While observing that BW has even named Bruce Nussbaum as Editorial Page Editor for Design Topics, it seems that this is the decade where particularly US/UK magazines like: FastCompany, Newsweek, BusinessWeek, Business 2.0 and the likes have discovered “Design” as a hot topic. This year “Many of the winning entries … for Industrial Design Excellence Awards spring from a close observation of the customer.”
Those of you who’ve ever attended one of my workshops know that I’m a fan of Sweden’s IKEA. Sure they sell a lot of crap as well as every mainstream manufacturer does, but beside the fact that I think that IKEA understands their customers very well (wait until you have a child; you’ll love their Smaland while having a coffee in the restaurant) they always come up with well designed and far more important affordable products for the masses.
From a strategic perspective offering “qualitative design solutions” which are calculated on an economies of scale basis are far more complex than the usual “design as a niche” approach where design addresses a differentiation strategy with all the consequences for price, branding, customer service etc.
Consequently BusinessWeek also created the “Catalyst Award Winners” category where “products get the prize for also adding to the bottom line”:
“There is no greater testament to the power of design than its ability to deliver on the bottom line. The Catalyst Award goes to previous idea winners that really succeed in the marketplace. A jury screens candidates for market and financial performance as well as strategic, industrial, and social impact. This year’s jury was composed of Ken Musgrave, director of industrial design at Dell; Walter B. Herbst, CEO of Herbst Lazar Bell Inc.; and Sam Farber, founder of Copco, Oxo, and Wovo”
Interestingly you might remember that I’ve selected Sam Farber’s definition of Design in my last posting ;-) Is this coincidence?
those of you who have joined one of my lectures or workshops recently certainly know that Apple is one of my favourite “Best Practice” Examples these days ;-)
“At Apple’s core is great innovation, beautiful design and an ability to bring warmth and passion to those who may be completely incurious about technical gadgetry but need it nonetheless to survive in today’s world.”
this has been confirmed by the 2004 Readers’ Choice Awards conducted by brandchannel.com. readers have pushed Apple back to the throne in terms of “the brand with the most global impact—a title held by Google since 2002.”
in this context it is worthwhile to note that certainly the main clientele of brandchannel.com are guess what? marketers, brand managers and to a certain extent design managers. therefore the result is not a real surprise.
Apple impresses me with their smart move from being a focused computer and OS manufacturer to a provider of the complete “online music value chain”. however it is notable that at the same time “its worldwide computer market share dropped to less than two percent in 2004 to a 1.87 percent share in Q3 of 2004 (down from 2.19% in Q3 2003). The 2004 world leader for market share was Dell at 18 percent, followed by HP at 16 percent and IBM with 6 percent.
The small white hope is that iPod’s halo effect will bring more buyers to Apple’s other offerings, which go beyond consumer goods to include servers, WiFi, and software, and include the already-backordered new iPod Shuffle and a sub-US$ 500 Mac.”
in contrast this “small white hope” with it’s this simple, technologically sophisticated user interface and its stylish, trendy design which has brought Apple an increase in sales of some 300% this year.
after all this appraisal in terms of naming the Apple iPod the design icon of the new century one shouldn’t forget that being successful with design is relative. and this is another insight from the brandchannel survey: while north american readers voted for Apple as #1 it doesn’t appear in the top rankings for the rest of the world!
in europe and africa brands like IKEA, Virgin, H&M, Nokia, Puma, Zara and Audi are the dominant players! this reminds me on a DMI conference I’ve attended in the late 90s in the US: while everyone in the room got excited about the success of the recently released “VW New Beetle” nobody could understand that the Beetle (which has a brilliant design approach according to my opinion) isn’t a real success in the “Old Europe” (for several reasons)
in my workshops on strategy & design I often use the example of IKEA to describe that design is a ‘process’ rather than simply a ‘product’. while, for most of us (and this is especially true for germans ;-), IKEA is similar to affordable scandinavian design, for IKEA design is just one means to generate successful business.
“It started by piggybacking its deliveries on milk trucks, and was almost wiped out by a fire. Now it has 186 stores in 31 countries and has made its reclusive founder, Ingvar Kamprad, the world’s richest man – while producing the beds on which 10% of Europeans were conceived. What is the secret of Ikea’s success? And what exactly is a Mållen clip for? Oliver Burkeman travels to the heart of Kamprad’s austere empire to find out. … True, you can love Ikea or hate it; you may feel both things at once. What is certain, though, is that Ikea loves you. This love is not unconditional – you’re going to have to work for it, primarily by assembling furniture. But Ikea really does love you, with an intensity that can be unsettling. And it has big plans for your future together.”
read the article and find out why IKEA is a superb example of combining ‘vision, passion, purpose, and charisma’ in order to serve both the company and most importantly: the customer! finally the article also lists some interesting figures [to which I will refer to from now on in my seminars ;-)].
in these tough economic times we often wonder which kind of corporate and business strategy will prove to be successful in the long run.
while market saturation is the status-quo for the majority of consumer goods in most western industrialized nations there are still markets niches to be uncovered. and believe it or not there is still enough money in the market waiting to be spent in these niches.
thomas d. sullivan, a new york freelancer who writes about design, architecture, and other topics for BusinessWeek reviews a book by Silverstein and Fiske called >>Trading Up: The New American Luxury (Portfolio, 300 p., $26.95)<< the authors address exactly the question from above.
as sullivan says in his article: ‘shopping for gratification’:
“they describe four ‘emotional spaces’ that influence consumption: taking care of me, connecting, questing, and individual style. home furnishings are typically taking care of me goods, while connecting goods (food, liquor, jewelry) help buyers to impress a potential mate or show affection. questing is about adventure — traveling to exotic locales or sampling the latest new cuisine. individual style is about consumption as self-expression.
silverstein and fiske say consumers increasingly split their purchases between commodities and items they really care about. the authors predict companies that focus on selling conventional midprice goods — things that are neither great values nor compelling — will suffer ‘death in the middle.’”
as always the article needs to be read with its american background in mind; implications for europe may be different however an impact will certainly be there. the point for the discipline of design (management) is how to contribute to these ‘emotional spaces’ with purpose and meaning.
in any case the real challenge isn’t addressed by the article and the book itself: how can design contribute to address these spaces with a democratic response as IKEA is practising for a long time. IKEA’s clear positioning as a cost leader in their industry in combination with real customer satisfaction at reasonable prices is still unbeaten. so, design managers: accept the challenge! read the article in business week online >>>