, but more often they don’t.

Every design project is different, so it is only partly helpful to deduce from a designer’s previous work how a future design will turn out. Instead, to find out if a designer is right for a project, conduct a design audit – see more about this below.

After the audit, have a conversation to find out about interests and passions. Then let the designer make a presentation about his vision for your project and company (this is not about the design itself or how it will look like – you don’t want ideas for free – but about the designer’s vision and approach). If the project at hand captures a designer’s heart and imagination, you will see it reflected in his presentation.

2: Collaboration from Brief to Launch

It often happens that companies do not know enough about design to use it to its full potential. Take the design brief, the start of each design development. In a conventional service relationship, the designer is given a brief by the client. For example, a company might tell a designer to design “something like” the product or brand of a competing company. But copying is not only unethical, it is also a strategic mistake – copies never help a company to achieve lasting success on the market. This brief is hence not in the best interest of the company, and it would need to be changed.

In a Design Collaboration, the design brief is created collaboratively between company and designer. The designer is not a mere receiver of orders: instead, he has to learn about the capabilities, needs and visions of a company to come up with concepts which work. The collaborative brief pins down a schedule, process and envisioned result. During the design process, key ideas and milestones are shared and discussed with key people in the company. Finally, the designer helps with suggestions for production, promotion and product launch.

3: Share Risk and Reward

Will a design be a success on the market? Every new endeavor comes with risk. In a traditional service relationship, the designer is used as a service provider, and he company bears all the risk for the design being successful on the market. In a design cooperation, on the other hand, risk and reward are shared.

The resulting design is offered on the marketplace mentioning both the company or brand name and the designers name, and the designer is mainly remunerated through a percentage of sales. That way, it is in the designer’s interest to do what he can to make the design successful on the market, and he will cooperate with production, marketing and sales to help with ideas and suggestions. That way, both company and designer profit.

4: It’s Top Management Business

In successful companies, there is often a special relationship between design and CEOs.
In the early years of Sony, Norio Ohga stablished a distinctive design and later became Sony’s President and Chairman. Steve Jobs of Apple had a great passion for design and spent a great amount of of his time discussing with his designers. Elon Musk takes design so serious that he personally leads all product design and engineering at Tesla.

Design is a strategic resource to envision, to innovate, and to create compelling offerings. It must be concern of top management.

5: Multi-modal and Transparent Communication

Genuine cooperation requires understanding, trust and openness with everyone involved. A designer needs to understand every aspect of the design project, from top management strategy to shop-floor production issues. Therefore treat everybody as a partner, from the CEO to the shop floor worker. Always communicate openly and transparently, and present ideas in a multi-modal manner: visually, with sketches and renderings; in a haptic manner, with 3D models or material samples; and verbally, explaining the reasoning and story behind the design.

6: Design does not stop

Design does not end when the designer stops working. Once a product or service enters the market, it enters a conversation with its customers. Consumers will interpret your offering as part of your brand and against the backdrop of competing offerings. Consumer feedback and consumer experiences must be fed back into the design process to iteratively innovate.

Remember: Innovation almost never fails because of a lack of ideas, but because of a lack of persistence. Innovation must be a systemic capability, and design a core competence. It is not just about a new product or service: it is also about values, experiences, processes and networks.

Designing Better Design Support

In the course of previous design support programs, it happened that companies wanted support, but weren’t actually willing to cooperate with a designer. Other companies found that in the midst of a consultation they can’t go forward because of a lack of budget. In another case, a company delayed production until after the support program ended, then produced the design with small alterations in order to cut out the designer.

In order to avoid this kind of issues, a design cooperation support program should audit both designers and companies (more about a design audit below), then monitor design projects and their implementation by a company, regularly follow up both with designer and company, and go forward with defined milestones. Like in every partnership, also Design Collaboration only works when everybody involved behaves fairly and has a genuine intent to make it work.

Conducting a Design Audit

A design audit is conducted on the basis of the portfolio and CV of a designer and must be conducted by people with a solid knowledge of design. The audit analyzes along 5 axes of ability. As each ability is analyzed, candidates receive a point score from 0 to 6. The highest possible score is 30. Candidates with the highest score should go on to have a conversation and a vision presentation.

