Shop where you borrow instead of buy - making do via the sharing economy...

                                                                                                                                  pic: Leila Berlin
According to The Guardian, the most popular items in Leila, Berlin's first "borrowing shop*" are the electric drills.

But it's not worth that person buying their own tools, said founder Nikolai Wolfert. "The average electric drill is used for 13 minutes in its entire lifetime – how does it make sense to buy something like that? It's much more efficient to share it."

Scarey...

Members can borrow anything from board games to wine glasses, fog machines to hiking rucksacks, juicers to unicycles. All they need to do to become members is drop off an item of their own.

Virtual tour of Leila here

Borrowing shops are under development in several Berlin districts, with similar projects being set up in Kiel and Vienna. In Berlin-Wedding, 80 artists are working with recycled materials to build Berlin's first "indoor treehouse", which will eventually serve as a "local public thinktank". In Neukölln, the Trial & Error culture lab organises swaps for artists' materials and fashion items.

At the more commercial end of the spectrum, Deutsche Telekom recently helped launch the social network wir.de, which allows neighbours to swap tools and services and sets up communal "toy boxes" in playgrounds around Berlin.

Whilst the idea of the "share-economy" is developing well elsewhere (i.e. Airbnb, which matches travellers to people with rooms to rent, and car2go and even M&S offering customers discounts in exchange for unwanted clothes, which are then donated to Oxfam) there is a sense that the shift away from ownership towards functionality is nowhere as tangible in Europe as in Berlin.

If you add share-economy drivers to consumers increasingly ‘making do’, it may begin to explain the difficulty of driving demand above flatline levels in many categories, everywhere…

And going back to drills, it is well known that drill manufacturers sell millions of ¾ inch drill-bits, not because people want drill-bits, but because they need ¾ inch holes, however produced...

In other words, the most insidious competition can be a product or service that replaces traditional ways of meeting needs. Therefore, training ourselves to focus on functionality and real need instead of want, can help us to anticipate and survive the shock of third-party innovation, hopefully….

* See video on how Leila works in practice here

Rebuilding consumer confidence - the brand role

Nielsen's latest Global Survey of Consumer Confidence reveals that in Q4 2013, 60% of Britons are seeking to reduce their electricity bills, 58% have cut back on expanding their wardrobes, 57% have cut out takeaways and 55% are switching to cheaper brands in the supermarket.

As reported in The Guardian, the poll of 30,000 people has uncovered the first dip in consumers' confidence since 2011. Chris Morley, managing director of Nielsen UK and Ireland, said: "British consumers are increasingly recognising improvements in the economy, but they are still cautious and likely to continue to modify their buying and consumption habits to save money"

It is obviously impossible and inappropriate for brands to attempt to shift the mood of the entire population, that being a job for the politicians (!). Better for brand owners to focus on that pool of loyal users, the ones that have remained loyal despite the pressures and blows to credibility (horsemeat etc), the consumers that continue to believe in your brand, albeit at reduced consumption levels.

Working from what you know works, it can be easier to encourage existing users to consume more, rather than trying to attract new users to the brand.

• A key first step is to reassess latest consumer needs vs. brand attributes
• ...and checking that the brand delivers more than it says on the tin, every time....
• Check post-consumption delight -who needs satisfaction...?
• Optimise consumption levels by ensuring 100% onshelf and multichannel availability 24/7 - why take a chance on preventing any potential consumer from accessing your greatest asset?
• Share with consumers other uses of the brand revealed by regular users
• Then begin to encourage existing users of your current brand to try another brand in your portfolio, capitalising on your mutual knowledge and emerging confidence in the relationship

When loyal consumers have experienced and have confidence in your offering on these two levels - existing and new products - it is time to build on the ability of satisfied, savvy consumers to tell their friends....

A slow approach?
Then how about taking a chance on delivery vs. promise, and allowing the other half of the 'tell a friend' mechanism to kick-in, whereby a delighted consumer tells one friend, whereas a complaining consumer tells ten eager listeners, via every medium available...much, much faster! 

A light-bulb idea that makes a real difference, free-of-charge...

Just when manufacturers were focused on LED light competition, and power suppliers were adjusting for lower consumption, Alfredo Moser, a Brazilian mechanic had a light-bulb moment and came up with a way of illuminating his house during the day without electricity - using nothing more than plastic bottles filled with water and a tiny bit of bleach to refract 40-60 watts of light into the room below, free….

First he makes a hole in a roof tile with a drill. Then, from the bottom upwards, he pushes a water-filled bottle into the newly-made hole. "You fix the bottle in with polyester resin. Even when it rains, the roof never leaks - not one drop."