Audit 1: Innovativeness

Innovation is the lifeblood of new business. What is the degree of a designer’s innovative thought? Does the portfolio show conventional thought and pre-made templates, or does it include innovative approaches and interesting experiments? Analyzing the degree of novel thought of a designer helps you to gauge how innovative his work will be.

Score scale: 0 for using pre-made templates, up to 3 for moderately original projects, 6 for highly innovative projects.

Audit 2: Stance

An often overlooked, but important part is played by the stance of a designer. There are three general stances which I call copiers, egoists and altruists. Does the designer have a tendency to copy other designs, does he develop primarily his own design style, or is he developing distinctive designs for different clients? If the designer applies one style across all products and companies, his interest is more in developing himself than the clients he works for. The best designers always strive to develop the brand and image of a client company rather then their own.

Score scale: 0 for copying, 1-2 for uni-style designers, 3-6 for a designer having developed a range of different successful designs for different clients.

Audit 3: Skill Spectrum

How does the skill of the designer fit to the project at hand? Is the designer a specialist working in a narrow area or does he work across disciplines? The wider the spectrum of a designer, the better is the chance he will be able to deal with the complexity of consumer demands, company needs and market pressures and come up with appropriate solutions. However, if the skill fits the project, a designer who is great in a particular area is a better choice than a designer who does many things, but none of them particularly well. If you are looking to work not with a single designer, but a design team, pay special attention to cooperation readiness and skills complementing each other.

Score scale: 0-1 for a narrow single discipline specialist, 2-3 for designers working across more than one design discipline (such as industrial design, graphic design, interactive design), 4-6 for a multi-disciplinary designer with additional experience in related disciplines such as business administration, engineering, marketing.

Audit 4: Business Experience

Does the designer have experience with business processes, company dynamics and corporate structures? In large and medium-sized companies, corporate experience helps to understand the needs of a company, to navigate business processes and to bring a design to market in an effective manner. Ultimately, ideas need to be implemented, company departments need to be involved, and possible production, delivery and sales issues solved. In small companies with flat hierarchies, corporate experience is less important, but a good understanding of business processes is still vital for bringing a design to market.

Score scale: 0 for no business experience, 1-2 for beginner experience and internships, 3-4 for experience in some projects, 5-6 for an extensive corporate and business experience.

Audit 5: Cooperation Readiness

Did the designer cooperate with others or is he a “lone wolf”? Cooperation can be learned, and experience in cooperations for different projects helps to facilitate a successful design development process and overcome adversities. The work style of a designer is equally important: this can be more theoretical or more practical. Theorists without hands-on capabilities often have trouble in implementation. A solely hands-on approach, on the other hand, might lack the consideration required for a design project. Approaching design from both theoretical and practical viewpoints is most useful.

Score scale: from 0 for poor cooperation readiness to 6 for a person with extensive cooperation experience, both theoretically and practically.

(C) Mario Gagliardi 2021. Published by Dongdaemun Design Plaza/ddp Design Fair/Seoul Design Foundation.

Part 1 (English)

Part 2 (English)

December 26, 2021

Design Integration: From Imitation to Ecosystem

This article was first published in Fall 2005 in Designmatters by the Danish Design Center (DDC) as ‘Imiteret, kommercialiseret, oplevet: Sammenkædningen af design, virksomheder og denverdensøkonomiske udvikling’.

Company structures changed dramatically over the course of the last century. The structures and processes behind the production of goods evolved, and with these also the relationships of products and their users.

(more…)

March 19, 2021

Analysing lifestyle changes during and after the pandemic

Changes in lifestyles are always consequences of changing life circumstances. On an individual level, this includes education, income, or age; On a macro level, this includes, among other factors, political change, governance, and technical progress.

Lifestyle changes on an individual level are simple to understand: For instance, an increased or decreased income instantly affects individual purchasing behaviour. Macro level changes, on the other hand, often have multiple causes which create cause and effect chains. For instance, a small change in government policy concerning the taxation of the housing market can lead to large changes in wider market dynamics which in turn affect the wealth and welfare of large swathes of a population.

The current pandemic is an example of a global macro level change, as it endangers the health of populations worldwide. So does fast food, for instance, but a disease such as Covid 19 is faster in its detrimental effects on individual health.

The effect of a virus on individual health becomes quickly obvious, while the effects of government response to a virus takes more time to be noticeable. A country can successfully keep infections down through measures such as social distancing and isolation, but these measures can at the same time hold back vital economic interactions. The same measures which might avert a public health threat can cause an economic decline.

These chains of causes and effects affect changes in consumer needs and demands. A recent analysis of internet search words by The Economist reveals a few short-time indicators for lifestyle changes during the pandemic. As many had been confined to their homes, personal at-home activities such as working out at home (searches for dumbbells or Strava) or homemade arts and crafts (searches for tie-die or painting by numbers) surged.

Long-term changes are more important, however, as they result in fundamental changes in spending. Here are some of the long-term changes we predict:

High end traveling
In tourism, high-end businesses catering to high income consumers will have an easier time to regain market share. However, mass tourism on the level before Covid 19 will take a long time to recover.

More affordable basic services
The already existing trend towards informal and basic services (delivery services, personal transport) will increase as more nonessential jobs are lost as a consequence of isolation measures. The increased competition will also cause a downward price pressure on basic services without differentiator.

Decentralization of institutions
Institutions and infrastructure which until now was based on on centralized real estate will eventually have to be decentralized: Homes for the elderly, dormitories for migrant workers, or prisons are all based on cramming large numbers of vulnerable people together and hence became major infection hotspots.

Working from home
Also offices cram large numbers of people together. Working from home will therefore, at least for a segment of the population, become an integrated part of their lifestyle (see also Home, sweet home). Consequently, also businesses and services connected to offices – the office real estate market, inner city restaurants catering to office workers, or public transport systems – will be affected.

August 13, 2020

After Corona: Quality is back

The lockdowns and restrictions imposed by governments due to the Covid-19 pandemic resulted in many being furloughed or losing jobs. Consequently, it is expected that discretionary spending would decrease. In particular, businesses depending on day to day consumer traffic (restaurants, brick and mortar retail) or on gatherings of people (theatres, sports events) have been a marked disadvantage. However, spending at high quality restaurants is back to or above pre-Covid levels. Why is that?

There is a new perception, and it affects both discretionary and casual spending. Restaurant offerings which mainly relied on location to attract passing trade but did not offer distinctive value – such as premium ingredients, culinary creativity and skill – find out that they have, in current times with less passing trade, little to attract customers. For offerings with distinctive value, on the other hand, it is worth going to, even if prices are high.

A similar phenomenon appears in the luxury sector. Pre-Covid luxury often relied entirely on brand value. Many established luxury brands offered products without special materials or craftsmanship, yet have been able to justify high prices solely through brand recognition. These established luxury brands grew especially in the aspirational sector, sought out by middle-class consumers who seek to demonstrate status through commonly understood brand symbols such as Louis Vuitton or Prada.

After Corona, consumer perception and behaviour is changing. The commonly understood semantic brand value becomes less important than actual quality. When more people in society are economically struggling, the practice of flaunting a luxury item in public – the main reason why large-brand luxury items are bought in the first place – quickly becomes dubious. Just witness the social media backlash over Instagram influencers who continued to flaunt their branded luxury goods during Corona.

“You can’t just continue as usual. You can’t flaunt your wealth and your privilege at a time when things are really tough for lots of people. It’s alienating and it’s embarrassing.”
Camille Charriere, London-based influencer

In the post-Covid economic environment, main consumption motivators have changed. Flaunting a brand as a signal of privilege is socially less acceptable. The actual quality of an offering becomes more important in terms of material, craftsmanship and creativity. The last decade was about the rise of branded mass luxury driven by aspirational consumers eager on social signaling. After Corona, the focus has shifted. Actual quality is back, also with high prices, while the value of brands mainly driven by social signaling has decreased.

May 31, 2020

Home, sweet home

This is the first time most consumers across the world have the experience of being confined to their own home. What will this new experience mean for business? Let us look at the experiences of consumers during lockdowns and how this could impact consumption after Corona.

Phase 1: Panic
In the first phase of a quarantine, people struggle to understand the new situation. With the outlook to be confined to their homes and confronted with alarmist media messages, fear and anxiety drive people to expect the worst, and panic shopping for food sets in.