In the Philippines, where a quarter of the population lives below the poverty line, and electricity is unusually expensive, the idea has really taken off, with Moser lamps now fitted in 140,000 homes. The idea has also caught on in about 15 other countries, from India and Bangladesh, to Tanzania, Argentina and Fiji.

Another case of consumers, strapped for cash, 'making  do' with cheaper alternatives...
Full light bulb details here 

'Making do' with existing space: the Tesco-Sports Direct space-partnership…

Sports Direct is in advanced talks to take excess space in some of Tesco’s biggest stores, possibly via the Mezzanine floors. Sports Direct would be able to benefit from the customer traffic to Tesco, and allow the grocery multiple to shed space to a non-competing retailer.

As you know, Tesco is already reducing floor-space. A 120,000 sq. ft. store in Stockton-on-Tees, for example, is to be reduced to 80,000 sq. ft. by installing a gym on the store’s mezzanine floor, and a children’s play area on the ground floor.

They are already comfortable with the Sports Direct connection (see the Czech Republic, where Tesco cut the size of a hypermarket from 80,000 sq. ft. to 50,000 sq. ft., with Sports Direct taking the bulk of the excess space).

Retailing being a pragmatic model, Tesco realises that a 100,000 sq. ft. store represents space overcapacity. Reasons are irrelevant. In the ‘here and now’ retailing is about alternative use or going bust, with retail margins too low to allow any other options. Tesco’s willingness to consider complementary space-partners, rather than plough on regardless, has to be the right attitude. The rest is detail…

Imaginative NAMs, particularly those in multi-channel categories, already see the potential of collaborative promotions involving Tesco’s space-partners. For instance the scope for healthfood/sports supplements joint-initiatives is a no-brainer…

The real opportunity
But the real creativity is in seeing that this space-partnership is not about ‘making-do’ with a large store problem. With care, this idea can be rolled out into Tesco’s other formats, via complementary partners in many other categories, all realising synergies in existing store traffic.

As always, change of this nature can represent threats and opportunities for suppliers. This means that any categories/brands that are currently ‘space-fillers’ become ‘de-listable’ as Tesco develops its space-partnership model, and, paradoxically ‘needs more space’ as the idea develops…. However, those NAMs that can go to Tesco with creative linkages involving complementary routes to consumer, and even suggestions for possible space-partnerships, have to represent added-value for both retailers…

In other words, it is time for a really fundamental review of what your brand  represents to your consumers, in their preferred shopping environment, in the context of the Tesco space-partnership concept, remembering that all creativity is simply the linking of two old ideas that have not been combined before….

Recycling broken gadgets - savvy 'making-do'?

Restart parties could be the savvy way of ‘making do’ via a gadget repair, rather than auto-replacement of a useful tool or appliance.

Ugo Vallauri and Janet Gunter are the co-founders of The Restart Project, which aims to stop people throwing away broken gadgets and other electrical items and, instead, get them fixed by taking them along to a Restart party, as with a recent session in Camden Town Shed, in north London, but next time it could be a church hall, market stall or community centre near you.

The idea came out of work Mr Vallauri has done with Computer Aid, a charity that refurbishes old computers for use in developing nations. Using some basic repair skills of the volunteers that the parties bring together, gadget owners that have lost trust in commercial repairers can access the second or even third life of favourite items. More details of the MO and examples from the Camden Restart session here.

The real issue here is not the fact that some people have found a way of collaborating in a shared-repair experience, in the sophisticated West, but that ‘making do’ has been ‘ennobled’, in that people are  becoming more focused upon stretching existing resources, and talking about it, as a reaction to the pressures of austere times…

…and if even 10% of gadgets are repaired in this way, it effectively takes 10% out of the new gadget market….

The Knock-on effect: Kettle sales lose steam as coffee machines grow ever more popular

With kettle sales dropping by over 7% in five years, it might appear that kettle decline was due to a combination of the global financial crisis, people 'making do' with what they have, and a direct result of cutting back, when in fact our loss in sales may be caused by demand switching to another delivery mechanism, a new consumer-taste via a different appliance (22% of households in Britain now make their own espressos, lattes and cappuccinos). In other words, we are the knock-on effect of other peoples actions.

In practice, management-ego can cause us to assume that the knock-on effect is a result of our actions, rather than caused by others....

This means that direct attempts to stimulate demand can be a waste of promotional funds, when in practice we need to reassess fundamental demand for our product, re-examine its competitive appeal and then invest appropriately in maintaining the share-of-pocket our brand deserves...

And, just-in-case, perhaps diversify into coffee-making machines...?

More on home-coffee developments here