Phase 2: Getting to grips
In the second phase, people start to accomodate themselves with the new situation. With restaurants closed, many find that they are unskilled in the art of cooking and look for ways to use their stockpiles of food. Youtube creators quickly picked up on this new demand and are delivering videos with easy cooking instructions for panic-bought ingredients, for instance Corona Kochen by ZDF (Germany), Easy recipes (UK) or Easy treats (Australia). Next to cooking at home, wellness is booming.

Phase 3: Introspection
In the third phase, people get used to spend most of their time at home and start contemplating what to do with their time and circumstances. They consume more online media or try out new hobbies. Many find that while they have been busy living their lives, they neglected the homes they now find themselves in, and plan to enhance or refurbish their homes, if only to find themselves in better living conditions in case another lockdown might set in.

Phase 4: A new life
In the fourth phase, lockdowns are gradually being removed, and people get out of their homes again. Currently, European governments are planning to gradually reopen business. Austria, Denmark and the Czech Republic are reopening shops from mid-April, Norway and Lithuania from end of April, Sweden and Korea had no lockdowns. In China, where the lockdown has already ended, consumers had a phase of revenge shopping, flocking back to department stores to reward themselves after confinement and buying personal goods – luxury cosmetics, fashion accessories – to celebrate their newfound freedom and make themselves feel better.

Digital service providers are on the upswing: Adobe shares gained, penccil.com subscriptions are rising. On the other hand, airline and cruise line shares have dipped. But the quick reactions of investors and the longer term expectations of consumers are not always aligned: Saga cruise bookings for 2021, for instance, are up. A survey among consumers in Austria – the first country in Europe to gradually ease the lockdown – resulted in the intent of consumers to catch up on shopping, restaurant visits and travel. The survey shows that people also consider to change their lifestyle. These 4 trends will influence consumption in the future:

Off grid, on line
During the time of confinement, more consumers discovered the value of online services. This will accelerate the general shift from brick-and-mortar to online. More will work from home, and the online experience is evolving with virtual experiences, video storytelling and virtual assistants such as Samsung’s NEON project.

Home, sweet home
For many, home was mainly a place to sleep after a day spent outside – in transit, at the workplace, in restaurants. Being confined to their own homes was an experience most had for the first time in their lifetime. It was the only way to be safe and protected – an existential rather than just a circumstantial reason. Consumers found that their home is more important than they realized, and will look for ways to improve them.

Out but healthy
Consumers will stay vigilant about hygiene. Physical environments (hotels, retail spaces) emphasizing physical and mental health will benefit. Generous space is an advantage, while businesses connected to crowded spaces and crowded activities (budget hotels, football games…) have more to lose. Low-end hotel chain OYO, for example, has seen a 60% drop in revenue. High-end hotels should be better positioned from the outset and will think of new ways to advertise their top standards and promote offerings for private wellness, relaxation and meditation.

Bluer skies
As transport halts around the world, air pollution decreases and contrails diappear from the skies. People see skies which have not have been that blue since dozens of years, and in some places wild animals come back to explore quarantined towns. Videos of animals exploring quarantined towns get millions of views. This experience makes people reappreciate nature and in the long run more conscious about the environmental impact of their consumption. Public awareness about ecology is rising, questioning established industry structures and shopping patterns. The French president’s representative group of citizens recently proposed the closure of out-of-town hypermarkets to encourage shopping locally and shelving the 5G network because it uses 30 per cent more electricity than previous iterations. On the long run, consumers will increasingly look for products which are more responsive towards environment and society, with more authenticity baked in. Conscious consumption will be on the upswing, and products fit for this new view will have rich stories to tell about their integrity and value.

Focus on the internal image
To understand consumer trends, we have to understand the logic of consumer sentiment. As soon as shops reopened in Austria, long lines formed in front of home improvement stores, while there was initially less traffic in other shops. This indicates that consumption centering on the internal image – private space, homes – is benefiting, while consumption driven by the external image – fashion – will recover once social distancing rules have ended. Home improvement and interiors profit, while the established fashion industry is about to hibernate for a while. A Prada dress or a Louis Vuitton bag is bought to improve your external image: you want to look good and impress others. The importance of this external image diminishes when social exposure is reduced and social activites are curtailed. With rules on social distancing, the promise of fashion to signal and attract makes less sense. A new piece of furniture, on the other hand, is bought to improve your internal image.

Mayday (Post Scriptum, May 2nd, 2020)

Customers in front of Ikea on May 2nd, SCS Shopping City in the outskirts of Vienna

April 6, 2020

Podchain, ownership and usership

Car ownership was a fundamental idea of progress since Henry Ford came up with his Model T in the early 20th century. During America’s golden years, roughly from the nineteen- fifties until 9/11, owning a car was the first thing on every teenager’s mind. It was a sign of freedom and independence, the visible expression of the American dream, and ultimately a social necessity. The car you owned showed who you are, what you like, and where you stand in the social hierarchy.

Things have changed. Millennials own less cars than previous generations. Notorious traffic jams, CO2 pollution and parking problems make car ownership in cities difficult, and smartphone- based ride-hailing services such as Uber make it less necessary.

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October 29, 2019

On mental models, refusing a five billion dollar offer, and petting a cobra

Mental models are ideas of how things are. They are not about how things are in reality – they are beliefs about how things work or should work. People’s mental models can be wrong. If they are, they tend to be persistent, creating problems and at the same time impeding the ability to fix these problems. Here are two real-world stories about mental models.

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October 29, 2019

Design DIY

Until the late 20th century, the process of design was mainly top-down: design was being made by designers, produced by manufacturers, and branded by corporations. In the 21st century, these processes of production and consumption are being rethought. The design process has to become circular.

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January 26, 2018

Three approaches to the design process

The design process as it is usually taught and applied at the beginning of the 21st century is concerned with goals, aims and targets. It is dealing with business and industry, target groups and financial targets. It is looking at the often “wicked” problems found in all areas of life. It is, in general, working with – or trying to work with – the world, its structures and problems, including its systems, its territories, its politics and power struggles. But is this the only way the design process can be approached?
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December 25, 2017

Models of Innovation in Japan and Korea: MITI and KIDP

Korea’s strength in the creative industries, together with the strength of their multinational brands, is regarded as a model by other Asian countries. How did this model come about?
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December 13, 2017

Design and Myth

In his 1957 book „Mythologies“, Roland Barthes analyses the Deesse (The nickname of the Citroen DS car, “goddess” in French) as a mythical object, and plastic as a mythical material. Plastic interests him because of its transformability, the metamorphoses it contains, being able to imitate everything. He finds it remarkable that plastics are given mythical names of Greek shepherds (Polystyrene, Polyvinyl) and writes: “The public waits in a long queue in order to witness the accomplishment of the magical operation par excellence: the transmutation of matter.”

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December 10, 2017

Tools to think with

Concepts and assumptions determine how an organisation and its environment are seen. When plotting a course of action, managers implicitly rely on them. These concepts are the foundation for both daily decision-making and long-term planning. Once concepts are taken for granted, they are held implicitly, possibly impeding innovation efforts. Leonard and Straus found that thinking style preferences are becoming “hardwired” into brains and reinforced over years of practices and self-selection. When, in the course of an organisational change, the new outlook does not conform with held assumptions, these concepts can be the reason why people are reluctant to change.

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November 23, 2017

Korea’s most successful luxury brand

Whoo (后), the cosmetics brand designed by Mario Gagliardi, is now Korea’s most successful luxury brand, selected by the Seoul Economic Daily in 2017 (read more about its creation). The brand exceeded 100 billion Korean Won in annual sales in 2009, 200 billion Won in 2013, 400 billion Won in 2014, 800 billion Won in 2015, and annual sales exceeded 1 trillion Won last year. Whoo’s parent company LG Household & Health Care, part of LG Group, expects the annual sales of Whoo to surge to 1.6 trillion Won (US$ 1,4 billion) in 2017, making it the best-performing Korean luxury brand in history.

Designed at a time when Western cosmetics brands dominated the Asian market with narratives of Paris and New York, the brand was revolutionary in being the first cosmetics series to focus instead on Asian culture and history.

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October 31, 2017

Analysing the Digital: Transformations, Territories, Frames and Uses

While the digital is explained in itself by computer science, important questions for the humanities – such as how the Digital affects human behaviour, or how it impacts society and economy – are outside its scope. Different disciplines have provided answers, but there has been no integrated concept bridging these insights.

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July 4, 2017